Australasian Political Studies Association Conference 2003
Hosted by the School of Government
University of Tasmania

Political Economy Stream

Assessing the Costs and the Benefits of GM Food Production for New Zealand Producers: the Relevance of Changing Patterns of International Trade

Anne J. Rahming
Lecturer, Victoria University of Wellington

Abstract:

Recent analyses of the potential impact of genetically-modified (GM) food production on producer returns in New Zealand suggest that a GM-free strategy is likely to be more beneficial for two reasons: First, as an island state, New Zealand has the physical advantage of being able to avert the problem of cross-pollination many of the world’s states incur, giving it a competitive advantage in the production of ‘green’ foods. And second, trends within two of New Zealand’s largest trading partners, the EU and Japan, towards an increased consumption of GM-free products, signal that it can benefit more from providing these foods than from it would from producing GM goods. Recent trade data indicates, however, that trade with both the EU and Japan has suffered setbacks despite the current moratorium on GM products. This is likely to remain the case as the EU expands eastward and the Japanese economy continues to stumble. China, however, is a country whose population is far more GM-friendly and that shows signs of increasing consumption. Last year, it emerged as the fourth largest market for New Zealand exports, usurping Japan. This paper assesses the extent to which this shifting pattern of trade alters the cost-benefit logic for New Zealand producers. It is concluded that the benefits of GM-free food production to New Zealand producers is not as clear as previous analyses have asserted. This is the case because historical trading patterns are in a state of flux around the world. Analyses of the potential benefits for producers must, therefore, take into account the likely trading partners of the future – not those of the past.