Cost of losing GE-free label on primary exports unknown - report

A new report is calling on the government to consider the economic impacts of changing gene technology regulations on New Zealand's key primary sector exports, before it progresses with legislative change.

The government is working to change regulations to enable more gene editing and modification, and new legislation is expected next year.

The Potential costs of regulatory changes for gene technology study by the New Zealand Institute of Economic Research (NZIER) released on Monday estimated that introducing genetic modification in Aotearoa could shave billions of dollars off the value of food and fibre exports, which earned more than $54 billion in the year to June.

The report, commissioned by Organics Aotearoa New Zealand, suggested that primary sector exports could be reduced by up to $10-20 billion in revenue each year - because at present, exporters were earning premium values based on GMO-free and clean, green branding.

The report estimated that the clean, green New Zealand brand earned exports an extra 59 percent on its value as a premium product, and 39 percent respectively for organic-labelled products.

But author and NZIER senior economist, Dr Bill Kaye-Blake appreciated there were uncertainties in estimates generated from historic research - which he said were cause for further investigation before regulatory changes were adopted.

"In the past, when there have been regulatory changes, there's a process in government for doing regulatory impact statements," he said.

"Those statements look at what the problem is, what the options are for dealing with them and what the best way forward is. We don't see that here and it's a real gap in the government's work."

The report said lead agency the Ministry of Business Innovation and Employment (MBIE)had provided little evidence of the economic impacts or consequences of changing gene technology regulations.

Dr Bill Kaye-Blake said in his 20-plus years as a government advisor, he had not seen a regulatory change proposal put forward by the government without being supported by an economic impact statement.

"There are potential benefits. What we're asking for is a full accounting of the potential costs and the potential benefits," he said.

"We should be looking at how we can make new products and make new sales overseas, but it didn't go into enough detail on those potential costs or the potential challenges."

MBIE's manager for biotechnology policy and regulation Tony de Jong said he acknowledged MBIE had "not specifically commissioned research on the financial impacts of the gene technology legislation".

"The report, commissioned by Organics Aotearoa, acknowledges that there are 'disparities in findings and potential size of the impact' and states that the few primary sector specific studies available have a range of conclusions on impacts, including a conclusion of no impact at all," de Jong said

He said there were a range of publicly-available resources on the economic implications of gene editing, including via the Royal Society.

De Jong added that the biotechnology space was a rapidly growing sector with a total global market size of up to $1 trillion.

"Even under current restrictive rules, New Zealand's biotech sector generated $2.7 billion in revenue in 2020, and underpins a bioeconomy worth over $50 billion," he said.

Meanwhile, Dr Kaye-Blake said more research into the value of market messages needed to be completed, as well as the stance of New Zealand's export markets around biotechnology and how it could affect two-way trade.

Organics Aotearoa New Zealand will meet with decision makers in Wellington next month.

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