Canola growers could face a new expense in getting their product to market depending on the outcome of a crucial meeting in Montreal next month.
Signatories to the Cartagena Protocol on Biosafety are scheduled to meet at the end of May to make some critical decisions on how to regulate trade in genetically modified organisms.
Representatives from the 119 countries that have ratified the international agreement will gather in Quebec to determine if cargoes of food and feed need to be tested for GMOs and if so, what level of testing is required.
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What comes out of that meeting will have important ramifications for shippers of corn, soybeans, cotton and canola.
A study conducted by the International Food and Agricultural Trade Policy Council determined testing costs associated with the new protocol could range from $1 million to $87 million for corn exporters in the United States and Argentina.
No comparable number has been calculated for Canada’s canola industry.
“We haven’t quantified it. We just know that it will be miserable,” said Barbara Isman, president of the Canola Council of Canada.
Two of Canada’s biggest canola customers, Mexico and Japan, ratified the protocol, which came into force on Sept. 11, 2003.
For the past 18 months, parties to the agreement have been operating under a clause stipulating that suspect shipments should carry documentation identifying the cargo may contain GMOs, a workable solution for exporters of GM crops.
The Montreal conference will take that clause a step further by setting out what detailed requirements have to accompany food and feed grain shipments destined for countries that have ratified the agreement, including specifying the identity of the GM trait and at what level it is present in the cargo.
The text of the protocol states that those detailed requirements have to be determined before Sept. 11. Depending on what comes out of the Montreal discussion, the extra costs to the grain industry could be enormous.
According to the International Food and Agricultural Trade Policy Council study, if all 3,575 cargoes of corn exported from the U.S. and Argentina in 2004 were tested once at loading to see if there were any GMOs on board, it would cost the industry an extra $1 million.
If exporters were required to identify and quantify individual GM traits or varieties, the costs would quadruple to $4.4 million annually. And if more extensive sampling was required, the testing costs could soar to $87 million.
Those costs would double if importing countries had to confirm the results upon arrival.
Even trade in commodities without GM varieties will be affected by the protocol because crops are often mingled during harvest, storage and transportation.
A complicating factor for the canola industry is that there are seven GM traits that are either marketed or have been sold to farmers in the past, making testing even more difficult.
“I don’t actually even know how we would do it. I just don’t know how,” Isman mused.
Extensive testing requirements would add huge costs to the system, which would likely work their way down to the producer level.
“I’d like to say that it will be the consumer that pays but I haven’t seen a lot of evidence that (extra costs) have resulted in higher consumer prices,” said Isman.
In addition to incurring testing costs, the grain industry would have to absorb millions of dollars in demurrage fees as ships sit in ports waiting for laboratory results.
“What we’re hoping is that sanity will prevail in this,” said Isman.
Brazil and the European Union are the only two major exporting regions that have ratified the protocol.
