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Tuesday, October 25, 2016

GM Crops: How has the Australian farmer embraced them?

By Andrew Whitelaw  |  Source: OGTR, USDA, Monsanto, Productivity Commission, Trade, ACA

Key points

  • GM planting accounts for >90% of soybeans, corn and cotton production in the USA.
  • Western Australia has the highest planting of GM canola at 28%
  • GM canola accounts for 18% of Australian planting, and 20% when South Australia is excluded. 

2016-10-25 EMBRACE GM FIG 1

2016-10-25 EMBRACE GM FIG 2

2016-10-25 EMBRACE GM FIG 3

After much deliberation the Western Australian government has repealed its ban on genetically modified crops. In effect this allows growers the choice to cultivate any GM crops which are approved by the Office of the Gene Technology Regulator. In this analysis, we will examine the uptake for GM crops in the USA and Australia.

The Western Australian (WA) government have had in place a ban on GM crops with exemptions in place for canola and cotton. As of last Thursday night, the WA government have passed a bill allowing farmers the choice to use any GM technology approved by the Office of the Gene Technology Regulator.

This decision comes three months after the Australian government’s independent productivity commission published a raft of recommendations calling for changes to various agricultural regulations, including around the legalisation of GM crops. In the productivity commission report, it was highlighted that GM crops are no less safe than their non-gm counterparts and that co-existence had largely been proven both locally and overseas.

The debate has been quite heated over the past year as tensions rose over uncertainty after the WA labour party insisted that they would ban GM crops if they won the 2017 state election. In one comment from Labour MP Darren West, in 2015 it was suggested that uptake of GM crops had been limited to around 20% of WA farms.

This figure may or may not be correct, as we cannot find a source for this figure. However, it is more important to look at the hectares planted to GM crops, as there are varying enterprise sizes and many do not grow any canola GM or otherwise.

Firstly, let’s look at the adoption rates for GM crops in the United States. In figure 1, we can see adoption rates of three of the major GM commodities grown from 2000 to present. The corn, soybean and cotton crops are all above 90% of the available. It is quite clear that American farmers have enthusiastically embraced GM crops.

At a local level the adoption has been slower than the USA. We have received data from Monsanto with estimates of hectares planted based on GM canola seed sales, and using ABARES planting estimates for all Canola worked out the split from GM to Non-GM canola. In figure 2, we can see that the adoption rate has been fastest in Western Australia with the state planting 28%. The other main canola growing states of Vic and NSW which allow the cultivation of GM crops, following behind at 13% and 10% respectively.

In figure 3, we can see overall percentage of canola crops planted to GM varieties, and as Western Australia makes up the lion’s share of all production it is clear that overall the planting of Australian canola has increased to 20% when we exclude South Australia.  

What does this mean?

Overall the adoption of GM crops in Australia have been strong, although not at the same pace as the USA. This can be attributed to a number of factors, one of which is that many farmers use RR crops selectively to clean up paddocks, therefore they do not need to plant GM each year or in every paddock.  

Now that the uncertainty of a ban on GM crops in Western Australia (the largest canola area) removed, biotechnology companies will be more inclined to invest research dollars into new varieties which will become increasingly suited to the local environment which may encourage further adoption.

The opening up of WA to GM crops will give growers the choice of what type of crop they decide to plant, and as evidenced throughout other regions of the world coexistence is possible. 

Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report. 


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