You're reading: Farmers, consumers face GMO dilemma

Choosing over natural or genetically modified products is a key dilemma that Ukrainian agriculture faces today. Since the use of genetically modified organisms (GMO) is legally banned, Ukrainian agricultural companies heavily emphasize naturalness and cleanness of their production in own exports marketing strategy. Whether such a strategy could be a long-term one is a big question. The fast pace of GMO development, that implies higher money-generating efficiency, is challenging the companies' agricultural strategy.

Thus far, the verdict is still out on whether GMOs are
harmful to human health, though the World Health Organization said this
technology may be potentially hazardous. Traditionally, Ukrainian consumers are
averse to anything that is genetically modified. A December 2012 survey by
R&B market and sociological research center found that 80 percent of consumers
think GMO-based products are harmful, and 68 percent believe a majority of local
agricultural companies apply the technology. But as Iryna Stolyar, head of
public relations at leading agricultural holding Mriya, told the Kyiv Post, “If
this (technology) would be legal, everyone would be using it.”

In October 2013, acting Agriculture Minister Mykola Prysyazhnyuk
said that he favors legalizing the usage of GMO-seeds for soy cultivation and
in the future – for corn cultivation. Analysts and market participants say that
GMO-technologies should be legalized. Andriy Kolparkov, managing partner at Da
Vinci analytical group, noted that the current legal framework on the issue is
poor, adding that any new regulations could be put to national or local
referendums since the public is so sensitive to GMO initiatives.

Despite the legal prohibition, genetically modified
soy, rapeseed, corn and sunflowers are widely cultivated in Ukraine, various
sources stated. Seventy percent of soybeans, 10-20 percent of corn and more
than 10 percent of sunflowers are produced with GMO-seeds, according to global
auditing consultancy Deloitte referring to unofficial data. Jean-Jacques Herve,
agricultural board counselor at Credit Agricole Group, said that the percentage
of Ukrainian soy produced with genetically modified seeds may be even greater.

“Just visit a field and look if there are weeds or
not. If there are weeds, probably there are no GMOs, if there is not – it’s
probably because there are GMOs,” Herve added.

Most of the illegal production is by small- and
middle-sized farms. So far there have been several cases in which the European
Union refused entry of Ukrainian products due to GMO suspicions.

Farming with GMOs is obviously profitable and this
will stimulate companies to use such a technology, Deloitte’s analyst Andriy Onopriyenko
told the Kyiv Post. The Institute of Food Biotechnology and Genomics’ director
Yaroslav Blyum said that if Ukrainian producers were to use GMO technologies for
at least 50 percent of their output, their yearly net profit would grow by at
least $140-$315 million, while 100 percent usage would lead to a $500 million
growth in net profit. Volodymyr Klymenko, president of Ukrainian Grain
Association, added that cultivating GMO-cultures is a significant opportunity for
the country. The world’s population is slated to grow to 9 billion by 2050, so
the use of GMOs and other technologies will be critical to mitigate famine
risks.

GMOs have been used in world agriculture since 1996. Globally,
an estimated 170 million hectares is farmed with GMOs. Soy dominates this
market as 60-70 percent of its world production is based on GMO-related
technologies, followed by corn. Half of the world’s genetically modified agricultural
production is based in North America, around 37 percent in South America and 11
percent in Asia. Europe’s share does not exceed 1 percent since most countries oppose
its use. However, countries which tolerate it usually
have complicated conditions for importers willing to enter their agricultural
markets with genetically modified production.

Ukrainian consumers do not seem ready to accept GMO products
in the nearest future – such an attitude is based on health concerns, religious
beliefs and proneness to traditional methods of agricultural production. To
change this, a lot could be done through explanatory work based on high-quality
scientific research. However, foreign markets, which are already attracting
Ukraine’s largest agricultural companies, could generate demand for the country’s
cheap GMO-based products. Ukraine may become Europe’s key GMO producer in five
to seven years, stated Da Vinci AG. Still, markets in China, Japan and Europe
are very suspicious of these products, leaving Ukraine the hard task of
developing a long-term strategy for the use of GMOs.

Kyiv
Post associate business editor Ivan Verstyuk can be reached at [email protected]