Science Snapshot: Countries Resistant to GMO Crops Face Market Isolation, Higher Food Prices

Wednesday, April 21, 2021
Wheat field in Röe, Lysekil, Sweden. W.carter, CC0, via Wikimedia Commons

As the share of genetically engineered crops produced internationally continues to grow, countries resistant to approve the technology face market isolation and increased food costs, according to a recent study from the University of Arizona Department of Agriculture and Resource Economics and an international team of economists.

The cultivation of genetically engineered seed varieties has been approved internationally for seventeen food crops, including important staples like corn, soybeans, and rice. Roughly one‐third of global corn and more than three‐quarters of global soybean acreage are planted in genetically engineered varieties, and, together, these two crops represent almost a quarter of global calorie consumption, according to the study.

Since the technology was introduced in the mid-1990s, genetically engineered crops have been shown to reduce the use of harmful pesticides, lower greenhouse gas emissions, and increase global agricultural production. Despite the reported benefits of genetic engineering in agriculture, distrust of the technology has resulted in bans on genetically engineered crops and food products in at least forty‐seven countries.

“Countries may resist adopting GE technology due to public perception that the technology poses a risk to the environment or concerns that food from GE crops is not as healthy,” said Daniel Scheitrum, an assistant professor of agricultural economic policy and applied econometrics in the UArizona College of Agriculture and Life Sciences.

The complicated patchwork of international regulation on genetically engineered crops generates costs on both sides of the economic trade equation. Countries exporting genetically engineered products face a trade-off between achieving higher agricultural production and losing access to non-adopting import markets, explained Scheitrum.

According to the study, non-adopting countries’ market isolation, or loss of access to food from abroad, is two-fold. If a country does not approve genetically engineered varieties of a particular crop, it loses access to the net production grown in that GE variety. Further, while non-approving countries are still permitted to import conventional crops and food products from GE adopting countries, non-adopters may be hesitant to do so because of fears of cross contamination with GE content.

There are several famous examples of detections of non-approved GE content in imports. Some examples include detection of non-approved GE content in U.S. corn in 2000, U.S. rice in 2006, and U.S. corn again in 2013. Each of these events resulted in sharp declines of imports and even outright import bans of these crops, both the genetically-engineered and conventional varieties.

The study reveals these regulatory barriers have major implications for global food security, as the countries that are most resistant to GE crops are also some of the most dependent on food imports.

“For example, countries across Africa and Asia cite the risk of export losses to high‐income markets in Europe as a rationale for rejecting the technology,” Scheitrum said. “But a number of these countries that are averse to adopt genetically modified content are not major exporters. They’re net food importers, for the most part, so that argument comes at the cost of paying much higher prices for food.”

Non-adoption of genetic engineering technology isolates a market, reducing countries' food imports and raising food prices by approximately 6% when compared to GE adopting markets, according to the study. Not only do non-approving importers fail to receive the full benefits of agricultural expansion resulting from genetic engineering, the study reveals countries are worse-off relative to a world in which the technology never existed.

The authors find that the expansion of the global GE network has increased prices in the non-GE network 1% over what they would have been in a world absent GE expansion. The 6% relative price gap comprises a 5% absolute price reduction in the GE-adopting network and a 1% absolute price increase in the non-GE network.

“New developments in genetic engineering technology have made the process to develop new varieties much faster and cheaper. We can expect the GE share to increase within the current set of crops and to expand into additional crops. A country’s decision to resist adoption of GE crops will then become more meaningful as it loses access to an even greater portion of the world food supply. Unfortunately, this will likely lead to an even larger price gap,” Scheitrum said.

Rosemary Brandt
Media Relations Manager, College of Agriculture & Life Sciences