Study Confirms Adverse Economic Impacts of China Biotechnology Approval Process on Corn Exporting Countries

MAIZALL, the International Maize Alliance, points out that the findings of a study released by the Informa Agribusiness Consulting Group demonstrate that the persistent delays in China’s agricultural biotechnology regulatory process hinders North and South American farmers’ access to new biotechnology products. The result is adverse costs in the loss of thousands of jobs and billions in economic output.

The report, The Impact of Delays in Chinese Approvals of Biotech Crops, quantifies the significant economic impact due to the delayed availability of new biotech products (corn and soybeans) for farmers in major biotechnology cultivation countries, including Argentina, Brazil and the United States from 2011-2016. The report also provides estimates of the substantial benefits to the economies of these countries for the period 2017-2022, should China implement a timely and more predictable regulatory process.

“This comprehensive study demonstrates that in an interconnected global economy, food security relies on the ability of agricultural products to move efficiently between producers and consumers,” stated MAIZALL President Pam Johnson. “Delays in import approvals have significant repercussions on farmers, producers, and the global economy. It is past time for China to implement a wide-ranging reform of its biotech regulatory procedures to bring it to a more fully functioning system.”

For the United States corn market, the value of U.S. corn production would have been $100-$175 million higher annually in 2010/11 and 2011/12 if the timing of Chinese approvals of biotech corn events had been consistent with a functional regulatory system. From 2013/14 to 2015/16, the impact on the value of the US corn crop is estimated to have been well over $1 billion annually.

The trajectory of impacts to the corn sector in Brazil and Argentina mirrors the experience of the U.S. The value of the Brazilian corn crop would have been approximately $400 million higher in 2013/14 and 2014/15, while in other years the value of the crop would have increased by about $50 million.
The value of the Argentine crop is estimated to have been reduced by $150 million annually in 2013/14 and 2014/15 as a result of Chinese regulatory delays. In other years, the value of the crop was reduced by $15 million or less.

“These delays prevent farmers from adopting new technologies and innovations so that we can meet the responsibility of working together toward food and nutrition security, economic growth, and sustainable practices,” said MAIZALL Vice President Sergio Bortolozzo.

Looking ahead, over the next three to five years if the Chinese approval system was timelier in its procedures, the value of U.S. corn production would be $360 million to $1 billion higher from 2017/18 to 2021/22.Similarly, the value of the Brazilian corn crop would be approximately $60-$70 million higher annually in 2017/18 and 2018/19. From 2019/20 to 2021/22, the value of the crop would be approximately $155-$130 million higher. Likewise, the value of the Argentine corn crop would be increased by between $25-$70 million annually over the next five years.

The report, which also found similar impacts on the soybean market, estimated broader economic impacts both historically and in the future. Cumulatively, over the last five years, Chinese delays resulted in a total impact to the U.S. economy of over $14.8 billion in output and nearly $7 billion in Gross Domestic Product (GDP). The impact on Brazil’s economy over the past five years was nearly $4.9 billion in output and over $2.6 billion in GDP. The impact on Argentina’s economy over the same time period was nearly $2.1 billion in economic output and over $1.1 billion in GDP. The impact of these delays over the next five years would be of the same order of magnitude.

“We encourage our respective governments to continue to advocate for sound, science-based and predictable regulatory policies that will enable growers access to essential new innovations and meet the challenges of global food security, stated MAIZALL Second Vice President Alberto Morelli.”
For more information on the Informa Report, The Impact of Delays in Chinese Approvals of Biotech Crops, visit https://croplife.org/plant-biotechnology/regulatory-2/informa-report/.

—————————————————————————————————————————————–
MAIZALL is an equal partnership of four organizations in three countries: the U.S. Grains Council and the National Corn Growers Association in the United States, ABRAMHILO in Brazil, and MAIZAR in Argentina. While the three countries are vigorous competitors in world markets, their producers are jointly committed to trade, modern agricultural technology and improved market access.