Assessing Socio-Economic Impacts of GMOs


Assessing Socio-Economic Impacts of GMOs: Issues to Consider for Policy Development
Executive Summary
This Report
This report is motivated by the conclusions of EU Council of Environment Ministers of December 4, 2008, asking the European Commission to explore the possibility to consider other factors beyond health and environmental risks, i.e. "socio-economic benefits and risks and agronomic sustainability" (all covered by the term socioeconomic in this report) in GMO market authorisation. While socioeconomic issues have played a major role in the long standing EU debate on GMOs, there is, however, very little experience in explicitly and systematically assessing socioeconomic impacts of GMOs. Against this backdrop, this report aims to identify and explore the issues relevant to the topic and provide recommendations for policy development and further research. Research was structured along the following main questions: (i) what are socioeconomic effects of GMOs and what are the relevant issues and controversies? (ii) Whether and how can socioeconomic effects be differentiated or clustered e.g. according to the specific GMO, the intended application or the type of release? (iii) How could socioeconomic effects be assessed in the course of GMO market authorisations? Furthermore (iv), the study should explore the awareness and views of Austrian stakeholders on this topic. The study draws on a review of published literature and policy documents as well as phone interviews with stakeholders in Austria.
Socioeconomic considerations in the literature
There is a substantial body of literature on anticipated and documented impacts of GM crops beyond the health and environmental dimension. These impacts are referred to as economic, agronomic, agro-environmental, societal, social, socioeconomic etc. The term ‘socioeconomic’ seems to be used very broadly as involving a combination of social and economic factors. With the possible exception of ethical issues, the term appears to cover almost everything which does not fit into the health and environmental risk box. As the scope of "other factors" in GMO authorisation is not yet clear it is considered pertinent to keep the vagueness of the term in this report.
The majority of the publicly available literature investigates economic effects. Studies on developing countries have a strong bias towards farm level effects and cotton. Many reports can be traced to either industry and close-to-industry sources or to environmental NGO sources. Comprehensive studies from public authorities or independent organisations are scarce. Two examples are briefly described: a study compiled by the UK Cabinet Office in the course of the GM Nation exercise, and a large-scale assessment conducted in the context of the United Nations: the International Assessment on Agricultural Knowledge, Science and Technology for Development (IAASTD) aiming to investigate the impacts of agricultural knowledge, science and technology (AKST) on hunger, poverty, nutrition, human health, and environmental and social sustainability in relation to both the past and the future.
The UK study concluded that for the UK context economic benefits might be outweighed by additional costs though expecting the balance to change with future generations of GM crops. The IAASTD exercise was sceptical about the relative contribution of biotechnology for solving the main societal problems described above.
Many studies, the authors of which are related to industry showed clear benefits, especially on the farm level, while NGO studies often came to different conclusions.
Socioeconomic considerations in EU and national regulatory regimes
Socioeconomic impacts of GMO market approvals are considered in a broad range of countries including Armenia, Bangladesh, Bhutan, Cambodia, China, Honduras, India, Lebanon, Mauritius, Nigeria, Philippines, South Korea, and the Syrian Arab Republic. Scope and nature of requirements seem to vary considerably between these countries as does the way they are being established: part of national legislation, draft legislation, policies or regulatory practice. Australia, Brazil, Canada, Japan, and Thailand are examples for countries not taking into account socioeconomics. Among EU/EEA Member States, only France and Norway are known to explicitly assess socioeconomic impacts; the Austrian national law on GMOs includes a provision on socioeconomics which has not yet been implemented though.
Norway established a mandatory requirement to consider socioeconomic impacts back in 1993, focusing on ethical and social aspects as well as sustainability assessment. Requirements were subsequently detailed in regulations on impact assessment and opinions of the NBAB. Sustainability assessment includes all three pillars of sustainable development and explicitly recognises the global scale. It thereby extends environmental risk assessment when considering effects on biodiversity in third countries. Social utility aspects include for instance demand, problem solving capacities, and alternative products. Ethical assessment considers for instance the moral views of the general population, impacts on traditional cultures and weaker groups, and the integrity of species. Socioeconomic information is being weighted against health and environmental risks and associated uncertainties and irreversibility. The unfavourable opinions of the NBAB frequently included lack of benefit to the society and a positive contribution to sustainable development, though, health and environmental risks seem to be still the most important reason. The lack of socioeconomic information in the dossiers is perceived by Norway to be a particular problem. It is neither possible to force applicants to provide such information nor to comment on such aspects in the EU authorisation procedure because they are considered by EFSA to be out of scope.
In France, the High Council on Biotechnology (HBC) was established following a recent change in GMO policy. One of the two HCB Committees (CEES) provides advice to the government on economic, ethical, and social aspects of GMOs including in the course of routine evaluations of Directive 2001/18/EC and Regulation 1829/2003 dossiers. Based on the limited experience gained so far, CEES perceives its main challenges to be the lack of relevant information in the dossiers and the lack of guidance for criteria, methods, data, and assessments. CEES practice apparently includes providing quite prescriptive advice instead of options to the formal decision makers based on a weighing-up of health and environmental risks on the one hand, and socioeconomic concerns and benefits on the other hand. This practice is potentially changing lines of accountability and needs a more careful analysis in the context of the EU governance framework established for the food chain.
The Austrian GMO law includes a provision allowing decision makers to ban the marketing of products which are considered ‘socially unsustainable’ (‘sozial unverträglich’) – referring to social, economic, and ethical aspects. The meaning of this provision has never been clarified; it has been discussed to be potentially in conflict with EU legislation. In no case, explicit reference was made to this provision – which could therefore be considered as void. In case of an EU policy change, e.g. allowing for national assessments of socioeconomic impacts of GMOs, this provision could become an interesting reference. A more detailed legal analysis might be required to identify possible constraints.
Challenges from international regulations
Article 26 of the Cartagena Protocol on Biosafety establishes the right of Parties to take into account socio-economic considerations arising from the impact of living modified organisms in reaching a decision on whether to import these organisms, especially with regard to the value of biological diversity to indigenous and local communities. The scope of this Article is contentious with the USA and industry favouring a more narrow interpretation, and others including socioeconomic effects beyond the role of biological diversity to indigenous and local communities. The Article also includes a provision to make sure that Parties’ considerations of socioeconomic aspects meet their other international requirements thereby possibly limiting the scope of interpretations. Clearly, the WTO agreement has to be considered in the next steps of discussion. Moreover, non-Parties, such as the USA, are and will not be bound to the requirements of the Protocol. Therefore the possible role of the Article as a reference point for EU or national policy remains unclear.
WTO legislation does not a priori exclude socioeconomic aspects as long as they are verifiable, transparent, and non-discriminating. In developing their line of argumentation, countries need to define socioeconomic aspects as risk-, health- or trade-related to make them subject to any of the three WTO Agreements. Since the WTO dispute, GMOs have been considered almost exclusively in the context of the SPS Agreement as if no other possibilities exist. In fact, both the TBT- and the GATT Agreement provide more scope for addressing socioeconomic factors compared to the SPS Agreement. The recent WTO dispute on GMOs concluded that it is possible to base measures on more than one agreement. Overall, it seems to be possible to meet the key requirements, i.e. a legitimate objective, based on scientific or other evidence, not more trade-restrictive than necessary, and non-discrimination when making a case for socioeconomic consideration.
The FAO Draft International Code of Conduct on Plant Biotechnology prepared by the FAO Commission on Plant Genetic Resources in 1993 also holds relevant provisions on the consideration of socioeconomic factors. If finalized and adopted, the Draft Code of Conduct could facilitate the broadening GMO assessment and decision making.
Challenges from EU institutional arrangements
A key issue in implementing socioeconomic assessment for GMOs would be the institutional location at the EU level. Socioeconomic factors have so far been perceived to belong to the realm of risk management, i.e. the EC and the Member States. If risk management frequently asked for and evaluated socioeconomic data, the establishment of a dedicated body might be envisaged. From a governance perspective, providing advice on socioeconomic aspects can be considered as just another scientific advice to risk management and not as part of its core tasks, weighting of evidence on impacts and decision options, and mitigating negative effects. Applying the rationale which was underlying the establishment of EFSA to separate expert advice from decision making would require a functional and/or institutional separation to the EC. There is, however, no obvious entity at the EU level which could deal with socioeconomic assessments. EFSA has been proposed to cover some aspects (health and environmental benefits). EFSA’s scope might even be broadened to include a social science unit for more broadly assessing societal concerns. The latter proposal is, however, objected by industry and stakeholders. Moreover, commentators diverge on the need for changing the legal basis of EFSA, the EU General Food Law.
Industry suggested making use of the European Group on Ethics which could be complemented by another committee looking into economic and social issues. Though the remit of such a committee/body remained to be determined, it can reasonable be expected that it would comprise the evaluation of socioeconomic data provided in dossiers and coordination to Member States. Given the context specifity of socioeconomic impacts, Member States will have to play an important role in providing data and evaluations more specifically for national and regional context. It appears to be unlikely that a Committee of independent expert advisors could play such a role.
In principle, the mandate of EFSA could be modified along the lines of REACH legislation, which allowed establishing two committees: a scientific and a socio-economic committee linked to the European Environment Agency. This would, however, require amending EU legislation in particular, the EU General Food Law.
Challenges to a socioeconomic assessment framework
The analysis in this chapter is based on essential similarities between risk assessment and socioeconomic assessment (subsequently referred to as socioeconomic impact analysis, SOEIA). First, SOEIA is conceptualised as scientific advice on policy making, though largely based on social science. Second, this scientific advice can be expected to meet EU standards established for good governance and expert advice in policy contexts. Third, a SOEIA framework could be designed in symmetry to risk assessment. Fourth, the need for an elaborate framework which allows for both public participation and public scrutiny also comes from the inherent similarities of the conflicts. Both the assessment of health and environmental risks and the socioeconomic considerations led to contradicting results and conclusions and stir fierce debates among stakeholder groups as well as in the scientific literature. Given this similarities of both types of scientific advice, the concepts on inclusive and integrative risk governance can also be employed.
Setting an assessment means to clarify normative baselines, key concepts, criteria, impact dimensions, ‘endpoints’, and methods. Taking the example proposed by the Netherlands Commission on Genetic Modification (COGEM) report it is shown that conventional agriculture and sustainable development might have different meanings in Austria and the Netherlands. Such context specifity is likely to translate into divergence in scope, impact dimensions and criteria. Issues of scope could also be limited by international legislation, e.g. if considering not only impacts on Member States or EU territory but also on third countries. Different proposals have been made for criteria, impact dimensions and endpoints though, quite a few specifically covering a broader range of socioeconomic issues. Recent examples come from COGEM and Norwegian Biotechnology Advisory Board (NBAB) and from a German report. It remains unclear how and to what extent these proposals have been checked against empirical evidence on socioeconomic impacts described in scientific literature and public reports. This is, however, important as there is considerable evidence which needs to be systematically collected and scrutinised in order to verify and possibly develop the criteria proposed. Existing reviews do not seem to be comprehensive enough or seem to be biased in one or another direction. Putting together impact dimensions, endpoints, criteria and methods is a valid endeavour, however, it is still highly questionable if anything like a definitive checklist can be obtained. Researchers of social impact analyses widely disagree on what constitutes social impacts and which variables should be included in assessment criteria.
Austrian stakeholders highlighted impact dimensions relevant for Austria given its specific agroeconomic and sociocultural context: small-scale agriculture with a very high proportion of farmland located in disadvantaged (mainly mountainous) regions, very high proportion of organic farms; strong resistance from consumers and the general public to adopt GM crops
and derived food/feed. Hence, serious short-term and long-term impacts can be envisaged on conventional and organic producers and the entire food chain including consumers and seed producers, thereby affecting costs and gains for farmers, food producers and retailers, market shares and position, as well as competitiveness. It is also perceived to conflict with Austrian agriculture policy goals.
Setting up a framework and approaches for socioeconomic assessment of GMOs is breaking new ground, though this does not necessarily mean to start from scratch. Existing impact assessment approaches could be explored, e.g. social impact analysis and environmental impact assessment.
Given the need to clarify and agree on normative baselines, key concepts, criteria, impact dimensions, ‘endpoints’ and methods it is proposed to establish a distinct framing step which would provide for framing deliberations between expert advisors (here: mainly social scientists) and policy makers (here: risk management, i.e. the European Commission and the Member States). The importance of such a framing step has been acknowledged for risk assessment not only in the scientific literature but also in policy contexts, e.g. recently by the Codex Alimentarius Commission. This framing step could be designated as ‘impact assessment policy’ in analogy to the term ‘risk assessment policy’ used by the Codex. Generally agreed procedural and substantive aspects of impact assessment policy can and should be included in guidance documents. Trait/crop/application-specific guidance in analogy to the crop-specific OECD Consensus or Biology documents could also be considered. This framing stage could also have a clearing house function to allocate issues to either the scientific or the socioeconomic assessment. Over time the scientific risk assessment has been widened to include environmental impacts such as resistance management which are particularly important from an agronomic point of view. Such information might (also) be considered in the course of a socioeconomic assessment.
Public participation is considered important, in particular in the framing and evaluation step (when the expert advice is being considered and weighted by decision makers). The degree of public participation might be flexible depending on the issues at stake.
It is also important to consider the characteristics of socioeconomic data and the differences compared to data from scientific risk assessment. Socioeconomic data are crop/trait/application-specific but not necessarily event-specific. Thus there is no need to produce extensive socioeconomic data for each particular event. Supplementary event-specific information might only be relevant if important characteristics of the crop/trait/application combination are being affected. On the other hand, socioeconomic data can be specific for a particular geographical, climate, agroeconomic and socio-political context and such data cannot be directly applied to other contexts. This is complicating the establishment of trait/crop/application-specific guidance documents and putting the value of socioeconomic data from other contexts into perspective.
Wider policy challenges
This chapter briefly discusses other aspects still relevant for policy development.
The most important aspect is the need to set the stage for a broader debate on the EU level. A scoping document should be composed which clarifies some cornerstones of a socioeconomic assessment of GMOs. These clarifications should include the relationship to the parallel debate on allowing Member States to ban cultivation on their own territory (opt-out); whether socioeconomic impacts should only be considered in case of cultivation and restricted to the EU only or all GMOs and extended to impacts on third countries; whether socioeconomics would be routinely assessed in each case and – if not – what would trigger such an assessment; whether it would be possible to object to an application based on socioeconomic grounds; to whom the responsibilities would fall to provide socioeconomic data.
Another important question is how stakeholders will respond if this is becoming a broader debate. There is preliminary evidence from literature that a majority of stakeholders would positively receive the consideration of socioeconomic aspects with the biotechnology industry possibly opposing such a move. Almost all Austrian stakeholders interviewed in the course of this study also expressed a positive view. At this early stage, Austrian stakeholders have not yet taken any official position or view as there is still a lack of clarity whether at all and how socioeconomic considerations might become relevant. The majority highlighted prior occupancy with the issue of socioeconomics given the specifics of the Austrian context: lack of tolerance of consumers for trace amounts of GMOs; the threshold for GMOs in seeds, and organic food products being as low as 0.1%.
Other aspects not directly related to a socioeconomic assessment framework are
– Changing lines of accountability – in particularly if linked to opting-out: blame avoidance strategies (‘no’ votes or abstaining while predictably receiving a positive decision by the EC) might no longer be sustained.
– Administrative burden for Member States with strict coexistence laws is likely to increase in any case: if there is cultivation of GM crops in these countries, efforts will increase for implementing national legislation and control. In case of an opt-out clause based on socioeconomic reasons, Member States might be required to provide extensive socioeconomic data for their specific geographic and socio-cultural contexts.
– The appropriateness of regulation might again be subject to criticism if GM crops were rejected on socioeconomic grounds, while conventional varieties with a similar socioeconomic ‘profile’ would not be assessed at all and continue to be marketed.
– Applicants might not provide extensive and context specific data for less important markets – this is one explanation why Norway has so far not received additional socioeconomic information along with the risk assessment dossiers.
Characteristics of the Austrian context
Austria has a very distinct agricultural structure compared to other EU Member States. It has one of the highest proportions of farms in mountainous regions (more than 70%) – dominated by small-holders – and by-far the highest proportion of organic farms (15.2% corresponding to a share of 18.5% of total arable land). Since the late 1980ies, Austrian agricultural policy has highlighted sustainable and multifunctional agriculture (landscape management, tourism, biodiversity, rural development, socio-cultural aspects etc.) and strongly promoted ecological measures, organic farming and organic food, regional food supply, local and regional farmer-business initiatives etc. This is also mirrored in Austria’s National Sustainable Development Plan. Austria has the highest percentage of participation in EU agri-environment programmes (some 17%). National policies foresee to continue with this policy and to expand organic farming to 20% of total arable land by 2010.
Present generations of GM crops are not perceived to provide relevant benefits, a fact that is partly linked to the low infestation rates with pests such as the corn borer. Yield increase over the last few decades in case of maize compares and even exceeds the numbers from the USA.
Coexistence of GM and conventional/organic crops is being considered very difficult for two main reasons. First, the small-scale agriculture with an average plot size of some 1.7 hectares and plots typically scattered over an area. Policies in place support small-holder structures and less intensive farming as important in mountainous regions for the maintenance and management of cultural landscapes, tourism and rural development in general. Second, there is strong pressure to avoid any GM content in food exceeding 0.1%. This threshold is embedded in standards of the organic farmers association and in legal requirements for food labelled as GM-free. Beyond that many food processors and retailers are striving to avoid any GM content because of public demand. In fact, the acceptance of GM crops and food in Austria has been continuously ranking very low and lowest compared to other EU Member States.
As a consequence, coexistence measures would have to be much stricter and more comprehensive compared to other geographical contexts. For instance, according to simulation experiments with rape and maize considerable loss of conventional/organic crop land of 36 to 100% could be anticipated in order to allow for sufficient isolation distances.
The organic farming movement has also triggered ecological modernisation in Austrian agriculture with many farmers adopting ecological measures even if not farming organically. Organic farmers are frequently key actors in bottom-up initiatives of rural development which have become more and more important, especially in disadvantaged regions. These initiatives are typically comprising of several rural communes and could also cover larger regions. They are frequently linking regional actors along the food chain and other business sectors such as gastronomy, tourism and energy production. High quality food and specialities from sustainable production are being linked to regional characteristics. Many of these initiatives – even if not subscribed to organic farming – have adopted sustainability standards for farming, food-production and supply with GM-freeness as one of the key criteria. Members of such rural development initiatives, therefore, perceive cultivation of GM crops as a threat to their economic basis and sociocultural regional identity.
Overall, these characteristics have led to strict coexistence legislation by all Federal Provinces and the establishment of numerous initiatives promoting GM-free regions and GM-free food supply.
Overall this context has led to strict coexistence legislation by all Federal Provinces and the establishment of numerous initiatives promoting GM-free regions and GM-free food supply.
Austrian stakeholders consulted in the course of this study highlight these agro-economic and sociocultural specifics. Hence, serious short-term and long-term impacts can be envisaged on conventional and organic producers and the entire food chain including consumers and seed producers, thereby affecting costs and gains for farmers, food producers and retailers, market shares and position, as well as competitiveness. It is also perceived to conflict with Austrian agriculture policy goals.
Based on the analysis in this report, recommendations for policy development and research are provided:
– General recommendations
– Clarification and agreement on the EU level is needed
– On the cornerstones for socioeconomic assessment in order to set the stage for developing an assessment framework
– On the legal leeway to widen the scope of EFSA to also consider socioeconomic impacts
– On a base-set of socioeconomic indicators
More research is required on
– Recent WTO case law to explore the legal leeway in the international context for considering socioeconomic factors
– Assessment criteria, and methods which can be employed
– How the various concepts of impact analysis and integrated risk governance can provide guidance
– How to envisage a centralised multilevel assessment framework which allows for gathering and evaluating ‘contextualised’ socioeconomic information from individual Member States
– On stakeholders and public perception
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