abare.gov.au - research report 08.03

3	GM crop adoption in australia

Australia is a major producer and exporter of cereal crops – wheat, barley and sorghum, and oilseeds, in particular cottonseed and canola. For example, Australia’s share of global exports of canola and wheat exceeded 10 per cent, and of barley and cottonseed exceeded 20 per cent in the five years ended 2005-06 (table 5). Australia is also a major producer and exporter of cotton fibre but produces only small quantities of soybeans and maize.

Introduced in 1996, GM cotton is currently the only GM crop produced in Australia. Herbicide tolerant, insect resistant and stacked varieties have all been widely planted, and GM cotton accounted for around 92 per cent of total cotton production in 2006. More than 90 per cent of cotton production in Australia is exported, with key markets including Indonesia, China, Thailand and Japan.

Australia is a major producer and exporter of canola with more than 65 per cent of production exported in 2006 (figure i). Japan is the largest export market for Australian canola, with other destinations including the United Arab Emirates, Pakistan, Bangladesh, China and the European Union.

The Gene Technology Ministerial Council — established under the Commonwealth Gene Technology Act (2000) — has adopted a policy to recognise any state or territory legislation issued to preserve the identity of non-GM or GM products for marketing or trade purposes.

Two varieties of GM canola were approved for commercial production in 2003 by the Office of the Gene Technology Regulator (OGTR). However, the main canola producing states enacted moratoriums on production owing to market access concerns. Consequently GM canola has not yet been planted on a commercial scale in Australia.

States and territories, except Queensland and the Northern Territory, enacted GM crop moratorium legislation preventing the commercial production of GM crops. In Western Australia and Tasmania, the legislation applied to all GM crops, while in other states it applies only to GM food crops.

Most states and territories have now reviewed their moratoriums. The Australian Capital Territory reviews their moratorium legislation of GM crops annually. Following a recent independent review, Victoria announced the decision to allow the moratorium order on the commercial production of GM canola crops to expire on 29 February 2008. The New South Wales Government accepted all recommendation of their review and amended the GM food crop legislation. As a result a scheme for approving the cultivation of GM food plants under licence has been introduced. Under this scheme an expert committee was established to advise the NSW Agriculture Minister, on applications for the commercial production of GM crops. Under this scheme, NSW approved the commercial production of GM canola in early 2008. South Australia announced its decision to maintain a moratorium on the growing of GM crops in early 2008. Tasmania’s review is continuing and not expected to be completed until 2009. Western Australia is scheduled to review their moratorium order on GM canola, and is expected to submit a report to the Minister by late 2009. State and federal policy arrangements on GM crop uptake are discussed further in appendix D.

GM crops that are currently under field trials in Australia include rice, wheat, Indian mustard, sugar cane, white clover and grapes (table 6). In June 2007, a variety of drought tolerant wheat was also approved for trial. In addition, cotton varieties are under continual development targeting new traits including improved fibre quality, disease and viral resistance, drought tolerance and water use efficiency, and cottonseed oil modification to produce healthier oils. These varieties could lead to significant benefits to consumers as well as producers.

5	Australian cereals and oilseeds production and trade average 2002-03 to 2006-07

production

australia’s
share of
global exports

volume

value

cereals

wheat

18 792

4 315

barley

7 129

1 362

sorghum

1 756

321

maize

346

oilseeds

canola

1 210

483

cottonseed

637

1026

soybeans

6	GM field crop trials currently underway in Australia

crop

traits

canola

herbicide tolerance, hybrid breeding system

wheat

modified starch characteristics, drought tolerance

cotton

insect resistance, herbicide tolerance, high oleic acid content,
water-use efficiency, waterlogging tolerance, fungal resistance

rice

herbicide tolerance

rose

altered flower colour

indian mustard

herbicide tolerance, hybrid breeding system

sugarcane

altered sugar production, test modification process, water-use
efficiency, nitrogen-use efficiency

white clover

virus resistance

grapevine

colour expression, sugar composition, flower and fruit development, reporter gene expression

pineapple

reduction of blackheart, delayed flowering, reporter gene expression

papaya

delayed fruit ripening, reporter gene expression

torenia

altered flower colour

Source: OGTR (2007).

Grains and oilseeds trade by Australia and emerging economies

The four emerging economies of Argentina, Brazil, China and India account for a major portion of global grains and oilseed production and play a significant role in global trade for these commodities. They account for 49 per cent of global soybean trade, 32 per cent of maize trade, 22 per cent of rice trade and 13 per cent of wheat trade (figure j, table 7). Australia competes with these countries to gain market access.

Australia and the emerging economies also share common markets for some crop exports. For example, Japan sources canola and wheat from Australia and China (figure k; United Nations Statistics Division 2007).

Emerging economies, particularly China, also import crop products for food and stock feed use. For example, China accounts for 8 per cent of global canola imports, 39 per cent of global soybean imports and 2 per cent of wheat imports. In this regard, Australia supplies around 19 per cent of China’s canola imports and 26 per cent of China’s wheat imports (figure l; United Nations Statistics Division 2007).

If GM varieties of wheat are commercialised, China, India and Argentina are likely to benefit most from adoption. These three economies account for around 30 per cent of world wheat production and 13 per cent of global wheat exports (table 7). Conversely, Australia accounts for around 12 per cent of global wheat exports and 3 per cent of global wheat production. Global market changes could therefore have significant implications for the Australian wheat industry.

Argentina, Brazil, India and China are significant producers and exporters of grains and oilseeds, many of which are GM based crops. As Australia’s agriculture sector shares some common export markets with emerging economies, and competes in the global market for these commodities, delaying the adoption of GM crops while emerging economies continue to increase uptake, can be expected to have important economic implications for Australia. These impacts are quantified in the following chapter using several illustrative scenarios.