The Economic and Environmental Impacts of GM Canola

1. Peter W.B. Phillips, Ph.D. Professor, Johnson-Shoyama Graduate School of Public Policy Co-Lead and PI, VALGEN Co-Editor, AgBioForum Vice-Chair, AgWestBio Inc. Former member, CBAC and NAFTA Chapter 13 Panel on GM Maize in Mexico The Economic and Environmental Impacts of GM Canola

2. Outline • Introduction • Adoption history • Methodology • Economic benefits • Environmental benefits • Changes in herbicide-use • The KEY to the innovation system • Concluding message

3. Introduction • Both 00 rape (canola) and HT canola mostly Canadian invention • GM canola tested the regulatory system • One of first GM food crops • Fastest adoption • Have 1st (HT), 2nd (novel oil) and 3rd (PMP) generation crops coexisting • Have IPPM and segregation systems • Have had effective product recalls • Competitive market with 3 main suppliers

4. Mid to late 1990s • First GM canola varieties: • Developed in partnerships; approved in 1995 • IPPM seed multiplication program of 30,000 acres in 1995 and 240,000 in 1996 • IPPM system ended in 1997: 25% of market • Canola changed cropping practices • High level of summerfallow practiced in W. Canada in mid-90s • GM canola triggered changes in farm management practices and rapid increase in conservation tillage • NOTE: even before GM varieties, most seed purchased

5. GM Canola: The first decade • From 2003 onward, adoption ranged from 92% - 98% • Total acreage rose from 9M acres in 2002 to 16M acres in 2008 • Acreage in 2011 about 18.5 M acres Market Share 2006-10 Source: Authors calculations; Canola Council of Canada data: http://www.canolacouncil.org/ht_conventional_estimates.aspx

6. Methodology for 2007 study • Farm data collected by mail in western Canada—the key growing region for canola • Mailed 40,000 surveys to farmers in Western Canada • Each survey was 4 pages long, consisting of 80 questions • Time to complete was estimated at 45 minutes • Response rate of 1.7%, but ultimately higher • Confidence interval of 95% Western Canada: AB, SK, MB

7. Economic benefits • Costs flat to down: • Seeds & chemicals packages priced competitively • Tillage and weed control (multiyear effects) • Benefits significant and widespread: • Farmers: yields up due to earlier seeding and lower dockage • Prices lower: adopters, innovators and consumers win • Environmental gains

8. Tillage (Gusta et al, 2011) • Min-till and zero-till land management strategies increased greatly • In 1999, conservation tillage was 11% of canola production • Now accounts for 65% • Tillage costs related to canola production dropped • In 1999 estimated to be $214M • In 2006 estimated at $60M (-72%)

9. Weed control (Gusta et al, 2011) • 95% of farmers report that weed control has improved or is the same following GM canola • 76% of farmers report that the management of herbicide resistance in weeds is not major issue • Control of volunteer canola has not changed from pre-GM • 74% of producers report that control of volunteer canola is the same as prior to GM canola or easier—in short—NO SUPERWEEDS SO FAR!

10. Spill-overs (Gusta et al, 2011) • Phillips (2003) identified direct benefits at C$11/acre • Survey found bi-modal benefit distribution, with an average of C$15/acre • Herbicide costs for second year crop drop by 53%

11. Economic Impact: 2005-07 C$M Source: Gusta et al, 2011.

12. Aggregate Economic Benefits(Gusta et al, 2011) • Total direct and indirect benefits in 2005-07 worth C$1.1 – 1.2 billion, or C$350-400M/year • Benefits higher for the year following canola production than the direct crop • Control of volunteer canola and the management of herbicide resistance in weed populations not an issue • Possibly under-valued the move to conservation tillage practices

13. Environmental Benefits (Smyth et al, 2011a) • Key is movement to conservation tillage • 65% of the canola uses minimum or zero tillage • 83% of producers reported higher soil moisture • 86% report lower soil erosion • 41% are seeding canola onto erodible land • Result is better carbon management: • Less released and more sequestered • In total, nearly 1 million tonnes of carbon is sequestered or no longer released, possibly worth $5 million (at $5/tonne)

14. Changes in herbicide use (Smyth et al, 2011b) • Chemicals always used on canola • GM canola uses new chemicals with lower toxicity • GM canola uses less chemicals per acre • Environmental impact quotient (EIQ) measures effect of pesticides and herbicides on farm workers, consumers and ecology; values updated annually • Other studies: • EI estimates for canola range from declines of 22% to 42% • decline in herbicide use in canola to be 12% to 30%

15. Environmental impacts 1995 v 2006 Source: Smyth et al, 2011b.

16. Overall Environmental Impact(Smyth et al 2011b) • In 2007, 2.6 million kg of herbicide active ingredient applied to canola fields • If GM canola had not been developed, we estimate that the previous canola varieties would have required 4.1 million kg • Welfare effect of reduced herbicide-use estimated to be $23 million

17. The Triple Helix Innovation System ( Regulators MNEs Public Labs Sources: Phillips & Khachatourians 2001 and Phillips 2007.

18. Partnerships are the key MNEs Regulators Public Labs Sources: Phillips & Khachatourians 2001 and Phillips 2007.

19. Conclusions • GM crops can and do offer a wide range of socio-economic and environmental benefits • While there are always risks, they can and must be managed • GM canola in Canada has been a win-win for producers, consumers, the economy and the environment • HT canola may be the MOST environmentally friendly and sustainable crop option currently in use in Canada today (possibly including organics)

20. Key references • Gusta, M, S. Smyth, K Belcher, P. Phillips, and D. Castle. 2011. Economic Benefits of Genetically Modified Herbicide Tolerant Canola for Producers. AgBioForum 14(1): 1-13. • Phillips, P. 2007. Governing transformative technological innovation: Who’s in charge? Oxford: Edward Elgar, pp. 306. • Phillips, P. 2003. The economic impact of herbicide tolerant canola in Canada. In N. Kalaitzanondakes (ed) The economic and environmental impacts of agbiotech: A global perspective. Kluwer, pp. 119-140. • Phillips, P. and G.G. Khachatourians. 2001. The Biotechnology Revolution in Global Agriculture: Invention, Innovation and Investment in the Canola Sector. CABI, pp. 360. • Smyth, S., M. Gusta, K. Belcher, P. Phillips and D. Castle. 2011a. Environmental Impacts from Herbicide Tolerant Canola Production in Western Canada. Agricultural Systems 104: 403-410. • Smyth, S. M Gusta, K Belcher, P Phillips and D Castle. 2011b. Changes in Herbicide Use Following the Adoption of HT Canola in Western Canada. Weed Technology In Press. Accessed at http://www.wssajournals.org/doi/abs/10.1614/WT-D-10-00164.1. I gratefully acknowledge the financial support of the Canola Council of Canada, Genome Canada, NSERC, SSHRC and AgWestBio.

21. Peter W.B. Phillips, Ph.D. Professor, Johnson-Shoyama Graduate School of Public Policy Co-Lead and PI, VALGEN Co-Editor, AgBioForum Vice-Chair, AgWestBio Inc. Former member, CBAC and NAFTA Chapter 13 Panel on GM Maize in Mexico The Economic and Environmental Impacts of GM Canola