A synthesis report prepared by Anne-Katrin Bock, Karine Lheureux, Monique Libeau-Dulos, Hans Nilsagård, Emilio Rodriguez-Cerezo (IPTS - JRC) in May 2002 on studies conducted by: F. Angevin, N. Colbach, J.-M. Meynard, C. Roturier (INRA, France), J. Sweet (NIAB, UK), A. Philp (CEST, UK), K. Menrad, M. Menrad, S. Wörner (ISI, Germany), J. Kilpatrick (ADAS, UK), L. Bonfini, G. Van den Eede (IHCP-JRC, Italy)
Tables Below
Table 53: Economic performance of oilseed rape seed production in the United Kingdom
Table 54: Economic performance of conventional and organic rapeseed production in central Germany and France
Table 55: Economic performance of conventional and organic maize production in France 1997 to 1999 (with irrigation)
Table 56: Economic performance of conventional and organic potato production in Germany 1996/97 to 1998/99
Table 57: Economic performance of conventional and organic potato production in the United Kingdom
Foreword
The possible increase of commercial production of genetically modified (GM) crops in European agriculture may lead to the adventitious presence of GM crops in non-GM crops. Taking into account the need to keep the two crops separated, the co-existence of GM and non- GM crops in European agriculture presents a challenge.
In May 2000 DG AGRI requested a study on agronomic and economic aspects of co-existence of GM, conventional and organic crops in European agriculture from the Joint Research Centre.
The study was initiated as a pan-JRC operation and with external expertise mostly channeled via the European Science and Technology Observatory (ESTO).
This synthesis report presents the results obtained and is based on the six studies performed by different institutes involved:
This report, the economic analysis and the co-ordination of the study was done by Anne-Katrin Bock, Karine Lheureux, Monique Libeau-Dulos, Hans Nilsagard and Emilio Rodriguez-Cerezo, Institute for Prospective Technological Studies (IPTS), Joint Research Centre.
Whilst IPTS is grateful for the collaboration with the JRC Institutes and for the help and inputs received from other European Commission services (DG AGRI, DG ENTR, DG ENV, DG SANCO), responsibility for the contents rests solely with the IPTS.
Seville, May 2002 Per Sørup
Consumers, food/feed industry and retailers demand a reasonable degree of choice between GMO- and non-GMO-derived products. But different modes of agricultural production are not naturally compartmentalised. If GM crops increase their share in EU agriculture (which is now minimal) questions arise concerning their possible co-existence with non-GM crops (conventional and organic) at farm level or regional level. Some of these questions are of agronomic and economic nature, and these are addressed in this report:
What will be the levels of adventitious presence of GM crops in organic or conventional crops, with current farming practices if the share of GM crops increases to 10% or 50%?
The study was done for three crops for which GM varieties are available (oilseed rape for seed production, maize for feed production and potatoes for consumption), and for several farm types (both organic and conventional) that were defined to cover the variability present in EU farming infrastructure. For all crop-farm combinations, a hypothetical share of GM crops of 10% or 50% in the region was considered. A share of 50% mimics the situation in countries that adopted GM crops readily (for example the share of GM oilseed rape in Canada is currently 54%), while the 10% figure represents a scenario of slow adoption of GM crops in the EU. In these scenarios, an estimation of the expected levels of adventitious presence of GM crops in non-GM crops was done with a combination of computer modelling and expert opinion. The estimations have a strong relative value (i.e. they are useful in predicting the effect of a change in farming practices) but the absolute figures obtained have to be taken with care since the models are not yet fully adjusted with field data.
The estimated levels of adventitious presence of GM crops do not change dramatically between the two scenarios of GM crop share (10% or 50%). A practical consequence is that measures to prevent adventitious presence of GM crops (see below) may have to be implemented in the early stages of adoption.
On the other hand, the estimated levels of adventitious presence of GM crops in non-GM crops - assuming the current farming practices specified in the study- vary significantly depending on the crop and farm type (for example, as much as 2.2% for a conventional intensive maize farm or as low as 0.1% for an organic potato farm). In general there is a trend to expect lower levels of adventitious presence of GM crops on organic farms, because of segregation systems already in place, but there are notable exceptions. For example in seed production of rape, organic farms will face higher probability of adventitious presence of GM crops due to problems in controlling volunteers with organic practices.
Sources of adventitious presence of GM crops are well known, and can be divided into four main origins (seed impurities, cross-pollination, volunteers and harvesting-storage practices). The relative importance of each source for the final level depends on the crop and farm type: volunteers are a key source of adventitious presence of GM crops for rape seed farms (especially organic) but are of low importance in maize farms, where seed impurities and crosspollination account for most of the adventitious presence of GM maize.
Can this adventitious presence of GM crops in organic or conventional crops be reduced below certain policy-relevant thresholds with changed farming practices?
Once again the answer depends on the farm-crop combination. The thresholds used in the analysis are similar to those being discussed in various regulations. These are 0.3% for seed production of allogamous species (rape) and 1% for maize and potato crops (for food-feed uses). All farm types producing oilseed rape seed or conventional maize will be able to meet their thresholds provided they change the set of current farming practices defined in the study. It should be noted that these current farming practices are a compromise, given the diversity of European farms in this regard. Therefore, some of the changes proposed (and the estimated costs associated) could be already in use in number of farms. In some cases (dependent on farm type) changing farming practices at the individual farm level will be insufficient. In these cases changes may involve co-operation between neighbouring farms. Examples are the introduction of flowering time differences between GM and non-GM varieties, or region-wide border management. In contrast, all potato farm types and some maize farm types (organic) could meet these thresholds with the set of current farming practices defined in the study (with all the reservations already mentioned for the value of absolute figures).
Can adventitious presence of GM crops in organic or conventional crops be avoided?
The possibility of changing practices to meet very low thresholds for all crops, near the analytical limit of quantification (~ 0.1%) is also considered in the report. This reflects the situation in organic farming where the use of GM varieties is not permitted (Council Regulation (EC) 1804/1999), setting a de facto threshold. The report concludes that a 0.1% limit will be extremely difficult to meet for any farm-crop combination in the scenarios considered (10% and 50% GMOs in the region), even with significant changes in farming practices. Perhaps some farm types producing seed of oilseed rape could approach such thresholds, but only with significant changes of farming practices.
What is the cost of these changes?
In the analysis all costs are allocated to conventional or organic crop production, including those affecting primarily GMO production in case of co-operation. Compliance with the 1% and 0.3% thresholds through changes in farming practices and introduction of a monitoring system as well as likely insurance needs may result in additional costs of 1% - 10% of current product price for the farm-crop combinations studied (in the 50% scenario). Exceptions are found in the production of seed of oilseed rape, where costs can be much higher in particular farm types (up to 41%). In all cases, monitoring activities account for a large part of the additional costs. Cost reductions might be possible with segregation becoming an integrated part of agricultural practices and with decreasing costs of GMO tests. Generally, organic farms face higher costs (especially indicative insurance costs) per hectare and per tonne than conventional farms. However, when relating costs to product prices, the price premium for organic crops may reduce this difference considerably. Costs have been calculated without taking into account any changes in demand or market prices that would probably accompany an increased level of GM crops in agriculture.
Can the different types of production co-exist in a region?
This question has to be examined case-by-case for each crop. However, it seems clear that coexistence with thresholds in the region of 0.1% is virtually impossible in any of the scenarios considered. When considering the 0.3% (production of seed) and 1% (food-feed production) thresholds, co-existence of GM and non-GM crops in a region (with 10% or 50% GMO share) might technically be possible but economically difficult because of the costs and complexities of changes associated. This is the case exemplified by seed production of rape. For potato the costs are much lower and no significant change of practices is needed, so co-existence could be a reality. The costs and types of adaptation of maize growers put this crop in an intermediate situation, but some types of conventional, intensive maize farms will have difficulties in a coexistence situation.
Can the different types of production co-exist on the same farm?
Finally, cultivation of GM and conventional or organic crops on the same farm might be an unrealistic scenario, even for larger farms. Due to the importance of volunteers, oilseed rape seed producers will exclude growing GM crops on the same farm to avoid adventitious presence of GM seeds in their non-GM seeds. Also for maize and potatoes it would make the handling of the crops rather difficult.
ANNEX I: ECONOMIC PERFORMANCE OF OILSEED RAPE
Table 53: Economic performance of oilseed rape seed production in the United Kingdom
Source: Nix & Hill, 2000, White, 2000 4); own calculations
Region UK UK Crop Conventional Organic certified seed certified seed 3) Farm type OSR 1 OSR 2, 2’ Yield (t/ha) 3.50 2.3 Price (€/t) 369.2 738.4 Gross income (t/ha) 1292.2 1698.32 Variable costs (€/ha) Seeds 129.7 n. a. Fertiliser 160.1 n. a. Crop protection 205.2 n. a. Machinery and 2512 n. a. other costs Total variable costs 746 1152.12 (€/ha) Gross margin (€/ha) 546.2 546.2 Area payment (€/ha)1 435.0 435.0 Gross margin + 981.2 981.2 payments (€/ha) 1) The area payments include price compensation payments as well as payments for set-aside programmes which have been introduced in the reform of CAP in 1992/93. 2) Machinery and other costs have been added using data from the conventional German farm 3) For certified organic seed a price premium of 100% compared to conventional certified seed was assumed. This price premium was validated by discussions with a representative of a European producer of organic certified seed. It originates from cost increases from not using pesticides etc. It is therefore mainly a cost driven premium, as opposite to the price premia on organic products sold to consumers, which at present time are strongly affected by a short term structural lack of supply and which do not always reflect long term differences in production costs. Thus, the gross margin is assumed to be similar to conventional seed production, and the total variable costs have been calculated as the difference between the gross income and the gross margin. Therefore no breakdown costs for the organic production is available. 4) Nix, J. & Hill, P. (2000) Farm management pocket book. Edition 31. Wye: Imperial College; White, D. (2000) Personal communication. NIAB Seed Certification Data. n.a. not available
Table 54: Economic performance of conventional and organic rapeseed production in central
Germany and France
Source: KTBL, 1997, 1998, 1999, CETIOM, 1999, own calculations based on Michelsen et al., 1999,
Offermann & Nieberg, 20007)
Region Germany1) France2) Germany Crop Conventional Conventional Organic oilseed rape production oilseed rape production oilseed rape production with seed saving with seed saving with seed saving practices practices practices Farm type OSR 3 (OSR 3) OSR 4, 4’ Yield (t/ha) 3.14 3.51 2.04 Price (€/t) 231 152.5 277 Gross income (t/ha) 725.3 535.1 5273 Variable costs (€/ha) Seeds 36.3 - 63 Fertiliser4 134.3 84.1 16 Crop protection4 136.5 120.1 186 Machinery 186.3 - 65 Other costs 64.8 78.6 Total variable costs (€/ha) 558.1 282.9 330 Gross margin (€/ha) 167.1 252.3 197 Area payment (€/ha)5 529.6 5626 530 Payment for organic - - 114 agriculture (€/ha) Gross margin + payments 696.7 814.3 841 (€/ha) 1) Average of data of KTBL (1997, 1998, 1999) 2) Information of the year 1999 published by CETIOM (1999) 3) 60 % sold as organic, 40 % sold as conventional rapeseed (Michelsen et al., 1999). 4) The costs of fertiliser and crop protection are aggregated in organic farms. 5) The area payments include price compensation payments as well as payments for set-aside programmes which have been introduced in the reform of CAP in 1992/93. 6) Information provided by Teyssier (1999) 7) Kuratorium für Technik und Bauwesen in der Landwirtschaft (KTBL) (1997) Standarddeckungsbeiträge 1996/97. Darmstadt. http://www.dainet.de/ktbl/manag/stdb/stdb97.htm; Kuratorium für Technik und Bauwesen in der Landwirtschaft (KTBL) (1998) Standard-deckungsbeiträge 1997/98. Darmstadt. http://www.dainet.de/ktbl/manag/stdb/stdb98.htm; Kuratorium für Technik und Bauwesen in der Landwirtschaft (KTBL) (1999) Standarddeckungsbeiträge 1998/99. Darmstadt. http://www.dainet.de/ktbl/manag/stdb/stdb99.htm; Michelsen, J., Hamm, U., Wynen, E. & Roth, E. (1999) The European market for organic products: growth and development. In: Organic Farming in Europe: Economics and Policy. Volume 7. Stuttgart: Department of Farm Economics, University of Hohenheim.; Offermann, F. & Nieberg, H. (2000) Economic performance of organic farms in Europe. In: Organic Farming in Europe: Economics and Policy. Volume 5. Stuttgart: Department of Farm Economics, University of Hohenheim.
ANNEX II: ECONOMIC PERFORMANCE OF GRAIN MAIZE PRODUCTION
Table 55: Economic performance of conventional and organic maize production in France 1997 to
1999 (with irrigation)
Source: Les 4 saison Sud-Adour, 2000, Enquête Unigrain, ITAB
Region France France France Pau 1 Vienne 2 Pau and Vienne3 Crop Conventional Conventional intensive maize non-intensive Organic production maize maize production production Farm type Maize 1 Maize 3 Maize 2, 2’, 4, 4’ Yield (t/ha) 10.15 10.06 9.0 Price (€/t) 98.5 108.1 228.7 Gross income (€/ha) 999.8 1087.5 2058.3 Variable costs (€/ha) Seeds 123.1 159.2 133.4 Fertiliser 186.1 165.1 160.1 Crop protection 96.5 87.4 21.3 Other costs4 143.8 67.0 444.4 Total variable costs 549.4 478.7 759.2 (€/ha) Gross margin (€/ha) 450.4 608.8 1299.1 Area payment (€/ha)5 506.0 488.9 426.9 Gross margin + area 956.4 1097.7 1726.0 payment (€/ha) 1) Average of Pau region 1997 to 1999 (representing Farm type 1) 2) Average of Vienne region 1997 to 1998 (representing Farm type 3) 3) Average of France 1995 to 1999 (representing Farm types 2, 2’, 4 and 4’) 4) Due to different sources of information the "other costs" include different items in the included regions: harvesting, hail insurance and irrigation costs in Pau, work made by enterprises in Vienne and harvesting, drying and irrigation costs in case of organic maize production. 5) The area payments include price compensation payments as well as payments for set-aside programmes which have been introduced in the context of the reform of the CAP in 1993/94.
ANNEX III: ECONOMIC PERFORMANCE OF POTATO PRODUCTION
Table 56: Economic performance of conventional and organic potato production in Germany
1996/97 to 1998/99
Source: KTBL, 1997, 1998, 1999, own calculations based on Michelsen et al., 1999, Offermann &
Nieberg, 20004)
Region Germany Germany Germany Germany Brunswick Brunswick North-west North-west coastal area coastal area Crop Conventional Organic Conventional Organic potatoes for potatoes for early early processing1 processing potatoes potatoes Farm type Potato 1 Potato 2 Potato 3 Potato 4 Yield (t/ha) 41.9 25.1 27.2 16.3 Price (€/t) 92 276 177 531 Gross income (€/ha) 3855 66982 4814 83722 Variable costs (€/ha) Plants 566 979 1159 2005 Fertiliser3) 182 22 146 19 Crop protection3 188 379 164 387 Machinery 379 265 387 145 Other costs 265 145 Total variable costs 1580 1645 2001 2556 (€/ha) Gross margin (€/ha) 2275 5052 2813 5816 Payment for organic - 114 - 114 farming (€/ha) Gross margin + 2275 5166 2813 5930 payment organic farming (€/ha) 1) Average of data of KTBL (1997, 1998, 1999) 2) 95 % sold as organic, 5 % sold as conventional potatoes (Michelsen et al., 1999) 3) The costs of fertiliser and crop protection are aggregated in organic farms. 4) Kuratorium für Technik und Bauwesen in der Landwirtschaft (KTBL) (1997) Standarddeckungsbeiträge 1996/97. Darmstadt. http://www.dainet.de/ktbl/manag/stdb/stdb97.htm; Kuratorium für Technik und Bauwesen in der Landwirtschaft (KTBL) (1998) Standard-deckungsbeiträge 1997/98. Darmstadt. http://www.dainet.de/ktbl/manag/stdb/stdb98.htm; Kuratorium für Technik und Bauwesen in der Landwirtschaft (KTBL) (1999) Standarddeckungsbeiträge 1998/99. Darmstadt. http://www.dainet.de/ktbl/manag/stdb/stdb99.htm; Michelsen, J., Hamm, U., Wynen, E. & Roth, E. (1999) The European market for organic products: growth and development. In: Organic Farming in Europe: Economics and Policy. Volume 7. Stuttgart: Department of Farm Economics, University of Hohenheim.; Offermann, F. & Nieberg, H. (2000) Economic performance of organic farms in Europe. In: Organic Farming in Europe: Economics and Policy. Volume 5. Stuttgart: Department of Farm Economics, University of Hohenheim
Table 57: Economic performance of conventional and organic potato production in the United Kingdom
Source: Nix, J. & Hill, P. (2000)
Region UK UK UK East Anglia South West England Crop Conventional Organic Conventional early potatoes potatoes potatoes for food processing Farm type (Potato 1) (Potato 2) (Potato 3) Yield (t/ha) 42.5 25.0 22.5 Price (€/t) 131.4 410.5 221.6 Gross income (€/ha) 5584 10262 4986 Variable costs (€/ha) Plants 1034 1231 1149 Fertiliser 361 164 287 Crop protection 739 - 328 Machinery 656 821 328 Total variable costs 3446 3037 2461 (€/ha) Gross margin (€/ha) 2138 7225 2525 Source: Nix, J. & Hill, P. (2000) Farm management pocket book. Edition 31. Wye: Imperial College
source: http://www.jrc.cec.eu.int (home page)
http://www.jrc.cec.eu.int/download/GMCrops_coexistence.pdf (report 1MB PDF)
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