Moratoriums on the production of commercial genetically modified canola in Australia could cost farmers A$3 billion ($2.3 billion) over the next 10 years, a study by a government agency on Monday said. The study was carried out by the Australian Bureau of Agricultural and Resource Economics, a unit of the federal conservative government.
Labour party-run state governments have moratoriums on the production of commercial genetically modified (GMO) canola crops until 2007 in South Australia, 2008 in New South Wales, Victoria and Tasmania and 2009 in Western Australia.
The New South Wales government decided to extend a ban from 2006 only last week.
Continued growth in the adoption of transgenic crops and the development of new varieties in Asia and in North and South America could result in Australian grain and oilseed producers competing with increasing volumes of GMO crops on export markets, the federal bureau's executive director Brian Fisher said.
"This is likely to result in lower profitability and lower market share for conventional grain crops, which are more expensive to produce than transgenic varieties," he said.
Australia, the world's second biggest canola exporter, is already competing with transgenic canola seed in their major markets, primarily against number one producer Canada, he added.
Australian producers of other conventional grains also faced a future in which they were potentially forced to compete with lower cost transgenic crops grown in Asia and in North and South America, Fisher said.
Over the period 2000 to 2004, Australian canola's main export markets were Japan, 41 percent, China, 21 percent, Pakistan 17 percent and Bangladesh 10 percent.
These four markets are dominated by Australia and Canada, which produces mostly transgenic canola.
"Canadian producers of transgenic canola have not lost market share in their main export markets for canola seed, and they appear to have a production cost advantage over Australian producers by virtue of lower costs in their weed suppression regimes," the study said.
"Lower costs of production in Canada are a potential threat to the continued viability of Australian exports of canola seed," it said, adding there was no evidence the commercialisation of transgenic canola in Australia would hurt its own exports.