China’s approval process for bioengineered agricultural crops is costing the U.S. economy billions of dollars in lost sales, according to an analysis released May 30 by Informa Agribusiness Consulting. The report, commissioned by CropLife International, was issued as the United States and China prepare for another round of trade consultations.
The report, The Impact of Delays in Chinese Approvals of Biotech Crops, quantifies the economic impact due to the delayed availability of new biotech products for farmers in major biotechnology cultivation countries, including the United States and Brazil. In the U.S., Informa estimates Chinese delays from 2011-2016 resulted in the agricultural industry and the broader economy foregoing: $5 billion in farm income growth, nearly 34,000 new jobs, $4.6 billion in wage growth, $7 billion in GDP growth, and $15 billion in business sales.
CropLife noted that in recent years, China has taken considerably longer than other countries to approve biotechnology products. “Delays – including delays in innovations reaching the marketplace – impede global initiatives to improve food and nutrition security, advance economic prosperity, and increase the adoption of environmentally sound practices,” CropLife noted.
China operates an “asynchronous” approval system, requiring that a cultivating country like the United States or Brazil finish its approval process before beginning the approval process in China.
In 2017, China purchased nearly $20 billion worth of American agricultural products, including more than $10 billion in U.S. soybean sales annually.
“Due to the size of the Chinese market for U.S.-grown commodities, technology companies often delay commercialization of new products in the United States and other countries until they have been approved in China so as to avoid trade disruptions,” added the Biotechnology Industry Organization in its press release.
According to the report, the value of U.S. corn production would have been $100 million to175 million higher annually in the 2010-11 and 2011-12 crop-marketing years “if the timing of Chinese approvals of biotech corn events had been consistent with a functional regulatory system.” From 2013-14 to 2015-16, Informa estimates the impact on the value of the U.S. corn crop to have been over $1 billion annually.
For soybeans, more-timely approvals of biotech events by China would have had a relatively small effect on the U.S. soybean sector over the last six years. Informa estimates that yields and production would have been slightly higher for 2015-16 and 2016-17, resulting in a higher value for the soybean crop on the order of $10 million each year.