The Coexistence of Genetically Modified, Organic and Conventional Foods

In many ways, the debate about coexistence is about the future of the global food system and its capacity to meet the rapidly growing demand for food and nutrition. Since their commercial introduction in 1995 and 1996, genetically modified (GM) crops have been adopted by farmers around the world at impressive rates. In 2014, over 180 million hectares of GM crops were cultivated by more than 18 million farmers in 28 countries. Soybeans, maize, cotton, and canola are the primary GM crops worldwide, representing 50, 30, 14, and 5 %, respectively, of the global area devoted to GM production. Soybean producers have adopted GM varieties at the highest rate; over 80 % of global soybean area is planted with GM varieties. Nearly 70 % of cotton area, 30 % of maize area, and 25 % of canola area are produced using GM varieties. Overall, of all crops for which GM varieties are available, nearly half the production area is planted with GM varieties (James 2014). In the next decade, global adoption is expected to grow further as the research pipeline for new biotech traits and crops has increased almost fourfold in the last few years (Stein and Rodríguez-Cerezo 2010).

Gene flow is a natural process that occurs among sexually-compatible individuals in which cross pollination can result in viable seeds. Gene flow between individuals within and among populations via pollen occurs only when they have concurrent geography, overlapping flowering times, and share common pollinators. Given a population size sufficient to avoid genetic drift, alleles that have neither positive nor negative impact on fitness will persist in the population at an allelic frequency equal to their introduction level. Alleles for genes conferring a fitness effect will be selected naturally for or against depending on the selection pressure. For example, the frequency of alleles conferring disease resistance may increase in the population in generations where a certain pathogen is prevalent but not when it is absent, while alleles conferring herbicide resistance will neither increase nor decrease in the population in areas where the herbicide is not used. Favorable genotypes for a certain trait are usually fixed at a more rapid rate in self-pollinating than in outcrossing species. Genetic and biological features such as polyploidy, fecundity, and generation time also affect shifts in allele frequencies.

The American Seed Trade Association defines coexistence as “The practice of growing, reproducing and handling seed products with different characteristics or intended markets with the goal of successfully achieving intended product integrity and maintaining economic value of such products.” The principle of coexistence has been fundamental to the seed industry almost from the inception of creating specific populations of genetics intended for planting. In order for seed producers to successfully transfer the value created in a unique population, variety or hybrid, they must find ways to maintain purity and identification of those genetics throughout their life cycle. This can prove challenging in an environment dominated by commodity products of the same or similar species.

Effective coexistence should assure the production of abundant supplies of safe and nutritious foods on a sustainable basis, while allowing customers and suppliers the freedom to choose whether to use conventional, organic, or agricultural biotechnology products consistent with these underlying consumer preferences and choices.

Clarkson Grain supplies grains and oilseeds selected to meet specific characteristics. Its clients make foods and/or feeds. It contracts with farmers before planting to raise the appropriate hybrids/varieties according to the parameters needed to meet buyers’ values. Crops include soybeans of various varieties and maize of various types including white, yellow, blue and waxy. Key distinctions include GM, non-GM and certified organic. Non-GM is generally defined as containing less than 0.9 % traits developed through genetic engineering.

Coexistence policy in the European Union (EU) is designed to avoid unintended and adventitious presence of genetically modified (GM) crops in other products, preventing the potential economic loss from admixture (European Commission 2010). Coexistence is a direct consequence of the decision to provide consumers with a well informed choice when it comes to food produced from GM crops. While a mandatory labeling regime identifies GM produce in the market place, the availability of both GM and non-GM depends on the possibility of a downstream supply chain to provide both goods. Therefore, what is commonly called “coexistence measures” are a set of technical, administrative, and liability rules set out to avoid the unintended presence of GM material in non-GM crops at the farm level. Hence coexistence measures are not environmental risk management tools but tools to resolve potential market failures arising from GM crop cultivation in the EU.

The European policy of co-existence for GMOs follows a number of well-established social, economic and legal principles. Applying these principles in practice has resulted in a complex “rag rug” of co-existence policies in Europe. This rag rug makes enforcement of these principles difficult, at times even impossible. This chapter will review the pros and cons of applying different social, economic and legal principles in Europe, mainly from a legal and economic perspective. It will discuss the dilemmas, consequences, and sometimes contradictory results of the European co-existence policy and its potential future developments.

This chapter provides a general overview about Brazil’s GM crop adoption and information on the implementation of specific coexistence rules for maize. While the current GMO situation and policy approaches are widely discussed, there has been an accumulation of practical experiences in Brazil, both from adopting producers and by enforcement of government policy that is less obvious. The chapter focuses predominantly on the Brazilian experience because, taken as a whole, Latin America has few coexistence policies or even coexistence practices that can be discussed.

When it comes to the coexistence of conventional, genetically modified (GM) and organic crops, different countries have taken different regulatory approaches. In some countries, like in the case of the US, governments have let the market and firms manage coexistence. In other countries, as in the case of the European Union (EU), governments have actively regulated coexistence through specific rules and allocation of property rights. Indeed, the EU has been the most active in the introduction of such regulations. Since the mid-2000s it has introduced policies to guide coexistence whose stated goal is to provide freedom of choice for farmers in their production decisions and for consumers in their purchasing decisions. In this context, a set of technical, administrative, and liability rules, collectively called coexistence measures, was established (European Commission 2010). Some of these rules can be characterized as ex ante and others as ex post. Ex ante measures seek to limit the accidental low-level presence (LLP) of GM material in conventional and organic crops by specifying minimum isolation distances between GM and other crops, the use of buffer zones, and other technical means to limit accidental outcrossing and genetic admixture. Ex post measures seek to compensate non-GM producers for economic losses when LLP is not prevented.

The United States Department of Agriculture’s (USDA) regulatory review process for the introduction of genetically modified (GM) plant events has been the subject of extraordinary judicial scrutiny for the past 7 years. The process began in 2007 with a decision from the District Court for the Northern District of California vacating the USDA’s deregulation of Roundup Ready Alfalfa (RRA) (the Geertson I litigation).

The size of the trade in organic agriculture was estimated to be worth $US 64 billion in 2014 and has been increasing at a rate of 10 %. This valuable trade is of obvious interest also to developing countries which are primarily agriculture-based economies. As early as 2003 the European Commission identified that the cultivation of GM crops was likely to have implications for the organization of organic agricultural production. In a communication of that year it observed that the possibility of the adventitious presence of GM material in organic crops raised the question as to how producer choice for the different production types could be ensured. Additionally, the successful segregation of GM from organic agriculture is indispensable in preserving access to the lucrative trade in organic products. This chapter looks at litigation in Australia and the USA concerning the liability which arises in circumstances where GM cultivation was said to have imperiled organic agriculture.

As the United States Department of Agriculture considers a coexistence policy, this chapter discusses three facets of the policy that appear to be under-explored. These three facets are: The National Environmental Policy Act, the mitigation-of-damages doctrine, and the benefit rule from the common law. The chapter urges careful and thoughtful attention and discussion about each of these three facets.

This piece analyses the CJEU’s Bablok Case from the perspective of law and economics. It uses doctrinal and economic argumentation to test its effects on international trade as well as on the legal order of the EU. It tests whether these insights live up to the expectations of the lawmaker. Furthermore, it makes policy recommendations how these insights can be used to further policy making in this area at EU level. We proceed in five steps. We will first introduce the background of the case and the regulatory environment, before we turn to describing the facts and findings of the Court. We will subsequently illustrate the changes in the regulatory system triggered by the Court’s judgment, before we turn to a more thorough analysis of the judgment on the EU and the global trade system from a socio-economic perspective. From these findings, we will conclude with concrete policy recommendations.

Tolerance levels exist for many undesirable attributes in food where there is a general consensus regarding the potential food safety hazard: insect fragments, stones, livestock antibiotics, chemical residues, weed seeds, manure, etc. Yet much of the current debate about zero tolerance relates to the presence of genetically modified (GM) material, with far less consensus regarding the acceptability of traces of GM material and the role of science and technology as the arbiter of a safety threshold. The result has been international trade tensions, and increased complexity in supply chain relationships. Embedded in zero tolerance for GM material are divergent perceptions encompassing what constitutes ‘high’ and ‘low’ quality and an extension of the use of zero tolerance requirements beyond food safety to encompass different notions of food quality. Thresholds exist for a variety of materials that are commonly found in not only food but also in the trade of agricultural products. Even while knowing that trade in agricultural products cannot function at zero percent, it was decided by European legislators that if any GM variety was detected in agricultural product imports, or found growing in the European Union (EU), and if the variety was not approved for import or feed production, its use would be illegal and therefore the tolerance threshold was established at zero. Zero tolerance standards for GM material in international food markets and the discovery in 2009 of trace amounts of a deregistered GM variety of Canadian flax in bakery goods in Germany lead to the closure of the EU market to Canadian flaxseed.

In Germany, seeds have a zero tolerance for traces of GMOs which are not approved for cultivation in the EU (Bundesverwaltungsgericht 2012). However, adventitious presence of unapproved events in seeds may happen. That can be the cause for unintended release of GMOs into the environment. Two of these cases have been broadly discussed in the media. In 2010, the BASF GMO potato variety Amadea appeared in fields of the BASF GMO potato variety Amflora in Sweden. In contrast to Amflora, Amadea was and is not an approved variety for commercial cultivation in the EU. In another case, seed samples of the maize variety PR38H20 from Pioneer, dedicated for the German market, were tested positive for the Monsanto GMO event NK603. Varieties including this event are not approved for cultivation by the EU. But by the time positive test results have been announced, relevant maize seeds were sold to farmers and sown. Problems that appeared during the practical handling of that issue revealed that there is a lack of legal guidelines and regulations for the situation of unintended release of unapproved GMO varieties in the EU. In the following case study we will focus on the PR38H20 case.

Canola, the third most important edible oil crop in the world behind maize and palm, has had an almost unique history among those crops that have been targets of genetic modification. It was one of the earliest and most rapidly adopted GM crops; it has developed and tested market structures for three generations of technology (i.e. higher-yielding traits, quality-enhancing attributes and industrial uses); it emerged from a global research effort that was not driven from the US or EU; it has significant competition in the seed market, with five of the multinationals engaged in developing and marketing new varieties; it was one of the earliest crops to use an identity preserved production and marketing (IPPM) system to quality assure GM-free product; it has ongoing segregation programs to manage non-food varieties throughout Canada; it has developed a system to manage ongoing technology recalls and seed quality; and it has been the focus of litigation related to the conflict between patents and farmers’ rights and coexistence between organic and GM crops. In that sense, canola offers a number of lessons for other crop sectors considering if or how to manage the introduction of GM technology.

The emergence of the phenomenon of genetically modified (GM) ‘regulatory lag’ has the potential to significantly impact the development and commercialization of new transgenic crop varieties. GM ‘regulatory lag’ occurs where there are significant delays in approval of a GM product in an emerging export market, or differences in the regulatory approval timetable between significant export markets. Several recent lawsuits involving Syngenta’s Viptera maize product line raise significant issues for technology developers, producers, handlers, processers and shippers in instances where ‘regulatory lag’ is occurring or is possible. The chapter will examine the legal implications of GM ‘regulatory lag’ for these parties and offer one possible solution to an increasingly significant industry problem.

Progress toward sustainable and profitable farming systems using a full technology toolbox is needed to accelerate agricultural productivity globally. Increasing agricultural productivity is one of the keys to ensuring global food security. Food security is a serious issue for many countries that are dependent on commodity markets to meet their needs or supplement domestic agricultural productivity. High dependence on imports places countries at risk of production shortfalls, supply constraints, and price volatility due to growing global demand and competition for grain commodities. Prolonged regulatory timelines due to asynchronous approvals coupled with a lack of harmonized policies on low-level presence of unapproved events contribute to uncertainty that directly impacts product launches and indirectly affects the pace of research, development, commercialization, and import of innovative products. The public and private sector technology pipelines are producing new discoveries and developing innovations that promise to increase the pace of crop genetic improvement. While the opportunities for delivering more productive, pest resistant crops that use less water and inputs per unit production are real, success will depend on establishing efficient, predictable, and rational evidence-based regulatory frameworks.

Crops developed through biotechnology must undergo regulatory approval to ensure their environmental, food and feed safety before they are commercially introduced in the marketplace. This regulatory process necessarily lengthens the time required to bring such new crops to market. Insofar as this delay is necessary to ensure their safety it is regarded as worthwhile. Efficiency is crucial, though; there are many possible ways that the regulatory review process can be structured.

Development of genetically modified (GM) crops has begun and is continuing on numerous fronts and in several countries. Wheat will be one of the first food grains where GM traits are introduced and will likely be a precursor to similar developments for other food grains. GM wheat is currently being developed in a number of countries (e.g., United States, Australia, United Kingdom, China) and by a number of companies (e.g., Monsanto, Bayer Crop Science, Dow Agrosciences, and Limagrain, in addition to several research organizations, including the University of Adelaide, CSIRO, and Victoria Agribiosciences Center—now AgriBio and in the United Kingdom). Traits under development using GM techniques include fusarium resistance (Huso and Wilson 2005; Tollefson 2011; Valliyodan and Nguyen 2006), drought resistance, and protein quality. Indeed, much of the groundwork in GM wheat development is emerging from Australia and setting the stage for development in other countries.

Biotech crops represent a substantial share of key agricultural commodities traded in international markets, primarily maize, soybeans, cotton, and canola. Unique among agricultural innovations, though, biotechnology is strictly regulated.

China developed a public sector dominated biotechnology program and commercialized several genetically modified (GM) plants beginning in the late 1990s. Plants that have been approved for commercialization prior to 2006 include biotech-derived varieties of cotton, petunia, tomato, sweet pepper, poplar trees, and papaya. Bt cotton is the most successful story of China’s biotech program as it currently accounts for nearly 70 % of total cotton area. Huang et al. (Science 295:674–677, 2002) show that, when compared with conventional cotton, Bt cotton increases yield by 15 % and reduces pesticide use by 35.4 kg/ha (or nearly 60 % of pesticide use). In 2009 China issued production safety certificates to Bt rice and phytase maize, although to date they have not been approved for commercial production. Biotech soybean, wheat, and several other crops have also reached different stages of the biosafety regulation process.

This chapter analyzes the economic effects of different implementation options of low level presence policies to cope with asynchronous approval of GM events in the case of small countries. A simple analytical model is developed to identify factors for consideration in the design of regulations and apply it to the case of Vietnam. The model shows that the tolerance level, the delay for LLP approval, the delay for full approval, and the degree of trust in exporter’s regulations are three determinant factors. In the case of Vietnam, the total cost of having a rapid approval for GM events approved in five developed countries is estimated to amount to USD18 million. In the longer term, additional costs for zero tolerance level range from a few USD million to over 50 million per year. These costs need to be compared to the perceived benefits of implementing a zero tolerance policy.

In international trade law countries are allowed to put in place trade barriers and maintain them unless challenged by another country for being in violation of its international obligations. In the case of WTO members these obligations are set out in the WTO agreements. The WTO provides an opportunity for Member States to formally challenge trade barriers imposed by other Members if they believe the barrier does not comply with the provisions of a WTO agreement. The WTO agreements make no specific reference to low level presence. Thus, trade barriers put in place to deal with the presence of unintentionally comingled products must be interpreted on the basis of general WTO rules. Automatic import bans on shipments comingled with unapproved GM-products would appear not to comply with WTO obligations, but as with many differences in interpretation, clarity would have to await a challenge and a ruling from a disputes panel.

Since the first genetically modified (GM) crops were grown in 1996, agricultural biotechnology adoption has continued to increase around the world. From foundation traits like herbicide tolerance and insect resistance to more complex products with stacked and novel traits, research and adoption of GM crops is increasing, as are the number of products available on the market and the benefits to farmers, consumers, and the environment. Today, there are roughly 30 commercialized products on the market; it is estimated that there will be a three- to four-fold increase in the number of commercialized biotech products available to farmers in the coming years.

It looks increasingly likely that the future of biotechnology will be determined as much in the marketplace as in the capitals of key nation states. Regardless of what governments now do about regulating biotechnology in the agri-food sector, the technology seems to be irreversibly present in parts of the global marketplace. How the market is able to respond to diverging and incommensurate demands about the provenance of food will influence the scale and scope of benefits and costs generated, and ultimately will determine how investors (both public and private) allocate resources to this area. Coexistence will either be part of the solution or part of the problem.

The coexistence of genetically modified (GM) products with their conventional and organic counterparts has been one of the most scrutinized issues surrounding the introduction of products of agricultural biotechnology into the agri-food marketing system. Fears that the widespread adoption of GM products would drive their conventional (and, perhaps, organic) counterparts out of the market have been countered by arguments that their presence enhances the equilibrium product variety in the market (GMO Compass; EarthOpenSource). Central to the argument is, of course, the possibility of coexistence of GM, conventional, and organic products with the main focus having been on farm production systems and the prospect of coexistence of GM, conventional, and organic crops (Devos et al. 2009; Bertheau 2013).

While there seems to be little lingering doubt about the yield increases brought about by GM crops, much less is known about the extent to which consumer concern about GMOs translate into price and food expenditure effects. This chapter presents an analysis of the relative prices of food items and expenditures on food products with and without GM ingredients at the consumer level.

In the European Union, a mandatory GMO labeling law for food and feed products that contain more than 0.9 % EU-approved GMOs has been in place since the early 2000s. This law does not include animal products derived from animals that were fed with GM feed. To enable consumers to also choose animal products derived from animals that were fed with non-GM feed only, some EU Member States have chosen to adopt national GM-free schemes. The labeling scheme in the EU results in three potential product categories: products labeled as GM following the mandatory labeling standard; products labeled as GM-free, following voluntary labeling standards; and non-labeled food products. In this chapter, we provide a short overview how the volunary GM-free standard for animal products in the European Union evolved since the introduction of GM foods.

The backlash against the introduction of genetically modified (GM) crops and the concern about contamination of non-GM crops by genetic material originating from GM crops has resulted in a complex and costly legal and physical arrangement for coexistence of GM and non-GM agricultural product systems. It has also led to a new broad body of research on various aspects of co-existence. This chapter aims to understand some of the economic forces that lead to the need for co-existence, and to develop welfare economics-based mechanisms to solve it.

One of the sub-texts to the debate about coexistence is whether and how modern improved varieties embodying GM traits can coexist with landrace varieties and traditional knowledge, especially in centres of origin and biological diversity. This issue came to a head in 2001 when David Quist and Ignacio Chapela, two University of California Berkeley plant biologists, published in Nature that they had found transgenes introgressed in local maize landraces in the mountains of Oaxaca, Mexico (Quist and Chapela 2001). A pressing concern for many was that none of the transgenes found had been approved for deliberate environmental release in Mexico. The resulting flurry of activity engaged local campesinos, a host of environmental NGOs, the main biotechnology companies that had developed the disputed traits, a range of scientists around the world, various state authorities and the federal government in Mexico and, ultimately, a reference to the North American Commission for Environmental Cooperation.

The works in this volume affirm that coexistence is a complex, multifaceted issue. The need for coexistence in agricultural markets affects the decisions and behavior of individual farmers and multinational grain trading firms alike. It is relevant to local grain elevators and international agriculture markets. It is discussed between neighbors and at meetings of world political leaders. As innovation continues in world food markets, coexistence will continue to be an important consideration for all market participants.