A Way Forward for Frankenstein Foods.
Bob Lindner, University of Western Australia
A year ago, the future for GMO's looked bright. Plantings of transgenic
soybean, corn, cotton, and canola by North American farmers set new
benchmarks for the rate of adoption of a new agricultural technology.
Widespread consumer resistance to eating GMO's in Europe was virtually the
only cloud on the horizon, but industry assumed that this temporary problem
could be overcome by more information about the safety of GMO's.
One year later, the outlook has changed. Not only has consumer resistance to
GMO's intensified rather than waned in Europe, it has now spread widely in
many other countries as well. Even in Canada and the US, there are press
reports of supermarket chains declaring that their shelves will be GMO free
in future. Not surprisingly, some of the largest food marketing companies
are reacting by either refusing to buy GMO's from farmers, or are
discounting the farm gate prices that they are willing to pay for GMO's.
Lastly, the share prices of some of the life science companies that have
gambled most heavily on selling GMO's to the world food markets have been
Despite these problems, there are lessons to be learnt from studies of
innovation adoption. First, an innovation will only be adopted for the long
term if it delivers meaningful benefits to potential adopters. To date, the
overwhelming majority of GMO's in the food chain are the products of first
generation GM crops. They deliver lower costs of production to farmers, but
no benefits to consumers unless some of the lower production costs are
passed on as lower retail prices. In fact, because there is a virtually
universal perception of some risk to health from eating GMO's, well informed
rational consumers will not purchase GMO's unless the price is lower than
the non-transgenic alternative. To deliver a price premium for
non-transgenic food, industry must provide voluntary verifiable labelling
and maintain credible identity preserved production and marketing systems.
Second, the most persuasive source of information for potential adopters
about an innovation is direct observation of the experience of "early
adopters". Thus most consumers will only be persuaded that GMO's are
eat after they have observed other consumers eating GMO's on a long-term
basis without any ill effects. Again, this is an argument for deep discounts
in the retail price for GMO's for an initial period that will be measured in
years, if not decades. Consumer resistance to GMO's poses the most immediate
threat to the return on past investments in biotechnology, but may prove to
be relatively transitory.