How Low Can You Go: The Consequences of Zero Tolerance
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Transcript of How Low Can You Go: The Consequences of Zero Tolerance
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How Low Can You Go: The Consequences of Zero
Tolerance
Jill E. Hobbs, William A. Kerr and Stuart J. SmythDepartment of Bioresource Policy, Business &
EconomicsUniversity of Saskatchewan, Canada
Presented at the 16th ICABR Conference/128th EAAE Seminar: “The Political Economy of the Bioeconomy: Biotehnology and
Biofuel”, Ravello, Italy, June 2012
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Several years ago in Scotland …
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Tolerance levels exist for many undesirable attributes
…..insect fragments, stones, chemical residues, weed seeds, livestock antibiotics…
But far less consensus for GM material Adoption of Zero Tolerance approach: International trade tensions Uncertainty and complexity in supply
chains Contradictory role of science
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Outline Economic model of co-mingling Role of science and the emergence
of zero tolerance Two case studies: Canadian GM Flax in EU ECJ ruling on pollen as a food
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What is the socially optimal level of co-mingling?
Where marginal costs of allowing non-zero co-mingling equal the marginal benefits
Trade-off between the potential impact costs of unapproved GM varieties entering food supply chain Vs the mitigation costs from reducing the threat of co-mingling
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The socially optimal level of co-mingling
Impact costs (UU): Risk (uncertainty) unforeseen human
health and environmental consequences Reduction in consumer choice Mitigation costs (MM): Supply chain identity preservation &
segregation Testing, certification, monitoring Opportunity costs of foregone markets Remedial measures re: cross-
contamination
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The socially optimal level of co-mingling
Cost
Level of co-mingling
0% 100%
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The socially optimal level of co-mingling
Cost
Level of co-mingling
0% 100%
U
U
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The socially optimal level of co-mingling
Cost
Level of co-mingling
0% 100%
M
MU
U
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The socially optimal level of co-mingling
Cost
Level of co-mingling
0% 100%
M
MU
U
TT
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The socially optimal level of co-mingling
Cost
Level of co-mingling
0% 100%
M
MU
U
TT
CM1
X
Y
Z
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The socially optimal level of co-mingling
Cost
Level of co-mingling
0% 100%
M
MU
U
TT
CM2CM1
X
Y
Z
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The socially optimal level of co-mingling
Cost
Level of co-mingling
0% 100%CM*
M
MU
U
TT
CM2CM1
X
Y
Z
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From moratorium to co-existence
EU moratorium on approval and importation of GM crops: 1999-2003
2004: Member states instructed to develop frameworks for co-existence
How was low level or adventitious presence handled? Incidents resolved without suspension of
international trade Minimal political interference
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Examples 2000, Canadian canola shipment to Europe
0.4% unapproved GM traits Crop destroyed (France, UK) or harvested but
prohibited from entering market (Sweden) 2002, UK. Impurities in canola seed for seed
trials. Co-mingling 2.8% Crop harvested and seed destroyed
2003, Trace amounts GM canola detected in Canadian mustard exports to EU. Apparently little reaction. No information on what
EU importers did with mustard shipment
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Emergence of zero tolerance
EU Directive 2001/18 establishes zero tolerance
2006, US rice exports to EU. Trace amounts of unapproved GM (LL601 rice). EU bans imports of US rice. Currently <1/3 previous level
2006, Herculex GM corn approved in US, not in EU. Trace amounts discovered. Trade disrupted until EU approval in 2009
Challenges for animal feed industry. 2011, threshold of 0.1% established for feed
Zero tolerance remains for food
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Case 1: Triffid Flax Canadian flax: mostly industrial, small
human food market No supply chain segregation CDC Triffid flax. Approved in Canada 1998
but voluntarily de-registered (2001) due to export market uncertainty.
Never grown commercially. Germplasm and seedstocks destroyed.
No tests existed
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The Case of Triffid Flax 2009: firm develops new (PCR) test specific
to Triffid flax Germany issues EU-wide Rapid Alert
notification confirming presence of GM-flax in Canadian non-GM flax imports
Widespread presence detected in EU: bakery, cereal products.
Canadian flax imports banned Significant costs on exporters and EU importers Protocol developed for sampling along supply
chain
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Questions raised by the case
1. What did the zero tolerance import ban achieve? Agronomically obsolete variety, approval will
never be sought. Co-mingling widespread & prolonged (10 years).
2. “Zero” is defined by what can be detected. improvements in testing technology move
the boundary of probable zero. Costs of “zero” rise without an assessment of cost-benefit trade-off
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
0(A)
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
0(A)
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
0(A)1%
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
0(A)1%
D
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
0(A)p(0) 1%
D
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
0(A)p(0) 1%
D
E
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
Probable zero
0(A)p(0) 1%
D
E
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
Probable zero
0(A)p(0) 1%
D
E
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Science and the shifting boundary of zero
Cost
Level of co-mingling
100%
M
MU
U
TT
5%
C
Probable zero
0(A)p(0)
uncertainty
1%
D
E
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Questions raised by the case
3. Private sector incentives to develop tests Worldwide adoption of new Triffid flax test.
Zero threshold determined by perceived profitability of improved test, not public policy.
4. Establishment of sampling criteria somewhat arbitrary. Where in supply chain? Cost-practicality trade-off So what does zero really mean?
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Case 2: Pollen, bees & honey
September 6 2011 EU Court of Justice ruled that pollen in honey constituted a foodstuff.
What’s the big deal?
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Confluence of events Asynchronous approvals: GM variety
approvals proceeding at different rates
EU zero tolerance policy for unapproved GM products
Co-existence policy: conventional & organic crops (including honey) not suffer co-mingling with GM crops Buffer zones around GM crops
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Unintended consequences of zero tolerance?
Pollen is now “ a food”. Honey producers unable to sell their
product if pollen from GM crops is present
Bees roam: 3-10km buffer zones? Co-existence rules could effectively
prevent planting of GM crops Unintended consequence: exacerbate
asynchronous approvals
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Conclusions Cases illustrate sub-optimal outcomes
from current zero tolerance policy Challenges in operationalizing zero
and unintended consequences Determinants of ‘zero’ driven by
exogenous factors Real question: not “How Low Can you
Go?” but “How Low Should you Go?”
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Thank you