Egg Industry News and Commentary

  —  Apr 12

 
Reevaluation of Acceptance of GM in China

    

The China National Chemical Corporation, a parastatal entity, has completed their $43 billion acquisition of Syngenta AG of Switzerland.  Syngenta is a leading biotechnology company developing and distributing GM seeds.  Partly through ignorance but also institutional opposition, Chinese consumers are generally unwilling to embrace GM technology.  The justification for previous Government policy on GM lies in the low productivity of farms. 

  

Currently farmers in China can harvest 95 bushels of corn per acre equivalent to 6 metric tons per Ha.  The U.S. equivalent is 180 bushels per acre. Similar differences exist between the yield of soybeans in China (25 bushels per acre or 1,600 kg per Ha) compared to 52 bushels per acre in the U.S.

Simply put, if the yield of corn and soybeans were to be increased to levels approaching U.S. standards, the price of commodities would fall to the point where millions of small-scale farmers would be displaced resulting in social upheaval.  Accordingly the Government of China which plans all production has maintained a program of excluding GM seeds but cynically allows importation of GM grains for livestock and human consumption.

China National Chemical Corporation will have to integrate the technology of its acquisition into the agriculture of its nation as it will have to compete in the future with powerful competitors such as the combination of DuPont Company and Monsanto.  The national market for seeds in China is estimated at $17 billion according to an article by Brian Spegele in the March 27th edition of the Wall Street Journal.  Pressure to capitalize on their investment will force China to adopt GM grains.  A thaw in attitude was cited in the WSJ article with Zhang Taolin the Vice-Minister for Agriculture stating, “The Government believes GM is safe”.  Syngenta maintains that the Government of China which has funded GM research will adopt the technology for the domestic market in an attempt to upgrade productivity.

It is anticipated that the change in consumer attitude may take some time with Jian Wu, business director at DuPont of China criticizing the Government for “not educating the general public about the real benefits of GMO”.  Of specific interest in China is cultivation of GM soybeans to produce cooking oil which is in demand.

It would appear that China is in a position to learn from the mistakes of the European and U.S. biotechnology companies that identified farmers as their customers for GM seeds. In fact consumers at the end of the production chain represented the arbiters of acceptability.