Review of the Moratorium on Genetically Modified Canola in Victoria Published by the Victorian Government Department of Primary Industries, Melbourne, November 2007

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Review of the Moratorium on Genetically Modified Canola in Victoria Published by the Victorian Government Department of Primary Industries, Melbourne, November 2007 DEPARTMENT OF PRIMARY INDUSTRIES Review of the moratorium on genetically modified canola in Victoria Published by the Victorian Government Department of Primary Industries, Melbourne, November 2007 © The State of Victoria, 2007 This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968 (Cwth). Authorised by: Victorian Government 1 Spring Street, Melbourne Victoria 3000 Australia ISBN 978-1-74199-675-3 (print) ISBN 978-7-74199-676-0 (online) Disclaimer: This publication is copyright. Reproduction and the making available of this material for personal, in-house or non-commercial purposes is authorised, on condition that: • the copyright owner is acknowledged • no official connection is claimed • the material is made available without charge or at cost • the material is not subject to inaccurate, misleading or derogatory treatment. Requests for permission to reproduce or communicate this material in any way not permitted by this licence (or by the fair dealing provisions of the Copyright Act 1968) should be directed to the Customer Service Centre, 136 186 or email [email protected]. For more information about DPI visit the website at www.dpi.vic.gov.au or call the Customer Service Centre on 136 186. 30 October 2007 Minister for Agriculture Victoria Dear Minister As members of the independent Review of the moratorium on genetically modified canola in Victoria, we are pleased to submit our report to you. We would like to thank all those who took part in the Review by either providing submissions or other information to us or taking part in consultations. We commend the report to you and your Victorian parliamentary colleagues. Yours sincerely Professor Sir Gustav Nossal, Chair Mrs Christine Forster Mrs Merna Curnow Terms of reference Terms of reference The Review Panel will: 1. Assess the economic impacts on Victoria of the moratorium on GM canola; 2. Assess the expected economic impacts of: • allowing the moratorium to expire; and • extending the moratorium. 3. Recommend whether Government should allow the moratorium to expire or be extended; and 4. Recommend any complementary policies and practices that are required to address the consequences of the moratorium ending. The Review Panel’s findings and recommendations will specifically address the moratorium on GM canola. To provide a context for its report, the Review will: • Describe the existing regulatory framework governing the release of genetically modified organisms; and • Summarise research findings on the extent of commercialisation of genetically modified organisms in Australia and overseas and assessments of the economic, health and environmental impacts that have resulted. iii Table of contents Table of contents Terms of reference �������������������������������������������������������������������������������� iii List of abbreviations and acronyms �����������������������������������������������������xi Executive summary �������������������������������������������������������������������������������� 1 The Review ����������������������������������������������������������������������������������������������������������1 Canola market and supply chain developments ��������������������������������������������������2 Benefits of genetically modified canola ���������������������������������������������������������������3 Economic impacts of the moratorium ������������������������������������������������������������������3 Complementary policies and practices ����������������������������������������������������������������4 Findings ������������������������������������������������������������������������������������������������� 7 Recommendations���������������������������������������������������������������������������������� 9 Chapter 1 Introduction and Review process ��������������������������������������� 11 1.1 Review process ��������������������������������������������������������������������������������������������11 1.2 National regulatory arrangements ���������������������������������������������������������������13 1.3 The 2004 Order for a moratorium in Victoria ����������������������������������������������13 1.4 Overview of this report ��������������������������������������������������������������������������������15 Chapter 2 Genetically modified canola ������������������������������������������������ 17 2.1 Herbicide-tolerant canola varieties ��������������������������������������������������������������17 2.2 Overview of genetically modified crops worldwide �������������������������������������18 2.3 Genetically modified crops in Australia �������������������������������������������������������19 2.4 Genetically modified canola varieties in Australia ���������������������������������������19 Chapter 3 The canola market �������������������������������������������������������������� 21 3.1 Overview of global canola production and trade �����������������������������������������21 3.2 Overview of canola production and trade in Australia ���������������������������������23 Chapter 4 Impacts on markets ������������������������������������������������������������ 29 4.1 Factors influencing consumer choice ����������������������������������������������������������29 4.2 Changes to consumer attitudes �������������������������������������������������������������������31 4.3 Is there a price premium for Australian non-GM canola? �����������������������������31 4.4 Is there a marketing advantage for being ‘GM free’? ������������������������������������33 4.5 Trends in grain handling ������������������������������������������������������������������������������34 4.6 Segregation �������������������������������������������������������������������������������������������������34 v Review of the moratorium on genetically modified canola in Victoria 4.7 Grain supply chain ability to achieve coexistence ���������������������������������������38 4.8 Downstream industries �������������������������������������������������������������������������������40 Chapter 5 On‑farm impacts������������������������������������������������������������������ 43 5.1 Why do Victorian farmers grow canola?.......................................................43 5.2 Benefits of genetically modified canola �������������������������������������������������������44 5.3 Impact on gross margins �����������������������������������������������������������������������������45 5.4 The importance of choice in farm business decision making ��������������46 Chapter Estimating the economic impact of the moratorium ������������� 49 6.1 Methodology of the cost–benefit analysis ���������������������������������������������������49 6.2 Results of the cost–benefit analysis �������������������������������������������������������������50 6.3 Key assumptions and sensitivity analysis ����������������������������������������������������51 Chapter 7 Impact on science, research and development ������������������ 53 7.1 Reduction in research and development......................................................53 7.2 Loss of Australian research capability ���������������������������������������������������������55 7.3 Broader legislative reform............................................................................56 7.4 Securing a return on investment �����������������������������������������������������������������56 Chapter 8 Impact on the organic food sector ������������������������������������� 59 8.1 The organics industry ����������������������������������������������������������������������������������59 8.2 Genetically modified canola and the organic supply chain ��������������������������59 8.3 Have genetically modified crops negatively affected organic production overseas? �����������������������������������������������������������������������������������62 Chapter 9 Liability and dispute resolution ����������������������������������������� 63 9.1 Is there unique legal risk associated with introducing genetically modified canola? ����������������������������������������������������������������������������������������63 9.2 Common law actions �����������������������������������������������������������������������������������64 9.3 Breach of contract ����������������������������������������������������������������������������������������64 Chapter 10 Are further measures needed? ����������������������������������������� 67 10.1 Communication and monitoring of ongoing impacts ��������������������������������67 10.2 Consistent regulatory arrangements ���������������������������������������������������������68 Chapter 11 Summary, conclusions and recommendations ����������������� 69 Appendix 1 Membership of the Review Panel ������������������������������������� 87 Appendix 2 National regulatory arrangements ����������������������������������� 89 vi Table of contents Appendix 3 Public submissions presented to the Panel ��������������������� 91 A3.1 Organisations and individuals who presented individual written public submissions....................................................................................91 A3.2 Individuals who presented copies of a Victorian citizen campaign submission �������������������������������������������������������������������������������93 A3.3 Individuals who presented copies of a Japanese citizen campaign submission �������������������������������������������������������������������������������95 A3.4 Individuals who presented copies of the Victorian Farmers Federation campaign submission
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