Low Levels of Genetically Modified Crops in International Food and Feed Trade

The low level presence (LLP) and adventitious presence (AP) of Genetically Modified Organisms (GMO) in internationally traded food crops have been a major issue of discussion recently. The production (research and commercial use) of GM food crops is increasing in both developed and developing countries. On the other hand, many countries have quite diverse GMO regulations. Asynchronous Approvals (AA) and zero tolerance policy have been reported to have trade diversion effects by some of the exporters. Therefore, FAO conducted a survey to evaluate the issue and examine the impact of LLP on trade flow. The survey was sent to national government organizations through FAO Representations (FAORs), Codex contact points, and individual contacts in early 2013. The survey results provided useful information on the current situation of GM food crops, regulations, and other related issues. Almost half of the respondents (47 percent) indicated that they produce GM crops for research or commercial use. 78 percent of respondents indicated that they have a GMO regulation; however, 22 percent either don’t have or are planning to have regulations in the future. This situation may give a rise to uncontrolled import of GM crops especially for developing countries. High level of regional guidelines is a critical issue in food safety regulations worldwide. 37 percent of the respondents indicated that they have a LLP threshold at least for one group of product (feed). The remaining 63 percent do not have any threshold limit for LLP related imports. Only 33 percent of the respondents indicated that they have a technical capacity to detect GMOs in imports. Therefore, capacity development is a particularly an important issue for developing countries. 37 percent of the respondents indicated that they faced LLP/AP in their imports in the last 10 years. The main crops that are subject to LLP/AP incidents are linseed, rice, maize, and soybean. The US (73 incidents), China (62), and Canada (44) were the main exporters whose consignments were involved in LLP/AP incidents in the survey. The most important factors that contribute to the trade risk are indicated as different policies on GMOs existing between trading partners, unintentional movement of GM crops, and different timing for approvals. The economic analysis section of the study found some evidence regarding the deterrent impact of regulation restrictiveness, including zero tolerance for the maize trade. The restrictive LLP threshold itself has a somewhat ambiguous impact such that it is found insignificant in an ad hoc model, while a theoretical model indicates a slight deterring effect on bilateral export flows. On the other hand, the FAO survey reveals that there are some incidents reported by the importing countries related to the LLP/AP. Most of the time the situation is handled through rejection or market withdrawals by the importers of developed countries, and in some cases it was accepted by some developing countries. These incidents may have several welfare impacts on producers, consumers, and agribusiness firms. A certain level of incidents can lead to income loss for exporters and consequently for producers. Consumers in importing countries can potentially face higher domestic prices when import is deterred from one country and directed to a trading partner. Therefore, GM crop producing countries, either for research or commercialized production, should take all the necessary measures in the stages of production, harvesting, transportation, storage, and marketing to eliminate low level of presence in conventional crops. More international collaboration is needed in this area. When evaluating the impacts of related regulations and standards a holistic approach that covers consumer safety and environmental effects should be considered together with the trade effects.