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Labelling rules to lift GM food cost
By Brendan Pearson, Financial Review
Food production costs could rise by between 6 per cent and 17 per
cent under a tough new labelling regime for genetically modified food,
according to a European Union study released yesterday.
The findings are in a new study, The Economic Impacts of Genetically
Modified Crops on the Agri-food Sector released by the European
Commission's Agriculture directorate.
The report's release comes before a decision by Federal, State and
New Zealand health ministers in Wellington next week on the design of
mandatory labelling rules for GM food products.
Initial health ministers' proposals for a zero tolerance approach -
supported by consumer groups and the Australian Medical Association -
have drawn fire from the Prime Minister, Mr John Howard, who has
warned such a regime would provide unacceptable costs on farm and
Mr Howard has suggested that 1 per cent of GM trace elements be
permitted before a food product must be labelled as a GM product.
A consultant's report prepared for health ministers also warned that
a stringent labelling regime could reduce key Australian food exports
by up to 20 per cent.
Warning of the "considerable risk" posed to our major export
commodities produced with the aid of GM processes, the KPMG study
cautioned there could be "a reduction in the value of certain exports
by as much as 20 per cent - in the case of the dairy industry across
both countries this could be up to $1.5 billion".
Meanwhile, the EU study found that although data on profitability of
GM crops remained mixed, it was clear that they allowed for "greater
flexibility in growing practices and for reduced, or more flexible
"This convenience effect should translate into increased labour
productivity and savings in crop-specific labour costs," the EU report
But the president of the National Farmers' Federation, Mr Ian Donges,
told a NSW farm conference yesterday that consumer demand remained the
main constraint of the adoption of the technology.