Trade Talk

On the 5th of February, 2015, spokespeople for the European cereal, vegetable oil and animal feed importers, labelled the EU’s “missing GM authorisations” a ticking bomb.

But let’s face it; few people heard that news at breakfast time. The still fresh Greek election result, attempts to renegotiate Greek debt obligations, and the declining value of the Euro dragged the news agenda straight back to 2009.

Unfortunately therefore, one currently unreported impact of the Greek election result on Europe’s economy could well be that today, that ticking bomb is still ticking, and few, if any media outlets have explained the threat it poses to our economy or for you. So, here goes…

Europe relies on foreign farmers

European arable land is mainly used to produce high value-added foods. In fact, Europe exports approximately 120 billion euros of these agricultural commodities annually, like wine, whisky and pasta. At the same time we import mainly less expensive, unprocessed commodities. If Europe would like to produce itself the volume of agricultural commodities which it imports, we would need to devote the total surface of Germany for it. This would clearly be unfeasible.

We depend on a well-functioning global agricultural trade system to gain affordable access to many basic commodities for human consumption, like fruit and coffee; but also other commodities like soya for animal feed or cotton for the manufacturing of textiles.

In some cases this is because the European climate is not suited to growing these crops, but in many others it is because Europe’s high land, water, labour and regulatory compliance costs mean that farmers are no longer able to produce crops competitively here. Soya – a critically important protein feed crop for livestock – is an example of this.

Farmers outside the EU grow GM crops

In 2013, the EU28 countries imported 12.8 billion euros of soybeans and oilcakes derived from soya from the USA, Brazil and Argentina. This is equivalent to 14% of Europe’s total annual agricultural imports and is the biggest import ahead of coffee (7.4 billion representing 7.2%).

Here in Europe however, distracted by our own internal politics, we have not understood that growers outside the EU (who are given the choice) almost exclusively now chose to grow GM varieties of soybean meaning non GM soybean is rare and expensive to source.

Europe and its livestock (or meat) industry have therefore become dependent on GM crops to feed their animals because there is simply not an affordable alternative.

Similarly the majority of cotton grown around the world now also comes from seeds bred using GM techniques, meaning access to many of the textiles we use in Europe today – most likely including the clothes on your back and the money in your wallet – rely on us importing GM crops. In fact, the EU’s imports of GM commodities are estimated to total upwards of 60 kg for each of its 500 million citizens per year.

What is the GM time bomb?

There are currently 13 GM crop import authorizations awaiting final decision by the EU College of Commissioners, following completion of the EFSA scientific assessment. Only political approval awaits, but the European Commission has put these approvals on hold since November 2013 despite proven product safety.

Many of these varieties are also already being commercially grown by our trade partners. Reduced access to approved crops for import to Europe, not only results in higher prices, but there is a real danger of accidental commodity-mixing in the supply chain, resulting in the blockage of valuable, perishable and scientifically safe agricultural commodities at European ports.

While the authors of the aforementioned public statement on the “missing GM authorizations” estimate that this would increase costs by 100 million euros per month for their industries, there is worse news for others.

Blockage of soymeal from the EU’s main suppliers as a result of traces of non-authorized (but safety-assessed) GMOs could result in a soybean price increase of over 200% and a real danger of running out of affordable animal feed in Europe. Farm profits would drop by around € 3 billion for the beef sector, € 1.2bn for the dairy sector and € 1bn for the pig meat sector.

A 2010 study for the European Commission also estimated that asynchronous GMO approvals for EU imports of animal feed products (alone) would increase the cost of meat and other livestock products by 10.5 billion euros annually for consumers. It concluded that the total cost to the EU economy would be 9.6 billion euros a year, not to mention potential shortages of the commodities we have come to rely on.

Big numbers of course but on a day when the Greek debt was on the front page of many European newspapers, some may have unfortunately dismissed the GM time bomb as “chicken feed”.

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