Non-GM wheat segregation strategies: comparing costs
Date
2001-06-01
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Degree Level
Masters
Abstract
Genetically modified (GM) wheat is expected to receive regulatory approval in
Canada between 2003 and 2005. There may be a definitive portion of the supply chain
for wheat set to realize the potential benefits of GM wheat. However, by September
2000, 18 countries and the EU, 21 food retailers, 29 food manufacturers and six
restaurant chains around the world had announced intentions to introduce either
mandatory or voluntary labelling requirements for genetically modified foods. Thus, to
allow genetically modified varieties of crops to be grown in Canada, while maintaining
access to export markets requesting labelling, crop segregation or identity preservation
systems must be introduced.
The primary objective of the study was to compare the private and regional costs
of three potential segregation alternatives, all of which utilize the bulk commodity
infrastructure already established in western Canada to handle the segregation of non-GM
wheat. The systems that were examined included the designation of a high
throughput terminal, the designation of multiple small wooden elevators and lastly, the
segregation of GM and non-GM wheat within terminals. The three options were
analyzed under various GM adoption rates and volumes of non-GM wheat being
demanded under the assumption that the low-cost option would be dependant on the
availability of non-GM wheat in the region, as well as the amount of product requiring
segregation.
A model was used that attempted to simulate the decision-making processes of
producers in the region as well as methods used by the companies handling the segregation in their attempts to source the required amount of non-GM grain. The
results of the model indicated that segregation within terminals was almost always the
low-cost option. However, an analysis of the potential risk of contamination indicated
that this option was most likely the least feasible option. An analysis of the remaining
two options indicated that the low-cost option for the entire region would be to designate
a high throughput terminal under any circumstances. The results of the study illustrate
the importance of contamination risk when determining the low-cost segregation
strategy. The results also illustrate that failing to include regional costs, including lost
rail incentives and the inefficiencies of small elevators may lead to sub-optimal
strategies.
Note:Some of the page numbers are mislabelled or repeated. There are no missing pages and the thesis is complete.
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Degree
Master of Science (M.Sc.)
Department
Agricultural Economics
Program
Agricultural Economics