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Effects of delays in import approvals on agriculture sectors and broader economies of major crop-producing and -exporting countries explored.
May 30, 2018
A new study by the Informa Agribusiness Consulting group titled “The Impact of Delays in Chinese Approvals of Biotech Crops” quantifies the effects of delays in import approvals on the agriculture sectors and the broader economies of major crop-producing and -exporting countries, including China.
Cumulatively over the last five years, the value of corn and soybeans produced in Argentina, Brazil, Canada and the U.S. would have been $8.5 billion higher, and gross domestic product (GDP) would have been $11 billion higher, if approval timelines had been similar to those of other key crop-importing countries.
Additionally, in the peak impact year, 120,000 more jobs would have been supported.
The study also estimated the benefits of more timely import approvals over the next five years compared with continued delays.
“This study demonstrates the importance of trade to the global agriculture sector, along with the implications if regulatory systems are not consistent and predictable across major countries,” said Tom Scott, global director of Informa’s Agribusiness Consulting group. “Not only do crop-exporting countries stand to gain from timely approvals, but so do Chinese consumers of grains, protein meals and vegetable oils.”
In 2017, China purchased nearly $20 billion worth of American agricultural products, including more than $10 billion in U.S. soybean sales annually. Due to the size of the Chinese market for U.S.-grown commodities, technology companies often delay commercialization of new products in the U.S. and other countries until they have been approved in China so as to avoid trade disruptions.
For the U.S., Informa estimated that China's delays from 2011 to 2016 resulted in farmers and the broader economy foregoing: $5 billion in farm income growth, nearly 34,000 new jobs, $4.6 billion in wage growth, $7 billion in GDP growth and $15 billion in business sales.
Further, should China implement a timely and predictable regulatory process, Informa forecasts a substantial benefit to the U.S. economy for the 2017-22 period, including:
• $4.9 billion in increased farm income;
• $4.4 billion in increased wage growth;
• $7.3 billion increase in GDP;
• $15 billion in increased business sales, and
• The creation of and support of more than 19,000 U.S. jobs.
Jim Greenwood, president and chief executive officer of the Biotechnology Innovation Organization (BIO), said, “This new report confirms what we’ve known anecdotally for some time: Unreasonable Chinese delays in approval of safe and highly productive ag biotech crops are hurting farmers in the United States and around the world.
“As the Informa report underscores, clearing the queue of pending approvals, while important, will only offer a short-term solution. A systemic change is needed to enable farmers access to new technologies sooner to provide a more reliable, sustainable food and feed supply for the United States, China and the world,” Greenwood added.
“The goal of the seed technology industry is to work cooperatively as a partner with the Chinese government to bring new production technologies to farmers around the world, including China. The outcome of this partnership will be an increase in global food security and greater economic activity in rural communities,” Greenwood said.
To access the study, visit www.agribusinessintelligence.informa.com/consulting
Informa’s Agribusiness Consulting group is a global business dedicated to the food and agriculture industry. Its network of more than 140 in-house specialist consultants and associates stretches from North and South America to Europe, Asia and beyond.
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