- Email: [email protected]
On the proportionality of EU spatial ex ante coexistence regulations: Reply
Food Policy 35 (2010) 183–184
Contents lists available at ScienceDirect
Food Policy journal homepage: www.elsevier.com/locate/foodpol
On the proportionality of EU spatial ex ante coexistence regulations: Reply Matty Demont a,b,*, Koen Dillen b, Wim Daems b, Christophe Sausse c, Eric Tollens b, Erik Mathijs b a
Africa Rice Center (AfricaRice), B.P. 96, Saint-Louis, Senegal Division for Agricultural and Food Economics, Department of Earth and Environmental Sciences, Katholieke Universiteit Leuven, Celestijnenlaan 200E Bus 2411, B-3001 Leuven, Belgium c Centre Technique Interprofessionel des Oléagineux Métropolitains (CETIOM), Centre de Grignon B.P. 4, 78850 Thiverval Grignon, France b
a r t i c l e Keywords: European Union Biotechnology Policy analysis Flexibility Consumer Welfare
i n f o
a b s t r a c t Desquilbet and Bullock (2010) criticize some aspects of our analysis of the European Union’s (EU) spatial ex ante coexistence regulations (SEACERs) of genetically modified (GM) and non-GM crops presented in Demont et al. (2009). We argue that, besides misinterpreting some of our original arguments, the authors propose a policy analysis framework which is inconsistent with the main goal of the EU’s SEACERs. Their example incorrectly suggests that SEACERs play an additional role of regulating non-GM crop supply on the market. This would be inefficient from a policy economics perspective, especially in an open economy where global trade is taken into account. Therefore, we argue that analyzing flexibility of SEACERs in a market framework could lead to erroneous conclusions and in that case a simple farm level analysis such as presented in Demont et al. (2009) is preferred. Ó 2010 Elsevier Ltd. All rights reserved.
Desquilbet and Bullock (2010) criticize some aspects of our analysis of the European Union’s (EU) spatial ex ante coexistence regulations (SEACERs) presented in a recent article in this journal (Demont et al., 2009) and in earlier work (Demont et al., 2008; Demont and Devos, 2008; Devos et al., 2008, 2009). In this rebuttal letter, we argue that the authors unnecessarily add confusion to the debate as they (i) misquote and misinterpret some of our arguments; (ii) fail to capture the subtleties of our proposed framework; and (iii) propose a policy analysis framework which is inconsistent with the main goal of the EU’s SEACERs. First of all, in our view Desquilbet and Bullock (2010) put too much emphasis on the actual isolation distances we summarized in Demont et al. (2009) for the example of maize. Although we stand behind our literature review, the proposed distances are purely illustrative and the framework we develop is conceptual; in order to use it, policy makers will need to feed it with crop-specific data. Secondly, in their assertion ‘‘pollen barriers are not necessarily flexible and isolation distances are not necessarily rigid”, we believe that Desquilbet and Bullock (2010) misinterpret our arguments. In our work, we never claimed that pollen barriers ‘‘are” flexible and isolation distances rigid. We defined flexibility and rigidity as regulatory concepts, determined by the level of responsibility implied by EU legislation. We argued that pollen barriers are more compatible with regulatory flexibility than isolation distances: not
* Corresponding author. Address: Africa Rice Center (AfricaRice), B.P. 96, SaintLouis, Senegal. Tel.: +221 339626493; fax: +221 339626491. E-mail address: [email protected] (M. Demont). 0306-9192/$ - see front matter Ó 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.foodpol.2010.03.001
only are pollen barriers more easily interchangeable among farmers as they are planted with the same crop species, they need not be as large to achieve a similar rate of reduction in cross-fertilization (Proposition 2). Moreover, their critique fails to capture the subtleties of our framework which introduces the concepts of partial versus total field conversion (Proposition 1). For any particular field, the larger the distance requirement is, the higher the shadow factor, the lower the profits from genetically modified (GM) crop production and the higher the likelihood is that the field will be entirely planted with non-GM crops. The switch from partial to total field conversion introduces an important discontinuity into the distance-interchangeability relationship. Thirdly, while Desquilbet and Bullock’s (2010) main critique ‘‘any economic analysis of coexistence measures should include their welfare effects on consumers as well as on producers” seems reasonable from a policy economics perspective, our view is that their proposed framework is inconsistent with the main goal of the EU’s SEACERs. Their argument essentially comes down to rejecting the idea that market effects can be exogenized in any policy analysis of SEACERs. We believe that the authors’ argument mixes two legal principles with different purposes, i.e. mandatory labeling (LP1), and coexistence (LP2). LP1 directly aims at protecting consumers’ freedom of choice by setting the 0.9% threshold for the adventitious presence of GM material in non-GM products, while LP2 directly aims at protecting non-GM farmers from income losses resulting from GM contamination and, hence, indirectly at protecting consumers’ freedom of choice. In other words, provided that the legal principles are both complied with and effective – two assumptions maintained throughout our paper – market effects
184
M. Demont et al. / Food Policy 35 (2010) 183–184
can be exogenized in the analysis of the flexibility of SEACERs. It is interesting to note how the authors interpret LP2 in their example, as if its primary raison d’être is the regulation of non-GM crop supply on the differentiated GM/non-GM crop market. We consider this interpretation to be inconsistent with the goal of the EU’s SEACERs, and also to be inefficient from a policy economics perspective as it would imply that the EU is trying to preserve non-GM crop supply (to protect consumers’ choice) by means of two legal principles, i.e. LP1 and LP2. Especially in an open economy where global trade is taken into account, it would be very inefficient to design R2 to regulate the supply of non-GM crops on the European market as it only affects European farmers and production. Hence, the correct market analysis framework needs to take into account both legal principles in both dimensions, i.e. ex ante and ex post. Analyzing ex ante LP2 flexibility alone in a market framework could lead to erroneous conclusions and in that case a simple farm level analysis subject to the compliance and effectiveness assumptions – such as presented in Demont et al. (2009) – is preferred. Finally, by omitting the word ‘‘rigidity” in ‘‘shifting coexistence regulation from ex ante to ex post”, followed by ‘‘if only ex post liability measures are implemented”, we believe that Desquilbet and Bullock (2010) misquote and misinterpret our closing argument. Nowhere do we advocate for the absence of ex ante regulations, but only for relaxing their rigidity. In fact, literature shows that in the case of low cost externalities, such as GM contamination (loss is at most equal to the rents generated by identity preservation), Shavell’s (1984) argument – advanced by the authors – does not hold and a combination of ex post and ex ante regulations is more efficient. Kolstad et al. (1990) argue that in such cases the ex ante regulations should be below the social optimal level, which is in
line with our recommendation to move rigidity to ex post regulations. Acknowledgements The financial support of the European Commission’s 6th Framework Programme SIGMEA project (Sustainable Introduction of Genetically Modified organisms into European Agriculture) is gratefully acknowledged. We thank Yann Devos, Olivier Sanvido, Andreas Gumbert and Manuel Gómez-Barbero for useful advice. The authors assume full responsibility for any shortcomings in this response letter. References Demont, M., Devos, Y., 2008. Regulating coexistence of GM and non-GM crops without jeopardizing economic incentives. Trends in Biotechnology 26 (7), 353–358. Demont, M., Daems, W., Dillen, K., Mathijs, E., Sausse, C., Tollens, E., 2008. Regulating coexistence in Europe: beware of the domino-effect! Ecological Economics 64 (4), 683–689. Demont, M., Dillen, K., Daems, W., Sausse, C., Tollens, E., Mathijs, E., 2009. On the proportionality of EU spatial ex ante coexistence regulations. Food Policy 34 (6), 508–518. Desquilbet, M., Bullock, D.S., 2010. On the proportionality of EU spatial ex ante coexistence regulations: a comment. Food Policy 35 (1), 87–90. Devos, Y., Demont, M., Sanvido, O., 2008. Coexistence in the EU – return of the moratorium on GM crops? Nature Biotechnology 26 (11), 1223–1225. Devos, Y., Demont, M., Dillen, K., Reheul, D., Kaiser, M., Sanvido, O., 2009. Coexistence of genetically modified (GM) and non-GM crops in the European Union. A review. Agronomy for Sustainable Development 29 (1), 11–30. Kolstad, C.D., Ulen, T.S., Johnson, G.V., 1990. Ex post liability for harm vs. ex ante safety regulation: substitutes or complements? American Economic Review 80 (4), 888–901. Shavell, S., 1984. Liability for harm versus regulation of safety. Journal of Legal Studies 13 (2), 357–374.
Contents lists available at ScienceDirect
Food Policy journal homepage: www.elsevier.com/locate/foodpol
On the proportionality of EU spatial ex ante coexistence regulations: Reply Matty Demont a,b,*, Koen Dillen b, Wim Daems b, Christophe Sausse c, Eric Tollens b, Erik Mathijs b a
Africa Rice Center (AfricaRice), B.P. 96, Saint-Louis, Senegal Division for Agricultural and Food Economics, Department of Earth and Environmental Sciences, Katholieke Universiteit Leuven, Celestijnenlaan 200E Bus 2411, B-3001 Leuven, Belgium c Centre Technique Interprofessionel des Oléagineux Métropolitains (CETIOM), Centre de Grignon B.P. 4, 78850 Thiverval Grignon, France b
a r t i c l e Keywords: European Union Biotechnology Policy analysis Flexibility Consumer Welfare
i n f o
a b s t r a c t Desquilbet and Bullock (2010) criticize some aspects of our analysis of the European Union’s (EU) spatial ex ante coexistence regulations (SEACERs) of genetically modified (GM) and non-GM crops presented in Demont et al. (2009). We argue that, besides misinterpreting some of our original arguments, the authors propose a policy analysis framework which is inconsistent with the main goal of the EU’s SEACERs. Their example incorrectly suggests that SEACERs play an additional role of regulating non-GM crop supply on the market. This would be inefficient from a policy economics perspective, especially in an open economy where global trade is taken into account. Therefore, we argue that analyzing flexibility of SEACERs in a market framework could lead to erroneous conclusions and in that case a simple farm level analysis such as presented in Demont et al. (2009) is preferred. Ó 2010 Elsevier Ltd. All rights reserved.
Desquilbet and Bullock (2010) criticize some aspects of our analysis of the European Union’s (EU) spatial ex ante coexistence regulations (SEACERs) presented in a recent article in this journal (Demont et al., 2009) and in earlier work (Demont et al., 2008; Demont and Devos, 2008; Devos et al., 2008, 2009). In this rebuttal letter, we argue that the authors unnecessarily add confusion to the debate as they (i) misquote and misinterpret some of our arguments; (ii) fail to capture the subtleties of our proposed framework; and (iii) propose a policy analysis framework which is inconsistent with the main goal of the EU’s SEACERs. First of all, in our view Desquilbet and Bullock (2010) put too much emphasis on the actual isolation distances we summarized in Demont et al. (2009) for the example of maize. Although we stand behind our literature review, the proposed distances are purely illustrative and the framework we develop is conceptual; in order to use it, policy makers will need to feed it with crop-specific data. Secondly, in their assertion ‘‘pollen barriers are not necessarily flexible and isolation distances are not necessarily rigid”, we believe that Desquilbet and Bullock (2010) misinterpret our arguments. In our work, we never claimed that pollen barriers ‘‘are” flexible and isolation distances rigid. We defined flexibility and rigidity as regulatory concepts, determined by the level of responsibility implied by EU legislation. We argued that pollen barriers are more compatible with regulatory flexibility than isolation distances: not
* Corresponding author. Address: Africa Rice Center (AfricaRice), B.P. 96, SaintLouis, Senegal. Tel.: +221 339626493; fax: +221 339626491. E-mail address: [email protected] (M. Demont). 0306-9192/$ - see front matter Ó 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.foodpol.2010.03.001
only are pollen barriers more easily interchangeable among farmers as they are planted with the same crop species, they need not be as large to achieve a similar rate of reduction in cross-fertilization (Proposition 2). Moreover, their critique fails to capture the subtleties of our framework which introduces the concepts of partial versus total field conversion (Proposition 1). For any particular field, the larger the distance requirement is, the higher the shadow factor, the lower the profits from genetically modified (GM) crop production and the higher the likelihood is that the field will be entirely planted with non-GM crops. The switch from partial to total field conversion introduces an important discontinuity into the distance-interchangeability relationship. Thirdly, while Desquilbet and Bullock’s (2010) main critique ‘‘any economic analysis of coexistence measures should include their welfare effects on consumers as well as on producers” seems reasonable from a policy economics perspective, our view is that their proposed framework is inconsistent with the main goal of the EU’s SEACERs. Their argument essentially comes down to rejecting the idea that market effects can be exogenized in any policy analysis of SEACERs. We believe that the authors’ argument mixes two legal principles with different purposes, i.e. mandatory labeling (LP1), and coexistence (LP2). LP1 directly aims at protecting consumers’ freedom of choice by setting the 0.9% threshold for the adventitious presence of GM material in non-GM products, while LP2 directly aims at protecting non-GM farmers from income losses resulting from GM contamination and, hence, indirectly at protecting consumers’ freedom of choice. In other words, provided that the legal principles are both complied with and effective – two assumptions maintained throughout our paper – market effects
184
M. Demont et al. / Food Policy 35 (2010) 183–184
can be exogenized in the analysis of the flexibility of SEACERs. It is interesting to note how the authors interpret LP2 in their example, as if its primary raison d’être is the regulation of non-GM crop supply on the differentiated GM/non-GM crop market. We consider this interpretation to be inconsistent with the goal of the EU’s SEACERs, and also to be inefficient from a policy economics perspective as it would imply that the EU is trying to preserve non-GM crop supply (to protect consumers’ choice) by means of two legal principles, i.e. LP1 and LP2. Especially in an open economy where global trade is taken into account, it would be very inefficient to design R2 to regulate the supply of non-GM crops on the European market as it only affects European farmers and production. Hence, the correct market analysis framework needs to take into account both legal principles in both dimensions, i.e. ex ante and ex post. Analyzing ex ante LP2 flexibility alone in a market framework could lead to erroneous conclusions and in that case a simple farm level analysis subject to the compliance and effectiveness assumptions – such as presented in Demont et al. (2009) – is preferred. Finally, by omitting the word ‘‘rigidity” in ‘‘shifting coexistence regulation from ex ante to ex post”, followed by ‘‘if only ex post liability measures are implemented”, we believe that Desquilbet and Bullock (2010) misquote and misinterpret our closing argument. Nowhere do we advocate for the absence of ex ante regulations, but only for relaxing their rigidity. In fact, literature shows that in the case of low cost externalities, such as GM contamination (loss is at most equal to the rents generated by identity preservation), Shavell’s (1984) argument – advanced by the authors – does not hold and a combination of ex post and ex ante regulations is more efficient. Kolstad et al. (1990) argue that in such cases the ex ante regulations should be below the social optimal level, which is in
line with our recommendation to move rigidity to ex post regulations. Acknowledgements The financial support of the European Commission’s 6th Framework Programme SIGMEA project (Sustainable Introduction of Genetically Modified organisms into European Agriculture) is gratefully acknowledged. We thank Yann Devos, Olivier Sanvido, Andreas Gumbert and Manuel Gómez-Barbero for useful advice. The authors assume full responsibility for any shortcomings in this response letter. References Demont, M., Devos, Y., 2008. Regulating coexistence of GM and non-GM crops without jeopardizing economic incentives. Trends in Biotechnology 26 (7), 353–358. Demont, M., Daems, W., Dillen, K., Mathijs, E., Sausse, C., Tollens, E., 2008. Regulating coexistence in Europe: beware of the domino-effect! Ecological Economics 64 (4), 683–689. Demont, M., Dillen, K., Daems, W., Sausse, C., Tollens, E., Mathijs, E., 2009. On the proportionality of EU spatial ex ante coexistence regulations. Food Policy 34 (6), 508–518. Desquilbet, M., Bullock, D.S., 2010. On the proportionality of EU spatial ex ante coexistence regulations: a comment. Food Policy 35 (1), 87–90. Devos, Y., Demont, M., Sanvido, O., 2008. Coexistence in the EU – return of the moratorium on GM crops? Nature Biotechnology 26 (11), 1223–1225. Devos, Y., Demont, M., Dillen, K., Reheul, D., Kaiser, M., Sanvido, O., 2009. Coexistence of genetically modified (GM) and non-GM crops in the European Union. A review. Agronomy for Sustainable Development 29 (1), 11–30. Kolstad, C.D., Ulen, T.S., Johnson, G.V., 1990. Ex post liability for harm vs. ex ante safety regulation: substitutes or complements? American Economic Review 80 (4), 888–901. Shavell, S., 1984. Liability for harm versus regulation of safety. Journal of Legal Studies 13 (2), 357–374.