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2008/SOM1/HLPDAB/006 Agenda Item: 1

The Low Level Presence of Regulated Recombinant-DNA Plant Materials in Commodity Trade

Purpose: Information

Submitted by: International Grain Trade Coalition (IGTC)

High Level Policy Dialogue on Agriculture Biotechnology

Lima, Peru27-28 February 2008

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THE LOW LEVEL PRESENCE OF REGULATED RECOMBINANT-DNA

PLANT MATERIALS IN COMMODITY TRADE

THE LOW LEVEL PRESENCE OF REGULATED RECOMBINANT-DNA

PLANT MATERIALS IN COMMODITY TRADE

Randal Giroux Ph.D. International Grain Trade Coalition

Seventh Meeting of APEC High Level Policy Dialogue on Agricultural BiotechnologyFebruary 27-28, 2008, Peru

Randal Giroux Ph.D. International Grain Trade Coalition

Seventh Meeting of APEC High Level Policy Dialogue on Agricultural BiotechnologyFebruary 27-28, 2008, Peru

COCERAL

GAFTA

ANIAME, APPAMEX

Hungarian Grain and Feed Association

Solvent Extractors‘Association, Soybean Processors Association

Russian Grain Union

ABIOVE, ANEC

CEC

NACMA

Canada Grains Council

IGTC Membership-21 Organizations/ 3000 members / 80 countries

CNAGS

NAEGA, NCGA, NGFA, USGC, USW, CRA

, 

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Few crops represent large share of global and use, production & consumption

Soybeans7%

Maize12%

Rice, Paddy12%

Wheat18%

Other42%

Barley5%

Sorghum4%

50%

CottonCanola

Population & income growth drive

•Higher caloric intake •Improved diets•Increased consumption of oils•Increased animal protein consumption• 73% of global corn goes to feed.

..their production continues to grow..driven by growth in demand

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

Sunflower OilSoy Oil

Canola OilPalm Kernel Oil

Palm OilCorn Oil

Coconut Oil

-

50,000

100,000

150,000

200,000

250,000

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

Poultry MeatPigmeatBeef and Veal

Palm Kernal2%

Copra1%

Fish3%

Canola11%

Cotton Seed6%

Sunflower5%

Peanut3%

Soybean69%

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Where Are World Grain Markets Going?

• Demands on grain will continue to grow– GDP growth– Biofuels– Water resources

• Easiest markets likely get the most attention– Biofuels over Food/Feed– Domestic over Export– Generic over Specialty

Global demand for raw crop materials is accelerating

150016001700180019002000210022002300240025002600

1980 1985 1990 1995 2000 2005

Mill

ion

Met

ric T

ons

Principal grains, rice, oilseeds, fish meal, palm oil

Source: USDA, Foreign Agricultural Service

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World Bulk Grain Systems Characteristics

• Most grain used for food,feed or for processing is shipped by bulk handling systems

• Bulk system is characterized by high volumes to achieve low costs (economies of scale)

• Most of the world grain is utilized as feed

• 72% of world corn production

• 60% of oilseed production

• Food and feed grains move through the same infrastructure.

Impact of biotechnology approval framework on global food and feed supply chain

• Compliance with National Requirements• Regulatory Compliance (Unapproved events)

– Asynchronous Approvals– Field Escapes

• Regulatory Compliance (Labeling Exemptions)– Managing to a Threshold– Customer specific-thresholds

• Compliance with International Requirements– Biosafety Protocol (18.2.a)

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Asynchronous Approvals leads to the LLP of unapproved events in grain shipments

• Low Level Presence (LLP)– The potential for the unintended mixing between

different crops or other impurities within grain, feed and food production

• LLP not a new concept to the grain industry– Well recognized and widely understood in

international trade.– Standards currently exist to account for LLP of

materials such as broken kernels, foreign material, diseased kernels, etc.

LLP of GMOs will occur in all trans-boundary shipments of all commodities (both GMOs and non-GMOs) shipped from countries

having GMOs in commercial production

What is LLP?

Grain Perspective• Unintentional• Low level presence of a transgenic

event(s) authorized in one or more countries but not in country of import

• Reasonably be expected to be present consistent with generally accepted agricultural and manufacturing practices

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Why is the grain industry involved in LLP discussions?

• Agricultural biotechnology is here to stay

• As national and international regulatory frameworks emerge for modern biotechnology, the food and feed supply chain will be affected by these government decisions

• World’s grain industry must be proactive to advocate regulatory frameworks in their respective countries that avoid disruptions in the international trade of grain, oilseeds, pulses and derived products

Zero tolerance is the most disruptive policy for LLP in grain shipments for FFP

Grain industry reasons to move off zero tolerance for LLP

• Zero threshold LLP policies expose grain industry/importers to exceptionally high risk:– Demurrage, additional handling/storage costs/

disposal costs)– Neither Identity-preservation (IdP) nor grain

channeling can manage these events to zero tolerance

• To manage risk exporters/importers stop offering product: – Trade stops; loss of export opportunity impacts

entire export value chain– Worst case leads to domestic industry downsizing

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LLP Risk Management Priorities

IGTC urges governments to take a tiered approach to managing LLP:

1. Synchronize event authorizations among countries whenever possible.

2. Recognition of the exporting country’s risk assessment system a) Grant full authorization to the eventb) Move off of current zero thresholds by announcing low-

level marketing thresholds.3. Conduct a low level presence risk assessment

for the event using the Codex Low Level AP Risk Assessment Annex and assign an LLP threshold.

Proactive Use of Codex Low Level AP Risk Assessment Guidelines

• Some governments are expected to use the new Codex Low level AP Risk Assessment Guidelines only when an event is detected at unload– Costly: Ship unloading may be delayed until low level risk

assessment is completed, creating additional unnecessary costs (Discourages Trade)

• Grain industry urges governments to perform low level AP risk assessment as soon as information on the event is posted to the new FAO database and proactively announce a marketing tolerance.– Less costly, marketing tolerance known in advance of

shipment (Encourages Trade)

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Setting an LLP threshold

• Since the biotechnology event has been approved at 100% inclusion in the exporting country, governments should look to existing marketing thresholds for guidance in setting LLP thresholds – Clearly established minimum standards, enables markets to

trade products with claims of identity and attributes (No.2 yellow, Organic, Waxy)

– Establishes thresholds that allows grain customers to maximize the value of the grain product and minimize cost inefficiencies and handling costs associated with the supply chain

– Domestic industry players can establish lower thresholds contractually, where there are market demands for such products

Existing LLP marketing thresholds provide guidance

• Numerous grain and marketing standards currently exist to account for incidental LLP that are cost-effective, technically feasible and practical for FFP shipments

• These standards are generally set at 3-5%, to maximize market accessibility and minimize added costs for special handling and risk management

• Through dialogue, governments and industry tend to establish marketing/quality standards that are consistent with generally accepted agricultural and manufacturing practices.

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International and Grain Marketing Standards

• ISO and Codex Forums– ISO wheat standard (ISO 7970: 1989) includes maximum

tolerances for; other cereals (3%), harmful or toxic seeds (0.5%), etc.

– Codex Maize standard (153-1985) defines thresholds for factors such as broken kernels (6%), diseased kernels (0.5%) etc.

• Grain Marketing Standards– No. 2 CWRS tolerances for wheats of other classes – 4.5%

total (CGC, August 2007)– No.2 wheat tolerance for wheats of other classes- 5% (FGIS

standards May 2006)– Waxy corn. Corn that consists of 95 percent or more waxy

corn. (5% AP tolerance)

Biotechnology Labeling and Organic Marketing Standards

• Biotechnology standards trigger labeling:– NAFTA trilateral agreement for labeling a cargo to comply

with BSP BCH listing– Tolerance exemptions for mandatory and voluntary labeling

of products derived from modern biotechnology– Voluntary GM food labeling tolerance for Canada and HK

• Organic Certification– The Canadian Organic Products Regulations: “…..the

contents of which are at least 95% organic products and single ingredient organic products may bear the logo “Canada Organic;”

– 'Organic Farming - EC Control System' [No 2092/91]: “…. products bearing this logo can be confident that at least 95%of the product's ingredients have been organically produced;

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Conclusion

• Demands on global agricultural supply chain demands are increasing and agricultural biotechnology policy should aim to minimize the disruption of trade

• For agricultural biotechnology, zero tolerance is the most disruptive policy for LLP in grain shipments for FFP

• While synchronized approvals are the preferred outcome, approval of Codex LLP annex and national implementation of LLP policy in a proactive manner is encouraged

• Existing marketing standards should be consulted to help inform governments on what is cost-effective, technically feasible and practical for FFP shipments

• LLP levels of 5%, maximize the value of the grain product and minimize cost inefficiencies and handling costs associated with grain channeling.

What can APEC Member Countries Do?

• Support the Codex LLP annex approval

• Proactively address the issue of LLP– Get your private sector entities involved in the issue– Start a industry-government dialogue on the topic

• Develop national policy that minimizes impacts LLP of agricultural biotechnology products– Develop risk assessment policy that minimizes

asynchronous approval gaps between trading partners– Establish policies for agricultural biotechnology that create

access and predictability for global supply chains– Acknowledge the need for and support the development of

practical and acheivable standards for low level presence in collaboration with industry

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