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Tuesday, 12 November 2002
Page: 6164


Senator CHERRY (11:14 PM) —I rise tonight to speak on a very interesting report that was tabled by the Productivity Commission last Friday entitled Modelling possible impacts of GM crops on Australian trade. The report models a number of assumptions about the possible responses of world markets to the adoption and commercialisation of GM crops in Australia and it comes to some interesting conclusions. Specifically, it concludes that if Australia's adoption of GM crops does not increase, while its trading partners expand their use of GM crop technology, Australia may lose some opportunities to raise or even maintain its market share over the long run.

This is something which the Grains Council has picked up. It has said that this report supports and encourages the adoption of genetically modified crops in Australia. Yet the press release from the Grains Council, which makes it clear that Australia will lose its competitive position against overseas producers if farmers cannot take advantage of the potential for GM crops to increase productivity, is not really reflected properly in the report, because nowhere in the Grains Council propaganda going out to its members does it state the assumptions on which its report is based. It does not note, for example, that the report assumes that there is no GM-free price premium that develops the marketplace for GM-free markets; it does not really assume that Australia is cut out of the markets that have low tolerance to GM-free contamination. It assumes a 25 per cent reduction in those markets but not absolute denial of access. The report also goes on in a number of other areas to assume that productivity improvements will continue at six per cent and seven per cent, eventually declining to two per cent, for GM crops. The evidence coming out of some parts of the United States at this point in time is that, rather than there being a productivity improvement in genetically modified crops, it actually wears through after possibly one or two years. In fact, there are now some studies suggesting that there is no improvement at all, but, in fact, after two or three seasons farmers are actually looking at a reduction in productivity.

The other thing which I am very concerned about in this report, put out in the name of the Australian government, is that it does not note more recent research on the costs of genetically modified crops. In particular, if Australia is going to maintain a genetically modified crop sector and a GM-free sector, we are looking at quite substantial costs. A recent European Union study on the costs of segregating different production, marketing, harvesting, distribution, sales mechanisms and systems for both GM crops and GM-free crops estimated it would gobble up between one per cent and 10 per cent of the harvest returns of the grain crop—that is, between one per cent and 10 per cent of the costs of our current return to farmers would be gobbled up by the costs of keeping the GM farmers out of the GM-free farms— and that assumes it can work in the longer term. There are some real doubts, given the nature of canola seeds in particular, that it could, in fact, work in the longer term.

The Australian Grain Harvesters Association, for example, has expressed deep concern about the enormous cost to grain harvesters of having to deal with GM and GM-free zones, and the costs of segregating their plant moving between a GM and a GM-free farm: the cost of dressing down and cleaning a harvester each time it is moved between farms. These costs have not been taken into account by the Productivity Commission in this propaganda put out to support the Grains Council position, nor has it taken into account the European Union studies or the studies coming out of the United States more recently by groups such as the British Soil Association, which show that the cost of genetically modified crops to US and Canadian farmers over last three seasons was upwards of $12 billion in terms of lost markets, in terms of reduced productivity, in terms of increased segregation costs and in terms of increased royalty payments to the multinational seed companies. These costs also have not been taken into account by the Productivity Commission.

I am deeply concerned, because this is the sort of material being put out to argue about what Australia should be doing on genetically modified crops. I am concerned about it because we are now only less than five months away from the gene technology regulator deciding two very important applications for the commercial release of genetically modified canola by two multinational seed companies, Monsanto and Aventis. That is literally five months away. We have not heard how that inquiry is going and we have not heard what evidence there is, but we do know that all that the gene technology regulator is allowed to look at under its act from this federal parliament is the scientific and the health aspects of genetically modified crop proposals. It is not allowed to look at the economic benefits and the economic costs of those particular proposals. We would expect the Productivity Commission to do the work on that, but this particular report fails in every possible respect in delivering a value-free and reasonable assumption of all the various options and scenarios that could and should have been considered for genetically modified crops. That is why the Democrats are adamant that there needs to be a proper cost-benefit analysis of the economic impact of the commercial release of genetically modified crops in Australia. It has not happened to date and it will not be happening through the gene technology regulator. It certainly will not be happening in the Grains Council itself.

The Grains Council have established what they call the Grains Gene Technology Committee to look at the issue of the segregation between genetically modified crops and GM-free crops in their system. But this committee is fundamentally flawed in its structure and even in its scope. Its scope is to look not so much at whether it is possible on a cost-benefit analysis to develop a cost-effective means of developing separate distribution systems for GM crops and GM-free crops but, rather, at how to get the least cost, lowest risk, segregated industry framework. The question, `Can we do it?' is not asked. The question is, `We're going to do it; how can we do it at least cost and at lowest risk?' The problem is, when you look at access to markets, such as the European Union, they will not accept a crop that has a contamination rate for GM-free crops of more than one per cent. Can we achieve that in a segregated crop in Australia? Can we achieve that with the segregated marketing systems? And what will be the cost of that? These issues are not being considered in the Australian context.

It is not surprising. Going back to the Grains Gene Technology Committee, six of its members represent the beneficiaries of the adoption of genetically modified crops— multinational seed companies and their various proponents. Six of them sit at the table which is going to decide the rules which will regulate the adoption of their crops and their products. This is an extraordinary conflict of interest. It is extraordinary that this committee is not just advising the Grains Council, which is supposed to represent the interests of farmers; it is advising state governments on how they are going to develop the rules which decide how genetically modified crops will benefit Australia. It is extraordinary that all this is going on in Australia without proper debate—without any proper consideration of the costs and benefits of how these crops will be developed or the longer term impact on our trade position, on our farming families, on our communities, and on our reliance on biotechnology imported from other countries.

All of this is happening without a proper national debate, and that is something which the Democrats are particularly angry about. I will be returning to this place to discuss this at a later stage. I appreciate that I cannot actually foreshadow amendments here, but these things will be debated in amendments that I will be moving to subsequent legislation. I also believe that it is time that this Senate, this parliament and, more importantly, this Australian government and the Labor state governments started to take seriously the threats to the economy and the environment from the commercialisation of genetically modified canola. That approval is now only four months away. We as a nation really have to take that into account; we certainly need to.