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From "Reports on Agriculture", Exercise number 3, December 2010

The coexistence of genetic engineering in the food and agricultural sectors

By Scientific Advisory Board on Agricultural Policy at the BMELV 1)

The EU has formulated a coexistence target in order to be able to take advantage of the opportunities offered by "green biotechnology" whilst also maintaining GM-free farming on the market. Hardly any experience with this is available since only one GM plant species, maize (MON 810), has so far been grown in Europe in a few Member States and since no comparable coexistence strategy exists in the main countries where GMPs are grown (USA, Brazil, Argentina).

94. The Scientific Advisory Board on Agriculture developed the following recommendations based on the latest findings:

  • I. The decision to authorise the marketing of GM constructs should continue to be taken exclusively according to scientific criteria and based on the EFSA decision. However, the decision to authorise cultivation should be taken separately from that and based on socio-economic criteria at Member State level.
  • II. In order to lower the costs incurred due to coexistence and to avoid coexistence conflicts, the rules of good farming practice (GFP) for other crop species or constructs should also be formulated with the aim of virtually ruling out any impurities above the labelling threshold by accordingly allowing for extensive safety margins. In order to reduce mixes to a minimum, GM varieties must be grown, harvested, transported and stored completely separately from NGM varieties. This is particularly important for seed and planting stock. The obligation to provide information in the event of a change of farmer should be extended beyond the 5-year period, as appropriate, depending on the crop species (e.g., in the case of rape). A schedule of penalties for non-compliance with good farming practice should be drawn up and implemented.
  • III. The GFP rules that have so far applied only to maize should be regularly reviewed after two to three years of practical experience and revised, as appropriate.
  • IV. Suitable agronomic measures should be prescribed for rape in the autumn in order to ensure that the highest possible proportion of shed seeds germinate and do not become dormant. In addition, volunteers should be rigorously controlled in the successor crops in order to counteract the development of GM weed rape. In accordance with the latest findings, stipulating a distance of 50 m is deemed sufficient. GM rape grains should only be transported in closed containers. Due to the dormancy characteristics of rape, the obligation to document and retain data should be extended to twelve years. A duty of farmers who have grown GM rape on their land within the last twelve years to provide information to their customers should be introduced.
  • V. In order to prevent contaminations of GM-free potato stands with GM volunteer plants, the careful control of volunteer potatoes should be supplemented by stipulating that the growing of GM potatoes should be followed by a two-year potato-free period. The control of volunteer plants should also be provided for so that the cropping intervals may be extended as appropriate if, due to particular weather situations or crop rotations, weed potatoes occur in the second succeeding crop after the GM potatoes.
  • VI. In the case of sugar-beet, good farming practice should ensure the complete removal of sugar-beet bolters in order to prevent a gene transfer from GM sugar-beets to non-GM beets or related species.
  • VII. The existing rule of joint and strict liability should be maintained and the strict liability should by means of suitable wording in the law, be more clearly limited to the marketing damage that arises in the agricultural sector and to the 0.9% threshold. In order to cover the consequential damage in the agricultural sector that occurs despite compliance with GFP, a liability fund should be established that covers relevant liability claims against NGM farmers. The State and industry could provide the financial resources for the fund. An effective cost-participation regulation should be provided for as an incentive for damage limitation.
  • VIII. The current de facto ban on mixing should be repealed by an amendment to Community law. It should, at the same time, be laid down by law that State controls of the threshold should only be conducted at the last stage of the food chain where GM is still detectable.
  • IX. A 0.3 percent labelling threshold should be set for seeds and, in addition to that, voluntary labelling of GM concentrations of under 0.1 percent should be allowed. Crop-specific GM-free growing areas should be designated around the nurseries and breeding stations of breeders in order to protect the GM-free seed-breeding establishments.
  • X. After an adequate transitional period the GM labelling requirement should be extended to cover animal products in the production of which genetically modified feed has been used. The "GM-free" label that has already been introduced should be made available to NGM producers or marketers taking part in certification schemes. The inspection tasks should, as far as possible, be performed with the aid of the private sector, e.g., by charging a private-sector organisation to perform state functions.
  • XI. After positive labelling of "green biotechnology" has been introduced throughout the country and following a transitional period, labelling should also be introduced for "white biotechnology".
  • XII. Temporary subsidies towards the costs of analysis should be granted to NGM farmers in the initial phase of GM cultivation. Provision should be made for the analytical findings to be made available to public bodies for evaluation. The Advisory Board recommends that government funds should be provided for research activities in order to lower the costs of analysis and to improve the sampling strategies.

Man is a crucial factor in the coexistence approach. Whether an increasing contamination of NGM products occurs over time is heavily dependent on how consistently we handle the GFP rules and on whether we succeed in adapting these rules to new findings.

1) Members of the scientific advisory board: Prof. Prof. Dr. Folkhard Isermeyer (Vorsitzender). Johann Heinrich von Thünen-Institut (vTI), Braunschweig; Prof. Dr. Dr. Annette Otte (Stellvertretende Vorsitzende), Universität Gießen; Prof. Dr. Jürgen Bauhaus, Universität Freiburg; Prof. Dr. Olaf Christen, Martin-Luther-Universität Halle-Wittenberg, Prof. Dr. Stephan Dabbert, Universität Hohenheim; Prof. Dr. Dr. Matthias Gauly, Universität Göttingen; Prof. Dr. Dr. h. c. Alois Heißenhuber, Technische Universität München, Prof. Dr. Jürgen Hess, Universität Kassel, Prof. Dr. Dr. h. c. Dieter Kirschke, Humboldt-Universität Berlin; Prof. Dr. Uwe Latacz-Lohmann, Christian-Albrecht-Universität zu Kiel; Prof. Dr. Matin Qaim, Universität Göttingen; Prof. Dr. Peter Michael Schmitz, Universität Gießen; Prof. Dr. Achim Spiller, Universität Göttingen; Prof. Dr. Albert Sundrum, Universität Kassel; Prof. Dr. Peter Weingarten, Johann Heinrich von Thünen-Institut (vTI), Braunschweig

Assessment of fodder-production systems on sandy soils from an environmental and economic perspective – Calculation of an eco-efficiency scale –

By Martin Hagemann, Tammo Francksen and Friedhelm Taube, Kiel

This paper investigates typical fodder production systems on sandy soils from the environmental and economic perspectives. To this end, an eco-efficiency scale was first defined and then calculated using the "free disposal hull-analysis". The goals of the eco-efficiency analysis were to quantify the negative environmental effects resulting from nitrate leaching and CO2-emmisions and to measure the eco-efficiency of the analysed fodder production systems. Eco-inefficient units would be able to bring about a maximum reduction of both negative effects when they applied one of the alternative eco-efficient systems that had been identified. The employed method ensures that eco-efficient systems lead only to environmental improvement but not to a reduced gross margin per hectare compared to the reference situation.

The results of the empirical analysis showed that the nitrate leaching caused by fodder production was able to be reduced by 14 percent and the CO2-emissions by 11 percent respectively through farm strategies. Depending on the fodder production system applied, an average farm in Schleswig-Holstein could achieve a reduction of up to 232 kg nitrate and 6790 kg CO2 per farm per year. In addition to this significant environmental potential for improvement, the farms would at the same time be able to achieve an increase of the gross margin from fodder production by up to 8,000 Euro per farm and year.

The meaning of field irrigation for the land lease market in northeast Lower Saxony

By Henning Wilhelm Battermann, Cord-Herwig Plumeyer and Ludwig Theuvsen, Göttingen

Against the background of the implementation of the EU water directive, this paper analyzes the impact of irrigation on agricultural land markets. The study focuses on Germany’s largest irrigation area, i.e. the north-eastern heath region of Lower Saxony. First, we outline some theoretical considerations with regard to the calculation of land rents. Then, based on irrigation tests in north-eastern Lower Saxony and typical regional crop rotations, we calculate farmers’ willingness to pay for irrigated leasehold compared to rain-fed cropping. We then present the results of a large-scale survey of farmers in north-eastern Lower Saxony and derive farmers’ willingness to pay from empirical data. We find that willingness to pay for irrigated land as stated by the farmers surveyed is considerably higher than the additional benefit of irrigation derived from calculations based on marginal income effects. This discrepancy can be due to the fact that irrigation allows farmers to control weather, especially yield risks. We conclude that changes of water policies with regard to irrigation in northeastern Lower Saxony will probably have an effect on regional markets for leasehold.

The effect of untaxed reserves and accrued liabilities in the agricultural sector in a fiscal and economic context

By Niklas Blanck and Enno Bahrs, Hohenheim

German trade and tax law offers a vast number of opportunities and obligations to create untaxed reserves and accrued liabilities. For most agricultural enterprises in Germany, it is only tax law that is of importance. While fiscal reserves are created from untaxed income and delay the tax payment for the time of their existence; accrued liabilities are expenses in the current period which only result in a payout in later periods. They therefore anticipate future risks. One aspect which fiscal reserves and accrued liabilities have in common is that, at the time they are created, they both reduce the taxable income and tax burden, whereas when later released, they increase income and tax load. The postponement of tax payments makes it interesting to use the available instruments. However, looking at the list of potential reserves and accrued liabilities shows that agricultural enterprises can only use a quite small number of instruments. The tax options they have are limited. The most important untaxed reserves for farmers are the investment deduction amount (§ 7g EStG) and the reinvestment reserve (§ 6b EStG). The creation of accrued liabilities is limited to enterprises that keep accounts and has not become widespread in agriculture yet. An increasing diversification of agricultural enterprises towards energy production and non-agricultural services may change this situation fundamentally.

Exemplary calculations show the financial advantages of reserves and accrued liabilities regarding different interest and tax rates. The reinvestment reserve may provide financial benefits, even without realizing a reinvestment. The income equalization deposit – a new form of untaxed reserves especially for farmers that farmers are calling for – may also have a tax-reducing effect. However, an introduction of income equalization deposits without any restrictions is unlikely. On the other hand, having restrictions would run the risk of favoring farmers who already have enough liquidity.
Regardless of whether the income equalization deposit is introduced or not, farmers will have to carry on dealing with variations in tax law. A higher profit and loss potential, resulting from diversification as well as farm growth, will increase the fiscal and economic importance of reserves and accrued liabilities in agriculture.

Satisfaction of German agricultural machinery dealers with manufacturers – an empirical investigation

By Alexander Staus and Tilman Becker, Stuttgart

This paper investigates the satisfaction of dealers with their suppliers in the agricultural machinery sector. While there are some studies about the satisfaction of automobile dealers with their manufacturers, this paper presents the first investigation in the area of agricultural machinery.

This paper first investigates the current state of overall dealer satisfaction with the producers in the agricultural area. The additional sales and marketing variables are arranged in 38 questions, summarized in eight areas (dimensions). A regression analysis identifies the dimensions which significantly affect overall satisfaction. Four significant dimensions can be determined: the hard factors "product program" and "marketing and sales promotion" and the soft factors "future in competition" and "relationship with the manufacturer." Product program is by far the most important dimension for every dealer group.

Depending on the number of business locations, soft or hard factors are more or less relevant. For dealers with few business locations, soft factors are important. Particularly "marketing and sales promotion" as a hard factor is more important for dealers with many business locations. The result can be explained by the fact that the dealer is also a customer. The dimensions in which the dealer acts as a customer are particularly important. The dimensions which he can influence by himself are less important.

Barriers to the implementation of an Animal Welfare Label

Von Annabell Franz, Marie von Meyer, Achim Spiller, Göttingen

Currently the Federal Government of Germany and the European Commission are discussing the possibility of introducing an animal welfare label. This label is intended to enable consumers to make a conscious purchasing decision on animal-friendly products. Different studies show that many consumers (in Germany around 20 %) prefer products produced under animal-friendly conditions. However, the supply of such products is limited. This study examines the source of this discrepancy by way of an action-based analytical approach and identifies different barriers within the supply chain that prevent the establishment of a market segment for animal-friendly products. Although consumer demand will be decisive for long-term success, first of all the stakeholders of the supply chain must be convinced. If they are not prepared to participate in an animal welfare program, the diffusion in this area may take a very long time or even fail. This study presents such supply chain barriers and interprets them in light of neo-institutionalism.

Determinants of the demand for organic milk in Germany – An econometric analysis

By Rebecca Schröck, Gießen

A growing number of studies deals with consumer decisions with respect to organic food, but only a few provide quantitative estimates of price and income elasticities. This paper contributes to the existing literature by providing own-price elasticity estimates as well as analysis of the sociodemographic determinants of demand for organic milk. The analysis is based on the GfK Consumer Scan Scanner panel dataset on food purchases of German households covering a sample period of four years from January 2004 to December 2007. A multi-stage estimation procedure is applied. Firstly, a probit regression figures out which household characteristics influence the probability of buying organic milk. Secondly, a fixed-effects-panel regression selects all those determinants that have an effect on the quantity demanded. Finally, the study determines whether the price elasticity of demand depends on income, age and household size and whether price elasticity varies between different shop types.

The results show that the tendency to buy organic milk rises with an increase in the level of education and income. Furthermore, the demand is usually higher in households with young children and with a female responsible for budget management. However, the probability declines when there is more than one child per household.

The results of the fixed-effects-regression indicate that the demand for organic milk in Germany is highly price-inelastic. As expected, price sensitivity for all types of milk is higher in discount shops than in other forms of retail such as supermarkets or large-scale retail. Demand in organic food shops is the least responsive to price changes.

Low absolute price elasticities indicate that price promotions at retail level will not lead to an increase in sales. Instead, other instruments in the marketing mix, especially those based on communication and distribution policy, seem to be more promising.

Keywords: Organic milk, Household Panel, Probit Analysis, Fixed-Effects-Panels Analysis, Price elasticity, Private Labels

Public interpretations in the discourse on bioenergy – A qualitative media analysis

Von Ulrike Zschache, Stephan von Cramon-Taubadel, Ludwig Theuvsen, Göttingen

Bioenergy production in Germany and elsewhere has developed rapidly in recent years. This astonishing surge was boosted by a wide range of political support and subsidies at both EU and national level as part of a general strategy directed at encouraging the use of renewable energies. However, there has been increasing criticism of the intensive production and energetic use of biomass in the last three years. In this context, major risks are seen with regard to environmental sustainability and global food security. The issue is, however, multilayered and characterised by a great variety of competing interests, opinions and perceptions. From the point-of-view of democratic theory, future policies will have to take into account public opinion on the opportunities and risks associated with bioenergy if they are to acquire democratic legitimacy. The analysis of mass media discourses can generate valuable insights into perceptions and interpretations in the public realm. To illustrate this, we present the results of a qualitative analysis of the media debate on bioenergy in leading German newspapers. The findings reveal a broad spectrum of interpretative views on bioenergy which compete with each other for political influence.

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