The Business Side of Genetically Modified Organisms (GMOs)

The Business Side of Genetically Modified Organisms (GMOs)

We look at how GMOs affect Farmers and their Crops, Business and the Economy and the Rules and Regulations pertaining to GMOs.

GMOs: Farmers and their Crops

Why use genetic engineering if other methods are just as effective at boosting productivity?

Genetic engineering research has focused on overcoming problems that affect productivity, such as disease, weeds, and pests. When crops can avoid disease, weeds, and pests, crop yield is enhanced.  Genetic modification is only one of the tools that farmers can use to boost productivity, and it does not eliminate the need for other advances such as hybridization, agricultural chemicals, and farm machinery. Rather, genetic modification is a technologically advanced application of biotechnology that works in conjunction with other modern agricultural practices.

Examples of how genetic engineering has been able to strengthen plants in order to help them survive:

In the early 1990s, papayas in Hawaii were hit with Papaya Ring Spot Virus, devastating the crop with a 40 percent reduction in just five years.  Scientists developed two varieties of papaya that were resistant to the virus, and today healthy papayas are now growing in Hawaii. [x]

How widely are GE seeds being accepted and used by farmers across the globe?

These statistics tell the story of the level of acceptance and use of GE seeds by farmers of plots large and small, in both the developed and developing world.  According to the independent International Service for the Acquisition of Agri-biotech Applications (ISAAA), a not-for-profit organization, the global area of biotech crops for 2012 was 170.3 million hectares, grown by 17.3 million farmers in 28 countries, with an average annual growth in areas cultivated of approximately 6%. More than 90% of farmers growing biotech crops are resource-poor farmers in developing countries.[xi]

It is important to note that despite an increased cost to the farmer and the largest focus of GE crops mainly on staple crops, the opportunity for using GE is not only limited to farmers in developed countries:

Interestingly, according to the International Service for the Acquisition of Agricultural Biotechnology Applications  “of the 28 countries that plant transgenic crops, 20 are developing countries….(and) 90% of those who grew biotech crops – that is, more than 16 million – were resource-poor smallholder farmers in developing countries.”

GMOs: Business and the Economy

Genetic modification prevents crop loss due to disease, insects, and herbicides used to control weeds, resulting in more efficient production and potentially lower food prices. According to the World Bank, agricultural sector growth is the most effective pathway for reducing poverty and increasing food access. Genetically modified crops increase farmers’ revenue by reducing some input costs, including for pesticides and water; reducing crop losses; and allowing farmers more time to pursue other labor activities. GM crops also reduce insurance costs for farmers by producing more consistent yields. For example, in India, smallholder farmers who planted Bt cotton earned 50% more with higher productivity per hectare and reduced pest damage.

The question often arises: Doesn’t genetic engineering mainly benefit large agribusiness and the main global staple crops?

The large seed companies, of which most are American, are making investments in research and production of technologies that respond to the global marketplace. They are less likely to invest in the genetic engineering of indigenous crops that are not globally traded but are nonetheless important locally. This has led critics to claim that GM will undermine biodiversity. Supporters, on the other hand, believe that GM has many benefits for neglected crops, especially when funded by the public sector. As mentioned above, the papaya crop in Hawaii was being consumed by a virus, and the industry faced failure until the introduction of a transgenic papaya turned it around. Researchers in Uganda and Kenya are showing positive gains on a wilt that affects bananas, by transferring two genes from green peppers. Other crops that researchers are working on include eggplants, black-eyed peas, and cowpeas, and soy.  Researchers have also recently finished sequencing the genome of Tef, Ethiopia’s staple crop. Studies also show that small farmers in poor countries benefit from GM crops with increased incomes as a result of higher yields and lower input costs for fertilizers and pesticides.

GMOs: Rules and Regulations

With companies then playing a significant role in developing new GE seeds, what are governments doing, if anything, to regulate these new biotechnologies?

Governments on the national level across the globe are actively reviewing and regulating for approval these new technologies. Each new technology goes through a comprehensive regulatory review that in the United States also includes the opportunity for public comments. In 1986 the U.S. government created the Coordinated Framework for the Coordination of Biotechnology, with three agencies having primary responsibility for its implementation, the Food and Drug Administration, the Environmental Protection Agency and the Animal and Plant Health Inspection Service. [xvii]

With the push to eat more “natural” foods, the question arises if GMOs are unnatural?

There is actually no FDA regulation or specific definition of the term “natural” on food labels, so there is little merit to any label claiming that a food product is “natural.” Typically, though, the term indicates that a food product is not highly processed and/or does not contain added colours or preservatives. Genetically modified crops are not “unnatural” under this definition.

The label law specifies that foods that containing genetically modified ingredients must indicate this:

There have been a number of state referendums that would require all foods to be labeled if they contain any genetically engineered ingredients. Proponents argue that consumers have the right to know what is in their food.  Some studies have found that between 60-70 percent of food in the United States have some GM ingredients. Without any new state or federal laws, manufacturers of foods that do not contain GM may already label their products as GM-free if they choose.

In interesting comment from the US states that: opponents to the labelling law regarding GMOs suggest that this type of label would put a stigma on a farming technology that numerous studies show has no negative health implications. Additionally, labeling would require the adoption of significant changes in how crops are grown, stored, and processed that would result in increased food prices. One study by researchers at Cornell University estimated that the budget for a family of four could increase by an additional $500 to $800 a year under new labeling requirements. Different state rules for labeling would make it difficult for companies to comply.

What does the organic label mean and what is its relationship to genetic engineering? Does an organic label mean it is GMO free?

The National Organic Program was created by the Department of Agriculture in 2002 to regulate organic foods. Foods may only be labeled “organic” if grown by certified organic producers and processors. To obtain the organic certification, synthetic fertilizers and pesticides may not be used, nor can seeds that have been genetically engineered. Equally, food processors may not mix organic and nonorganic materials during processing. These products then are allowed to use the USDA Organic label.


There are countless benefits to using genetically engineered crops, and insufficient evidence of hazardous effects to humans or animals.

Many misunderstandings and misconceptions about genetically modified plant crops exist.

Yet there is strong scientific consensus, including statements from organizations such as the American Association for the Advancement of Science and the U.S.’ National Academy of Sciences, that genetically engineered plants, including soybean crops, are safe to eat.


This article was largely sourced from

You can view the original article here.

Other Resources include:

  1. Genetically engineered varieties of corn, upland cotton, and soybeans by state and for the United States, 2000-13. USDA Economic Research Service website.
  2. Debate on GMO’s health risks after statistical findings in regulatory tests.   De Vendemois et al. Int.J.Biol Sci. ISSN. 1449-2288. Oct 2010.
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