Penciling out the costs and benefits of growing genetically modified crops is no easy task, says an agricultural economist at the University of Saskatchewan.
That is a challenge for farmers as they face decisions about whether to plant GM varieties, said Hartley Furtan.
“It is uncertain whether the introduction of this new technology has in fact increased the profitability of farmers,” he told the annual meeting of the Saskatchewan Seed Growers Association held in Saskatoon during the Crop Production Show.
GM herbicide-tolerant canola has been widely adopted by Canadian farmers, accounting for an estimated 70 percent of total acreage in 1999. GM wheat is expected to be commercially available in two to three years.
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Some of the production costs can be measured relatively easily, such as seed, herbicide and technical use agreements. The impact on yields can also be assessed with some accuracy.
When Furtan looks at those numbers for canola and other GM crops, the bottom-line benefits seem to be marginal.
But he said it is difficult to attach a dollar figure to one of the features of GM crops that farmers find most attractive – convenience.
“That seems to be an important piece of what’s pushing adoption by farmers,” he told the seed growers.
Herbicide-tolerant canola provides more flexibility when timing weed control. Fewer pesticide applications are required, reducing labor and management costs.
“But how to calculate the economic benefit of this flexibility is difficult,” said Furtan.
He added the benefits of growing GM crops can quickly disappear if there is any increase in weeds due to herbicide resistance.
The weed control benefit could be reduced significantly if herbicide-tolerant canola and wheat were to be grown in rotation in successive years.
“Then you’re going to have to use a more complex herbicide cocktail,” he said. “There will be increased costs in the second crop, which reduces the total benefits.”
Monsanto, which is developing a Roundup Ready wheat for release in 2003-04, has said it will not be released until weed control options are available to control herbicide-tolerant volunteer plants.
Furtan is preparing a study into the economic benefits of GM wheat. It should be released in April or May.
Some of the biggest unknowns about GM wheat involve prices and markets. Will it find a market?
Will GM wheat fetch a premium price or be discounted?
What effect might it have on world production and prices?
What will be the cost of segregating it in the handling and transportation system?
All of those issues could easily affect the profitability of the crop but Furtan said they won’t be part of his study, which is focusing on costs at the farm level.
“This is just a little piece of the puzzle,” he told reporters later. “That’s another study.”
