Low level presence of genetically modified crops in food and feed trade in Malaysia

Genetic engineering technology has been applied extensively on crops. Although widely traded, the commercialization of genetically modified (GM) crops is subjected to domestic regulatory approval. Considering that the authorization processes are not synchronized across countries or better known as asynchronous approval, the mixture of authorized and unauthorized GM crops along the supply chain cannot be avoided. The possible implication is that GM crop authorized in one country might be found in another country that has not yet given authorization, thus creating a low level presence (LLP) situation. In light of this development, the research aimed to investigate these issues through its specific objectives. For the first objective, which is to examine trade impacts from asynchronous approvals of GM crops, the research has developed a Protectionism Index for 31 countries to reflect the stringency of GM crops regulatory mechanisms that cause asynchronous approval problems. Together with other observable variables and based on panel data structure, the index was empirically tested in a gravity model of trade. It was found that in general, asynchronous approval has a negative impact on trade particularly for maize. The second objective focuses on evaluating the welfare effect using bilateral trade data based on changes in consumer surplus and costs to the government giving the change in LLP tolerance. The results demonstrate that non-zero tolerance for LLP can increase the consumer surplus and reduce the cost to the government in implementing the regulations to monitor LLP occurrence. Overall, these will lead to an increase in welfare effects. The third objective is to investigate factors that could lead the LLP policy formulation direction. Data were collected using the questionnaire and from the interviews, mainly targeted respondents from the government sector, industry, and non-government organization. Based on the analyses, several factors are found to be critical. In particular, the Partial Least Square modeling indicated the applicability of the policy with existing laws as well as its consistency with existing international guidelines were found to be significant. Institutional capacity also plays an important role to make a practical policy. Findings also suggested public awareness and availability of resources should not be neglected. Several implications have emerged from the findings. By studying impacts from asynchronous approval and LLP, empirical data on the broader question of how policymakers address science and new technologies related issues are made available. The research findings are relevant and can assist policymakers in Malaysia to understand better about the existing magnitude of LLP as well as the issues and challenges that the government is facing and will be facing when formulating and implementing LLP policy. The results also provide policymakers with a different perspective on LLP tolerance options together with its trade and regulatory consequences. Higher LLP tolerances can restrain trade disruptions and related economic costs but may be feasible only when no substantial food, feed or environmental safety concerns be present. Meanwhile, lower tolerances imply higher costs as segregation becomes more costly and trade disruption more likely. Thus, being an importer of maize and soybean, Malaysia should have a clear policy direction. A practical LLP management strategy is not only crucial to keep food and feed safe, but also can provide transparency and predictability for imports and minimizing disruptions to trade.

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