Genetically modified food - Evaluating the economic risks

Public opposition to the genetic engineering of food crops (GM food) has no t been based solely on concern about biological risks. Economic risks have been widely cited too: the fear that the world's food supply will be concen trated in the hands of a few large firms, the fear that such firms will eng age or are already engaging in anti-competitive practices, and the fear of the transfer of ownership rights over genetic resources to the private sect or. Are these fears justified? We argue that the GM food industry may be on course for further consolidation, and this could be anti-competitive. In f act, policymakers face a dilemma: a stringent regulatory approval process e nhances food safety, but at the cost of increasing market concentration. We argue also that the integration of seed and agri-chemical manufacturers ma y bias the introduction of GM traits in undesirable directions. Some busine ss practices (stick as tie-in contracts between seeds and complementary pro ducts such as herbicides) may have an exclusionary motive that warrants scr utiny on anti-competitive grounds, while some other practices (such as the use of terminator genes) appear more benign. Finally, we argue against gran ting patents on genes or even on gene 'functions'. Doing so may delay the d evelopment of socially beneficial applications.