Risky Business - Greenpeace

Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
5.2 Grain Elevator/Processor Impacts
Including Testing Costs
Rice processors and handlers had to engage in a testing and
cleaning regime to ensure that all incoming rice was GE-free
for the 2007 harvest. As previously mentioned the US Rice
Federation issued a document US Rice Industry
Recommendations to Reestablish Supply and Marketability
of US Rice. This document requested state authorities in each
rice state to implement a series of regulatory provisions to
restore customer confidence in the rice industry. The
recommendations included a) seed testing protocols, b)
certified seed sampling, c) banning the planting of Cheniere
seed, d) crop producer certifications and e) establishing an
industry/landgrant university task force to educate rice
producers. Given that the tone of the document was basically
to have the industry GE-free, processors and handlers had to
engage in extra paperwork to ensure that producers were
delivering GE-free crops. In order to estimate the cost of this
regime, cost estimates were derived from the grain
merchandising literature dealing with identity preserved
segregation. Even though the rice production coming off the
farms in 2007 is not segregated per se, the costs of
paperwork and grain testing make the protocols associated
with rice handling analogous to an identity preservation
system. The extra costs arising from cleaning out and
ensuring GE-free rice grain storage and processessing arise
from a) sampling and testing, b) maintenance, c) mistakes or
misgrades in rice sampling, d) disputes, e) labour, f) other
costs. Maltsbarger and Kalaitzandonakes 49 estimated the
identity segregation costs for a range of elevator sizes for
identity preserved high-oil corn. Depending on the elevator
size the segregation costs range from $0.021 to $0.049 per
bushel. Of this, the sample testing analysis costs ranged from
$0.011 to $0.031 per bushel.
For LL601 detection the testing costs will be much higher.
In 2007 many processors including the two major rice
cooperatives Riceland Foods and Producers Rice Mill are
testing every truckload of rice for LL601 50 . A standard
truckload contains 910 bushels 51 . Genescan 52 a GMO
testing lab charges $180 for a bar 35S test that meets EU's
GE regulations. If every truckload of rice is getting tested this
means that the cost of LL601 testing is $0.197 per bushel
($0.197 = $180/910 bushels). Using this testing cost and
the other segregation costs from Maltsbarger and
Kalaitzandonakes (misgrades, maintenance, disputes/labour
and other) the range of segregation costs for LL601 is $0.207
to $0.215 per bushel. Assuming these costs are applied to
the expected total US rice production in 2007, Table 5.2.1
lays out the estimated total costs.
The total cost to the US rice industry to clean up and
maintain GE-free status for 2007 ranges from $88 million to
$91 million. These costs include the sum of all long grain and
medium/short grain production in the US.
16