Based on our presentation on behalf of IFPRI at the UN Food and Agriculture Organization (FAO) Technical Conference on the Low Levels of Genetically Modified Crops in International Food and Feed Trade held March 20-21, 2014 in Rome, Italy and based on responses from different stakeholders, we felt necessary to share not only the presentation but also our comments to the slides and additional information about the presentation.
So far we have been referring to the cost of compliance in a relatively narrow manner. Let me broaden up the discussion to consider cost of compliance to regulatory issues as this has had a distinct set of implications particularly for developing countries .
We have research that shows that regulatory delays have a negative impact on returns to investment. We have estimated that 6 years of delays is the trigger point to suspending an investment in a GM crop. In average, we seem to be reaching the 4 year mark so we are quite close to the trigger point.
Regulatory delays in this sense, increase investment risk. This is a project investment decision weighing potential gains and probability of completing a regulatory process to obtain a net return. In the case of uncertainty this increases the likelihood that investment in R&D will not be made.
- Falck Zepeda, J., J. Yorobe, Jr., B. Amir Husin, A. Manalo, E. Lokollo, G. Ramon, P. Zambrano and Sutrisno “Estimates and Implications of the Costs of Compliance with Biosafety Regulations in Developing Countries: The case of the Philippines and Indonesia,”. GM Crops and Food: Biotechnology and Agriculture in the Food Chain. Volume 3, Issue 1 January/February/March 2012 http://www.landesbioscience.com/journals/gmcrops/article/18727/?nocache=668315680
- Smyth S.J., McDonald J., Falck-Zepeda J.B. Investment, regulation, and uncertainty: Managing new plant breeding techniques. GM Crops and Food: Biotechnology in Agriculture and the Food Chain 2014; 5:4 – 3; http://dx.doi.org/10.4161/gmcr.27465
- Bayer, J. C., G. W. Norton, and J. B. Falck-Zepeda. 2010. Cost of compliance with biotechnology regulation in the Philippines: Implications for developing countries. AgBioForum 13(1): 53-62. http://www.agbioforum.org/v13n1/v13n1a04-norton.htm