Els Wynen
Economics, Commerce and Industrial Relations Group
23 November 1999
List of Acronyms
Major Issues
Introduction
What is genetic engineering?
A new technology: who gains?
Farmers
Yields and farm returns
Box 1: some parameters of GE crops
Farmers' attitudes
Risks
Labelling and food safety
Consumers
'Substantial equivalence'
Australian situation
Consumers' concern
Information
International trade obligations
Environmental impacts
Investors
Institutional arrangements
Genetic Manipulation Advisory
Committee
Interim Office of the Gene Technology Regulator
Australia New Zealand Food Authority Act 1991
Australian Quarantine Inspection Scheme
National Registration Authority for Agricultural and Veterinary
Chemicals
Summary and conclusions
Endnotes
List of Acronyms
AAA
|
Agrifood Alliance Australia
|
AAAS
|
Australian Association for the Advancement of
Science
|
ACA
|
Australian Consumers' Association
|
AFFA
|
Department of Agriculture, Fisheries and
Forestry Australia
|
ANZFA
|
ANZ Food Authority
|
ANZFA
|
Australia and New Zealand Food Authority
|
ANZFSC
|
Australia and New Zealand Food Standards
Council
|
AQIS
|
Australian Quarantine and Inspection Service
|
Avcare
|
National Association of Crop Production and
Animal Health
|
BMA
|
British Medical Association
|
Bt
|
Bacillus thuringiensis
|
DITAC
|
Department of Industry, Technology and
Commerce
|
EU
|
European Union
|
FAO
|
Food and Agriculture Organization
|
GE
|
genetic engineering
|
GMAC
|
Genetic Manipulation Advisory Committee
|
GMO
|
genetically modified organism
|
GTAC
|
Gene Technology Advisory Committee
|
IOGTR
|
Interim Office of the Gene Technology
Regulator
|
LMO
|
living modified organism
|
NFF
|
National Farmers' Federation
|
NFU
|
National Farmers' Union
|
NRA
|
National Registration Authority for Agricultural
and Veterinary Chemicals
|
OFA
|
Organic Federation of Australia
|
OGTR
|
Office of the Genetic Technology Regulator
|
PHA
|
Public Health Association
|
RDMC
|
Recombinant DNA Monitoring Committee
|
SCARM
|
Standing Committee on Agriculture and Resource
Management
|
SPSA
|
Sanitary and Phyto-Sanitary Agreement
|
TBTA
|
Technical Barriers to Trade Agreement
|
TGA
|
Therapeutic Goods Administration
|
WHO
|
World Health Organization
|
WTO
|
World Trade Organization
|
Major Issues
In May 1999 the Australian Government committed
$17.5 million to the development of a new biotechnology strategy to
'... ensure that Australia captures the benefit of this emerging
technology'(1). Of this amount, $10 million was to be spent on
measures such as the establishment of a senior Ministerial Council
to manage the biotechnology agenda, development of a national
biotechnology strategy and public awareness programs. Another $7.5
million went to the Health and Aged Care Department for the
establishment of the Office of the Gene Technology Regulator by 1
July 2001.
At the time of these announcements, genetic
engineering seemed the way ahead for agriculture in Australia,
promising significant improvements in productivity. Inserting fish
genes in plants to promote cold resistance is an oft quoted example
of the remarkable potential of this technology. Advantages for the
environment were heralded, through a reduction in pesticide use.
Characteristics of this new technology have been mentioned as
including a decrease in use of fertiliser, pesticide, labour and
energy; lower input costs; higher yields; better food quality;
better adaptation of crops to environmental requirements (drought,
salt) and environmental possibilities (nitrogen fixing)(2). Many
Australian farmers, however, have been reported as being somewhat
reticent about involvement with genetically modified organisms
(GMOs)(3), or still need to be convinced about its advantages(4).
Fifty-five per cent of farmers favoured a five-year moratorium on
GMO crops.(5) The farmers' hesitancy stems from uncertainty about
the effect of returns to farming, uncertainty over marketing
possibilities of the crop and liability towards other farmers if
pollution occurs. Meanwhile a number of other controversies have
surfaced, and these will need to be addressed if the technology is
going to be able to reach its potential.
The opposition to GMOs in the European Union
(EU) has intensified, culminating in a change of source of imports
for some agricultural products (such as for some of the canola from
Australia instead of from Canada), and refusal of some shipments
(such as organic potato chips from the USA found to include
genetically engineered (GE) material). Although the value of these
goods is low in the overall scheme of things, it may be symptomatic
of events to come. In the USA concerns have been at a much lower
level with well over 25 per cent of the area of maize, soybeans,
canola and cotton in 1999 under GE varieties, mainly incorporating
herbicide resistance and insecticide traits. For soybeans this
figure was even close to 60 per cent. More recently, however, with
two of the leading maize buyers in the US decided not to be
involved with non-EU-approved maize for the time being(6), a
decrease in area under GE-crops seems likely.
Meanwhile, the Australia and New Zealand Food
Standard Council (ANZFSC) had resolved to include genetically
engineered products in the Food Standard Code, adopting
mandatory labelling for GMO products, including those that are
'substantially equivalent', an issue of great importance. However,
in October 1999 the actual inclusion in the Code was postponed
under the direction of the Prime Minister. Also in other countries,
such as the EU and Japan, food labelling of some sort has been or
is in the process of being adopted. Compliance with these kinds of
measures with World Trade Organisation (WTO) requirements has now
come under scrutiny. However, the issue is far from clear and is
bound to be high on the agenda of the next WTO Round starting in
Seattle at the end of November 1999.
A main issue regarding labelling concerns
'substantial equivalence', a concept which originates from FAO/WHO
deliberations in 1990. If indeed products of genetic engineering
(GE) and non-GE are the same, as some supporters of GMOs maintain,
there is no need to differentiate between the two products.
However, many consumers do believe the two products are different,
and consider that they have the right to know and to make their own
choice. Environmentalists foresee as yet undiscovered or
undisclosed, and possibly irreversible, problems in the environment
through the release of organisms that have not been tested
appropriately. They therefore want the precautionary principle
applied and, failing this, want to be able to express their opinion
and contribute to the solution by refraining from consuming GE
goods, hence their support for labelling.
A third group of concerns relates to the market
power this technology can confer on a small number of players.
Action has been taken to prevent an undesirable concentration of
power, as an anti-trust lawsuit is to be brought in the USA(7). It
is possible that this may become a considerable issue in the
future.
Social and legal changes tend to trail
technological change. To serve the requirements of the new
technology, the regulatory system in Australia is in need of
adaptation. It can be argued that a system is required which could
decide not only on laboratory research and GMO releases for
research purposes (carried out by the Gene Manipulation Advisory
Committee-GMAC-in the past), but also for commercial use (for
example seed for farmers). To that end the Interim Office of the
Gene Technology Regulator (IOGTR) was instituted, with GMAC
transformed to GTAC-the Gene Technology Advisory Committee, now in
an advisory role to the IOGTR. The Interim Office is in the process
of setting up a more permanent system to be approved under a Bill
to be introduced in April 2000.
Institutional changes are also needed on the
consumer side. Other institutions important in this debate are
ANZFSC and the ANZ Food Authority (ANZFA) mandated to oversee and
enforce the Australia New Zealand Food Authority Act 1991,
under which responsibility for food labelling resides(8). After the
recent delay of the incorporation of labelling in the food
standards on the grounds of expense, the members of ANZFSC have
ordered a review of costs, among other things, and more action can
be expected in the near future. The Australian Quarantine and
Inspection Service (AQIS) and the National Registration Authority
for Agricultural and Veterinary Chemicals (NRA) carry
responsibility for compliance of imports and exports with domestic
and overseas regulations, and for approving crops that express
traits related to agricultural and veterinary chemicals,
respectively.
Australia stands at the crossroads in its
management of GMOs. Too cautious an approach may see it lose market
opportunities and market share to competitors, if they have
benefited from the new technology. On the other hand, a too liberal
interpretation may see it out of step with some of its major
markets, and raise concerns about as yet unknown food safety and
environmental issues.
Introduction
In the 1980s interest in genetic engineering
increased, especially from industry and scientists, and this
interest accelerated to enthusiasm in the 1990s. While the use of
the technology is going through a period of enormous growth, the
level of controversy grows exponentially, albeit with a time lag.
This controversy started mainly in European countries, but is
presently becoming an issue also in the USA. Australia and Asian(9)
countries are also involved as, apart from domestic protests,
events abroad are of utmost importance in determining continued or
new trading possibilities.
With the announcement of expenditure in the
1999-2000 budget of $17.5 million on issues related to GE, the
Australian Government signalled its intention to move forward in
accepting GE as a significant technology in agriculture. The policy
issue became one of how best to manage the technology. As part of
the management policy, the Interim Office of Gene Technology was
set up as the regulator of genetically engineered products, both in
the area of research and commercial releases into the
environment(10). It is also to develop an institutional framework
to accommodate the technology in the future.
In this paper the main issues related to genetic
engineering in agriculture are examined, together with the
Government's past involvement in the issues. This then leads to an
examination of requirements for future Government involvement.
The first issue to be discussed is what GE
actually is. Two features are identified: the speeding up of
conventional breeding programs, and the recombination of genes in
ways not possible with conventional breeding. The implications of
this second use of the technology for agriculture are then
discussed. Only issues related to agriculture are covered in this
paper. Medical advances and other benefits are not addressed.
Clearly this new technology has enormous
potential. Increased productivity is expected, both in terms of
quantity and quality of products. For example, producing rice
varieties with enhanced vitamin content may reduce the incidence of
childhood blindness in some poor countries. If this was all,
government would have a limited role to play in this area, as the
market would sort out whether and to what extent this technology
would be adopted. Government involvement could then be restricted
to making sure that appropriate property rights are in place, and
to the provision of seeding money to help overcome thresholds if
deemed appropriate.
However, a less optimistic view is that there
are down sides to genetically modified organisms (GMOs) which
require governments to play a role. The main issues mentioned
generally pertain to human health and effects on the environment.
It is argued that, without government intervention, a higher than
socially optimum uptake of the technology would take place. Most of
the controversy relates to the degree of problems (actual and
potential) and, in the absence of agreement between the parties
about the severity of the problems, the right of consumers to make
up their own mind and to choose through product differentiation
(product labelling).
In addition, wider-ranging issues are coming to
the fore, such as trade and investments in the area. Australian
compliance with international requirements is scrutinised to
determine whether Australia can implement certain regulations
without international repercussions. The need for, and advisability
of, public investment is touched upon.
The last part of the paper looks at institutions
which have handled issues related to GE, and what kind of
institutions are needed in the future. The nature of GE implies
that some of the institutions on which we have relied in the past
may need to be modified to better regulate the new technology.
What is genetic engineering?
The techniques of plant and animal breeding have
long been used to modify characteristics of plants and animals. In
agriculture, the focus has been mainly on increased productivity
(higher yields with the use of similar inputs) or breeding for
characteristics which customers were interested to buy (such as a
change in taste, colour, smell). The conventional way of plant
breeding usually occurs within species, for example, different
varieties of wheat. Some interspecies crosses can be made with this
technology, such as a cross between a donkey and horse resulting in
a mule or ass, or between wheat and rye resulting in triticale.
Breeding methods of the past often required
considerable time before the breeder arrived at the stage where the
new product was ready for commercial sale. Stages of breeding
include crossing of two individual specimens at time of maturity,
harvesting the fruits of the next generation and selecting those
that showed the desired characteristics. After a number of such
generations, the seed is then multiplied on a large scale to
produce enough for commercial activities. Time needed to arrive at
this last stage depends on the type of crop or animal, influenced
by the place of production. For example, the time factor is not
nearly as important in annual crops, where seeds are produced
within a few months of sowing, as with perennial crops that take
several years to mature, such as fruit trees. Similar examples can
be found in the animal world, with fast and slow breeding animals
(for example, mice and cattle). In places where crops can be grown
the whole year round (in greenhouses or the tropics) the time
between the first crossing and the desired end-product can be
shortened compared with less growth-promoting conditions.
GE takes this process to a different level. The
US Office of Technology Assessment (1992) describes GE as:
...an application of biotechnology involving the
manipulation of DNA and the transfer of gene components between
species in order to encourage replication of desired traits.
The importance of GE is twofold. First of all,
it has the capacity to speed up the process of combining
characteristics from two different individuals, such as with
conventional breeding. The gene from one specimen is mechanically
inserted in a cell of the other, and a combination of
characteristics can occur. Multiplication for commercial purposes
can start immediately. This reduces the breeding time, enabling the
production cost of this new product to decrease, and marketing to
commence sooner, with a speedier recovery of costs.
Secondly, apart from speeding up the
conventional process, GE can also accomplish combinations of
organisms that have not been possible in the past. This enables not
only changes in existing characteristics which were not possible
with conventional breeding but came from the same species. With
this new technology, also previously non-existing characteristics
can be introduced to a particular plant or animal that originates
from a different species, or even form of life (creating transgenic
varieties). An oft-quoted example is inserting certain fish genes
in plants to promote cold resistance. It is this aspect which is
the most controversial.
A new technology: who
gains?
As with all widespread productivity enhancement
in agriculture, the benefits of GMOs accrue first of all, to the
producers. If farmers cannot see their way to gain from the
introduction of a new technology, it will not be adopted. For
example, the acceptance of tractors on farms would never have
happened if farmers had considered horses to be superior to
tractors. The gains could be in relative terms, and adoption may
occur on the grounds that non-adoption would leave farmers in one
country behind developments in other countries, with resulting
decreasing returns. This gain can be in the form of financial or
non-financial gain (for example, less physical contact with
pesticides as one source suggests(11)), or it can be in enticing
the consumers to buy more, thereby making marketing easier. That
does not mean that others cannot also gain from the invention, and
this does happen both upstream and downstream. Upstream, those who
invent the new technology may gain from selling it, and downstream
the consumer may gain from higher quality or lower prices.
In what way the different parties will benefit
depends on their responsiveness to changes in prices
(responsiveness of supply and demand). For example, if farmers can
produce apples for 10 per cent less of the cost with a GMO variety,
part of that increased profit will go to the tree stock producer,
as the farmer would be willing to pay more for the new variety. How
much will go to the stock producer depends to a large extent on the
production costs of the invention, on how much competition there is
in the supply of the product, and on how much can be sold at
different price levels. It is argued that, in the long run, most of
the potential farm profits (left after paying for the input
package) will go to the consumer, as farmers compete with one
another to sell the product.
Agriculture does not operate in a vacuum, so
there can be other gains and losses from farmers adopting a new
technology. One is off-farm effects, generally identified as an
environmental impact, which accrue to anybody not on the farm where
the gains/cost originate. This can include other farms. Gains/costs
can also accrue to consumers.
It seems reasonable to assume that those who
consider that they will gain or lose most by adoption of the
technology are those who have been most prominent in the debate on
GE technology. They are many and varied, and can be gleaned from
the submissions to the House of Representatives Standing Committee
of Primary Industries and Regional Services on primary producer
access to gene technology. They include members of the input
industries, researchers, farmer organisations, environment groups,
politicians and government bodies. One of the umbrella groups of
farmers, input industries and researchers is the Agrifood Alliance
Australia (AAA), which includes:
-
- National Farmers' Federation
-
- Avcare (National Association of Crop Production and Animal
Health)
-
- Grains Research and Development Corporation
-
- Seed Industry Association of Australia
-
- Australian Biotechnology Association
-
- Cooperative Research Centres Association
-
- Pivot Limited.
Other players include the Australian
Conservation Foundation (GeneEthics Network) and the Organic
Federation of Australia (OFA). The Australian Consumers'
Association (ACA) was heavily involved with the Concensus
Conference 'Gene Technology in the Food Chain'(12), convened by the
Australian Museum in March 1999, to try to bring together disparate
points of view.
Farmers
At present it is far too early to estimate what
the potential benefits of GMOs to farmers are likely to be. Most of
the attention of the industry has been devoted to herbicide
tolerance (in crops such as maize, soybeans, canola and cotton) and
insecticide inclusion in crops. The inclusion of the natural
pesticide Bacillus thuringiensis (Bt) in maize and cotton plants is
designed to kill certain pests, such as Heliothis (the cotton boll
worm). The target insects ingest lethal doses when eating the
plant, thus avoiding the need for an insecticide application. In
Australia, the only GMO which has been commercially available to
farmers is Bt cotton.
One reason that farmers are interested in this
technology is increased returns to farming. This can occur by a
change in yields or input costs or a combination of the two. It is
important, though, that knowledge about the change in one of those
factors does not give an indication of the total effect. For
example, a decrease in yield, resulting in lower gross returns does
not disadvantage a farmer if the decrease in input cost (such as
cost of seed and pesticide) compensates for this loss. Furthermore,
a technique that permits a change in rotation may also be an
advantage without any change in yields.
Yields and farm returns
Yield comparisons in the USA reviewed here are
shown in Box 1.
The University of Wisconsin carried out a survey
in eight states of Northern USA on Roundup Ready soybean (a variety
tolerant to the herbicide Roundup). The survey shows decreases in
comparison with the non-GMO crop at an average of seven per cent
for the top variety, six per cent for the top five varieties, and
five per cent for all varieties(13). Seed companies found similar
figures in trials in southern Wisconsin and central and southern
Minnesota. No net farm returns were calculated.
The US Department of Agriculture has published
figures of its analysis of different crops, but warns that figures
for yields and pesticide use from farm survey data, as they supply
the data, are biased.(14) Yields of herbicide tolerant maize are
shown as between -10 and +25 per cent different from non-GMO crops,
measured in different states in the years 1996 to 1998. For
soybeans the comparable figures were between -6 and +21 per cent,
and for cotton between -12 and +19 per cent. The Bt crops showed a
more positive picture, with maize varying between -2 and +30 per
cent, and for cotton up to 26 per cent.
Iowa State University took the USDA's figures
for Iowa and calculated farm returns for GE and non-GE crops. In
1998 just over 40 per cent of the area under soybeans were sown to
GE varieties, which showed a 4 per cent decrease in yield(15). Bt
maize in the same state and year yielded 9 per cent higher.
Calculations of returns showed GE soybeans to have a marginally
lower return to land and labour (US$357 as compared with US$360 per
hectare for non-GE crops). Bt maize returned US$9.80 per hectare
more than non-GE maize. For both GE crops seed was more expensive
than for the conventional crop. This may illustrate the notion of
input companies being able to capture some of the gain of the new
technology, as mentioned above. Australian buyers of imported GE
soybeans (farmers who use the product as input in their livestock
operations) may have been other beneficiaries of the technology
adopted by USA farmers by paying lower prices.(16) If this
technology indeed does lower consumer prices, this has implications
for soybean producers in Australia, both in connection with output
prices of that product, and also of other crops that can be used as
substitutes for soybeans, such as cereals.
Box 1: some
parameters of GE crops
|
% change
|
|
Yield
|
Return (US$/ha)
|
University of Wisconsin
Herbicide-tolerant
Soybean variety:
Top variety
Top 5 varieties
All varieties
|
-7
-6
-5
|
|
USDA
Herbicide-tolerant
Maize
Soybean
Cotton
Bt-incorporated:
Maize
Cotton
|
-10 to +25
-6 to +21
-12 to +19
-2 to +30
to +26
|
|
Iowa State
Herbicide-tolerant
Soybean
Bt-incorporated
Maize
|
-4
+9
|
-3
+10
|
Source: US Department of Agriculture.
Commercial Bt cotton has been grown in Australia
since 1996, when 30 000 hectares were under Ingard Australia's
first GMO crop. In 1998 this had risen to 85 000 hectares, 16 per
cent of the total area under the crop. For the last two years,
yields have been similar or slightly lower than for the
conventional varieties. In 1997-98 the returns from the GE
varieties were rather variable, with approximately half of the
growers receiving less than those with conventional cotton, and the
rest more.(17) Despite this, at least some Australian cotton
growers are eager to have access to the seed, as the Australian
Cotton Industry Council is trying to persuade Monsanto (the company
which is in the process of developing a two-gene resistant variety)
to commercialise its new seed. However, as there is a 6 to 13 per
cent yield drag in trials, Monsanto has decided not to release it
at present.(18) In 1999 permission has been given for 30 per cent
of the total area under cotton, or 130 000 hectares, to be grown in
Bt cotton.(19) This is the maximum acreage allowed under NRA
regulation, instituted to manage pest resistance problems.
The National Farmers' Federation (NFF) has long
been a proponent of access for Australian farmers to GMOs. Amongst
other beneficial characteristics of this new technology, the NFF
mentions a decrease in use of fertiliser, pesticide, labour and
energy; lower input costs; higher yields; better food quality;
better adaptation of crops to environmental requirements (drought,
salt) and environmental possibilities (nitrogen fixing), although
no evidence was provided to give weight to the list.(20) The NFF
mentions a 10 to 20 per cent yield increase in herbicide tolerant
canola in Canada (no reference provided).(21) No mention was made
of changes in other inputs, so that the effect on net farm income
is not clear.
Farmers' attitudes
Despite the NFF's enthusiasm, many farmers are
recorded as reticent about involvement with GMOs,(22) or still in
need to be convinced about its advantages.(23) Fifty-five per cent
of farmers favoured a five-year moratorium on GMO crops(24). Issues
of importance are demonstrated gains (not necessarily in decrease
in costs of one or more inputs or in increased yields, but in net
returns) and uncertainty over marketing possibilities of the crop
and liability towards others.
In summary, no overwhelming financial advantage
for farmers is yet apparent. In addition, some problems are
starting to present themselves more clearly. One is the possible
liability for contamination of other farmers' crops, an aspect not
yet discussed extensively in the farming community. In some crops,
such as canola which can pollinate plants further away then
previously thought,(25) the problem is likely to be larger than in
others, such as in cotton, which is a self-pollinator. Liability
becomes especially important when contamination means loss of
markets for other farmers.
Risks
Some countries have looked into the possibility
of insurance against damage from GMOs. In Spain, companies which
produce or plant GE crops will have to contribute to a fund
intended to cover environmental accidents.(26) In Switzerland, the
world's second largest insurance company mentions problems with
risk assessment of GMOs, as risks of genetic engineering cannot be
covered with classical liability insurance models.(27)
One group of farmers which can be disadvantaged
by contamination is organic farmers.(28) At present, they could
lose their organic certification if their crop were found to be
polluted with GMOs, with obvious effects on their farm returns.(29)
Some have already lost their market due to pollution from
neighbouring fields.(30) In Canada, where the organic markets
amounts to approximately $1 billion with 20 per cent annual growth
rates, decrease of the EU canola market from 83 tonnes in 1994-95
to 20 tonnes in 1997-98 was attributed at least partly to
uncertainty about the GE status of the crop.(31) In Switzerland,
the Government recently denied permission for a field trial of GE
maize, on the basis that it may contaminate organic crops.(32)
Conventional non-GMO farmers may also lose their
market with GMO contamination. For example, in late 1998, NSW
canola farmers sold the largest cargo ever to leave Australia (57
thousand tonnes valued at $26 million) to the EU. The reason for
the sales from Australia, instead of from Canada, was reported to
be that '...Australia is the only country to guarantee
non-genetically modified canola'.(33) However, even without the
commercialisation of GE canola in Australia, this market could be
disrupted by the existence of field trials, as pollen from such
fields can cause contamination in other fields.
In Canada, the National Farmers' Union (NFU)
wants the federal government to make agricultural biotechnology
companies financially responsible for what it calls the 'genetic
pollution' of organic and traditional crops.(34)
In 1998 the USA lost a 70 million bushel maize
market in the EU(35) and complained about the cost to maize farmers
due to the EU refusal to import GMO maize, estimated at US$200
million for that year.(36) In 1998 more than half of the soybeans
and almost as much maize was grown from GE seed.(37) But the
American Corn Growers Association expects that a considerably lower
acreage will be grown under GE maize in 2000. Four reasons cited
include loss of export(38) and domestic markets; questions over
cross pollination, testing and certification; concern over
grain-elevator insistence on segregation; and premiums being
offered for GE-free crops. It expects that non-GE seed shortage is
a real possibility, and mentions that '...Congressional oversight
hearings involving the seed companies should be held to determine
the availability of non-GMO seed'.
The decision of Archer Daniels Midland(39), one
of the biggest US agribusinesses and a leading maize processor, to
not buy or trade any GMO maize which had not been approved by the
European Union is bound to put pressure on farmers to return to
non-GE varieties. A. E. Staley, the US maize processing subsidiary
of Britain's Tate and Lyle, has taken a similar decision. This
means that two of the leading maize buyers in the US have decided
not to be involved with non-EU-approved maize, at least in the
short run.
In the long run, the marketing question is
whether consumers are willing to buy GE food, and if so, at what
price. But even if consumers are convinced that the two products
are similar, not warranting differentiation in marketing or price,
farmers are not likely to gain substantially from the introduction
of the technology, given the flow-on effects to other groups (input
suppliers and consumers). The question is then more what farmers
overseas do with the technology. Australian farmers would be
disadvantaged only if overseas competitors are able to use the
technology, produce commodities more cheaply and affect world
prices. Although some farmers may gain at present from adopting the
new technology, it seems that many perceive that their gain, if
any, may not be worth the risk of losing their (short-term?)
markets or being liable for other farmers' losses.
Labelling and food safety
Consumers
Although GMO products have been, and still are,
sold through traditional marketing channels, consumer protests have
made a number of food manufacturers and retail outlets react. For
example, in the UK companies such as Unilever(40) and Nestle(41)
have restricted the availability of GE products. Retailers such as
Iceland, Asda, Sainsbury and Waitrose decided to drop GMO products
early this year, and Tesco, UK's largest food retailer, expected
that its own-label products would be largely GMO-free by the end of
1999.(42) Also in Australia some companies have removed GMO
ingredients from a number of their key products.(43)
One way of differentiating between GMO and
non-GMO products is through labelling. Labelling can occur in many
forms, such as mandatory, voluntary and on the use or non-use of
GMOs, with or without a qualifier. Each has advantages and
disadvantages, often for different players. The decision, which
form to adopt, affects not only the cost of the product but also
influences sales.(44)
In Australia, the Australia New Zealand Food
Standards Council accepted mandatory labelling of GE products at
its December 1998 meeting (see below). This would enable consumers
to choose between products, and is advocated by consumers (ACA),
organic farmers (OFA) and environmental groups. Others, however,
are less enthusiastic about this policy, such as a number of
members of the Agrifood Alliance Australia, the Australian Food and
Grocery Council and the NSW Farmers Association. Labelling requires
segregation throughout the marketing chain, involving costs of
debatable magnitude.(45)
Labelling, which enables consumers to
differentiate between products, has gained popularity in other
countries. Japan has announced that mandatory labelling will be
required for GE products made from maize and soybeans, and this is
expected to be finalised in April 2000. GE products of which the
origin cannot be detected with present technology and products not
directly consumed by humans will be exempt. This would exclude
products such as soy oil and soy sauce, and animal feed.(46)
More recently, the EU has decided to make food
labelling mandatory for all food with a higher than 1 per cent GE
content.(47) Individual EU member countries may have additional
legislation. For example, in the UK all food establishments
(restaurants, pubs, etc.) must tell customers which foods contain
GMOs.(48)
Although the USA and Canada have been opposed to
labelling in the past, pressure has been rising to consider
labelling. For example, Canada was recently reported as considering
voluntary labels on GE food.(49)
'Substantial
equivalence'
Most of the discussion about the food safety
aspects of GMOs is centred on the concept of 'substantial
equivalence'.(50) This was first framed by the UN Food and
Agriculture Organization (FAO) and the World Health Organization
(WHO) in 1990. A number of food characteristics are taken as
indicating the substance of the product (such as nutrients,
allergens and natural toxins). If a GMO product is similar in those
aspects to a non-GMO product, then the GMO product is classified as
'substantially equivalent', implying that no special arrangements
need to be made to accept the product for domestic consumption or
import.
Some argue, however, that this measuring method
neglects to deal with the possibility of unexpected novel toxins
and allergens, as can occur with GMOs(51), and that this means that
GMOs should be tested like any new products. In pharmaceuticals
that are produced via GE, pre-clinical tests in animals need to be
carried out to assess acute toxicity, followed by extensive
clinical trials in human volunteers.
The British Medical Association (BMA), for one,
recommends a moratorium on the commercial planting of GMO crops.
It:
...believes that any conclusions upon the safety
of introducing genetically modified materials into the UK is
premature as there is insufficient evidence to inform the decision
making process at present. (52)
It expands on this viewpoint by mentioning the
need for more research on allergenicity (due to the technology
combining characteristics of different species) and possible
toxicity. The BMA finds the use of antibiotic marker genes (used to
be able to trace other gene transfers) completely unacceptable, as
that will bring forward resistance to antibiotics in human disease
strains.
In August 1999 the Australian Medical
Association (AMA) and the Public Health Association (PHA), together
with the ACA called on the Government to adopt mandatory labelling
of GMOs, as:
...Genetically modified foods have been
developed and introduced without regard for full and independent
safety evaluation, or full and adequate public consultation or
rigorous assessment of health impacts.(53)
Australian situation
In July 1998, ANZFSC accepted ANZFA's
recommendation to adopt a standard to regulate GE food into the
Food Standards Code. The standard was incorporated into the Food
Standards Code, and came into effect on 13 May 1999 as Standard
A18. It makes the sale of any GE food illegal, unless approved by
ANZFSC. Approval depends on whether the product is 'substantially
equivalent' to existing products with regard to nutritional
quality, composition, allergenicity, or end use. If the product is
significantly different then there is a provision for mandatory
labelling.
In December 1998 Australian and New Zealand Food
Standards Council (ANZFSC) directed the Australian and New Zealand
Food Authority (ANZFA) to draft an amendment to the Food Standard
Code which would require labelling also of GE products considered
to be 'substantially equivalent'. ANZFA conducted a public
consultation in May and June 1999, but progress was slow. At its
August meeting, ANZFSC requested an inter-governmental task force
to help amend the Code.
Just before the next ANZFSC meeting in October
1999, the Australian Prime Minister was reported as having
'...placed on hold' this inclusion.(54) Controversy raged over the
costs of the scheme, with wildly disparate estimates (between $150
million and $3 billion)(55), and few having had the chance to
consider them closely. The ANZFSC confirmed its commitment to
mandatory labelling of GE foods at the meeting, and
...resolved to conduct, as part of the
consultative process, an economic and financial assessment to more
accurately determine the cost of the draft Standard.
This will be considered at their next meeting,
early in 2000.(56)
Meanwhile, controversy sprang up around another
issue. Due to the changes in the Code, any GE food already sold in
Australia and New Zealand would have to be registered by ANZFA by
the time that Standard A18 became binding in May 1999. By the end
of March, only seven applications had been received, and ANZFSC
decided to amend Standard A18 in a fashion which made it possible
for GE foods to be accepted by May 1999 on different grounds than
originally intended. These amendments included applications to be
received within one month (by the end of April); the food to be
lawfully on the market overseas and be considered safe by an
overseas regulatory agency; and ANZFA must not have any indication
that the food was unsafe. Thirteen more applications were received
before the end of April and those, together with the first seven,
fulfilled the new requirements and were allowed to continue sale in
Australia and New Zealand. Assessments of these applications are
currently taking place.(57)
Consumers' concern
There is evidence to support the view that
consumers are concerned about GMOs. ANZFA's website provides
details of a public consultation on the issue of GMO labelling. The
results show that 91 per cent of submissions were in favour of
labelling, even for those products with 'the same properties as
conventional food' (that is, 'substantially equivalent')(58). A
CSIRO survey, which included the issue of labelling GMOs, showed
significant interest of consumers in labelling in general. 36 per
cent rated labelling of GMOs as very important, and only 7 per cent
as not important at all. ANZFA is opposed to mandatory labelling of
products which it considers 'substantially equivalent'.
Information
Many of the organisations concerned with the new
technology, government and private, consider information campaigns
as of major importance to overcome the consumers' doubts on GE.
However, in March 1999 the Australian Museum convened the Consensus
Conference to try and arrive at a 'citizens consensus' about the
future of genetic engineering in Australia(59). The outcome was a
position of considerable caution on the part of the participants.
For example, one of the recommendations was that no new GMOs were
to be released, unless several requirements were fulfilled, one of
which was labelling of all GMOs. It seems therefore somewhat
doubtful that an information campaign alone will convince people to
accept GE products.
International trade
obligations
The mandatory labelling issue raises the
question whether it is compliant with international trade
obligations. The NFF has postulated that '...mandatory labelling
requirements for GM foods may be a breach of Australia's
obligations under the World Trade Organisation' [sic](60)
The Australian Food Council has expressed a similar sentiment in
the past.(61) The arguments are complicated and experts do not
agree upon the issues.
In 1995 the World Trade Organization (WTO) was
established with Australia along with some 134 other nations as
members. It was set up for the purpose of facilitating free trade
between countries. The background to this issue is the recognition,
internationally, that countries have used all kinds of non-trade
issues, such as the potentially detrimental effect of imports on
the domestic environment (health of flora and fauna) as a pretext
for import restrictions. Some essential features of the WTO
are:
-
- sovereignty and consistency: every country has the right to
determine its own product standards, but they need to be consistent
across products
-
- most favoured nation equivalence: imports from all countries
need to be treated in a similar way. For example, with the
exception of ratified regional trade agreements, tariffs on imports
cannot differentiate between country of origin.
In other words, the principle of sovereignty
allows each country to decide on their acceptable level of risk
regarding product quality, with requirements of consistency across
products. Members are allowed to apply similar standards to imports
as they do to their own producers, but must treat 'like products'
in the same way, irrespective of source. It is the aim that product
standards are harmonised over time. This would occur via the Codex
Alimentarius Commission, established in 1962 under the FAO/WHO food
standards program. The Codex Alimentarius Committee has reached no
agreement on GE food labelling after five years of discussion and
the talks are still at the initial stage.(62)
Some new multilateral trade agreements (such as
the Sanitary and Phyto-Sanitary (SPS) Agreement, and the Technical
Barriers to Trade (TBT) Agreement were signed at the end of the
Uruguay Round establishing the WTO. These recognised the importance
of the environment and the precautionary principle in relation to
trade.
The SPS Agreement allows factors such as health
consideration for people, flora and fauna to be taken into account
when determining import restrictions, but they must be
scientifically justifiable and consistent across products. For
example, the WTO recently ruled that Australia cannot prohibit
imports of salmon because of fear of disease for local fish
production, and at the same time allow the import of herring used
as bait, and ornamental finfish that can also transmit the same
diseases(63). The precautionary principle can be used, implying
that, if no scientific risk assessment is available, decisions can
still be made to restrict import on grounds of possible risk.
However, efforts need to be made to obtain evidence within a
reasonable time.(64)
The TBT Agreement complements the SPS Agreement,
and regulates the setting of technical standards, including product
and process standards.
With these rules it seems, at first sight, that
there should not be problems for a country to introduce labelling
legislation for certain kinds of food, and expecting importers to
keep to the labelling requirements. However, opinions are divided
on this issue. Some argue that, because differentiating between
import sources on the basis of differences in production processes
(as opposed to products) is not allowed, enforcing labelling for
GMOs would be unlawful under the WTO rules'.(65), (66) The argument
is that, if a product is deemed to be 'substantially equivalent',
forcing producers to show from which seed the crop is produced is
unlawful. That is, the difference in the two products is considered
to be one of process, not of product. The WTO has established that
discrimination on the ground of process is illegal, such as in the
case of tuna caught in dolphin-safe nets. Others opine that, as
tests can establish a difference between GMOs and non-GMOs (that
is, between the two products), '...it is hardly surprising that
commentators are predicting that biotechnology will provide
stimulating debate in the forthcoming WTO negotiations'.(67)
This last source also proposes that, since the
GMO issue is one of consumer choice and not of consumer safety
(which would have brought it under the SPS Agreement), the issue is
likely to be judged under the TBT Agreement, which could allow the
inclusion of processes as a basis of differences.(68) However, at
present this remains a contentious issue.
The above should give a good indication that, at
present, questions about compliance of labelling GMOs with WTO
rules are not easy to answer. The EU will insist that the consumer
has the right to know, and that mandatory labelling schemes are
allowed.(69) The USA is expected to argue the case that mandatory
labelling is contrary to WTO rules.
The WTO itself provides some information on the
topic, basically sounding positive about environmental labelling
programs, but concluding that:
...Further discussion is needed on how the use
in eco-labelling programmes of criteria based on
non-product-related processes and production methods should be
treated under the rules of the WTO Agreement on Technical Barriers
to Trade.(70)
The Biosafety Protocol on Transboundary
Movements of Living Modified Organisms is currently being
negotiated under the Convention on Biological Diversity. Its stated
aim is to govern the movement across country borders of 'living
modified organisms (LMOs) .... that may have an adverse effect on
the conservation and sustainable use of biological diversity.'
The Biosafety Protocol, if ratified, could have
significant impact on the international trade and transport of live
LMOs, although its emphasis is the impact of such GMOs on
biodiversity. Negotiations on the Protocol broke down in Cartegena,
Columbia in February 1999 and are due to recommence in Montreal,
Canada at the end of January 2000.
Environmental
impacts
Many claims are made about the environmental
effects of GMOs, ranging from positive to negative.
The main positive environmental effects of GE
emphasised to date are that this technology facilitates a reduction
in the need for pesticides in farming. Examples are Roundup Ready
soybeans, and Bt maize and Bt cotton. It should be noted that these
effects are not really positive in the strict sense of the word,
but they alleviate the negative effects of agriculture as presently
practised by most farmers in Australia. And it should be borne in
mind that, if the aim of the technology is to decrease pesticide
use on farms, other production methods are available.(71)
Although, at face value, pesticide reduction is
likely with this new technology, it is important to examine each
case carefully. For example, Roundup Ready soybean is said to need
less herbicide, as the decision about spraying can be taken after
the time of planting. At that time it would be clear whether the
growing conditions warrant expenditure on this input. If adverse
conditions occur, such as droughts or floods, frequently
experienced by Australian farmers, herbicide use can be postponed
or cancelled. Some data support this argument, although it is
mainly a mixed picture. The USDA's data show that less pesticides
were required at three out of five locations with
herbicide-resistant soybeans, and at one out of two locations where
cotton was grown. For insecticides, the relevant figures are one
out of one location for Bt maize, and two out of three for Bt
cotton(72). The Iowa study based on the USDA data reports 30 per
cent reductions in pesticide costs for the GE soybeans, and 22 per
cent for Bt maize.(73) Others point out that herbicide use is more
complicated, and that a reduction in total use with the
introduction of herbicide resistant crops is not so clear-cut.(74)
One of the reasons is that, once the farmer plants
herbicide-resistant crops, the main technology used against weeds
is then likely to be the use of herbicides, instead of a
combination of methods including herbicide use, crop rotations,
cultivation or cover crops.
Over time a number of negative effects have been
pointed out. Problems for farmers who have decided not to use GE
crops have been mentioned above, especially for crops that are
cross-pollinators. Even if buffer zones were sufficient to deter
cross-pollination(75), it would be impossible to guarantee
separation of the different varieties in the long run. For example,
seed blown from trucks during transport ensures unintentional
contamination of sites, which over time will affect other sites. It
is suggested that such spread of GMO plants will inevitably lead to
the appearance of superweeds, through crossing with plants in the
wild which are closely related (such as mustard weed with
canola)(76).
Another major concern is that the wide
distribution of a limited number of crop varieties means restricted
genetic diversity, thereby making an outbreak of diseases and pests
over large areas more likely in the future. Already, limited supply
of non-GMO varieties may be a concern in the USA (77). Although a
decrease in bio-diversity is an area of concern at present, the
widespread introduction of GMOs is thought to increase this
trend.
As development of pest resistance to the
in-built pesticide is likely to happen sooner or later(78) it is
argued that, in the long-term, not much gain is to be made from the
application of the technology. Opinions have been expressed that
even a few years' reduction in pesticide use should be worth the
investment for environmental reasons. Another point is that other
management systems (such as organic agriculture), which are at
present using BT sparingly, may soon not be able to use this
technique, due to overall resistance of the pests.
Concerns from environmentalists include the
unpredictability of new species: about where they could spread(79),
how they can mutate, and about their effect on other forms of life.
Concerns have been expressed about the development of new virulent
strains of viruses, especially in soil or the alimentary tracts of
mammals, which may create conditions for genes in transgenic plants
engineered for viral resistance with viral genes, to recombine with
pathogens, creating new pathogens.(80) A well-publicised example of
effect on non-target organisms is the case of pollen of Bt maize
that affects the Monarch butterfly under laboratory conditions(81),
but effects on other organisms in the field have also been
shown.(82) On these points, claims and counterclaims(83) are made,
but perhaps the main point is the uncertainty involved with the
releases, releases that may bring about unexpected and
unpredictable, and in some cases irretrievable, consequences.
Investors
The opinion has been expressed in Australia that
it is important for the country to be involved in the developmental
phase of GMOs. This is seen as a way in which to keep the seed
costs down for farmers, and make maximum use of already invested
public funding in the raw material used in GE.(84) A similar
thought is expressed by the Department of Agriculture, Fisheries
and Forestry-Australia (AFFA). It points out that Australian
researchers:
...can't maximise the returns to their
discoveries, when there is no local firm which is able and willing
to complete the development and bring the product to market, or
with the international infrastructure to sell it effectively
worldwide(85).
Another reason to encourage local investment in
GE technology is to enable the development of GE crops of interest
to Australian growers. Australian investments would facilitate
development of crops important for Australia, in which
international firms are not interested due to the limited size of
the market.(86) However, if international investors do not consider
the Australian market worthwhile, then it is difficult to see how
Australian investors would find it interesting, unless this
investment originates from the public purse.
The lack of capital availability to set up such
ventures is expected to be influenced by risk of failure,
complexity of institutional arrangements regarding ownership of the
technology, innovations which make investments more attractive, and
market resistance to GMO products.(87) In that vein, some applaud
the Government's overhaul of the capital gains tax system, which is
expected to encourage domestic and overseas investments into
Australian innovations.(88)
Internationally there seems to be some pressure
away from investments into this technology, as witnessed by the
Deutsche Bank which '...advised the world's largest investors to
sell their shares in leading companies involved in the development
of genetically modified organisms because consumers do not want to
buy their products' .(89) Shares of Monsanto, a major
company involved, are reported to have fallen over the last half
year up until August 1999, against a rising trend.(90)
Biotechnology companies in Australia in general are reported as
having obtained net profit margins (before tax) of 0.15 per cent
over the last financial year.(91)
Other deterrents for investors could well be an
anti-trust lawsuit to be brought in the USA announced in September
1999(92), and a suit to challenge the legality of introducing
GMOs.(93) The issue here is whether the EPA approved Bt crops
without fully assessing their environmental safety.
Institutional
arrangements
Where issues of human health and environment are
involved substantial market failure occurs, and governments have a
role to play to protect people and the environment. This role is
played via regulations and institutions.
Genetic engineering issues were relevant before
some of the organisations, presently involved, existed. The
Australian Association for the Advancement of Science (AAAS) began
monitoring gene technology developments in the 1970s and the
Recombinant DNA Monitoring Committee was established in the
Department of Industry, Technology and Commerce (DITAC) in 1982. In
1987 it was reconstituted and in 1988 was moved to the Department
of Administrative Services where it took on the name of Genetic
Manipulation Advisory Committee (GMAC). It had the task to oversee
the development and use of novel genetic manipulation techniques in
Australia and offer advice to the Minister.
More recently, the Interim Office of the Gene
Technology Regulator (IOGTR) has been instituted to take a leading
role in this area. GMAC can be considered to be the forerunner of
the IOGTR. It is, however, still in existence and, although not
strictly a regulatory body, some details are given on this
organisation before discussing others.
In agriculture, regulations related to the
technology of genetic engineering have been in the hands of several
bodies, the Australian and New Zealand Food Standards Council
(ANZFSC), the Australian Quarantine Inspection Service (AQIS) and
the National Registration Authority for Agricultural and Veterinary
Chemicals (NRA).
Apart from regulating the industry, government
also has the task of informing the public about biotechnology in
Australia. Biotechnology Australia was formed this year in the
Department of Industry Science and Resources, with $10 million to
spend over two years. Part of that budget, $1.7 million per year
for two years, is to be spent to educate Australians on the issue
of genetic engineering.
Genetic
Manipulation Advisory Committee
GMAC is a non-statutory body established in 1987
and, at that time, was located in the Department of Industry,
Technology and Commerce. It replaced and extended the work of the
Recombinant DNA Monitoring Committee (RDMC). In June 1999,
responsibility for GMAC was transferred to the Health and Aged Care
portfolio and it presently advises the newly established IOGTR.
The Committee consists of about 20 part-time
members, drawn from disciplines relevant to assessing genetic
manipulation proposals, and appointed by the Minister for Health
and Aged Care for their expertise rather than as representatives of
a particular interest group.
Guidelines for small and large-scale research
work, for deliberate release and for the potential for unintended
release of genetically engineered organisms were in operation.
These were not compulsory, although GMAC maintained that
'...sanctions could be implemented if a researcher refused to abide
by GMAC's advice'. The example of researchers being required to
sign agreements before being awarded funding was given.(94)
Obviously not all those involved in the development of gene
technology were dependent on these kinds of arrangements, and it is
not clear how those who were not dependent on the public purse
could be compelled to comply with GMAC's guidelines. GMACs lack of
legal teeth is acknowledged by IOGTR(95), although breaches of
their guidelines are shown to be few, and probably not
far-reaching.
Recently, GMAC has transformed into an advisory
body to the IOGTR, and will be called the Gene Technology Advisory
Committee (GTAC). IOGTR has outlined the way ahead for GTAC. It
will continue to oversee research and releases of GMOs of organisms
which are unlikely to occur in nature or likely to pose a hazard to
public health or to the environment(96). It will also be
responsible for identifying potential hazards and appropriate
procedures to ensure safety.
Interim Office of the Gene Technology
Regulator
The aim of the Government is to set up a
regulatory framework in which all matters concerning genetic
engineering can be taken care of. It is the intention that a Gene
Technology Bill will be introduced into Federal Parliament in April
2000(97). The Office of the Genetic Technology Regulator (OGTR),
which will administer the bill, is expected to be fully operational
no later than early 2001. It will be housed in the Therapeutic
Goods Administration (TGA) of the Department of Health and Aged
Care, indicating the Government's concern to separate from industry
matters of public health and safety and of environment. However,
public interest groups wanted the OTGR established in Environment
Australia because they felt that its presence in the TGA creates a
concentration of interests on drugs, tests and human gene therapies
which ought to be separate from professional and industrial medical
interests close to the TGA.
The OGTR will work closely with State and
Territory Governments.
Meanwhile, the Interim OGTR, instituted in
August 1999, performs the tasks of regulator. To that end it is
to:
-
- regulate all aspects of the development, production and use of
genetically modified organisms (GMOs) and their products, where no
other existing regulatory body has responsibility
-
- work with other regulatory bodies to ensure the consistent
application of standards and to harmonise genetic safety
assessments across all systems of regulation.(98)
In the performance of its tasks, it will draw
upon existing legislation. In agriculture this includes:
-
- foods: Australia New Zealand Food Authority Act 1991,
administered by ANZFA and accompanying State/Territory
legislation
-
- agricultural and veterinary chemicals: Agricultural and
Chemicals Code Act 1994, administered by the NRA and
accompanying State/Territory legislation
-
- imports and exports: Quarantine Act 1908, Imported
Food Control Act 1992 and Export Control Act 1982,
administered by the Australian Quarantine and Inspection Service
(AQIS) and by Wild Life Protection legislation administered by
Environment Australia.
Since its inception, the IOGTR has emphasised a
need for:
-
- more transparency and accountability for the procedure of
considering/accepting applications
-
- clear identification of the decision maker, that is, the
Minister of Health and Aged Care makes the final decision
-
- putting in place a mechanism for enforcing compliance with
conditions of release of GMOs, which up until now had been on a
voluntary basis. (99)
While the OGTR is in the process of being set up
and its structure finalised, decisions will have to be made on the
commercialisation of general releases of GMOs. The IOGTR is
therefore involved in tasks such as revising GTAC's structure and
processes to enable more transparency and accountability;
establishing processes and procedures which facilitate decision
making regarding the release of GMOs; contractual arrangements
regarding GMOs; and taking on tasks where no other agency has the
responsibility.(100) In other words, the IOGTR is involved in
setting up the structure within which it, and presumably the OGTR,
will function.
Australia New
Zealand Food Authority Act 1991
The Australian Food Authority Act
originates from 1991. In 1995 Australia and New Zealand signed a
treaty to establish a joint system for developing food standards in
the two countries, and the act is now known as the Australia
New Zealand Food Authority Act 1991.
The Australian and New Zealand Food Authority
(ANZFA), a statutory authority under Australian Commonwealth Law,
operates under the Act. It has a Board with seven directors, and it
advises the Australian and New Zealand Food Standards Council
(ANZFSC), a body which consists of the Health Ministers of the
Australian Commonwealth and the State and Territories, and New
Zealand. The Council decides on food standards to operate in
Australia and New Zealand (partially).
ANZFA and ANZFSC are helped in their tasks by
the ANZFA Advisory Committee, consisting of the ANZFA Chairperson,
nominations of each State and Territory and of New Zealand, and
other specific government agencies from Australia and New Zealand.
ANZFA also uses the services of the Australian Government
Analytical Laboratory for testing.
ANZFA is part of a wider regulatory system.
Other legislation which affects food standards include:
-
- New Zealand Food (Amendment) Act 1996
-
- State and Territory food legislation based on a Model Food
Act
-
- Food Safety (hygiene) Regulations
-
- Commonwealth Trade Practices Act and its State and Territory
equivalents
-
- Commonwealth customs and quarantine legislation
-
- Trade measurement and packaging legislation
-
- Other legislation governing the food industry.
The importance of ANZFSC and ANZFA here is that
they are in the centre of decisions made on how to handle GE
food.
ANZFA stresses its partnership with all kinds of
different organisations: (101)
ANZFA's government partners and community and
industry stakeholders are fundamental to developing sound and
lasting food policy and practical food regulations. The Authority
works in partnership with Australian and New Zealand governments,
the Australian States and Territories and other government
agencies. The Authority's relationship with consumers, the food
industry, food technologists and professionals, and other
government agencies is the basis of its strength and
success.(102)
However, with so many stakeholders to take into
consideration, the question arises about weights attributed by
ANZFA to the opinion of each group. This situation, where ANZFA is
expected to take into account opinions of diverse groups, exposes a
considerable problem of how to deal with different constituents
when their views are directly opposed to one another.
Australian
Quarantine Inspection Scheme
AQIS administers the Quarantine Act
1908 that covers the regulation of imports of plants and
animals into Australia. AQIS also administers the import
requirements for imported foods on behalf of ANZFA as part of the
Imported Foods Control Act 1992. When an importer wants to
import an organism which has been genetically modified, AQIS
conducts a quarantine import risk assessment, and determines
whether risk management conditions need to be applied prior to
issuing an import permit. Exports are regulated under the
Export Control Act 1982. The Quarantine Proclamation
1998 provides for the prohibition
of plants pending assessment.(103)
National Registration Authority for
Agricultural and Veterinary Chemicals
The NRA operates under the Commonwealth
Agricultural and Veterinary Chemicals Code Act 1994, and
relevant State legislation. NRA's task is to evaluate all
agricultural and veterinary chemicals before use is allowed, and it
decides whether they fulfil requirements of registration, as
defined under the Act. Proposed changes within the Act can be
submitted to AFFA, by the NRA and other bodies. AFFA then refers it
to the Policy Committee, which will give a recommendation to the
Standing Committee on Agriculture and Resource Management (SCARM).
If SCARM approves of the change, this will then be drafted by AFFA
to go before Parliament as a Disallowable Instrument. These changes
will be mainly in the area of what substances the NRA could exclude
from its registration program.
The relevance of the NRA in connection with GE
is twofold, first of all animal vaccines and secondly substances
with pesticidal characteristics in crops. It is this last category
which has been important in recent years. Cotton, with a gene of
Bacillus thuringiensis (BT), has been approved in
Australia, to protect the plant from Heliothis. At the
time of the Act's adoption, it was phrased broadly enough to be
able to cover micro-organisms such as BT. The living cell, with the
new characteristic, was deemed to fall within that category. If
crops are engineered for characteristics other than those related
to pesticides, they would not fall under the jurisdiction of the
NRA.
The NRA is advised by:
-
- Environment Australia
-
- Worksafe Australia
-
- Chemical Policy Assessment Unit in the Department of
Health.
Although the NRA has provision for community
consultations, the problem of attributing weight to the opinions of
its stakeholders is as relevant for this organisation as it is for
ANZFA. Another issue concerns transparency. When details about a
product are submitted to the NRA for registration,
'commercial-in-confidence' conditions can apply. If submitted under
those conditions, no other group has access to the data, which
implies that a review or challenge by other interested stakeholders
cannot take place. There is no definition for
'commercial-in-confidence'. Public interest groups and
environmentalists see this lack of transparency as an impediment to
sound decision making.
Summary
and conclusions
In the last decade, a potential for significant
and sustained productivity increase in agriculture has come about
and the question is how Australia can best take advantage of this
technology.
Like much technological change, genetic
engineering precedes, yet necessitates, institutional and social
change. Discussion of the likely impacts and implications of GE is
needed before the appropriate changes can be made.
In considering the likely impacts, one of the
main conclusions of this paper is that there is a high level of
uncertainty attached to almost all factors involved in the issue of
genetic engineering in agriculture. Although there are expectations
of great progress in agriculture, the extent of this is largely
unknown. Uncertainties relate not only to productivity, but also to
the impact on consumers and the environment.
The absence of large productivity gains at
present, however, does not mean that they are not possible in the
future. It also needs to be recognised that it is not necessarily
the farmers who gain substantially from the introduction of a new
technology, although they may lose their competitive edge if they
lag other countries in technology adoption. However, even if
farmers were not to capture the gains from the adoption of GE
varieties, there can still be a gain for the country as a whole,
which could warrant public investment in the technology.
In connection with GMOs farmers face several
difficulties. One is consumer acceptance of the product, at least
in the short term, as there is an increasing demand for labelling
of the product to distinguish it from non-GE products. The issue of
'substantial equivalence' is yet to be settled. It is of course
possible that, with more information, there could be less
resistance to buying GE food than there appears to be at present.
This, at least, seems the assumption behind the emphasis of
government and industry bodies on an information campaign directed
to consumers. Recent experience with information provision on this
topic suggests, however, that the opposite can well be the case,
and that consumers become more wary of GMOs. With the divergent
points of view on the benefits and costs of the technology, a
crucial question is what part of the funding will be allocated to
either side.
Farmers also risk legal action from those who
want to keep their products GMO-free. This can occur especially
with wind or insect pollinated crops, such as maize and canola.
From the point of view of farmers who do not want their crop
cross-pollinated with GE pollen, introduction in Australia of the
crops at all becomes a problem as it will be difficult to contain
these plants once introduced, as with any new crops or varieties.
For example, when transported to the market, some seeds are bound
to blow off the vehicle, and roadside contamination is unavoidable
in the long run, with potential long-term consequences for the
whole of the country. At present it is not clear who will bear the
costs of such contaminations, and this will need attention. It is
therefore perhaps not surprising that the majority of farmers in an
Australian survey indicated their preference for a moratorium on
GMOs.
The environmental issues involved are also
significant. A decrease in pesticide use is heralded as a great
environmental improvement by GE proponents. Although it is not
clear yet that there are significant benefits, especially in the
long run and on a large scale, any decrease may be seen as an
improvement. On the other hand, the escape of undesirable genes
into the environment with no possibility of ever recalling them
seems a risk worth paying attention to. A further environmental
issue is the trend of decreasing bio-diversity.
Internationally, the issue is important in
trade. The EU and Japan support the right of consumers to demand
mandatory labelling of GE products. The USA is opposed to mandatory
labelling, at least at present. The WTO meeting at the end of
November will very likely put this issue on the agenda for
discussions in the next round of multilateral trade negotiations,
but there is no guarantee that it will be resolved shortly.
At present the IOGTR is in the position of
setting up a framework to regulate the industry, which should take
account of the various issues discussed in this paper. Processes
are to be established to enable use of genetic engineered products
without jeopardising the safety of food and the environment. The
issues of transparency and accountability of the GE regulatory
process are considered important, as is public consultation. The
issue of 'commercial-in-confidence' will need attention, as present
practices mean that evidence provided in the process of GMO
acceptance cannot be examined by other parties. This hinders
transparency and accountability.
Given the prevailing uncertainty and public
concern about many aspects of GE products, and the importance of GE
policy for Australia's farming future, Australia can only benefit
from input from all directions when deciding which way to go at the
crossroads.
Endnotes
-
- Hon. Nick Minchin, 'Funding for Biotechnology Strategy',
Media Release 11 May 1999.
- National Farmers' Federation, Submission to the House of
Representatives Standing Committee on Primary Industries and
Regional Services Inquiry into Primary Producer Access to Gene
Technology, June 1999.
- M. Ragg, 'Farmers make a meal of technology debate', Sydney
Morning Herald, 21 July 1999.
- Anne Lloyd, 'Farmers uncertain about GM Crops. Clear Message
from survey: "Convince me!", Rural Press Report, 15
September 1999.
- Farm Weekly, 16 September 1999, pp. 3-4.
- Nikki Tait, 'Top US buyers spurn modified corn', Financial
Times: World Trade, 15 April 1999.
- Radio National Breakfast, 'Legal action planned to prevent
major companies using genetic engineering to gain control of world
agriculture', with G. Doogue, 22 September 1999.
- See also Rosemary Polya, 'Genetically Modified Foods - Are We
Worried Yet', Current Issues Brief No. 12, Department of
the Parliamentary Library, Canberra 1999, pp. 6-7.
- Craik Skehan, 'Billions at stake as food is frozen out',
Sydney Morning Herald, 27 October 1999.
- Hon. Dr Michael Wooldridge, 'New Safety: Measures for
Genetically Modified Products', Media Release, 22 August
1999.
- Charles Benbrook, 'Evidence of the magnitude and consequences
of the Roundup Ready soybean yield drag from university-based
varietal trials in 1998, AgBioTech InfoNet Technical
Paper, no. 1, 13 July 1999.
Also on:
http://www.biotech-info.net/RR_yield_drag_98.pdf.
- See: http:/www.consensusconference.chirp.com.au.
- Charles Benbrook, 'Evidence of the magnitude and consequences
of the Roundup Ready soybean yield drag from university-based
varietal trials in 1998', AgBioTech InfoNet Technical
Paper, no. 1, 13 July 1999.
Also on:
http://www.biotech-info.net/RR_yield_drag_98.pdf.
- See: http://www.econ.ag.gov/whatsnew/issues/gmo/modeling.htm,
'In 'uncontrolled experiments,' such as when analyzing farm survey
data, caution must be exercised because conditions other than the
'treatment' are not equal. Thus, differences between mean estimates
for yields and pesticide use from survey results cannot necessarily
be attributed to the use of genetic engineering technology since
the results are influenced by many other factors not controlled
for, including irrigation, weather, soils, nutrient and pest
management practices, other cropping practices, operator
characteristics, pest pressures, and others.'
- Mike Duffy and Matt Ernst, 'Does planting GMO seed boost
farmers' profits?', Leopold Letter, vol.11, no. 3, Leopold
Centre for Sustainable Agriculture, Iowa State University, 1999.
Also on:
http://www.ag.iastate.edu/centers/leopold/fall99leoletterindex.html.
- R. Watt, 'GM crops will be assessed on profits', Australian
Farm Journal, August 1999, p. 14.
- B. Pyke, Transgenic cotton teaches a few lessons',
Australian Farm Journal, August 1999, p. 16.
- http://www.aph.gov.au/hansard/reps/commttee/r2648.pdf,
p. 27-28.
- Cathy Bolt, 'Growers want new cotton type', Australian
Financial Review, 4-5 September 1999.
- National Farmers' Federation, Submission to the House of
Representatives Standing Committee on Primary Industries and
Regional Services Inquiry into Primary Producer Access to Gene
Technology, June 1999.
- National Farmers' Federation, Submission to the House of
Representatives Standing Committee on Primary Industries and
Regional Services Inquiry into Primary Producer Access to Gene
Technology, p. S296, June 1999.
- M. Ragg, 'Farmers make a meal of technology debate', Sydney
Morning Herald, 21 July 1999.
- Anne Lloyd, 'Farmers uncertain about GM Crops. Clear Message
from survey: 'Convince me!', Rural Press Report, 15
September 1999.
- Farm Weekly, 16 September 1999, pp. 3-4.
- Nick Nuttall, 'Bees spread genes from GM crops', The
Times (UK), 15 April 1999.
- Xavier Bosch, 'Spain makes transgenic crop producers pay into
insurance fund', Nature, vol. 397, 25 February 1999.
- Bridges Weekly Trade News Digest, vol. 2, No. 47, 7
December 1998.
- The International Federation for Organic Agricultural Movements
voted against the use of GMOs in food production and agriculture at
its 12th Scientific Conference in November 1999
(Ecology and Farming, No. 20, January 1999, p. 29).
- C. Lyddon, 'Gene modification fears boosts organic produce',
Reuters, London, 20 April 1999.
- R. Barrett, 'Wind-blown genes cut into organic profits',
Wisconsin State Journal, 24 March 1999.
- B. Hoyle, 'Canadian farmers seek compensation for 'genetic
pollution', Nature Biotechnology, vol. 17, August
1999.
- Abbott, 'Swiss reject GM trial to protect organics',
Nature, 29 April, 1999.
- 'Australia to ship largest cargo of canola to Europe', Asia
Pulse, 8 January 1999.
- J. Paulson, 'NFU fights 'genetic pollution'; National farm
group wants Ottawa to make ag-biotech firms liable', The
Saskatoon Star Phoenix, 12 May 1999.
- Reuters, 3 March 1999.
- T. McDougal, 'Fears that GM crop impasse could spark agri-trade
war', Farmers Guardian, 19 June 1998.
- Reuters, 'US seeks 'sensible proposal' on biotech foods at
WTO', 21 October 1999. Can be found on:
http://www.agriculture.com/worldwide/AgricultureFarming/10_19_1999.reulb-story-bcwtousabiotech.html
- Trade related issues are covered in a later section.
- Nikki Tait, 'Top US buyers spurn modified corn', Financial
Times: World Trade, 15 April 1999.
- Nick Nuttall, 'Cap'n Birdseye puts freeze on GM foods date',
The Times (UK), 28 April 1999.
- Greenpeace, 'Nestles joins stampede to get out of GE food
products', London, 28 April 1999.
- Nick Nuttall, 'Cap'n Birdseye puts freeze on GM foods date',
The Times (UK), 28 April 1999.
- C. Bolt, 'Alliance to push benefits of biotechnology',
Australian Financial Review, 17 May 1999.
- See: http://www.agbioforum.missouri.edu/
- See also below, in Section Australia New Zealand Food
Authority Act 1991.
- Labels: Linking Producers and Consumers, vol. 3, no.
7, October 1999. Can be found on:
http://www.newsbulletin.org/bulletins/getcurrentbulletin.cfm?bulletin_id=28&sid=
- M. Smith, and M. Wrong, 'EU sets out plan for modified food
labels', Australian Financial Times, 22 October 1999.
- The Sunday Age, 'GM: Britain gets tough', 19 September
1999, p. 13.
- Labels: Linking Producers and Consumers, vol. 3, no.
6, August 1999. Can be found on:
http://www.newsbulletin.org/bulletins/getcurrentbulletin.cfm?bulletin_id=28&sid=
- Eric Millstone, Eric Brunner and Sue Mayer, 'Beyond
'substantial equivalence'', Nature, 401, pp.525-26, 7
October 1999.
- 'Physicians and Scientists for Responsible Application of
Science and Technology' maintain that unexpected substances may
appear due to GE, which would make these products 'new' on http://www.psrast.org/mianunpr.htm.htm.
They compare the methods of testing 'substantially equivalent' and
new products on: http://www.psrast.org/subeqow.htm.
- British Medical Association, 'The impact of genetic
modification on agriculture, food and health-An interim statement',
London, May 1999.
- Australian Medical Association, Public Health Association,
Australian Consumers' Association, 'Grave fears that gene food
lables will be denied to consumers', Media Release, 29
July 1999.
- B. Pearson, 'Howard scotches food label plans', Australian
Financial Review, 21 October 1999.
- See: http://www.anzfa.gov.au/documents/gen24_99.asp.
- 'Labelling of genetically modified food', ANZFA Media
Release, 22 October 1999.
- 'Food Produced using gene technology', ANZFA Fact
Sheet, August 1999, edition 7. See:
http://www.anzfa.gov.au/LatestMedia/FactSheets/Foods_Produced_Using_Gene_Technology
- 'Stakeholder views from a public consultation on the labelling
of foods produced using gene technology', ANZFA Fact
Sheet, 26 October 1999. Can be found on: http://www.anzfa.gov.au/LatestMedia/FactSheets/Stakeholder_Views_From_A_Public_Consultation.htm.
- Australian Consumers' Association, 'Gene technology in the food
chain', Lay Panel Report of the first Australian Consensus
Conference, Canberra, 10-12 March 1999.
- NFF, 'GMO food labelling may breach WTO rules', Media
Release, Canberra, 21 October 1999.
- Australian Food Council, 'Gene Technology Regulation - Sense
and Sensibility Prevails', Media Release, 24 February
1998.
- Codex Alimentarius Commission, 'Report of the 27th
Session of the Codex Committee on Food Labelling', 27-30 April
1999, Ottawa.
- WTO, 'Australia - Measures affecting importation of salmon',
Report of the Appellate Body, WT/DS18/AB/R, 20 October
1998.
- Agreement on the Application of Sanitary and Phytosanitary
Measures, Article 5.7.
- In her testimony before the House of Representatives Standing
Committee of Primary Industries and Regional Services, Primary
Producer Access to Gene Technology, Dr Craig mentions that the NFF
received '...legal advice which suggests that the decision of ANZFA
may cause Australia to have trade problems in the WTO; that is
because of this whole issue of focussing on production and
processing methods, which is not a legitimate trade barrier to
impose'. 29 September 1999. See http://wopablue/hansard/reps/commttee/r2672.pdf,
p. 16.
- Oxley, 'Poor environmental policy - the fundamental problem in
the 'trade and environment' debate. Paper presented at the
Roundtable on Trade and Environment Conference, Canberra,
25 August 1999.
- J. McDonald, 'Mainstreaming ESD - Trade and environment in the
millennium Round'. Paper presented at the Roundtable on Trade
and Environment Conference, Canberra, 25 August 1999, p. 8.
- ibid., p. 40.
- ibid., p. 39, and speech by Ambassador of EU at National Press
Club, 21 October 1999.
- See: http://www.wto.org/wto/environ/eco.htm.
- Nic Lampkin and Susanne Padel, 'The Economics of Organic
Farming', CAB, Wallingford, UK, 1994.
- See: http://www.econ.ag.gov/whatsnew/issues/biotech/Table3.pdf.
- Mike Duffy and Matt Ernst, 'Does planting GMO seed boost
farmers' profits?', Leopold Letter, vol. 11, no. 3,
Leopold Centre for Sustainable Agriculture, Iowa State University,
1999. Also on:
http://www.ag.iastate.edu/centers/leopold/fall99leoletterindex.html.
- Charles Benbrook, 'Evidence of the magnitude and consequences
of the Roundup Ready soybean yield drag from university-based
varietal trials in 1998', AgBioTech InfoNet Technical
Paper no. 1, 13 July 1999.
Also on:
http://www.biotech-info.net/RR_yield_drag_98.pdf.
- Nick Nuttall, 'Bees spread genes from GM crops', The
Times (UK) 15 April, 1999, reports that canola pollen can be
spread up to 4 kilometers from test sites, while buffer zones in
the UK are of 200 metres. Brian Hoyle, 'Canadian farmers seek
compensation for "genetic pollution'', Nature
Biotechnology, vol. 17, August 1999, reports spread of pollen
up to 8 km.
Louise Robson, reports on pollen from pine
trees, which can travel up to 600 kilometers (AAP: 'UK:
conservation groups call for worldwide GM forestry halt', 9
November 1999, Story no. 8666.)
- 'Engineered plants may spread genes to weeds', Nature
Magazine, 3 September 1998.
- Nikki Tait, 'Battle grows over modified food', Australian
Financial Times, 6 October 1999.
- Rural News, 'Study warns that Bt cotton may not be long term
solution', 3 September 1999. See:
http://www.abc.net.au/rural/news/stories/s49065.htm.
- M. Williamson, 'Environmental risks from the release of
genetically modified organisms (GMOs) - the need for molecular
ecology', Molecular Ecology 1992, 7, pp. 3-8.
- R.A. Steinbrecher, 'From Green to Gene Revolution: the
environmental risks of genetically engineered crops', The
Ecologist, 26, pp. 272-282, 1996.
- Carol Kaesuk Yoon, 'Pollen from genetically altered corn
threatens Monarch butterfly, study finds', The New York
Times, 20 May 1999.
- Nigel Hawkes, 'Ladybirds harmed in transgenic crop test',
The Times (UK), 22 October 1997.
- See: http://www.bio.org/food%26ag/bt0610.htm.
- Australian Biotechnology Association, Submission to the House
of Representatives Standing Committee of Primary Industries and
Regional Services, Primary Producer Access to Gene Technology,
Submission no. 39, 10 June 1999.
- Department of Agriculture, Fisheries and Forestry - Australia,
Submission to the House of Representatives Standing Committee of
Primary Industries and Regional Services, Primary Producer Access
to Gene Technology, Submission no. 77, 17 September 1999.
- National Farmers' Federation, Submission to the House of
Representatives Standing Committee of Primary Industries and
Regional Services, Primary Producer Access to Gene Technology,
Submission no. 36, 11 June 1999.
- Department of Agriculture, Fisheries and Forestry - Australia,
Submission to the House of Representatives Standing Committee of
Primary Industries and Regional Services, Primary Producer Access
to Gene Technology, Submission no. 77, 17 September 1999.
- Australian Biotechnology Association, 'Australian Biotechnology
Association strongly supports government capital gains tax system
overhaul', News Release, Gardenvale, 29 September 1999.
- Australian Financial Review, 'Seeds of discontent', 26
August 1999.
- Australian Financial Review, 26 August 1999.
- Helen Meredith, 'Tough times for the biotech companies',
Australian Financial Review, 7 October 1999, p. 12.
- Radio National Breakfast, 'Legal action planned to prevent
major companies using genetic engineering to gain control of world
agriculture', with G. Doogue, 22 September 1999.
- 'US groups sue over approval of Bt crops...', Nature,
vol. 397, 25 February 1999.
- Faragher, Galloway K., McLean, 'Regulatory framework for
genetically modified organisms in Australia', Paper presented at
the Outlook Conference of the Australian Bureau of Agricultural and
Resource Economics, February 1998, Volume 2, p. 106.
- Interim office of the Gene Technology Regulator, Submission to
the House of Representatives Standing Committee on Primary
Industries and Regional Services, Inquiry into the Primary Producer
Access to Gene Technology, 22 September 1999, p. 6.
- ibid., pp. 6-7.
- ibid., p. 14.
- Interim Office of the Gene Technology Regulator, Submission to
the House of Representatives Standing Committee on Primary
Industries and Regional Services, Inquiry into the Primary Producer
Access to Gene Technology, 22 September 1999, p. 6.
- ibid.
- ibid.
- Presentation to the Genetic Consensus Conference in March 1999,
M. Bun for the Australian Consumer Association.
- See: http://www.anzfa.gov.au.
- For more details see Rosemary Polya, 'Genetically Modified
Foods - Are We Worried Yet', Current Issues Brief No.
12, Department of the Parliamentary Library, Canberra 1999,
pp. 6-7.