Thursday, February 8, 2007

GE Crops and India's Trade Interests

Suman Sahai

A somewhat garbled invitation was sent out by the Department of Biotechnology calling for a Consultation on Guidelines for Regulation of Genetic Modification in Crop Plants and Farm Animals with Reference to Trade Security. Had I not earlier known the purpose of this meeting, I would never have figured out what the consultation intended to achieve.

The purpose as it happened, was to discuss a policy for genetically engineering crops that India was exporting. The immediate impetus for the meeting was the understandable nervousness of the Indian Rice Exporters Association after contamination of US rice stocks with an unapproved genetically engineered herbicide tolerant rice led to the total rejection of US rice and entailed huge costs to recall stocks from the UK, Germany, Italy, New Zealand and Japan where US rice had been exported.

The rice exporters wanted the Indian government to have a policy and safeguards in place to protect rice exports from the country from contamination with GE rice, since as one representative rather imaginatively suggested, "anything to do with GM would be the kiss of death "for India's rice exports.

The gentleman had a point. India exports not just Basmati, but non-Basmati rice as well, largely to Europe and West Asia but also to Africa, both regions that have rejected GE crops and foods. The total annual value of India's rice export is approximately Rs.6000 crores. The importers of Indian rice are countries where there is mounting opposition to GE foods. Producing GE rice in India or even researching and testing it in the fields is bound to result in the escape of GE rice.

The irresponsible and clumsy manner in which the Bt rice field trials were conducted by the Mahyco Seed Company indicate that given the shoddy implementation of GE technology in our country and the lack of accountability on the parts of agencies and regulators, contamination from trial plots and field sites is a certainty. The presence of GE rice in India, will undoubtedly lead to contamination, jeopardizing rice exports to countries that will not accept GE foods.

Soybean is the other crop which India exports which qualifies as a special case for consideration. India is the only country in the world now that is producing GE free soybean. Because of this status it has an assured export market in countries like Japan and South Korea that are sensitive about soybean as food and expressly seek GE free soya. In addition, companies that use soybean meal in food, particularly baby foods and food for convalescents, and which have given undertakings to produce GE free foods, are buyers of GE free soybean. This is a captive market available only to India and it can be expanded several times, creating a growing market for India's soybean farmers many of who are to be found in the distress areas of Vidarbha. Instead of offering inadequate doles, a proper policy introducing GE free, organic soybean may help Vidarbha farmers find their feet and rebuild their agriculture with self respect and dignity.

It is understood that the Review Committee on Genetic Manipulation (RCGM) in the Department of Biotechnology has given permission to conduct research on GE herbicide tolerant soybean. This is extremely undesirable and should be stopped immediately. If India were to allow the cultivation of GE soybean ,or even its research and field trials, it would at once lose its assured export market. Becoming a GE soya producing nation, it would have to compete for markets with gigantic producers like Brazil, USA and Argentina, who are sitting on huge surpluses, unable to sell their produce easily on the world market.

I have no idea whether there was any policy outcome on GE crops and Indian trade interests from the DBT meeting. Both the soybean people and the rice exporters present there held the same view, that genetic engineering of crops in which India had trading interests, was undesirable. The MS Swaminathan led Task Force on Agbiotechnology has made the recommendation that the national policy on GE crops should seek the "economic well-being of farm families, food security of the nation, health security of the consumer, protection of the environment and the security of our national and international trade". Seeing the trend of sharply declining global markets for GE crops and foods, and the rapidly burgeoning market for organic food (currently valued at US $50 billion), it would be wise for India to recognize its USP in agriculture and develop the organic food sector, specially for exports.

Sunday, February 4, 2007

Trading in Genetically Engineered Crops

Suman Sahai

The All India Rice Exporters Association has taken a position against GE rice in India, since this would hurt their export markets.

The fact that many countries in the world have chosen to reject genetically engineered (GE) crops and foods must make us alive to the fact that these preferences will reflect in the way that such crops are traded. Countries that are exporters of agricultural produce to nations that do not accept GE products will need to keep this factor in mind when investing in crop development aimed at exports. Despite this obvious reality, there is little visible effort in India to link the research agenda in agriculture biotechnology to India's trade advantages or vulnerabilities. This is not the case in other countries like Australia where an application to run a large-scale trial of genetically engineered canola was substantially diluted by the State Government where the trials were to be held. The Agriculture minister rejected the advice of his expert council which had recommended a 3000 ha trial because the Australian Wheat Board had raised strong objections that such a trial might risk its export markets if contamination occurred with GE canola. On its part, the Australian Wheat Board has successfully opposed genetically engineered wheat, responding to strong indications from the market and trading partners that genetically engineered wheat would not be acceptable.

At present the politics of trade in genetically engineered products is most prominently determined by the widely diverging positions of the United States and the European Union. This difference relates to their attitude to food production. European consumers, on an average, are more conscious of environmental concerns and food safety and tend to be suspicious of genetically engineered foods which they consider potentially unsafe and possibly damaging to the environment. In response to such attitudes, Europe's trading partners do not use genetic engineering in food production, so as not to risk losing markets in the EU. In amibia, where about 80% of the country's meat exports go to the EU, livestock farmers are extremely concerned that GE animal feed could enter the country unofficially and undermine the confidence of European consumers.

During the days of the food shortages in Africa, African governments refused US food aid because it consisted of genetically engineered foods. Zambia rejected the food aid entirely whereas Zimbabwe, Malawi and Mozambique allowed its entry only after the grain had been processed to flour, so that grains could not be used as seeds for planting and contaminating agricultural produce that is exported to the EU. Despite its protestations, the Africans believed that the US used the situation of the African famine to introduce genetically engineered food in the form of food aid so as to force open the African market for its own genetically engineered produce.

International trade in genetically engineered products will be determined by the Cartagena protocol on Biosafety. The central regulatory element of the Biosafety protocol is the Advance Information Agreement (AIA).This applies to the first intentional transboundary movement of a genetically engineered organism that will be released into the environment. These could be seeds or micro organisms, essentially those organisms that can multiply in nature. The AIA provision does not apply to all categories of genetically engineered organisms that are to be traded. For instance, pharmaceuticals for human use do not have to be notified under the AIA. Products (organisms) that will be used directly as food or animal feed or for processing (GE-FFP)also need not be notified under the AIA. The GE-FFP exemptions have been strongly objected to by parties and countries that have a more cautious approach to genetically engineered products but the clause was pushed through at the behest of the US and the countries supporting it in the negotiations of the Biosafety Protocol.

At the level of international trade, the US and EU have just had a major trade spat in the WTO over the fact that the EU had refused to import GE soybean and corn that the US wanted to export to it, because there is strong consumer rejection in the EU of all genetically engineered products that could enter the food chain. The US and its partners, Canada and Argentina, hauled the EU to the WTO dispute settlement court and the verdict was in favour of the US. This does not mean that countries cannot resist forcible exports as in the EU-US case, but it does mean that countries need to exercise all the flexibility available in the Cartagena Protocol and frame firm and clear cut national policies regarding trade in GE products.

In India there is no policy on biotechnology, despite the setting up of two Task Forces on agriculture and pharma biotechnology, nor is there any policy on how trade in GE products, especially food, is to be handled. A long standing restriction on the import of genetically engineered foods was overturned by an ad hoc 2006 decision to allow the import of soybean oil sourced from GE soybean, even though it was not labelled. It is widely believed this was the result of US pressure following the controversial Indo-US deal in agriculture. In any case, this precedence will have implications for future imports of GE products, particularly from the US.

After the global contamination of rice by Bayer's GE rice LL 601, engineered to produce pig vaccine, was detected, US rice consignments had to be recalled from countries as far apart as Japan and Germany. The US rice market crashed, costing millions in losses to traders and ultimately farmers. Responding to this, the All India Rice Exporters Association has taken a position against GE rice in India, since this would hurt their export markets.

In the absence of any policy on the subject, the Commerce Ministry has asked the Genetic Engineering Approval Committee (GEAC) not to approve GE crops in agri export zones. A few weeks later comes the announcement that the National Horticulture Board will invest substantially in genetic engineering and its priority areas will be the export oriented units! This is insane; different arms of government saying different things. To put an end to this confused mess, it is crucial that the country decides on a policy on genetically engineered crops and other products. This policy must be formulated after adequate public consultation and in a transparent manner; so that the country's domestic and trading interests are protected. Till this takes place, it is best to hold all GE crops in abeyance.