Friday, 14 December 2012

Over Obsessing About GM Ignores Other Ways to Solve the 9 Billion People Food Challenge

GM foods are once again in the headlines this time raised by new minister Owen Paterson who says that he cannot understand the fuss about authorising GM production in the UK as the horse has already bolted.

According to Paterson, most of the beef we eat contains GM ingredients because the concentrates fed to cattle comes from GM modified crops. Which may well be true as according to Monsanto’s website 95% of soy beans grown in the US are GM, as are 95% in Argentina and 50% in Brazil.

It is extraordinarily difficult to get to the bottom of the real facts about GM – is it a way to save the world or a pernicious threat to health and the environment?

What is becoming increasingly clear is that GM crops as a tool to feed the developed world are just one part of the solution. There are less contentious and arguably more fruitful ways to meet the challenge.
A look at where the major agribusiness investment companies are placing their bets helps put GM into context.

Sustainable Asset Management, a division of Rabobank sees the solution to satisfying the growing demand for food as one of identifying bottlenecks right across the food chain, and supporting innovative companies who can find profitable ways to ease the pressure points. Examples of food chain wide bottlenecks are waste, transport, and storage.

Focusing on farming,  SAM says that producer profitability primarily depends on factors such as soil quality, rainfall and water management, and distance to markets. But secondary factors like agricultural expertise, management capabilities and wise use of fixed assets and working capital are critical, and can either enhance or limit growth potential. Successful businesses, according to SAM are distinguished primarily by their level of agricultural expertise. Note that GM as a driver of profitability does not feature in this analysis.

Agribusiness investment house, Paine and Partners discussed investment opportunities in a recent EFFP conference, touching on many of the same themes as SAM. They have identified 25 investment hotspots of which GM seeds is just one - and a moderate growth and somewhat risky one at that, the risk being strict regulatory frameworks for development. 

They illustrate the impact of GM through a wheat example where they say that 2010 production of 2.4 billion mt could rise to 7.9 billion mt by 2030 but only 0.6 of this is accounted for by yield, which in turn includes more effective fertilisers and better irrigation techniques as well as increased use of high yield seeds. Waste reduction by contrast accounted for an additional 1.1 billion mt.

GM could play a part in solving the challenge of feeding 9 billion people. It may not be as large a part as some think. In the developed world consumers will have a say – even if it is only to avoid GM containing foods. As for the impact on the developing world, this too is not clear cut. Just last week The Times of India reported on a campaign targeted at stopping Monsanto setting up a research and development unit in the Punjab.

All concerned with increasing food production in the UK might want to consider whether spending so much of their time and energy fighting for GM could be better spent on other ways of improving productivity.