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Flawed figures no basis for decision making

A leading economist has slammed figures put out by the new Sustainability Council of NZ as absolute nonsense.

The Council has contended that New Zealand will be taking a much greater risk than other nations if it adopts GM agriculture.

“Nearly half New Zealand’s export income comes from agricultural products. This means that for NZ, the risk of adopting GM agriculture is five times greater than typical OECD nations,” Council chairman Sir Peter Elworthy said.

However, economist Adolf Stroombergen, from Infometrics, called the figures ridiculous. “It’s like saying if my house is five times bigger than someone else’s, my financial risk from loss due to an earthquake is five times higher. Is this the level of quantitative analysis we can expect from the Sustainability Council?”

“One might equally say that we run five times the risk of not benefiting from GE technology by extending the moratorium.”

Sir Peter said that while Europe is New Zealand’s biggest customer for agricultural products, the majority of Europeans did not want to eat GM food.

Mr Stroombergen said the literature did not always adequately portray consumer desires. “Most consumer attitudes on this issue are very poorly worded and reveal absolutely nothing about how consumers would behave when confronted with real alternatives in product characteristics at different prices.”

There were already many GE crops in Europe, Mr Stroombergen said.

“Commercial GM crops have been grown in Portugal, Spain, France, the Netherlands and Germany (plus farm-scale trials in Britain). It’s reported Germany grew large areas (estimated to be up to 50,000 ha) of Bt maize last year.

“Clearly organics and GM can co-exist in Europe - why should we compromise on the advantages of GM has to offer, when Europeans already utilise both GM and organic production methods?

“Why should NZ be GE-free when Europeans want both worlds in their own backyard?

The Sustainability Council quoted a study done 2 years ago by Professor Caroline Saunders of Lincoln University. The research, which was presented to the Royal Commission, purported to show that New Zealand could be expected to obtain higher returns for its food exports if it were not a GM producer than if it embraced GM agriculture.

However, Mr Stroombergen said Ms Saunders’ study did not consider the impacts on a wider economy, only on agriculture.

“Even then, the results are questionable as there are many international studies which show an economic benefit to farmers from GE technology.”

“In addition, price premia for organic products are often negative as well as temporary.

“The Royal Commission considered the Saunders study and wasn’t sufficiently persuaded by it to vary or amend its principle recommendation, that we make careful progress with GM to keep our options open.

“It is also worth repeating that the Royal Commission did not recommend a moratorium,” Mr Stroombergen said.


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