After I wrote about the anti-GM lobby group the ‘Network of Concerned Farmers’ and their misinformation campaign in my column in The Land newspaper (11th August edition, pg. 24), I received letters and emails accusing me of not understanding basic marketing principles. I was told that Australian canola growers are better off because they have more market opportunities, including a potential price premium, because GM canola has been banned in Australia.
(Canada and Argentina, both big Canola producers, grow and export product from mostly GM canola varieties – varieties banned in all canola growing states in Australia.)
I was surprised that no-one contested, or seemed concerned by, my allegation in that column that the Network of Concerned Farmers is neither honest nor consistent in its rhetoric. All the correspondence was focused on perceived ‘market advantage’.
(And why is it that ‘left leaning greenies’ become so focused on ‘market advantage’ when it comes to GM issues?)
I note that Farm Online has a piece today explaining that canola prices appear likely to remain at their current depressed levels or lower, with a large Canadian crop impacting on the market.
It continues:
Currently, canola is trading at around $330/tonne port, but industry analysts are predicting a further drop, saying the Australian market is already trading above international levels.
Many farmers consider $350/t the lowest price at which canola is viable.
In Canada, weather conditions are said to be unlikely to have a negative impact from now on, with most canola already windrowed.
On top of this, industry sources suggested Canada will be looking to get rid of a large amount of last season’s carryover stock, leading to further discounts in prices.
This is bad news for Australian growers, who at the same stage last year were presented with a golden opportunity to lock in prices over $400/t on the back of weather uncertainty in the northern hemisphere.
With Canada set to be able to fill core canola markets, such as Japan and Mexico, canola marketers will be forced to make sure their product becomes cheaper in relation to rival commodities, such as soybeans.
Where is the market concern with GM? Where is the market advantage in not growing GM? Why do Australian state governments continue with their bans on the growing of GM food crops?
It is not only a question of choice, but the environmental advantages of growing GM canola are compelling, see for example, http://www.ipa.org.au/files/news_263.html.
Jennifer Marohasy BSc PhD is a critical thinker with expertise in the scientific method.
Its not just market access that needs to be considered, its profit margins in the markets that are sold into. Thus it would be much more strategically sensible to discuss which strategies improve canola grower profits.
The GM canola hybrids produce a cost reduction of 5-15% because of the better yields they provide. Prices might well be lower now because greater industry supply and productivity but Canadian GM profitability might be steady because of lowered costs associated with better technology. Sadly not so for non GM Australia.
In addition to the increasing yields that the first generation GM canola crops provide the second and third generation GM canola in the pipeline will produce direct public health and environmental benefits. The new output traits being introduced into these crops ( in form of healthier oils) will add value by making differentiation of a bulk export crop possible but will also put more emphasis on internal supply chain management. Only countries with efficient supply chains that can segregate oilseed and grain for specific end use and markets will be able to enjoy the benefits of price premiums.
Our big grain marketers should be spending their dollars on R&D in improvements to protocols and technologies for traceability of differentiatied crops and quality and assurance processes rather than trying to differentiate our canola by marketing it as a ‘clean and green’ bulk commodity. The clean and green marketing advantage is not a viable long term option for our canola industry which risks to be overrun by substitutable value added vegetables oils ( derived from soy bean ) produced using GM by our main external competitors. Moreover there is internal competition from cotton growers that, through levies on their exported GM cotton fibre, are paying for research and development on GM technologies used to improve cotton seed oil quality. So while GM technologies is being used unfettered in Australia to add value to this multipurpose fibre and oil crop, the use of GM for securing the long term future for a thriving export industry based on a superior canola oilseed crop developed for Australian environmental conditions are being blocked.
Our plant breeders are ill equipped to ‘move’ agriculture across to a low input production system and the consumer will begin paying for that situation very soon! Breeders will need to be able to ‘create’ new crops effectively as the old ones have all been breed with the assumption that oil and natural gas will always be cheap! Clearly a ludicrous situation. Energy markets are eyeing low priced grain markets (subsidies helping out big time there!) and pretty soon you will have a world of farmers who are sick of selling cheap grain for food, having received deductions every year for the most stringent of quality violations. Energy markets are far less fussy! And while people continue to argue about the possible negatives of GM technology, they certainly almost always fail to appreciate the effects of us not adopting it! If you are a doubter, just keep an eye on the price of meat going forward – meat is a concentration of the costs of growing grain! And if you are a vegan, watch the price of grains increase sharply as the world’s farmers back out of the fossil fuel based system where profit margins have disappeared and energy markets take grain to its true market value!