GM Food and International Trade

The gains associated with the adoption of genetically modified (GM) food crops largely exceed any type of potential trade losses says a discussion paper on “Genetically modified food and international trade: The case of India, Bangladesh, Indonesia and the Philippines” published by the International Food Policy Research Institute (IFPRI).

Guillaume Gruere and colleagues note that adopting GM crops also allows net importing countries to greatly reduce their imports. GM rice is identified to be the most advantageous crop for the four countries. They also state that segregation of non-GM crops can help reduce any potential trade loss for GM adopters. The opportunity cost of segregation is much larger for sensitive importing countries than for countries adopting new GM crops. This suggests that sensitive importers will have the incentive to invest in separate non-GM marketing channels if exporting countries like India decide to adopt GM food crops.

The abstract and full paper are available at http://www.ifpri.org/pubs/dp/ifpridp00740.asp