AGRI Committee Report
If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.
LABELLING OF GENETICALLY MODIFIED FOODS
AND ITS IMPACTS ON FARMERS
The labelling of genetically modified (GM) food in Canada is mandatory only if a health problem has been identified (e.g. allergenicity) or the nutritional content has been changed. Canadian regulations require that these foods be assessed in terms of their effects on human health and the environment. Because the GM foods that are on the market have been determined by the departments and agencies responsible1 to be safe, it is not mandatory that they be labelled. Voluntary labelling of food products derived from biotechnology is allowed, however, and a standard is currently being developed by the Canadian General Standards Board. The purpose of that project is to provide further guidance for food companies and manufacturers, and better information to consumers.
The debate is not over. Some consumer and environmental groups would like to see mandatory labelling of GM foods, as is already the case in the European Union (EU) countries and in Japan. In Canada, Bill C-287, which proposed that a system for the mandatory labelling of GM foods be implemented, narrowly failed to receive second reading on October 17, 2001.
On October 23, 2001, in response to a proposal made by the Ministers of Health, Agriculture and Agri-Food, Industry and International Trade, the Standing Committee on Health decided to hold hearings to identify the best options for meeting consumers’ information needs with respect to GM foods.
Despite having a full schedule as a result of its mandate to travel across Canada to study the future role of the government in agriculture, the Standing Committee on Agriculture and Agri-Food decided to participate in this important debate by examining, more specifically, the impacts of mandatory and/or voluntary labelling of transgenic foods on farmers and the agri-food industry.
Accordingly, the Committee held four public hearings between January and April 2002, and heard close to twenty groups representing the various components of the agriculture and agri-food industry.
The concept of a genetically modified organism (GMO) generally refers to an organism — whether a plant, an animal or a micro-organism (bacterium, fungus, yeast, etc.) — that has been produced using modern biotechnology, including recombinant DNA technology. GMOs are also called transgenic organisms. This is essentially the definition used by the EU in its regulations, and by the Codex Alimentarius in its "Draft Principles for the Risk Analysis of Foods Derived from Modern Biotechnology", which will be submitted for adoption by the FAO/WHO Codex Alimentarius Commission at its next meeting in Rome in July 2003.
Regulations in Canada under the Food and Drug Act use a broader definition: a GMO includes an organism that exhibits characteristics that were not previously observed in that organism, regardless of the method used to obtain the new characteristic. That means that this definition covers more than just transgenic organisms. For example, Round-Up Ready® canola is a transgenic variety of canola, while Clearfield® imidazolinone-tolerant canola (imidazolinone being a herbicide) is a variety produced by provoking mutagenesis chemically,2 that is, without transferring genes from one species to another. Under the Canadian regulations, they are both regarded as genetically modified because their herbicide tolerance characteristics were new at the time they were first marketed. Only Round-Up Ready® canola is considered to be a GMO under the EU regulations and the Codex Alimentarius draft standard.
Even though Canada has chosen to use a broader definition for assessing and approving GMOs, there are still no clear rules to define what may be labelled. A preliminary version of the standard for labelling food derived from biotechnology, which is being developed by the Canadian General Standards Board, was published in July 2001. It limits labelling to foods derived from transgenic organisms rather than following the broader definition used in the Canadian regulations, which include assessment of GMOs; the new varieties of cereals produced using mutagenesis would therefore not be included. Nonetheless, the witnesses heard by the Committee were divided in their opinions as to the definition to be used in order for labelling to be meaningful.
Those who advocate a narrow definition, one that would cover only transgenic organisms, argue that it is the transfer of genetic material from one species to another that concerns consumers and environmental groups. It is therefore not necessary to follow the broader definition used for assessing GMOs because it does not reflect consumer expectations.
Conversely, the Consumers’ Association of Canada (CAC) would like the definition used for labelling to be consistent with the Food and Drug Regulations. In the CAC’s view, two varieties of pesticide-resistant canola produced using different methods, such as Round-Up Ready® canola and Clearfield® canola, should not be labelled differently as might happen if a definition that was limited to transgenic organisms were to be adopted. That opinion is shared by the Ontario Corn Producers’ Association which took the position that consumer surveys show that consumers’ idea of a transgenic product is broader than the scientific community’s definition: to them, the expression "genetically modified" also covers varieties produced by mutagenesis.
The definition that is chosen could also have implications for international trade. Because the trend in other countries is toward a definition that is limited to transgenic organisms, the Canadian Wheat Board has expressed reservations about choosing a broader definition that would be identical to the one in the present Food and Drug Regulations:
… a broad definition would put Canadian grain exports at a serious disadvantage relative to our competitors, in that certain products labelled as GMOs in Canada would not be considered GMOs in any other country, raising confusion and concerns in our export markets about certain Canadian grain varieties.
Canadian Wheat Board — Meeting No. 40, January 31, 2002
There are some who do not share that opinion. The Ontario Corn Producers’ Association argued that the definition of GMO that is used for labelling in Canada would have no effect on exports because exporters have to comply with the requirements of the countries or companies to which they are selling their products. For example, some varieties of corn contain new characteristics that have been approved in Canada but not in the EU. The corn industry has worked to ensure that varieties that possess new characteristics that have not yet been approved by the EU are not shipped to marketing chains that take products to EU member countries. This system has been in operation for three years and could easily be extended and adapted to other products. The list of new foods produced by Health Canada and the Canadian Food Inspection Agency could be used as a reference list by importers.
However, a majority of witnesses stressed that Canada should develop a policy that is compatible with the Codex Alimentarius definition — a narrow definition — which is already used by all countries that have adopted or are in the process of adopting a labelling policy. The Committee believes that it is important that Canada follow the international consensus that has been developed regarding the types of foods affected by labelling. For the purpose of the Canadian policy on labelling foods derived from biotechnology, the Committee therefore supports a narrow definition that would include only transgenic organisms.
As has been said, the Canadian food labelling system requires that a food be labelled when a health problem has been identified or the nutritional content has been modified. Given that the GM products currently on the market are considered by the ministers responsible to be safe, it is not mandatory that their nature be indicated on the label. However, the voluntary labelling of such foods is permitted.
The Canadian General Standards Board is currently developing a standard for the voluntary labelling of these kinds of food products to provide further guidance for food companies and manufacturers. For the moment, there is nothing to prevent a manufacturer from labelling their products, such as wheat flour or apple sauce as "GMO-free". However, because there are no transgenic varieties of wheat and apples on the world market at the moment, this type of labelling could be considered as misleading in that it implies that wheat flour or apple sauce derived from GMOs does exist. Whether labelling is mandatory or voluntary, a standard is therefore essential to standardize labelling practices so that they are verifiable and do not mislead the consumer.
The Consumers’ Association of Canada and all of the witnesses representing the agriculture and agri-food industry, with the exception of the National Farmers Union, were in favour of voluntary rather than mandatory labelling. The Committee recognizes that there is a role for labelling in order to help provide information to consumers who want to know more about food production practices. However, whether the issue is organic farming or free-range chickens, for example, this type of labelling is optional, as AGCare (Agricultural Groups Concerned About Resources and the Environment) pointed out:
Labelling foods based on their production method … in order to enhance consumer choice is not a health and safety issue. This type of labelling has traditionally been voluntary, and it should remain so.
Agricultural Groups Concerned About Resources and the Environment — Meeting No. 52, February 26, 2002
Labelling must not replace assessment of the safety of the food, which is the responsibility of Health Canada and the Canadian Food Inspection Agency. Making labelling mandatory might give the impression that existing measures to ensure food safety are not adequate. That could have negative consequences, as the Food and Consumer Products Manufacturers of Canada testified:
Since consumers see GM labels as a warning, we would far rather remove GM ingredients from our products than mislead consumers into thinking our products are not safe.
Food and Consumer Products Manufacturers of
Canada — Meeting No. 40, January 31, 2002
That group also said:
To avoid the misperceptions GM labels would create and their potential economic implications, food manufacturers believe they have several options available to them, including sourcing ingredients from non-GM commodities or moving away from their current sourcing of GM commodities today; substituting other GM ingredients for those derived from GM sources, such as switching from corn sweeteners to sucrose; and sourcing ingredients internationally or moving out of Canada to source those ingredients. … [A]nd today our manufacturers use 35% of Canadian farm outputs in the manufacturing of their products.
Food and Consumer Products Manufacturers of
Canada — Meeting No. 40, January 31, 2002
Some people even go so far as to believe that mandatory labelling is a way of boycotting the technology and making it go away. The Committee is of the opinion that biotechnology is a way of improving agricultural and agri-food production, as long as product safety is properly assessed before any product is marketed. Labelling of GM foods, therefore, amounts to providing information about a product, and not some kind of warning that a product is not safe. Consequently, the Committee recommends:
RECOMMENDATION 1
That the government continue to develop a standard for the voluntary labelling of food derived from biotechnology. That standard should use a narrow definition of GMOs, as proposed in the draft standard produced by the Canadian General Standards Board.
If the policy of voluntary labelling of GM foods is maintained in Canada, it will be essential to strengthen consumer confidence in the safety of food products and maintain a level of excellence in the assessment of the effects on human health and the environment of the new transgenic organisms that will arrive on the market. Consequently, the Committee recommends:
RECOMMENDATION 2
That the government intensify research into the benefits and risks to human health and the environment of agricultural products derived from biotechnology, and bring forward a public information program.
Whether the labelling system is voluntary or mandatory, the agri-food industry will have to adjust to a new situation. Monitoring and segregating transgenic products will continue to involve logistical changes and additional costs.
In the case of voluntary labelling, farmers and companies that choose to enter the niche market for foods labelled "GMO-free" or "GM" will bear the costs. That choice would presumably be based on an economic calculation — does labelling allow them to charge more for their products? Some witnesses considered the example of cereals and thought that the costs would not be very different from the costs of the existing identity-preserved systems. Those who would choose to stay out of this niche market would not have to bear the costs.
If labelling of GM foods were to be mandatory, the entire industry would have to reorganize grain production, transportation, handling and processing to separate the transgenic from the non-transgenic products. We could anticipate that individual farmers, at least those who continued to use transgenic seed, would operate in substantially the same way as seed producers do now, with similar costs. Because people would expect food products to be labelled, this would not necessarily result in a premium price or higher farm-gate price.
Few figures were offered at the public hearings to try to quantify the additional costs that would result from mandatory or voluntary labelling of GM foods. Witnesses mentioned a number of factors that might influence costs, including:
The definition of GMO — a narrow definition, which is limited to transgenic organisms, or a broader definition, which includes any organism that exhibits a characteristic not previously observed in that organism, regardless of the method used to obtain that characteristic.
The threshold of tolerance adopted for determining whether an ingredient must be declared to be GM or not. Japan labels an ingredient in a food product if it was manufactured with more than 5% GMO. The EU has set a 1% threshold.
The types of foods that will be labelled that is, all ingredients derived from GMOs or only those whose genetic modification is scientifically detectable.
The availability of scientific tests to detect genetic modifications.
The creation of a tracking system that would include keeping records and certifying farmers and companies.
Some studies, including one done in Canada by KPMG,3 provide an idea of the additional costs and confirm that those costs will be borne by the two ends of the chain: farmers and consumers. However, the accuracy of those studies was questioned, and some witnesses, including the Consumers’ Association of Canada and the Grain Growers of Canada, considered the costs to be exaggerated. On this point, the KPMG representative said that the report was intended to provide an estimate, and that many of the people consulted had been unable to make reliable cost estimates. Until further detailed work has been done to establish what changes labelling will necessitate in the organization of the industry, there will be no reliable data.
The Committee believes that it is time for a realistic and objective study so that the discussion of the costs of labelling that would meet consumer needs has a basis in sound facts. Consequently, the Committee recommends:
RECOMMENDATION 3
That the government assess the additional costs, particularly for farmers and consumers, of implementing segregation and tracking systems, which are necessary for the labelling of GM foods, and report to the Committee and the House of Commons.
Furthermore, because of the importance of international trade for Canadian farmers, the Committee recommends:
RECOMMENDATION 4
That the government assess the trade implications of mandatory versus voluntary labelling of GM foods, and report the results of this assessment to the Committee and the House of Commons.
1 Health Canada for the human health aspects and the Canadian Food Inspection Agency for the environmental aspects. 2 Mutagenesis is a plant improvement technique that consists of modifying the genes of a plant by irradiating its cells or
with the assistance of chemicals. It is not a genetic engineering technique and does not involve transferring genes
between organisms. 3 KPMG Consulting, Economic Impact Study: Potential Costs of Mandatory Labelling of Food Products Derived from
Biotechnology in Canada, Phase I Report, January 2000.