Executive Summary
Objectives
This report reviews literature on the economic impact of
genetically modified crops and places this within the context of UK arable
farming. Its primary function has been to provide objective information
and analysis that can help the Strategy Unit of the Cabinet Office in its
work on the possible economic impacts of GM crops on UK farmers.
Background context to GM crop development and
adoption
- Over the last few years there have been
declining prices for most arable crops (notably cereals) and falling
levels of profitability;
- The economic performance of farms can
vary widely, both between and within regions. This means that the
potential impact of a new piece of technology (eg, GM cost reducing
technology) will be subject to significant variation in impact at a
local level;
- The underlying policy
environment, set by the Common Agricultural Policy (CAP) is changing.
Levels of support are decreasing and the EU market is opening up to
increasing levels of competition from world markets. To remain as
competitive as possible, many UK producers are likely to explore all
forms of new technology that can assist them (eg, through yield
enhancement, cost reductions). The planting of GM crops could be an
approach taken provided farmers perceive that there is a market for the
produce. Others may look at other cost reducing technologies, focus on
higher value, niche product production, like organics, where cost is
less of a market driver, join agri-environmental schemes that target the
delivery of environment and landscape goods for the wider public or
leave the sector;
- Recent market changes of
relevance to UK farming include the growth in demand for products that
are perceived to better meet the demands of consumer concerns about the
environment, health and production systems (eg, development of markets
for organic produce). On the supply side, there has been significant
development of more sophisticated supply systems that incorporate
identity preservation and traceability. As a result an increasing number
of farmers are now members of independently accredited, quality
assurance schemes. There has also been greater adoption of ‘more
integrated crop management systems’ (eg, less use of prophylactic spray
regimes in favour of spraying according to pest and disease thresholds);
- New technologies take time to
come to the market place. Thus the lifting of any moratorium on GM crop
approval in the EU does not mean that GM crops will immediately be made
available to farmers. Regulatory and seed approval procedures and
requirements mean that the first GM crops that might be available to UK
arable farmers are still 2-4 years away.
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Full report published by the UK Cabinet Office Strategy Unit - PDF
Executive Summary
PG Economics comments on the Greenpeace paper ‘GM and dairy
cow feed: steps to a GM-free future for the UK dairy industry’ |
