Shunning GM could cost future market share: report

A new economic model indicates Australia won't reap an export bonanza by adopting genetically modified (GM) crops, but could see its market share stagnate or decline if it rejects or over-regulates GM crops and foods.

The new analysis by the Productivity Commission, Modelling Possible Effects of GM Crops on Australian Trade, concludes that because GM oilseed and non-wheat grain crops are relatively minor exports for Australia, there will be little impact on markets, even GM cultivars offer marginal increases in productivity or other economic benefits.

The model was run under three different sets of assumptions, relating to likely increases in the productivity of GM over conventional crops, consumer acceptance of GM food products, and the regulatory response of Australia and its major trading partners.

The outcome was essentially the same in each case: Australia has little to gain at present from moving to GM crops, but will lose out in the longer term if its trading competitors do so.

The Productivity Commission's conclusions rest on the probability that countries that adopt GM cropping will be able to produce cheaper animal feeds from GM seed and grains, allowing them to compete at a price advantage in high-value export markets for downstream commodities such as meat, dairy products and processed foods.

This change would also cause Australia to import more of these products into its own domestic market, with adverse effects on Australian producers.

The report comes at a time when anti-GM activist groups in Australia, including Greenpeace, the Australian GeneEthics Network, and the Organic Federation of Australia, have stepped up pressure on the government to place a moratorium on the introduction of GM canola.