GM crops could provide $8 billion boost

Posted by Daniel Palmer on 12th May 2008

With debate raging about the true benefits of GM crops, the Australian Bureau of Agricultural and Resource Economics (ABARE) has released a report indicating that significant economic benefits to Australia’s regional economies will result from their use.

Australian legislation ensures that most GM crops are banned and there are currently no whole GM fruits, vegetables or cereals in the Australian marketplace. GM cotton farming, though, is now allowed in Australia with GM canola legal in NSW and Victoria from this year on.

Australia’s delay in using GM crops has been fuelled by concerns about the safety of GM food. Critics of GM food argue, amid fear that they could pose health and environmental risks, that there is enough food in the word without the need to take unnecessary risks. Advocates, on the other hand, believe they are a suitable solution to help feed the growing global population. And, with global panic over food stocks and high prices, expect the GM debate to intensify.

The potential economic impact of cultivating GM crops on state and regional economies was estimated by ABARE under two scenarios – adopting GM canola and adopting GM canola alongside GM wheat, maize, soy beans and rice.

The results indicate New South Wales will benefit most from adopting GM crops. Significant economic benefits are also estimated for other major grain producing states, including Western Australia, Victoria, South Australia and Queensland. All up, it is suggested that the Australian economy would benefit by $8.1 billion with NSW gaining the most with a $3.5 billion boost followed by WA with $2.4 billion, SA with $1.4 billion and Victoria with $1.1 billion.

Delaying the adoption of GM crops will lead to significant foregone benefits to Australia, according to the report. “Delaying GM uptake means we are forgoing significant economic benefits for regional Australia,” said Phillip Glyde, ABARE Executive Director.

“If the adoption of GM canola is delayed for five years, for example, the cumulative foregone benefits would be around a total of $97 million for Western Australia and $66 million for South Australia, measured in 2006-07 dollars,” Mr Glyde added.

The new ABARE report – ‘Economic Impacts of GM crops in Australia’ – was released today and can be found on their website. Funding for the report was provided by the Australian Government Department of Agriculture Fisheries and Forestry under the National Biotechnology Strategy. would welcome your opinions on the topic of GM crops. Are they a sound solution or a danger to our health and the environment?