Europe’s lag on biotech approvals hurts industry

Recent delays on soy imports put EU at comparative disadvantage with competitors.

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A large importer of Shipments of US soya beans bound for the European Union have been blocked due to the discovery of minute amounts of un-approved GMO maize in soya beans last summer.
A large importer of Shipments of US soya beans bound for the European Union have been blocked due to the discovery of minute amounts of un-approved GMO maize in soya beans last summer.

Delays by the European Union (EU) in approving genetically modified corn and other crops found to be safe in thorough testing by EU agencies is creating a crisis among member states. Feed and livestock producers are placed at a comparative disadvantage with other countries which place EU industries at risk, according to several industry groups. 

These industry groups include, FEDIOL, representing the European seed and bean crushers, meals producers, vegetable oils and fats producers/processors; FEFAC, the European Feed Manufacturers’ Federation; COCERAL, the voice of the European cereals, rice, feedstuffs, oilseeds, olive oil and fats and agro-supply trade; and COPA-COGECA, the united voice of farmers and their cooperatives in the EU.

The groups say that while they welcome the fact that ministers from eight countries recognized the severity the scarcity of soya bean supplies in the EU outlined by EU Commissioner Fischer Boel of Denmark, they warn that until the EU agrees to clear and effective response — urgently — the problem will not go away.

Charts: World’s largest soymeal consuming markets and world's largest soybean importers 

Studies show that losses between fall and spring 2010 could be as high as $5 billion. What has exasperated the problem for the EU, is that U.S. shipments were halted when South American stocks were at an all-time low due to the worst drought in Brazil and Argentina in a decade, and aggressive soya bean purchasing by China. As a result of shipments blocked to the EU from the United States by EU GM rules, the trading bloc effectively has no more soybeans until the next South American harvest in late winter, barring policy relief.

Companies have little interest in shipping soybean products to the EU right now at the risk of being turned back. As a result, soybean exports were said to be carrying a premium of as much as $90 per ton at press-time, a premium of unprecedented proportion.

What created the problem?

The problem started last summer when just under 200,000 MT of soya beans destined for the EU from the United States were found to contain “minute traces” genetically modified maize (corn) not approved in the EU – breaching the EU’s policy of zero tolerance.

As a result, EU operators have been forced to stop all imports of North American soya beans and soya bean meal as, whatever precautions are taken, it is not possible to guarantee the absence of minute levels of foreign materials, other than by ceasing trade altogether.

“With the current lack of alternatives, and no immediate action from the EU to agree to a low-level threshold, this situation will leave Europe’s farmers, livestock producers and agricultural trade, as well as food and feed processing industries in an extremely precarious position,” the trade groups contend. “The threat of layoffs and vulnerable livestock farmers going out of business still remain.” “However, even if approvals took the minimum three months to agree, there would be no solution before the end of the year. In the meantime, there is still no solution to the immediate soya bean shortage.”

GMO crisis

The groups say that EU Farm Ministers must deal with technical measures in relation to an EU “low-level presence” threshold which, unlike the current zero tolerance policy, could be implemented and enforced, and protect EU consumers’ interest. “Without it,” they continue, “the crisis will become inevitable.”

Some EU officials clearly recognize the problem. “About 80% of soya beans produced around the world are GMOs, meaning there are major problems ahead if the EU continues to source its soya-based feed only from non-GMO crops and a handful of authorized biotech varieties,” EU Agriculture Commissioner Mariann Fischer said at the European Parliament in early September. “If we can’t rely on it at competitive prices, we’ll kill our meat production.”

In a conversation with an American soya bean official, a major shipper said, “They could find GMO dust in iron ore if they push the test hard enough given commodity transportation. They clearly could find it in South American soy because there’s some GMO maize there and it gets in all facilities. There isn’t a dry bulk ship on the sea that doesn’t harbor a bit of it.”

The ban on soya bean exports to the EU hurts European users of beans such as livestock producers and feed companies, soya processors, EU soya bean farmers, and at the same time US growers who have temporarily lost an important market.

But with global demand for beans tight, US farmers can sell their beans to other markets such as China, while there is no option for EU growers and users to obtain beans.

Many more soya traits coming

One of the major problems ahead for the EU is not only GMOs that have been approved, but what is going to be approved, coupled with the fact that approvals take much longer in the EU than in other countries.
For example, in the next five years, the following GMO bean varieties are likely to be approved, according to Vanessa Kummer of the United Soybean Board:

  • Low phytate beans
  • High omega-3 beans
  • High stearic acid beans

Longer-term traits coming are high-protein soya beans for the feed and livestock industries, and soya beans containing antibodies against E coli.

“Over the next 10 years, nearly 25 different biotech traits are expected to be developed and commercialized in the US, Brazil and Argentina,” comments a soybean consultant. “This is what is worrying the EU feed and farm industry. The fear is that the EU biotech approvals system will continue to lag behind approvals in other countries. For example, it can take twice as long—three years or more—for the EU to approve a product compared to 15 to 18 months in the US And if a product is not EU-approved it cannot be imported.”

Web of politics

According to Kummer, both US soya bean farmers and EU customers are caught up in “discriminatory and unrealistic EU biotech labeling laws, decisions on biotech driven by politics rather than science, and a dysfunctional EU biotech approval process,” which is evident in politicization, which equals delays at various stages of the approval process and can lead to market access issues, plus the “zero tolerance issue” in which she and European agricultural industries agree.

FEFAC President Pedro Correa de Barros has warned that feed prices may increase significantly “at very short notice” because of the EU zero-tolerance policy for not yet EU-approved GM plants in imported feeds.

In a letter to the EU Farm Council Presidency, he stated that “at a time when most EU livestock producers were facing economic hardship, the EU opposition to provide a practical threshold for trace levels of not yet EU authorized GM crops in imported feeds may drive EU livestock farmers and feed operators out of business.”

EU dependent on imports

He said that the EU is dependent for more than 80% on imports of vegetable proteins for which there are no substitution possibilities in the short term. Ironically, though, EU imports of meat are all produced from animals which may legally be fed with not yet authorized GM plants, placing EU livestock producers and its feed industry at a comparative disadvantage.

One analysis, “Food and Feed Chain Dossier,” noted that the EU feed industry is already facing a significant price increase. “This situation will put an industry that is already suffering in an even more uncompetitive position and ultimately also impacting livestock farming.”

The result, this report says, is that shorting the EU on soya beans and soya bean meal will increase the costs of all feed ingredients for the feed industry and livestock producers. The report notes that soya meal represents 35% of feed rations for white meat, “potentially increasing production cost again, due to higher soy bean and soya meal prices.”

This, the report continues, would plunge the pig meat and poultry sectors into a deep crisis. The worst case scenario (lack of feedstuffs) would mean production being permanently delocalized to third countries at a time when the EU is trying to seek out new markets through bilateral agreements.”

Change is coming

But one analyst commented that despite his criticism of the EU process, he believes change is coming that will provide relief for the feed and livestock industries and will reduce the spread in competitiveness between Europe and the rest of the world.

What needs to happen, he says, is for EU officials to stand up to NGOs (non-governmental organizations), to which GMOs are a dirty word, and who do not want to see GMO approvals. Ironically, he says, the EUs own scientific bodies have concluded that GM crop traits such as those approved by the U.S., Brazil, and Argentina, are perfectly safe for consumers.

The problem, he says, is that the GMO issue hit consumers at the same time that major food scares did, thus GMOs got lumped in with other issues that NGOs were able to use to their advantage.

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