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Crop Biotech Update

Innovation Study Demonstrates Financial Benefits of HT Canola in Canada

February 12, 2020

In a wide study to assess the impacts of innovation, University of Saskatchewan researchers noted how GMO canola, herbicide tolerant in particular, helped farmers gain more than C$200 million in profit, among other benefits.

Researchers from the University of Saskatchewan investigated how the distribution of benefits makes an impact on innovation. It was noted that the distribution of benefits is important to innovation. Innovation comes in stages, and each stage must share a proportion of the benefits. This is illustrated in such scenarios as to when technology fails to benefit a manufacturer, that technology will not make it to the market; or when a product fails to bring benefits to the consumers, it is unlikely to be bought.

To better understand the distribution of impacts of innovation, the researchers focused to study the uses of innovation of herbicide tolerant (HT) canola to develop a baseline value of its benefits in Canada. In their study, they mentioned that the benefits of innovations are commonly measured in terms of money. Thus, the findings of the HT canola Canada-based baseline study include: (1) a C$233 million gain from the crop by three multinational enterprises from 1985 to 2020; (2) an estimated loss of C$400 million by other development firms and public canola breeding programs who did not adopt the HT canola; (3) Farmers gained C$208 million by adopting HT canola; (4) A gain of C$26 million by Canadian consumers through lower canola oil prices; and (5) A gain of C$19 million by consumers worldwide through the lower prices of Canadian canola.

Putting these information into perspective using five different policy options to assess the impacts, the researchers established three key impacts with regards to innovation: (1) Providing innovation incentives generates a larger positive impact than spread out over time; (2) delays in regulatory approvals has a larger negative impact compared to twice the cost of the regulatory approval; and (3) there is little incentive for the canola industry to endorse the intellectual property rights system when it is weakened by 50%.

The study concludes that when financial incentives are provided up-front as encouragement, it causes a higher level of benefits. The study also found that having an efficient regulatory system is important since regulatory delays reduce the overall level of benefits and cause costly consequences.

The details of the study were made available by author Stuart J. Smyth through SAIFood.

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