Radical overhaul not needed in U.S. grain handling system for GMOs

URBANA, Ill. – It will not take a radical overhaul of the U.S. grain handling system to meet current European Union-required 99 percent purity levels for nongenetically modified organisms, according to a study prepared by University of Illinois associate professor of agricultural and consumer economics David Bullock and two colleagues.



“Recent observations suggest that, yes, the U.S. grain handling system, with its current storage and transportation facilities, can satisfy the EU standards,” said Bullock. “The increased handling of speciality grains has already led to changes in the U.S. grain handling infrastructure, but these changes have been relatively small.



“In any sort of near term, we should not expect to see an overhaul of the grain handling infrastructure, but rather a reshuffling of it.”



It was prompted by the controversy surrounding the production and marketing of agricultural genetically modified organisms.



“Many consumers worldwide currently worry that food derived from GMOs may be unhealthy, or that the production of GMOs may have negative environmental consequences or other negative social consequences,” said Bullock. “As a result, recently there have been calls all over the world, but especially in the European Union and Japan, for increased regulation of the production and marketing of GMOs and of products derived from GMOs.”



In Europe, laws have been passed mandating the labeling of genetically modified products.



This raises a potential challenge for U.S. corn and soybean producers. USDA estimates indicate that 52 percent of U.S. soybean acres and 25 percent of the corn acres will be planted with genetically modified varieties.



“If consumers strongly reject products labeled as GMO, then we can expect that market signals will be created that encourage the segregation of non-GMO grain from genetically modified grain, and that the identity of non-GMO grain must be preserved,” Bullock said.



“Our study examines in detail the various stages of the U.S. grain handling system, how each functions, and how the segregation policy might affect them,” said Bullock.



The study concludes that the current U.S. grain handling system can deal with segregation requirements without building a whole new infrastructure and junking the existing one.



“Currently, it seems that a major cost in non-GMO segregation and identity preservation does not come from cleaning grain handling machinery or testing, but rather from the ‘reshuffling of the grain handling system,” Bullock said. “Rather than incur the expense of frequently cleaning out grain elevator components, grain handlers are instead dedicating already separated grain handling paths to either GMOs or non-GMOs.



“These changes imply that farmers might have to transport their grain a few more miles to find an elevator that receives the particular type of grain the farmer is selling. This reshuffling of elevator uses does have a cost to the farmer and the system. But evidently this cost is much lower than would be the cost of building a whole new infrastructure.”Bullock pointed out that the GMO controversy has not changed the basic nature of the grain handling industry.



“GMO technology does not overturn the basic economics of the grain handling industry,” he said. “Grain handlers make their profits not simply from storing and moving grain. Rather, they make their profits from understanding grain markets, and knowing when market signals are calling for what type of grains to be blended and moved from one location to another.”