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The GM debate and the Irish pig-meat sector Print



By Peadar Lawlor and Maria Walsh


Cost of substituting imported GM feed with a non-GM equivalent?

 

Declaring Ireland a GM-free country has been raised by some as a mechanism to enhance the export potential of the Irish food industry. It is important to note that EU law prohibits the imposition of a national ban on GM crops/feed unless scientific research can support a ban based on health/environmental fears. The only way that Ireland could adopt a GM-free position would be to do so based on a voluntary decision by the Agricultural sector in Ireland.

It is very difficult to accurately predict the financial impact of a GM-free Ireland on the Irish pig industry. Soybean and maize would be the ingredients of most concern in this regard. Pig diets are formulated on a least cost basis and if one ingredient becomes expensive the formulation is altered to incorporate a cheaper alternative. In addition to the GM situation, other factors such as weather, freight, currency, energy cost and funds activity will all impact on ingredient supply and price thus influencing the ingredient composition of pig diets.

Today the additional cost of formulating a GM-free pig diet would increase for the following reasons:
  1. Cost of sourcing similar non-GM ingredients.
  2. Cost of substituting GM ingredients with alternative protein and energy products.
  3. While GM maize by-products are not used to a great extent in pig diets, the effect of using more wheat and barley as substitutes in ruminant diets would make such cereals scarcer thus increasing their cost of inclusion in GM-free pig diets.
 

 

Below is an estimate of the cost of formulating a GM-free composite pig feed on 11th September 2009. At that time GM-free soya was available at a premium of €35/tonne. All the maize being imported at the time was GM-free with no premium over GM maize.

However, there was a premium for non-GM maize gluten and maize distillers of €10 and €18 respectively. In Table 1 below maize and maize products are not distinguished and a premium of €10 is assumed for non-GM over GM.
If we were to feed non-GM pig diets based on prices on ingredient prices on 11th September 2009 the cost of feeding a pig would increase by €2.51 and the total cost to the pig industry would amount to in excess of €8.7 million / annum (Table 1).
 
The EC Directorate-general for agriculture and rural development (2007) predict that the additional cost of non-GM maize products could be as high as €60/tonne for some Member States with direct sea access (Spain, UK, Portugal, Netherlands and Ireland).

Although, the likelihood in Ireland is that alternative feed ingredients would be used instead of maize or maize by-products to formulate a GM-free diet, and consequently these alternatives would similarly increase in price. Table 1 shows a scenario where the full €60/t premium for non-GM maize and maize by-products is absorbed. In this case the cost of feeding a pig would increase by €3.93 and the total cost to the pig industry would amount to in excess of €13.8 million / annum (Table 1).
 
 
It is highly unlikely that the Irish pig industry could survive in a GM-free Ireland in the absence of a premium being paid for GM-free pig-meat. The history of recovering such premiums from the market place has not been a positive one.

 
Table 1. Estimated Cost of Substituting Conventional for GM Ingredients on Irish Pig Industry.
Assumptions
Feed intake (inc. sow) per pig (Kg) 285   (PIGSYS  2008)                                                                                                     
No of sows in Republic 148662 (Teagasc Pig Herd Survey, 2009)
No. pigs produced/sow/year 23.4
(PIGSYS 2008)
Total pig feed required (tonne) 991427
(a) Situation on September 11th 2009
Inclusion of GM ingredients (%) Premium for Non-GM ingredient (€/tonne) Premium for Non-GM diet (€ /tonne)
Soya 20 35 7.00
Maize Products 8 10 0.80
Soya Oil 1 100 1.00
Additional cost / tonne diet (€) 8.80
Total cost to pig Industry (million €) 8.70
Total cost per pig (€) 2.51
(b) Situation on September 11th 2009 but with access to cheaper GM maize products
Inclusion of GM ingredients (%) Premium for Non-GM ingredient (€/tonne) Premium for Non-GM diet (€ /tonne)
Soya 20 40 8.00
Maize Products 8 60 4.80
Soya Oil 1 100 1.00
Additional cost / tonne diet (€) 13.80
Total cost to pig Industry (million €) 13.70
Total cost per pig (€) 3.93
 
 



EU Authorization
As the area of GM crops increases year on year it becomes increasingly difficult and more expensive to access non-GM alternatives. In addition, it can take up to 33 months to get a GM feed ingredient authorized in the EU which means that these crops are generally harvested before EU authorization is received. The delay in the authorization process results in a premium being paid by the Industry for authorized GM alternatives or non-GM alternatives.

 
Summary
The Irish feed industry is highly reliant on imported feed ingredients, particularly soya and maize by-products as a source of protein. If Ireland were to adopt a GM-free position the resulting hikes in feed cost would make it difficult for the Irish pig-meat sector to survive. As it is, Irish farmers pay a premium for authorized GM feed ingredients over world market prices because of the lengthy authorization process currently in place in the EU.


 
References

 

 
Peadar Lawlor is a Principal Research Officer and Maria Walsh is a Research Officer in the Pig Development Unit both based at Moorepark Research Centre. E-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it



 

 

 
 
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