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.

 

Slide13

In fact, we have estimated that the cost of compliance is not as important except for those organizations who have budget constraints. These organizations include National Agricultural Research Organizations (NAROs), the International Agricultural Research Systems (IARs), and smaller private firms. Increases in the broader cost of compliance of regulations is likely to impact the number and the type of technologies for development most likely in favor of those technologies with a higher return and less of a public good product.

As the figure in this slide shows, we can observe this impact with four technologies form the public sector in the Philippines, where the impact of cost on net benefits is not as important as the regulatory time delays.

Having said this, cost will be of course relevant for those organizations who are likely to pay and be affected by regulations. If a shipment is rejected (i.e. a 50,000 ton PANAMAX ship filled with grain) at an importing port of destination, then someone indeed will incur cost and certainly losses from this operation. If this outcome, introduces uncertainty into the process, then exporters may elect to suspend their shipments to trade sensitive countries. This obviously has several economic welfare implications. \

References

  • 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
  • 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
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