exploring the social and economic costs of ero tolerance policy on the canadian producer: the case...

~ Cami Ryan ~~ Cami Ryan ~University of SaskatchewanUniversity of Saskatchewan

Flax DayFlax Day“From Dialogue to Direction”“From Dialogue to Direction”

January 9, 2012January 9, 2012

�� Funding through Saskatchewan Flax Funding through Saskatchewan Flax Development Commission and Development Commission and Canadian Agricultural Adaptation Canadian Agricultural Adaptation Program (CAAP)Program (CAAP)Program (CAAP)Program (CAAP)

�� Grower SurveyGrower Survey�� Document the impact of the Document the impact of the TriffidTriffid Flax Flax

issueissue�� Administered to 8000 Administered to 8000 SaskFlaxSaskFlax membersmembers�� n = 272n = 272

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Linda Braun and I put our heads together in early 2010 to develop a research strategy to investigate and document the Triffid issue. Our proposal was approved and we received CAAP funding in December 2010 and initiated our research right away. We conducted a focus group on LLP a year ago this week at CPW, inviting industry stakeholders to the table to discuss this important issue. We also conducted one-on-ne interviews with industry stakeholders. However, a key component of our work revolved around the administration of a grower survey. We initiated the process via snail mail in early 2011 and managed to get almost 300 responses by the end of April.

�� Background of Genetically Modified Background of Genetically Modified Flax (CDC Flax (CDC TriffidTriffid) to 2001) to 2001

�� The ReThe Re--emergence of GM Flax: 2009 emergence of GM Flax: 2009 ––2011201120112011

�� Review of results from Flax Grower Review of results from Flax Grower SurveySurvey

�� Summary Thoughts…Summary Thoughts…

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Grower survey Seed sources, production and sales Testing and stewardship protocol Perceptions around issue management & information Flax and future production Time and other costs

Canada

Source: FAO Stats

IndiaIndia

USUS

ChinaChina

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Data from 1961 / other that a couple of intervals 60s / 70s, Canada lead the world in global production of flax/linseed Canada has and continues to be a global leader in flax production Canadian production occurs in AB, SK and MB 40% share of the world market 80% share of the export market in flax 70% of Canadian production is exported to the EU market

�� Plant with novel traits (PNT)Plant with novel traits (PNT)�� Developed in the late 80s at the Crop Development Developed in the late 80s at the Crop Development

Centre / U of S)Centre / U of S)�� Value of Value of TriffidTriffid -- environmentalenvironmental

�� Tolerance to soil residues of sulfonylureaTolerance to soil residues of sulfonylurea--based based herbicides herbicides herbicides herbicides

�� Cultivated the year after herbicide was used in fieldsCultivated the year after herbicide was used in fields�� Alternative to continuous cropping of wheat/barley and Alternative to continuous cropping of wheat/barley and

to summerto summer--fallowingfallowing

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Intended as a crop to be cultivated the year after a triasulfuron or metsulfuron-methyl herbicide was used (commercially known as Glean)

1988 1989 1994

Feed ApprovalFeed ApprovalFeed ApprovalFeed Approval

1996 1996/97

FoodFoodFoodFood

Food/FeedFood/FeedFood/FeedFood/Feed

19981997/98

??

Recall and crush organizedRecall and crush organized

CDC CDC TriffidTriffid transported/crushed/destroyedtransported/crushed/destroyed

2000

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2001

CDC CDC TriffidTriffid deregisteredderegistered

CDC CDC TriffidTriffid transported/crushed/destroyedtransported/crushed/destroyed

Problem solved… or so we thought.

JulyJuly20092009

SeptSept20092009

16K 16K tonnestonnes in quarantinein quarantineOctOct20092009

Testing!!!!Testing!!!!

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Source: Source: VijuViju etaletal 20112011

The most immediate impact of the Triffid contamination case was upon Canadian flaxseed exports. From a high of 321,400 tonnes of total flaxseed exports for the crop year 2008- 09, the level of exports dropped by 124,800 tonnes to 196,600 tonnes for the crop year 2009-10. Exports to the EU decreased from 86,100 tonnes in December of 2008 to 54,300 tonnes in December, 2009 (CGC, 2011c). Exports of flaxseed to the EU continued to drop until May 2010 when they reversed to an increasing trend. One other interesting consequence of the Triffid case is the large increase of flaxseed exports to China. As can be seen in Figure 3, from being a negligible import market during 2008, China imported a high of 55, 200 tonnes of flaxseed in December, 2009, matching the EU?s import level.

NPTII marker discoveredNPTII marker discovered

FP967 notification on RASFFFP967 notification on RASFF

Launch of Stewardship ProtocolLaunch of Stewardship Protocol

1111 Data Source: Saskatchewan Ministry of Agriculture (2011)Data Source: Saskatchewan Ministry of Agriculture (2011)

Point “1” indicates the point in time where the NPTII marker was discovered in a shipment of flax at an EU port (July 2009). Point “2” represents the price point at the time of the notification of FP967 (Triffid) was registered to RASFF by a German company (September 8, 2009). Point “3” shows the point at which the DG Sanco/EU and Canadian flax industry agreed upon, developed and launched the Stewardship Protocol for sampling and testing flax. Market confidence appears to rise (with small fluctuations) in the following months into 2010 with a peak price at $15.91 by February 9, 2011. Optimism appears to have returned to the market.

�� Seed sources, production and sales:Seed sources, production and sales:�� 70% did not change seed sources70% did not change seed sources�� Of the 30% that Of the 30% that did did [check all that apply]:[check all that apply]:

üü Bought certified from another source: Bought certified from another source: 74% 74% üü Non longer used farmNon longer used farm--saved seed: saved seed: 22% 22% üü Used different farmUsed different farm--saved seed: saved seed: 14%14%üü Used different farmUsed different farm--saved seed: saved seed: 14%14%

�� 19% reported reduction in sales; of those, 83% indicated 19% reported reduction in sales; of those, 83% indicated sales were reduced by 50% or moresales were reduced by 50% or more

�� 74% sold to grain companies (2010/11)74% sold to grain companies (2010/11)�� 78% of all respondents indicated that the practice of 78% of all respondents indicated that the practice of

saving farm seed has become more importantsaving farm seed has become more important

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“I am worried that the right to use farm saved seed is being forced “I am worried that the right to use farm saved seed is being forced away from the producer. It is not a large corporation ‘right’ to away from the producer. It is not a large corporation ‘right’ to

be able to force these seed issues.”be able to force these seed issues.”

8000 surveys mailed out / early in 2010 By the end of April, we had received almost 300 responses Of those that did switch seed sources, we asked those growers to qualify their response. The nature of the question allowed for respondents to choose ‘any/all that apply’ (which would suggest overlaps in responses) and, in addition, allowed for growers to make further qualifying statements. Of those that did switch seed sources, 74% indicated that they bought certified seed from another regular supplier, 22% stated that they didn’t use farm-saved seed while 14% used different farm-saved seed. Six percent stated that they didn’t seed flax at all. One grower said that he/she didn’t buy any flax at all while another two growers stated that that they sourced flax from “where they could”. So… I reviewed the data again and found these numbers. Not sure where I got the others from / or if I just misread the data. How does this sound?

�� Testing and Stewardship:Testing and Stewardship:�� 26,000 tests conducted on over 10,000 seed lots26,000 tests conducted on over 10,000 seed lots�� 0.0498% of seed lots tested positive for 0.0498% of seed lots tested positive for TriffidTriffid�� Widespread, very lowWidespread, very low--level presencelevel presence

1313Map generated by M. St. Louis; Data sourced from Flax Council of CanadaMap generated by M. St. Louis; Data sourced from Flax Council of Canada

“I think the testing for “I think the testing for TriffidTriffid is way overis way over--priced and inaccurate. I have sent priced and inaccurate. I have sent flax samples from the same lot twice and received two results: one negative flax samples from the same lot twice and received two results: one negative

and one positive.”and one positive.”

Since 2009, almost 26K tests have been conducted on Canadian flax samples. The image here shows wide-spread very low level presence of Triffid across census subdivision. Allegations that the tests were prone to false positives circulated early on during the Triffid issue. Recently, using a simple statistical approach on simulation modeling, Lamb and Booker (2011) explore the quantification of low levels of genetic modification contamination (GM). Results of their research indicate that GM contamination is likely present at extremely low levels in breeder seed lots and that levels are virtually indistinguishable from zero given the potential rates of false positive tests.

�� Testing and Stewardship:Testing and Stewardship:�� Identified challenges: negative at origin does not Identified challenges: negative at origin does not

necessarily mean negative at destinationnecessarily mean negative at destination�� No guarantees:No guarantees:

“I don’t see the need to have flax tested in the fall for sale then the same “I don’t see the need to have flax tested in the fall for sale then the same seed tested in the spring for seeding. That’s a total ripseed tested in the spring for seeding. That’s a total rip--off in my opinion.”off in my opinion.”

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“[The grain company] didn’t even ask to see test results “[The grain company] didn’t even ask to see test results –– I think thatI think thatwe have tested enough.”we have tested enough.”

•• Testing costs:Testing costs:�� 55% 55% -- $500 or less; 29% $500 or less; 29% -- $500 to 999$ range; 11% $500 to 999$ range; 11% -- over $1000over $1000

�� Test results:Test results:

There appeared to be Only a small percentage of growers spent over a $1000 on testing… actual testing fees are only a small part of the problem… time and search costs represented additional costs that aren’t easily quantifiable.

�� Perceptions around issue management, Perceptions around issue management, communication & access to information:communication & access to information:�� Who are the primary actors?: Who are the primary actors?:

�� differentiated resultsdifferentiated results�� Key sources for info?Key sources for info?

�� Western Producer and Western Producer and SaskFlaxSaskFlax NewsletterNewsletter�� Western Producer and Western Producer and SaskFlaxSaskFlax NewsletterNewsletter�� 73% stated that there was adequate to more than 73% stated that there was adequate to more than

adequate amount of info adequate amount of info �� 5% stated ‘not acceptable at all’5% stated ‘not acceptable at all’

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Lack of awareness regarding who the major players were in the management of the Triffid issue. Growers appeared to resort to tried and true sources for information on the Triffid issue including WP and SaskFlax Newsletter– I think that it is safe to say that Linda and her team fielded many, many calls over several months regarding this issue.

�� Flax and future production:Flax and future production:�� 63% stated that they would likely grow flax again in 63% stated that they would likely grow flax again in

same or more quantitiessame or more quantities�� 23% would continue to grow flax, but less of it23% would continue to grow flax, but less of it�� 9% stated that they would abandon it altogether9% stated that they would abandon it altogether

�� Market volatility huge detractorMarket volatility huge detractor�� Market volatility huge detractorMarket volatility huge detractor

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“We will only grow flax when the “We will only grow flax when the TriffidTriffid issue is gone issue is gone and when no testing is required before delivery. and when no testing is required before delivery.

Testing is time consuming, costly and a big hassle.”Testing is time consuming, costly and a big hassle.”

�� Time and other costs:Time and other costs:�� 57% spent three hours or less on activities to manage on57% spent three hours or less on activities to manage on--

farm farm TriffidTriffid issuesissues�� 17% spent three to eight17% spent three to eight�� 25% spent a day or more25% spent a day or more�� CarryCarry--over costs: ‘prefer not to answer’over costs: ‘prefer not to answer’�� CarryCarry--over costs: ‘prefer not to answer’over costs: ‘prefer not to answer’

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“I feel like whoever introduced “I feel like whoever introduced TriffidTriffid flax into the production systemflax into the production systemshould be responsible for compensating farmers for the cost &should be responsible for compensating farmers for the cost &

problems incurred in production and marketing.”problems incurred in production and marketing.”

“Growers did not cause this mess but have been told to clean it up!“Growers did not cause this mess but have been told to clean it up![Expletive] ridiculous!.”[Expletive] ridiculous!.”

Liability – click

Cost CategoryCost Category NotesNotes

Demurrage/quarantine $12,000,000 As of September 2010 (Ryan & Smyth 2011)

Testing costs $3,900,000 2009 to 2011 (Ryan & Smyth 2011)

Cost of segregation, other $13,185,217 2009 to 2011 (Dayananda 2011)Cost of segregation, othercosts for breeders, certified seed suppliers, producers, grain companies, AAFC & SaskFlax

$13,185,217 2009 to 2011 (Dayananda 2011)

Total Estimated Costs $29,085,217

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“Market access battles will continue… A low level presence (LLP) policy is needed… so that minute quantities of a GM crop can’t be a

barrier to trade…” Kevin Hursh, Dec/2011

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It was recognized that relationship and trust building were key motivations for establishing agreements with the EU in order to ensure unimpeded trade – This has been carried out repetitively, through missions to and meetings with the EU, since the Triffid issue first began in 2009. These relationship-building exercises have, according to several industry interviewees, lead to the establishment of the Canadian Stewardship program and testing protocols which have been critical to re-establishing trade with the EU and Japan. Although it is unclear as to when such a policy will be finalized, all agree that Canada needs a LLP policy. The current zero tolerance policy is not sustainable nor does it set a good example for Canada in terms of international trade.

�� Costs difficult to quantifyCosts difficult to quantify�� Costs incurred on both sides of ‘the pond’ Costs incurred on both sides of ‘the pond’ –– EU and EU and

CanadaCanada�� Optimistically speaking…Optimistically speaking…

�� Flax prices have increased Flax prices have increased �� China bought up stocks during crisisChina bought up stocks during crisis�� China bought up stocks during crisisChina bought up stocks during crisis

�� Mind you…Mind you…�� Russia and the Ukraine have increased production / lost Russia and the Ukraine have increased production / lost

market share for Canadamarket share for Canada�� Canada still needs to test / costlyCanada still needs to test / costly

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Costs / Testing technology is not static. testing is problematic… obviously more work is needed there in terms of developing better testing protocols EU Short supply resulted in steep price surges Switching costs to other seed/oil sources (alternate crops) Search costs for other suppliers of flax seed Costs related to the recall / customer complaints Job loss

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Our goal in all of this was to document what we view as a significant part of Canadian agricultural history – and to share that story. And that’s being done. There is a network of people that are involved in exploring the Triffid issue from various angles and we are all making efforts to share our findings – all over the world. This story is making its round in a variety of forums.

Thank you!Thank you!CamiCami RyanRyanDepartments of Plant Science & Departments of Plant Science & BioresourceBioresource Policy, Business and Policy, Business and EconomicsEconomicsUniversity of SaskatchewanUniversity of SaskatchewanTwitter me @Twitter me @DocCamiRyanDocCamiRyanTwitter me @Twitter me @DocCamiRyanDocCamiRyanBlog: http://doccami.posterous.com/Blog: http://doccami.posterous.com/

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Acknowledgements:Acknowledgements:Linda Braun, Linda Braun, SaskFlaxSaskFlaxWill Hill, Flax Council of CanadaWill Hill, Flax Council of CanadaGordon Rowland, Helen Booker, Eric Gordon Rowland, Helen Booker, Eric Lamb, Mike St. Louis, Stuart Smyth Lamb, Mike St. Louis, Stuart Smyth –– U U of Sof S

Thanks to the many people that participated in and contributed to this research project – focus group, interviews… you input was invaluable in our efforts to document the Triffid issue. We set out to document the issue and the great thing was that we were able to do it as the issue transpired over time. There’s still more work to be done. But it is our hope that what we have documented to date will be of service to others…This project has successfully documented the complexities of the Triffid issue in the Canadian agricultural context, gaining insights into producers’ and stakeholders’ perceptions and views on the matter. Of particular value is the fact that we were able to document much of the Triffid issue in “real time”; as programs developed to support the agricultural sector and as changes in systems were implemented in order to mitigate damages and loss. For the length of this project, we were able to monitor things as they transpired. We anticipate that the report, articles and other pieces generated through this research will serve as key resources and references for other similar works. It is anticipated that a situation similar to this may arise in other parts of the agricultural sector, and this project will assist in the management of that prospective issue. Presented our findings at forums across Canada and around the world… academic, etc.

exploring the social and economic costs of ero tolerance policy on the canadian producer: the case...

Documents

saved seed

ryan

grow flax

flax council

costs

triffid

farm

smyth 2011