| Summary |
| Global status of GM crops |
 Genetically modified (GM) crops have been rapidly adopted across the world, covering more than 114 million hectares of agricultural land in 23 countries by 2007. The most notable expansion has been in the emerging economies of Argentina, Brazil, India and China.
The most widely adopted GM crops by area in 2007 were those with traits for herbicide tolerance (HT crops) (63 per cent) and resistance to pests (mostly Bt crops) (18 per cent), as well as newly developed varieties that have a combination of herbicide tolerance and pest resistance traits (stacked trait crops) (19 per cent). The inclusion of these traits in crops can benefit farmers by reducing input requirements, increasing crop yields, or both.
Soybean, maize, cotton and canola are the most widely adopted GM crops, accounting for more than 99 per cent of the GM crop plantings globally. These crops are widely traded internationally, with more than 50 importing countries. Around 98 per cent of soybean, 80 per cent of maize, 73 per cent of canola and 57 per cent of cotton traded globally is sourced from countries growing GM crops.
Increased crop production as a result of GM crop uptake has enabled emerging economies to gain a larger share of global crop markets. |
| Diffusion of GM crops in emerging economies |
The continued uptake of GM crops in Argentina, Brazil, India and China has allowed these economies to achieve significant increases in crop productivity, improving their competitiveness on international markets. These four countries, in aggregate, account for around 39 per cent of the world’s GM crop plantings and this share is likely to increase as they continue to introduce GM crops at a faster pace than other countries.
The agriculture sectors in these emerging economies are well situated to adopt new biotechnologies. Farmers in these economies have gained experience in adapting to new technological developments and in taking up opportunities for productivity improvement.
Looking forward, challenges that emerging economies may face in increasing their adoption of GM crops include:
improving the regulatory frameworks governing adoption of GM crops
strengthening intellectual property rights to enable a greater level of foreign investment in research and development
improving transport and storage infrastructure for agricultural commodities. |
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| GM crops in australia |
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Cotton is the only crop currently produced in Australia with GM traits. More than 90 per cent of cotton produced in Australia is from GM varieties, with the majority exported to markets including Japan, China and Indonesia.
Two varieties of GM canola were approved for commercial production in 2003 by the Office of the Gene Technology Regulator (OGTR). However, GM canola has not yet been planted on a commercial scale because of state government moratoriums in all canola producing states. A number of field trials for other crops are being undertaken.
Commercial canola cultivation is likely to commence in some parts of Australia in the short term. Following a recent review, Victoria announced the expiry on 29 February 2008 of the moratorium on the commercial production of GM canola. In New South Wales, the government has amended the GM food crop legislation and approved the cultivation of GM food crops under licence. Under this scheme the commercial growing of GM canola in NSW was approved in March 2008.
Canola and cotton are currently the only markets in which Australia competes where GM crops have a significant market share. However, Australia has a major role in other world grain markets in which there is potential for a significant uptake of GM crops. For example. Australia is currently undertaking field GM crop trials in rice and wheat. |
| Economic impacts of GM crop uptake in Australia |
More than half of Australia’s production of grains and oilseeds is exported and Australia shares common world markets with emerging economies. Delaying GM crop uptake in Australia while emerging economies continue to increase uptake will have adverse impacts on Australian exports.
In this report, the potential benefits from Australia adopting GM oilseed and wheat crops are examined using ABARE’s global trade and environment model (GTEM).
This analysis is based on an illustrative scenario in which GM oilseeds and wheat will be ready for uptake in Australia and in the emerging economies of Argentina, Brazil, India and China in 2009. Alternative policies taken by the European Union on importing GM crops are considered. The scenario analysis is undertaken for a ten year period to 2018. |
| Main conclusions of the ABARE analysis |
If Australia adopts GM oilseeds and wheat, alongside increases in adoption of these crops by emerging economies, there will be a gain to Australia’s export competitiveness and world market shares. Under the assumption that imports of GM crops are not restricted in foreign markets, the estimated aggregate gain to the Australian economy (measured by an increase in gross national product) would be around $912 million (in 2007 Australian dollars) by 2018 relative to what would otherwise be the case.
Australian farm export income is expected to increase if Australia adopts GM oilseeds and wheat alongside the emerging economies. Under the assumption that imports of GM crops are not restricted in foreign markets, estimated earnings from Australian oilseeds and wheat exports would increase by $918 million (in 2007 Australian dollars) by 2018, compared to what would otherwise be the case.
As a result of improved export competitiveness of the oilseeds and wheat industries, resources are expected to move into these industries from the rest of the agriculture sector, leading to an estimated small decline in exports in other agricultural industries. For the agriculture sector as a whole, estimated export earnings would increase by $747 million (in 2007 Australian dollars) by 2018, compared with what would otherwise be, if Australia adopted GM varieties of oilseeds and wheat alongside emerging economies.
Under an alternative assumption that the European Union bans imports of GM crops from GM adopting countries, the estimated gain to the Australian economy of adopting GM oilseeds and wheat would reduce to $732 million (in 2007 Australian dollars) by 2018, compared with what would otherwise be the case.
Under the assumption that the European Union bans imports of GM crops, the estimated increase in Australia’s agricultural exports would be around $558 million (in 2007 Australian dollars) in 2018, compared with what would otherwise be the case. Export earnings of the oilseeds and wheat industries are estimated to rise by $682 million (in 2007 Australian dollars) by 2018, from what would otherwise be the case. |
