WESSEX
'Genetically Modified Crops Spell Trouble on the Farm'
The article below on GM crops appeared in
the November/December 1998 edition
of CSM (Chartered Surveyor Monthly), the official journal
of the Royal
Institution of Chartered Surveyors. The RICS has
90,000 members world-wide
practicing in over 100 countries, the majority of whom
receive the journal.
Amongst other services Rural Practice Chartered Surveyors
provide land
management advice to owners and occupiers of agricultural
land throughout
the UK.
A copy of the article is also available on the RICS web
site at
http://www.rics.org.uk/csm/
. (RICS home page is at www.rics.org.uk
)
The printed version of the article is also accompanied by
the following
quotation from a speech given by Jeff Rooker, minister of
state for food
safety, House of Commons, 30 July 1998:
"I accept the argument that genetic
modification is not simply speeding up
the natural process. It cannot be when genes are mixed
from different
species. There is some comfort in the regulatory
process for medicine
which, I admit, is not in place for food and
agriculture....."
CSM confirm that the article may be reproduced in any
other journal or
publication provided its original publication source is
acknowledged.
The RICS, in London, can be contacted on +44 (0)171 222
7000
(Natural Law Party Wessex)
(more information on GMO problems available at
www.btinternet.com/~nlpwessex
)
GENETICALLY
MODIFIED CROPS SPELL TROUBLE ON THE FARM
Mark Griffiths gives a personal view of the
potential impact
of genetically modified crops on farm business finance
The court of appeal case Regina v Secretary of State
for the Environment and
MAFF ex parte Watson this year drew attention to
land management
complications which the introduction of genetically
modified (GM) crops into
British agriculture is likely to cause. One of these is
that any farm
certified by the Soil Association whose crops become
cross-pollinated by GM
crops will lose its organic status.
This, of course, has serious financial implications for
growers of organic
crops. But the implications do not stop there. Following
the initial lead
given by Iceland Frozen Foods, other big food retailers,
including
supermarket giants Tesco and Sainsbury, are seeking
contracts with suppliers
who can guarantee GM-free food. This requirement is being
driven by consumer
demand.
A fine crop of legal claims
Any farm that loses its GM-free status, either because of
its cropping
history or because of cross-pollination from a neighbour,
could be denied
access to important markets, and that may lead to legal
claims against
neighbours for GM contamination and to disputes between
landlord and tenant.
Although as yet untested in law, the growing of GM crops
may also prove to
be a breach of the `rules of good husbandry' included in
many tenancy
agreements. These require land to be kept `clean' and in
`good condition'. A
tenant could end up with a substantial claim for
depreciation in the value
of the landlord's freehold reversionary interest at the
end of a tenancy.
Both scenarios would be likely to have damaging effects
on freehold and
rental land values, and in so doing may also be of
concern to banks if
secured loans based on the collateral value of the land
have been made.
Just as arable land without IACS eligibility is worth
less, so land which
has lost GM-free status could suffer substantial capital
value depreciation.
Market economics and CAP reform
The reform of the CAP will mean that farm gate prices
will be much more
dependent on market demand for agricultural products. It
will no longer be
financially so attractive to sell products that the
market does not want
into intervention storage in the hope that the EU will
release them onto
world markets later, courtesy of generous export
subsidies.
In the post-Agenda-2000 scenario, what the consumer wants
and does not want
becomes of critical importance to the farming industry in
a way that was
previously unknown.
A MORI poll published in June showed that 61% of people
in the UK do not
want to eat GM food ingredients. This figure is up by 8%
from January 1998,
and could rise still further on a crescendo of public
debate.
Consumer resistance to genetically engineered food is
driven by concern over
the unknown long term effects of GM crops on public
health and the
environment, and a lack of confidence in the regulatory
system and the
biotechnology industry itself. Most such crops contain
randomly spliced
foreign genetic material from viruses, bacteria or other
organisms which
have never previously been an integral part of the human
diet.
Now that Sainsbury and Tesco both claim that almost all
their own-brand
products are free of DNA and protein from GM soya, the
GM-free market can no
longer be considered fringe or niche (soya is in 60% of
processed foods). As
a result of these competitive forces, GM soya is now
trading at a 15%
discount on world markets. If this scenario eventually
causes GM crops grown
in the UK to undergo a similar price penalty or to become
unsaleable on
domestic markets, the impact on farm profitability and
land values for GM
crop growers may be considerable.
Maintaining GM-free status
Most farms are still getting accustomed to the details of
standard crop
assurance schemes. Existing schemes, however, have not
anticipated the
traceability complications that will be thrown up by GM
crops.
If and when GM crops get the green light in the UK, it is
inevitable that
the supermarkets, driven by consumer preference and
competitive pressures,
will seek GM-specific husbandry and traceability
safeguards.
There are a number of special, practical problems
associated with GM crops.
First, in the field and in-store they look no different
to traditional crops
(there has already been one case of an experimental GM
crop in the south of
England being mixed mistakenly in-store with its non-GM
commercial crop
equivalent).
Second, some GM crops can be
cross-pollinated over 2.5km, so GM cropping on one farm
may affect the
GM-free status of another. And third, once GM crops have
been grown on a
farm, inherited modified genetic sequences in crop
volunteers and related
weed species (for example, Charlock, in the case of rape)
are likely to
persist on the farm even after the crop has been
harvested and sold. Once GM
crops have been grown on a farm, GM-free status could be
lost for ever.
Are GM crops worthwhile?
Ironically, the country which claims to be the greatest
democracy in the
world has introduced GM crops almost without consumers
knowing.
In the USA, unlike Europe, there has been no prior public
consultation. And
there is no mandatory labelling or GM crop segregation
either.
From the farmer's perspective, the case for growing GM
crops rests largely
on their ability to produce higher yields and margins.
Initially that was
what drove the expansion of their use in the USA.
However, after two or
three years of practical cropping experience in North
America, there is now
evidence that some GM crops may actually be producing
lower yields and
margins than their conventional equivalents. Certainly,
there is data to
this effect in the case of soya, oilseed rape and cotton.
A growing number of farmers in the USA and Canada are now
considering
whether or not they should cut back on their GM
production.
Even if GM varieties in the UK perform better than those
in the US, careful
consideration needs to be given to the wider implications
of their use. The
possibility of lost markets and litigation with
neighbours, landlords,
banks, retailers and consumers is not to be dismissed
lightly.
These are all issues which a valuer will have to take
into account when
advising owners and occupiers of agricultural land in
future. Assessment of
the way these factors affect the market for crops and
land may have a
crucial effect on both the farm trading account and its
balance sheet.
----------------------------------------------------------------------------
--------------------------------------------
[Additonal box with article]
CUSTOMER PROTOCOLS
What conditions will future customer protocols be likely
to seek from
farmers who wish to maintain their GM-free status?
Issues that are likely to need addressing include the
following.
* Will farmers be allowed to grow certified GM-free crops
on units that also
grow or have grown GM crops?
* If so, what procedures will be required to ensure that
the same machinery,
handling equipment and storage facilities are not used
for both types of
crops. British sugar has already been told by major
customers that if any GM
beet passes through its factories _ whether segregated or
not _ all orders
will be withdrawn and a switch made to imported cane
supplies.
* Will farmers be eligible to grow certified GM-free
crops on units that are
next to holdings that are growing GMOs and therefore at
risk from
contamination from cross-pollination?
* What insurance cover will farmers have to take out in
the event of GM
material being found in products that are claimed to be
GM-free, resulting
in the downgrading of product value, or claims for
environmental damage or
injury to health (if this should eventually arise?)
* How do such risks relate to the extension of food
safety `strict
liability' to unprocessed agricultural produce due in
1999?
* What insurance cover will farmers be required to take
out in the event
of[in case?]their GM crops pollinating a neighbour's
crops in a way that
causes loss of contracts or environmental damage, injury
to health, or
diminished property value?
Operating such stringent guidelines would clearly be a
big task,
particularly when considering the issue of
cross-contamination from neighbouring farms. However,
this issue is unlikely
to go away.
Food Safety Minister Jeff Rooker has already implied in a
statement to the
Commons relating to issues raised by the Watson case that
he is prepared to
consider the introduction of statutory GM-free buffer
zones around organic
farms in order to protect the financial investment that
the government
itself is making to encourage the organic sector through
conversion schemes.
----------------------------------------------------------------------------
--------------------------------------
CONTACT
Mark Griffiths FRICS, Dreweatt Neate, is European rural
policy adviser for
the RICS. Tel: +44 (0)1962 842233
: Next month, the NFU will give its view on the
commercial production of
GMOs in the UK
----------------------------------------------------------------------------
-----------------------------------------
[CSM EDITOR] As this issue of CSM went to press, the
government was
considering a three-year moratorium on the commercial
production of GMOs.
The move was welcomed by environmental groups, including
English Nature, but
crop producers threatened legal action if the ban were to
go ahead.
NFU Mutual won't insure GM crop trial risks
Return
to NLP Wessex GM page
What leading scientists
and public figures have said about the dangers of
genetically modified foods
Will GM crops deliver benefits to
farmers? - some realities behind biotechnology myths
Genetically
Engineered Foods - Safety Problems