Sweden
April, 2007
Source:
Livsmedelsekonomiska institutet
by Lena Fredriksson
SUMMARY
Genetically modified crops (GM
crops) have been commercially grown since the beginning of the
1990s with production on a larger scale starting in 1996. Since
then, things have changed, as a larger number of varieties have
reached the market accompanied by an entirely new range of
genetically modified crops. The US is the main GM producer
whereas the EU is only a minor player. Up to this date Sweden
has no commercial production of GM crops, but the introduction
of these crops in Europe, can make GM production viable in the
near future. A majority of Swedish farmers with a production
area of at least 50 hectares are interested.
The report compares the production of genetically modified crops
with the production of conventionally grown crops in Sweden in a
business perspective and differences in profits are calculated.
The calculations are based on previous data and transferred to
Swedish conditions.
A production change to herbicide resistant spring rape would
have three major effects: an increase in hectares harvested,
higher costs of seeds for sowing and lower costs of herbicides.
These three factors are estimated to improve the profitability
of production at a rate of 4 to 8 per cent of the production
price.
Production of herbicide resistant corn for feed would mainly
affect profitability through higher costs of seeds for sowing
and lower costs of herbicides. All together the profitability of
production is increased with approximately 600 SEK per hectare.
Blight resistant potatoes show an increase in profitability of
between 6 and 12 per cent when compared to conventional
potatoes. A decrease in the use of herbicides also reduces the
negative effects on the environment caused by conventionally
grown potatoes.
A change in sugar beet production from conventional to herbicide
resistant varieties would increase the cost of seeds for sowing
but reduce the cost of herbicides. The net effect is about 10
per cent of the production price in 2006 prices.
According to the report, Swedish farmers can make a profit from
shifting to GM varieties. The size of profits are however
difficult to determine until production is actually taking place
in Sweden. As long as genetically modified crops are not
commercially grown, business analysis such as the one in this
report can only give limited insights. Real effects of GM
production can not be determined until there are real
observations to base analysis on.
Production profit comparisons are complemented by an economic
analysis. Innovations normally reduce production costs and
consumer prices, which benefits consumers and the society at
large in the long run. The welfare effects of GM production are
dependent on: the costs of special instructions for
GM-production, the extent of separating capacity in food
production, costs of labelling and traceability, the price of GM
crops compared to conventionally and ecologically grown crops as
well as the amount of producers and consumers not accepting GM
crops at all. The net welfare effects of society are liable to
be small if costs of co-existence, separating, labelling and
traceability are large compared to profits from decreasing
production costs.
Full report in Swedish:
http://www.sli.lu.se/pdf/SLI_Rapport_20072.pdf
Related USDA/FAS GAIN report:
http://www.fas.usda.gov/gainfiles/200705/146281170.pdf
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