GMOs – The economic case against

October 10, 2014 by Pat Thomas

We are often told that GMOs are good for the economy. We are told that we need to invest in GMOs of be left behind by the profit-making gravy train.

Like so many GMO promises the claim is not backed up by much in the way of definitive research. Indeed investors have long been silent on the issue of GMOs.

But a new report from a Portland Oregon investment management group with an approximately US$500 million mutual fund, has at last shone some light on the economic case for – or in this instance, against – GMOs.

The report The Case Against GMOs – An Environmental Investor’s View of the Threat to Our Global Food Systems makes stark reading.

It notes that the adoption rate of GM crops is “astounding” and that:

“To give a sense of the scale of this area, all of the 2012 GM crop fields would cover nearly all of the state of Alaska. Over the course of the twenty years since they were introduced, GM crops have been planted on a cumulative 4 billion acres of land, an area roughly the size of Russia.”

The report also takes a side swipe at the many claims of benefits of GMOs including the notion that GM farming boosts yields and farming incomes by saving on fossil fuels, pesticides, and labour, that it farming represents a step toward environmental sustainability by decreasing emissions and the use of agricultural chemicals and that it GM crops are necessary to “feed the world”.

“None of these arguments have held up over extended periods of use or in the face of independent testing” it notes.

Specifically:

Pesticide and herbicide-resistant crops (by far the most widely used GM varieties) actually lead to an increase in pesticide and herbicide use over time horizons of as little as four years.

Financial gains, which farmers make through increased yields, are offset by increased spending on patented seeds, fertilizer, and herbicides or pesticides, leading to a net decrease in income for all but the largest mega-farms. These higher input costs are especially damaging when small, more marginal farmers experience crop failure. Elevated levels of bankruptcy and consolidation have frequently occurred following the deployment of GM crops.

Perhaps the most pervasive argument for GM crops is centered on the message that these crops are needed to “feed the world.” The underlying assumptions of this argument, however, are simply incorrect. At current levels of global production, there is enough food for every person on earth to have 3,000 calories per day.4 The problem lies with distribution, income, and food waste.

The report goes on to say that GM crops can actually exacerbate hunger issues by pressuring farmers in marginal areas [i.e. developing countries] to grow cash crops for export or extensive processing.

Taken together, say the authors of the report, the risks of GMOs form a very clear basis for exclusion from any Environmental, Social and Governance (ESG) investment strategy.

It concludes that mechanized agriculture, in some form, is likely necessary to feed the number of people in the world today. GM agriculture is not. Say the authors:

“It has so far provided insufficient and inconsistent benefits for the amount of risk it entails. Genetically modified agriculture, as it is currently practiced, should be far down the list of solutions for securing the global food supply.”

Note: the 2014 report is no longer onlne. The link in this article now goes to the updated version of the document, published January 2018.