GM crops in emerging economies: impacts on Australian agriculture

Emerging economies are big agricultural producers

Argentina, Brazil, India and China are important producers and, increasingly, exporters of agricultural commodities. These emerging economies have adopted GM crops, improving their crop productivity and competitiveness on international markets. Together, these four countries account for nearly 40 per cent of the world’s GM crop plantings and this share is likely to increase as they continue to take up GM crops at a faster pace than other countries, even faster than most developed nations.

Why will Australia be affected?

The continued uptake of GM crops in Argentina, Brazil, India and China is likely to lead to productivity gains for their agricultural sectors. Australia will feel the impact through changed international trade flows and substitution, whether or not there is significant adoption of GM crop varieties in Australia.

Australia and the emerging economies compete for export markets. For example, Japan sources canola from Australia and China.

Emerging economies are also markets for Australian agricultural exports. China, for instance, imports crop products for food and stockfeed use. Australia supplies 19 per cent of China’s canola imports. Increased domestic production in China could replace imports.

Argentina, Brazil, India and China are likely to continue adopting GM crops. ABARE modelling suggests that Australia will forgo significant economic gains by delaying the introduction of GM oilseeds and wheat if emerging economies continue to increase their uptake of GM crops. The increase in GM crop adoption has increased on-farm productivity, farm incomes and reduced input use in these economies. As a result these economies are improving their export competitiveness.

What GM crops does Argentina grow?

Argentina has the second largest GM crop area in the world, after the United States. Widespread use of GM varieties has resulted in a rapid expansion of the area under cultivation. On average, the total GM crop area in Argentina has increased by 70 per cent a year, since 1996.

The uptake of GM soybeans in Argentina has been particularly strong. GM soybean accounts for around 99 per cent of total soybean production since their release in 1996. There has also been rapid adoption of GM maize and GM cotton since these varieties were introduced in 1998. By 2006, 73 per cent (3.1 million ha) of total maize plantings were GM, while the GM cotton area reached 80 per cent (360 000 ha).

What GM crops does Brazil grow?

Brazil is the world’s third largest producer of GM crops. GM crops commercialised in Brazil include soybean, cotton and maize. In 2007, these three crops covered an area of around 15 million ha. Brazil produces about 25 per cent of world soybeans and is the world’s third largest producer of maize.

Brazil is also a large producer of cotton, with more than 1 million ha under cultivation, but growers face severe pest problems and significant insecticide costs. In 2006, farmers planted 120 000 ha of GM cotton, approximately 10 per cent of the total crop area.

Brazil has invested significant resources researching and developing GM varieties of rice, sugarcane, potato, papaya and eucalyptus.

What GM crops does India grow?

India commercialised three varieties of GM insect resistant cotton in 2002, and by 2006, 62 varieties were approved for commercial production. Cotton is an important cash crop, contributing around 30 per cent of the gross value of India’s agricultural production. The popularity of GM insect resistant cotton is illustrated by the expansion of cultivated area. The area under GM insect resistant cotton increased from 50 000 ha in 2002 to 3.8 million ha in 2006. In 2006–07, India surpassed the United States as the second largest cotton producer after China.

Other GM crops under trial in India include eggplant (brinjal), rice, cauliflower, tomato, okra, potato and mustard. These crops have traits such as insect and disease resistance, increased shelf life and higher levels of essential amino acids.

What GM crops does China grow?

China has been highly effective in utilising biotechnology in the agricultural sector. Two GM insect resistant cotton varieties were approved in 1997 and were rapidly adopted. More than 53 varieties of GM cotton are now grown commercially in China, representing around 69 per cent of total cotton plantings. These varieties are either insect resistant varieties or so called stacked trait crops, containing both insect resistance and herbicide tolerance genes. China has the third largest area of GM cotton, after the United States and India, with 3.8 million ha. China also has the largest number of farmers (7.1 million) growing GM cotton.

Since the late 1980s, China has been developing GM rice varieties able, for example, to resist pests such as bacterial blight, rice stem borers and leaf rollers.

Other GM varieties approved for commercialisation include tomato, sweet pepper, papaya, and petunia; however, plantings of these crops remain limited. Other crops under field trials include wheat, maize, soybeans, potato and canola.
What will influence the use of

GM crops in emerging economies?

The uptake of GM crops in emerging economies has been influenced by the experience of developed countries that have adopted GM crops. The pest problems to be overcome, management advantages and the status of intellectual property rights in the emerging economies are factors that may influence uptake of GM crops.

Investments to improve farming practices and provision of better infrastructure for agriculture may eventually pave the way for the increased use of improved varieties, some of which might be GM crops.

More information on this topic is available in the report:

Nossal, K, Abdalla, A, Curtotti, R, Tran Q.T and Brown, A, 2008, GM crops in emerging economies: impacts on Australian agriculture, ABARE research report 08.3. Prepared for the Australian Government Department of Agriculture, Fisheries and Forestry, Canberra, March 2008.

How do I find out more?

This brochure is one of a series of Biotechnology briefs on biotechnology and Australian agriculture.

Other titles in this series of Biotechnology briefs:

• GM canola: potential impacts on organic farming
• GM grains in Australia: identity preservation
• Market acceptance of GM canola
• GM crops: tools for insect pest and weed control
• GM canola: an information package
• Value of biotechnology applications to Australian agriculture
• GM oilseed crops and the Australian oilseed industry
• Genetically modified crops
• Australia’s crops and pastures in a changing climate
• Economic impacts of GM crops in Australia
• GM stockfeed in Australia.

The Australian Government’s National Biotechnology Strategy funded the production of these brochures and reports.

How can I get copies?

For a free copy of these and other DAFF publications please email: Biotechnolgy.

Visit the Australian Government Department of Agriculture, Fisheries and Forestry website for regular updates and information on agricultural biotechnology: www.daff.gov.au/agbiotech.

We want to ensure that developments in biotechnology are captured for the benefit of the Australian community, industry and the environment, while safeguarding human health and ensuring environmental protection.

The Australian Bureau of Agricultural and Resource Economics (ABARE) is an independent economic research agency of the Australian Government.