GM crops in Australia Costs, profits and economic risks

Transcription

1 GM crops in Australia Costs, profits and economic risks Max Foster Economist

2 Overview Adoption and performance of current GM crops in Australia cotton Canola/rapeseed Risks with GM crops in Australia Market acceptance/coexistence The GM pipeline in Australia

3 GM cotton in Australia

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5 Adoption of GM cotton in Australia Insect resistant (BollgardII )/herbicide tolerant Insect resistant (BollgardII ) Herbicide tolerant Insect resistant (Ingard ) %

6 Australian cotton yield Actual yield GM adoption Predicted yield t/ha %

7 Active ingredient application rates: cotton, Australia Conventional Ingard Bollgard II kg/ha Source: Bruce Pyke, Cotton Research and Development Corporation

8 Variable production costs: cotton, Australia, 2009 DRYLAND Conventional Roundup Ready Flex Roundup Ready Flex, Bollgard II IRRIGATED Conventional Roundup Ready Flex Roundup Ready Flex, Bollgard II Herbicide & application Insecticide & application Technology fees Other costs $/ha Source: Department of Industry and Investment, New South Wales (Agriculture)

9 Grower experience with insect resistant cotton in Australia % Environmental benefits Insect management benefits Lifestyle, OH&S benefits Source: Bruce Pyke, Cotton Research and Development Corporation Economic and yield benefits

10 Key risks: GM cotton in Australia Risk Environmental Outcome Assessed by the Gene Technology Regulator to be minimal Insect/weed resistance High technology fees Market acceptance and coexistence Resistance management plans Risk of crop failure: offset by price discounts; crop failure refunds; end point royalties Not an issue with either cotton lint or cottonseed

11 GM canola in Australia

12 Area of conventional and GM canola in Australia Conventional GM ha f

13 Canola yields: Australia and Canada 100 Yield, Australia Yield, Canada GM canola adoption, Canada % t/ha

14 Australian canola yields, by herbicide system National Variety Trials, Roundup Ready Clearfield Triazine Tolerant 1 t/ha New South Wales (4 trials) Victoria (4 trials) Western Australia (3 trials) Total (11 trials)

15 Variable costs and gross margins: canola, Australia, 2010 Monsanto Australia TRIAZINE TOLERANT Gross revenue Key variable costs ROUNDUP READY HYBRID Gross revenue Key variable costs yield 1.34t/ha; price $434/t; oil 40% Gross margin yield 1.57t/ha; price $434/t; oil 40% Gross margin Herbicide Seed Technology fee Other costs Gross revenue $/ha

16 Key risks: GM canola in Australia Risk Environmental High technology fees Unintended presence Risk reduction Assessed by the Gene Technology Regulator to be minimal Herbicide resistance End point royalties Separation distances from non-gm canola crops Appropriate handling and storage practices Market acceptance and coexistence Identity preservation and coexistence arrangements

17 International market acceptance

18 Market differentiation in world grain markets Segments Mixed grains GM and non-gm Certified non-gm Organic Standards for unintended presence of GM materials Government policies, such as mandatory GM labelling, GM approval processes

19 Share of world grain trade, GM producing countries excluding intra-eu trade % grain gluten feed oil grain meal oil grain meal oil grain meal oil corn cottonseed soybeans canola

20 Evidence of price premiums for non- GM grains in world markets Certified non-gm grain niche markets, with limited evidence of price premiums mainly with food soybeans and corn, where mandatory labelling would be required Organic about 1-2 per cent of world grain market premiums of more than 100 per cent probably sustainable as a niche market because of growing preferences for organically produced goods

21 Pattern of world canola trade, annual average, * EXPORT DESTINATIONS Other Bangladesh Canada United Arab Emirates Pakistan USA China Mexico Japan European Union * Excludes intra-eu trade Mt EXPORTERS Canada European Union Ukraine Australia United States Other 1 2 3

22 Some recent ABARE publications available free at GM grains in Australia: Identity preservation (2006) Market acceptance of GM canola (2007) Potential economic impacts from the introduction of GM canola on organic farming in Australia (2007) GM crops in emerging economies: impacts on Australian agriculture (2008) Economic impacts of GM crops in Australia (2008) GM stockfeed in Australia: economic issues for producers and consumers (2009) Evidence of price premiums for non-gm grains in world markets (2010)

23 Some GM crops in the pipeline in Australia Crop Trait Wheat (barley) Altered grain starch composition Salt tolerance Nutrient utilisation efficiency Drought tolerance Sugar cane Altered sugar production Drought tolerance/improved water use efficiency Improved nitrogen utilisation Herbicide tolerance Canola InVigor herbicide tolerant canola But no sign of Roundup Ready 2 canola Cotton Bollgard III?

24 Summary GM cotton High adoption rate in Australia Significant agronomic and environmental benefits GM canola Early stages of adoption in Australia Initial evidence suggests agronomic benefits Enables use of more benign herbicides Coexistence between GM and non-gm is possible Various GM crops in the pipeline in Australia Wheat, barley, sugar cane

25 GM crops in Australia Costs, profits and economic risks Max Foster Economist