Costs of coexistence7. Costs of coexistence highly depend on the framework for implementing coexistence measures and uniform measures are not optimal
The economic perspective of coexistence of GM and non-GM crops with specific applicability to oilseed rape (OSR) and maize in different regions of the EU was investigated by SIGMEA. Three levels of coexistence costs were considered:
- Costs of compliance to the coexistence measures developed to prevent adventitious presence of GM material as a result of cross-pollination;
- Testing for adventitious presence in non-GM crops (hereafter called monitoring costs);
- Costs due to failure of the system (losses due to contamination of conventional crops).
Coexistence costs had already been investigated in former coexistence studies[1]. In addition to standard coexistence measures such as isolation distances, we also considered flexible coexistence measures which allow GM and non-GM crops to be grown in adjacent fields as long as farmers coordinate their activities by:
- implementing a non-GM buffer zone (BZ) within GM fields, large enough to prevent cross-pollination to reach the official thresholds in neighboring fields cultivated with the same crop;
- discarding a non-GM strip (discard zone - DZ) within non-GM fields (again large enough to ensure the remaining parts of non-GM fields comply with thresholds). The crop from the discard strip could be delivered as a GM product by either party involved; the non-GM farmer gets a compensation for the income forgone, either from the GM farmer or from an insurance.
Various sizes of buffer and discard zones have been considered (from 10 to 100m[2]). These scenarios require a good coordination between farmers and they were compared to compulsory isolation distances between fields (various distances have also been considered for this measure).
We assumed that farmers growing GM varieties could benefit from GM technology by saving costs (e.g., herbicides or insecticides) or by higher yields (Bt traits). Different percentages of such benefits were considered. Non-GM farmers could receive a premium in an Identity-Preserved (IP) market and they might want to undertake additional measures to meet such IP requirements, as long as the price premium covers these costs.
The coexistence costs were addressed in the same regional case studies as those considered for assessing the technical feasibility of coexistence:
- coexistence costs for oilseed rape were examined in the Beauce region (France) and in the Fife region (Scotland);
- coexistence costs for maize were discussed in the Aragon region (Spain) and in Alsace (France);
- the potential costs of transboundary coexistence between France and Switzerland were analysed.
For calculating the coexistence costs, spatial simulation models taking into account the economic incentives for coexistence were used. Using a Geographical Information System (GIS) data set and Arcview® software, a set of simulations of realistic coexistence scenarios were carried out in order to assess the costs of coexistence in the different regions. We assumed that each GM and non-GM field was managed independently but that farmers agreed that buffer zones or discard zones were cultivated with non-GM varieties of the same crop species. It was also assumed that other sources of adventitious presence were controlled (e.g., no GM presence in non-GM seeds, or novolunteers in non GM crops)[3].
Generally speaking, results obtained in different regions demonstratedthat coexistence costs depend on the agricultural context (landscapes, cropping systems, climate, practices), the share of GM crop (maize or oilseed rape) in the Agricultural Used Area (AUA) and the willingness of GM and non-GM farmers to cooperate.
Uniform non-flexible coexistence rules, such as standardized large isolation distance requirements between GM and non-GM crops, while providing a margin factor for adventitious presence of GM in non-GM production, might impose a severe burden on GM crop production in the European regions investigated in this study. Indeed, cross-pollination highly depends on structural factors like field patterns, agronomic practices and climatic conditions and, in most cases, small isolation distances would be sufficient to meet the official threshold of 0.9%. Large uniform isolation distances, as implemented by most European countries, are not flexible and, therefore, not proportional to the actual risk of adventitious presence.
In addition, large and/or fixed isolation distance requirements may lead to a domino-effect[4]. so that farmers would have few, if any, fields complying with these isolation distances and would be unable to cultivate GM crops. This domino-effect can also occur with smaller fixed isolation distances in areas with lots of small fields and a high density of cropping with the same crops. This effect is particularly important at low levels of GM adoption as the probability of a GM field of having a non-GM field nearby is higher even though the overall cross-pollination potential is lower. Conversely, the domino-effect would be less of a problem for higher adoption rates of GM crops. The domino-effect exacerbates the non-proportionality of wide isolation distances by reducing GM crop planting options in the landscape and raising opportunity costs for GM crop adopters.
Flexible measures based on buffer zones or discard zones may require compensation of loss of income by non-GM farmers, whenever and wherever it occurs, but lead to lower overall coexistence costs and are proportional to the incentives for coexistence and, consequently, less counterproductive for European agriculture. However, they require a high level of coordination between farmers and hence assume that farmers will cooperate and accept additional transaction costs and financial risks. Under these conditions, flexible measures lead to a natural minimization of coexistence costs as farmers will negotiate the measures that reduce overall costs and reflect their incentives for coexistence in the long-run.
GM seed price premium had no significant effect on costs of coexistence, as non-GM seed price might also increase, while coexistence costs increased with the Identity Preservation (IP) price premium, due to factors such as greater demand for non-GM crops. The benefits of GM crop adoption are generally higher than the costs of coexistence (transaction costs not considered). It was concluded that GM crop adoption is not an issue of costs of compliance to coexistence measures but rather one of the incentives for adopting or rejecting the technology. From the economic point of view, coexistence is only a subject of concern when there is significant preference for non-GM crops with respect to to GM crops.
As far as flexible coexistence are considered (buffer or discard zones), the average per-hectare coexistence management costs, although variable, were relatively independent from the GM adoption rate in moderately dense areas such as Aragon (maize) or Scotland (oilseed rape) . There are, however, large differences regarding the monitoring costs which are related to GM crop adoption rates: the higher the GM adoption rate, the lower the additional per-ha costs of coexistence[5].
In Alsace, SIGMEA was able to test the impact of the agricultural structure on coexistence costs by comparing a region with small farms and small field sizes (Heiwiller) with a region with medium-sized farms and larger field sizes (Ensisheim). The coexistence costs are higher in those regions with a smaller scale of agricultural structures (fields, farms) . This is due to higher transaction costs on the one hand and a higher share of monitoring costs and discard zone areas on the non-GM maize area on the other hand. The latter leads to higher compensation costs for loss of income by the non-GM farmers.
The perceived effectiveness of the implemented coexistence measures, the non-GM farmer’s willingness to take the risk of non-compliance with IP market conditions and the non-GM farmer’s trust in liability or insurance procedures in the case of system failure are critical for the evaluation of the coexistence costs for non-GM farmers producing for the IP market. Monitoring can be a significant cost for non-GM farmers so that, in some situations, overall coexistence costs of non-GM farmers can be decreased by increasing discard zone sizes as this can result in lower monitoring requirements and costs. However, in some cases, the respective discard zone area required exceeds up to 99% of the envisaged non-GM maize area. As a consequence of these large discard zone areas, IP maize production in those cases is impossible.
Flexible coexistence regimes without discard zones would lift spatial constraints but is likely to increase the number of downgraded non-GM maize lots (fields not complying with the official threshold or any other IP requirements). Such regimes may be economically viable if the assumed insurance fee (e.g., 14 €/ha used in our work) could cover the compensation of non-GM farmers for downgraded IP maize produce. This is more likely to occur for small adoption rates. Nevertheless, such flexible coexistence regimes would not work at all in situations where GM-free production is required. As a consequence, downstream supply chain actors who demand pure GM-free IP produce might not be willing to accept deliveries from non-GM farmers in regions with flexible coexistence regimes. Thus, even though GM farmers would be able to compensate potential income forgone of the IP maize farmers with the insurance, those non-GM farmers might be excluded from IP maize market channels. Coexistence in this case would thus be impossible due to market exclusion of the non-GM farmers.
Finally, we addressed transboundary issues by analyzing the situation of maize farmers cultivating land along the border between France and Switzerland and considering that GM varieties were sown in France while GM cultivation was not permitted in Switzerland due to a five year moratorium. Swiss fields cultivated along the borders would be affected by cross-pollination with GM maize grown in the neighbouring country. In this case, low thresholds could not be met without implementing a strategy for coexistence in the non-GM growing country which may lead to legal issues. Growing non-GM maize in the border region would require exchange of information (location of GM crops, coexistence strategies, liability and thresholds) and additional measures to avoid admixture of GM and non-GM crops.
In summary, these SIGMEA studies demonstrate that the economics and appropriateness of different measures are mainly determined by the spatial and temporal patterns of fields and crops. This indicates that coexistence management measures should be as flexible as possible and based on local information on field characteristics whereas regional and national governance provides only general guidelines and rules.
[1]See for example Bock et al, 2002 and Messéan et al., 2006
[2]Large sizes of BZ or DZ have been considered as they would drastically reduce cross pollination and thus might avoid monitoring measures on the non-GM field or on the truck delivering the non-GM commodity to the elevator.
[3]These hypotheses do not alter general conclusions but prevent us from providing quantitative estimation.
[4]The domino-effect is a dynamic spill-over effect of farmer decisions induced by enforcing wide isolation distances on potential GM crop adopters. It consists in the iterative process of farmers switching their planting intentions from ‘GM’ to ‘IP’ crops to comply with isolation distances and hereby restricting planting options of neighbouring farmers.
[5]Monitoring costs of non-GM fields might increase but would be supported by a larger GM acreage.
Writing:
A. Messéan (INRA)
Creation date: 26 May 2009 Update: 28 May 2009 |