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7-Business: The economics of non-GMO segregation and identity preservation

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TITLE:  A) The economics of non-GMO segregation and identity preservation
        B) Corn mill works on products free of genetic engineering
SOURCE: A) INRA Rennes, France and University of Illinois, USA
        B) Associates Press, USA, edited and sent by Agnet, Canada
DATE:   A) October 21, 2000
        B) November 6, 2000

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A) The economics of non-GMO segregation and identity preservation

David S. Bullock, Marion Desquilbet
Institut National de la Recherche Agronomique Economie et Sociologie Rurales
Rennes, France
Elisavet I. Nitsi
University of Illinois, Department of Agricultural and Consumer Economics

The Economics of Non-GMO Segregation and Identity Preservation


Much controversy surrounds the production and marketing of agricultural 
genetically modified organisms (GMOs). Many consumers worldwide currently 
worry that food derived from GMOs may be unhealthy, or that the production 
of GMOs may have negative environmental consequences or other negative 
social consequences. As a result, recently there have been calls all over 
the world, but especially in the European Union (EU) and Japan, for 
increased regulation of the production and marketing of GMOs and of 
products derived from GMOs. Calls have been made for the banning of GMO 
imports in the EU and Japan, and laws have been passed mandating the 
labeling of genetically modified (GM) products in the EU.

According to USDA estimates, 52% of U.S. soybean acres and 25% of U.S. corn 
acres will be planted with GM varieties in 2000 (USDA NASS, 2000). The U.S. 
is a major world producer and exporter on both markets, and the EU and 
Japan are major destinations for U.S. soybean and corn products.

If consumers strongly reject products labeled as GMO, then we can expect 
that market signals will be created that encourage the segregation of non-
GM grain from GM grain, and that the identity of non-GM grain be preserved. 
Indeed, as will be explained, such market signals and non-GM segregation 
and identity preservation can already be observed in grain markets. In 
order to understand in any kind of empirical sense the economic effects of 
labeling laws and/or changes in consumer preferences for non-GM and GM 
agricultural products, it is first necessary to understand the 
institutional set-up of world grain markets and marketing channels. Through 
these channels grain flows from the seed industry all the way up to the 
processing industry. The effects that GM labeling laws and preference 
shifts will have on the economic well-being of the industries and people 
involved is the subject of this paper.

Corresponding authors:
David S. Bullock
Department of Agricultural and Consumer Economics, University of Illinois
305 Mumford Hall
1301 W. Gregory Drive
Urbana, IL 61801
Phone: (217) 333-5510
Fax: (217) 333-5538

Marion Desquilbet
rue Adolphe Bobierre, CS 61103
35011 Rennes cedex, France
Phone: (33) 2 23 48 56 08.
Fax: (33) 2 23 48 53 80

Copyright 2000 by Bullock, Desquilbet and Nitsi. All rights reserved.

Readers may make verbatim copies of this document for non-commercial 
purposes by any means, provided that this copyright notice appears on all 
such copies.


B) Corn mill works on products free of genetic engineering

JOHNSTOWN, Colo. - The Colorado Sweet Gold corn mill is refining its system 
of testing and tracking products to avert what caused another company to 
recall products containing genetically engineered corn. The story says that 
the system at Sweet Gold, one of the state's only mills to process corn for 
human consumption, helps assure delivery of a product free of pesticides, 
herbicides and genetic engineering. Sweet Gold plant manager John Hamilton 
was quoted as saying "It is more of a way of assuring ourselves that what 
happened to Taco Bell won't happen to us." Jim Miller, spokesman for the 
Colorado Department of Agriculture was quoted as saying, "This is 
absolutely not a wholesale indictment of biotechnology. Science-based 
technology requires product identification and a segregation system."

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