Genetically modified crops (GM crops) have been commercially grown since the beginning of the 1990s with production on a larger scale starting in 1996. Since then, things have changed, as a larger number of varieties have reached the market accompanied by an entirely new range of genetically modified crops. The US is the main GM producer whereas the EU is only a minor player. Up to this date Sweden has no commercial production of GM crops, but the introduction of these crops in Europe, can make GM production viable in the near future. A majority of Swedish farmers with a production area of at least 50 hectares are interested.
The report compares the production of genetically modified crops with the production of conventionally grown crops in Sweden in a business perspective and differences in profits are calculated. The calculations are based on previous data and transferred to Swedish conditions.
- A production change to herbicide resistant spring rape would have three major effects: an increase in hectares harvested, higher costs of seeds for sowing and lower costs of herbicides. These three factors are estimated to improve the profitability of production at a rate of 4 to 8 per cent of the production price.
- Production of herbicide resistant corn for feed would mainly affect profitability through higher costs of seeds for sowing and lower costs of herbicides. All together the profitability of production is increased with approximately 600 SEK per hectare.
- Blight resistant potatoes show an increase in profitability of between 6 and 12 per cent when compared to conventional potatoes. A decrease in the use of herbicides also reduces the negative effects on the environment caused by conventionally grown potatoes.
- A change in sugar beet production from conventional to herbicide resistant varieties would increase the cost of seeds for sowing but reduce the cost of herbicides. The net effect is about 10 per cent of the production price in 2006 prices.
According to the report, Swedish farmers can make a profit from shifting to GM varieties. The size of profits are however difficult to determine until production is actually taking place in Sweden. As long as genetically modified crops are not commercially grown, business analysis such as the one in this report can only give limited insights. Real effects of GM production can not be determined until there are real observations to base analysis on.
Production profit comparisons are complemented by an economic analysis. Innovations normally reduce production costs and consumer prices, which benefits consumers and the society at large in the long run. The welfare effects of GM production are dependent on: the costs of special instructions for GM-production, the extent of separating capacity in food production, costs of labelling and traceability, the price of GM crops compared to conventionally and ecologically grown crops as well as the amount of producers and consumers not accepting GM crops at all. The net welfare effects of society are liable to be small if costs of co-existence, separating, labelling and traceability are large compared to profits from decreasing production costs.