EU import restrictions on genetically modified feeds: impacts on Spanish, EU [European Union] and global livestock sectors

Abstract

Over the last decade, much controversy has surrounded the usage of genetically modified organism (GMO) technology in commercial agriculture. More specifically, it is feared that GMOs may introduce new allergens into the food chain or contribute to antibiotic resistance. At the current time, the European Union (EU) adopts a zero tolerance policy toward "non-approved" GMO imports, whilst the approval process has not kept pace with the proliferation of new GMO varieties. In the EU livestock sectors, this apparent mis-match threatens to interrupt supplies of high protein feed inputs (e.g., soymeal) from countries with more relaxed regulations regarding GMOs. Employing a well known multi-region computable general equilibrium framework, this study quantitatively assesses the impact of a hypothetical EU import ban on unapproved GMO varieties of soybean and maize imports on livestock, meat and dairy sectors. The model code is heavily modified to improve the characterisation of the agricultural sectors and land usage, whilst a realistic baseline is employed to update the global database to 2008, the year the hypothetical ban is implemented. In the "worst case" scenario, there are significant competitive losses in EU livestock, meat and dairy sectors. In Spain, the negative impacts are particularly pronounced given the importance of pig production in agriculture. In contrast, all non-EU regions' trade balances improve, with notable trade gains in the USA and Brazil. To conclude, the EU must urgently find a long term strategy for GMOs if it is to reconcile political expediency with pragmatic economic concerns.