Asia GM Outlook
BMI View: Although Asia is an agricultural powerhouse, genetically modified (GM) crop planting is low in the region. The adoption rate of GM crops will remain slow in the coming years, as many countries are still at early stages of field trials, which usually take years to complete. However, Asian governments are slowly but surely opening up to receive GM seeds into their food crops. This could allow seed companies to reap significant rewards in the region over the long term, both in China, which already grows GM crops, and in frontier agricultural markets such as Bangladesh, Vietnam and Indonesia.
Possessing about 40% of total global agriculture land and close to half of the world's total population, Asia only accounts for 10.8% of the global genetically modified (GM) planted area. Asia clearly has potential to grow GM crops, with India, China, Pakistan, Australia, the Philippines and Myanmar the main countries in Asia Pacific growing GM crops.
|Asia Still A Minor Player|
|Select Regions - GM Crop Plantings (% of global)|
Asia's overall resistance to GM seed use can be attributed to the significant negative sentiment towards developing GM food crops. In India and China, the total GM area only accounted for 5.3% and 3.5% of the respective countries' total arable land as of 2011. Crops permitted by the Indian and Chinese governments for GM planting are mainly for non-consumed and peripheral crops, such as cotton and some fruits and vegetables. India is tightening its stance on GM dissemination in the country. Since January 2013, the labelling on packaged food containing food derived from GM is mandatory. Moreover, the government shows no sign of resuming the approval process for GM eggplant since it stated a moratorium in 2010.
|Broadly Planted, When Allowed|
|Select Countries - GM Cotton Area Harvested (% of total)|
Towards A Slow Adoption Of Diversified GM Crops?
The adoption rate of GM crops in the region will remain slow in the coming years, as many countries are still at early stages of field trials, which usually take years to complete. However, Asian governments are slowly but surely opening up to receive GM seeds into their food crops.
China has commercialised six genetically modified plants since 1997, but almost all of these GM plants are not currently being produced because their biosafety certificates expired and were not renewed due to the lack of a commercial market. Looking ahead, we believe that the country will have little choice but to adopt large GM plantings for various crops, specifically rice and corn. China is already recording production deficits for corn and rice, and given the lack of land and the country's appetite for meat amid rising incomes, we believe the corn deficit is likely to widen in the coming years. Chinese-developed corn and rice GM varieties were granted biosafety certificates in 2009 and are still in the process of seed variety registration, which typically lasts around five years. However, China's regulatory infrastructure remains a strong obstacle to the fast commercialisation of a wider range of GM crops. Inadequate protection for intellectual property rights, lack of transparency in regulation and tight control over private sector research and development deter investment in the sector.
|Need To Fill The Gap|
|China - Corn, Rice & Soybean Production Balance ('000 tonnes)|
Apart from China, other countries are currently undergoing trials, and we continue to believe countries such as Vietnam, Indonesia and Bangladesh will be the next in line to grant commercial distribution of GM crops. Throughout 2012, Indonesia's government has taken additional steps to advance and simplify its agricultural biotechnology policies, albeit at a relatively slower pace over the previous year. We expect the commercialisation of GM feed enzymes, soybean, corn and sugarcane to come first.
|High Adoption Rate|
|India - GM Cotton Planted (% of total)|
Indonesia has launched field trials for GM corn, sugar cane and potatoes, and Vietnam is field-testing corn. Government approval is likely to come in the coming years, especially for GM corn, which Indonesia and Vietnam already import from major GM growers in North and Latin America. 2013 will be a critical year for the development of Vietnam's GM regulatory structure, as the two primary legal documents covering GM production, processing and commercialisation will be finalised and implemented. This is likely to accelerate the adoption of GM corn and rice in the country, and cultivation could be finally granted by 2015.
|na = not available. Source: BMI, USDA, Philippine Bureau of Plant Industry|
|Corn Production ('000 tonnes)||4,430||4,900||5,050||5,884||6,231||7,277||6,853||6,231||7,271||7,130||7,200|
|Total Area ('000 ha)||2,410||2,527||2,442||2,571||2,648||2,661||2,684||2,499||2,545||2,470||2,498|
|Gm corn area ('000 ha)||10.8||59.8||50.0||127.9||313.9||347.6||327.2||542.5||685.4||na||na|
|GM area (% of total)||0.4||2.4||2.0||5.0||11.9||13.1||12.2||21.7||26.9||na||na|
Philippines The Leader, Thailand Still Reluctant
The Philippines remains a regional leader regarding GM adoption, as it is the only country in Asia to plant GM corn, while GM rice (a variety called Golden Rice), GM cotton, eggplant and abaca are now under various stages of research and field trials. The adoption by Filipino farmers of GM corn for propagation continues to be dramatic, which bodes well for the future adoption rate of other GM crops. The commercialisation is likely to have a knock-on effect in the region as it could help to overcome other countries' reluctance to introduce GM crops.
Thailand is not likely to adopt GM crops in the coming years, as the government adopted in 2011 a policy that aims to keep Thai rice free of GM organisms for the period 2011-2015. The process of approving field trials for Thailand's first biotech crop corn remains stalled mainly due to a lack of political will. However, anti-GM activist groups claim that GM papaya seeds are widely distributed among Thai farmers and are currently grown in several provinces. A Supreme Administrative Court recognized in April that the approval by the Department of Agriculture of GM papaya trees field trial in 2003 - which led to contamination of nearby fields - as illegal as it was approved only by individual members of the National Biosafety Committee. The country currently has a few trials ongoing. Naresuan University is preparing to trial its first GM corn crop with the help of Monsanto Thailand on an 0.8 ha plot.
|Rank*||Country||Area Of GM Crop (Mn Ha)||GM Crops|
|* World ranking, in terms of area planted to GM crop. Source: ISAAA, BMI|
|2||Brazil||36.6||Soybean, maize, cotton|
|3||Argentina||23.9||Soybean, maize, cotton|
|6||China||4.0||Cotton, papaya, poplar, tomato, sweet pepper|
|9||South Africa||2.3||Maize, soybean, cotton|