Unrest grows over canola
Small Business, February 11 2008
Sam Di Virgilio, sales and marketing manager with the Australian Antipasto Company is not a happy man. Later this month the governments of Victoria and New South Wales will lift a four-year moratorium banning the cropping of genetically modified [GM] canola.
Di Virgilio's company, based in Footscray, is an Australian small business success story. Founded seven years ago it now employs a 100 people and is the largest producer of semi-dried tomatoes in Australia.
Business is so good it plans to triple its floorspace when later this year it moves to Broadmeadows in Melbourne's north.
The company also is part way through a five year strategy to build on its export success in Hong Kong, Japan, Korea, Singapore, Malaysia, Indonesia and the Middle-East.
Di Virgilio wants to break into the North American and European markets. This year the company's food lines were featured at one of the world's largest specialty food shows, Winter Fancy Foods held in San Diego, California.
But some buyers have proven hard to convince. Di Virgilio says while they like Australian products they object to canola oil being used as base ingredient in most of the company's product lines.
''GM canola is a real no-no in Europe,'' he says. ``They thought Australian canola was like Canadian GM canola.''
In fact customer resistance was so fierce the company received requests to substitute canola oil for sunflower oil. To finally get buyer acceptance the company changed the artwork on its product to emphasise that it's canola oil is Australian and GM free.
That is why lifting the ban has got Di Virgilio worried.
His company does not label itself organic, but as a premium food maker it relies on its reputation for freshness and quality ingredients.
''We are a business that uses fresh vegetables. We cut [them], dry [them], marinade [them]. We don't use any preservatives or anything artificial.''
''I think it is the wrong decision. Clean and green is something we have got going for us. [But this decision] is what happens when dollars get in the way. People say [farmers] are going to get a better yield but I'm sure it is going to backfire on us in the long run.''
Di Virgilio is not the only one who thinks the decision to lift the ban on GM canola is short-sighted.
Canadian Farmers Union official Terry Boehm is in Australia to warn farmers about his country's experiences with GM canola.
He says GM cropping has destroyed Canada's reputation as a supplier of clean-green high-quality product.
''Australia has nothing to gain and everything to lose by allowing cropping of GM canola,'' he says.
Announcing its decision to lift the ban, Victorian Premier John Brumby said he had accepted Federal Government approvals and the findings of a report led by eminent scientist Sir Gustav Nossal giving the all-clear for GM canola.
But there is growing disquiet among some small businesses about some of the assumptions underpinning the report's terms of reference, key findings and recommendations.
Alec Zurrer from award-winning premium cheese maker Jindi says he is concerned that the panel's report ignored the downstream impacts of introducing GM canola into the food chain.
Zurrer says while many bulk users of milk did not oppose the lifting the ban, he does.
He said most consumers remain completely unaware that canola-based products are used to feed diary cows, feed-lot cattle, poultry and by the pork industry.
In that way much of the canola Australia doesn't directly export as seed - around 100,000 tonnes each of processed oil and meal - ends up in value-added food products.
Under Australia's labelling laws premium food companies won't be able to make positive claims about being GM free while big food manufacturers are not required to disclose highly refined GM ingredients in their products.
Mark Barber from ACIL Tasman, the economists commissioned to advise the expert panel, said his brief was only to examine the costs and benefits to farmers and the grain industry of keeping the moratorium in place.
He says he was not asked to assess the wider economic impacts of introducing GM canola on downstream users of canola or the clean-green reputation of Australia's non-organic premium food industry.
ACIL Tasman estimated direct costs of the moratorium to farmers at $65 million while total projected cost of extending the moratorium until 2018 was put at $180 million.
That is not to say that the expert panel was not forewarned about the potential impact of GM canola on the consumer acceptance of Australian premium value-added foods.
Milawa Mustards, makers of premium mustards told the panel in its submission that their consumers ''wanted and expected'' high quality local non-GM ingredients in the product.
But instead of accepting that evidence the expert panel dismissed it by labelling it general in nature and citing the lack of a price premium between GM and GM free canola.
It chose instead to rely more heavily on focus group research commissioned by Biotechnology Australia - a federal government agency heavily involved in GM research - in finding that consumer resistance to GM canola in Australia is fading.
Clare Hughes, from Consumer Watchdog CHOICE, says while she has not read the expert panel's report or the research, Biotechnology Australia's lack of independence is a concern.
The expert report also cited research from major markets such as Europe, Japan and North America to justify its finding that consumer acceptance of GM products is waning.
Jerry Marston, a consultant with two decades experience working in the European food industry says he is surprised by the finding. ``I see no evidence that consumer attitudes to GM in Europe are changing.''
The decision to lift the GM canola moratorium comes at time when Australia's food sector is enjoying unprecedented export success.
Australian Government Department of Agriculture, Fisheries and Forestry figures reveal the value of Australian food exports to Japan, US and the Eurozone in 2005/06 totalled $9.8 billion.
Austrade, which actively promotes the clean-green angle puts Australia's emergence as one of United States' largest suppliers of value-added foods down to ... ''awareness of Australia's diverse food flavours; commitment to green, sustainable practices and rigorous food safety standards.''