On 30 Dec 2019, the Chinese Ministry of Agricultural and Rural Affairs released 192 GM crops to be issued with GMO safety certificate, of which 3 were homegrown grain crops with herbicide-tolerant and insect-resistant traits. Since the last time China approved food GM crops was in 2009, this move was interpreted by some analysts as another attempt to promote the commercial plantation of GM grain crops. Seed companies thus became increasingly sought after by investors on the stock market as GM grain crops would be commercially planted as soon as the next 2 or 3 years.
Homegrown GM Food Crops
Only GM crops issued with GMO biosafety certificates can be imported and consumed in China, but there are two more administrative steps to commercializing a plantation: the crop variety examination and the seed license. In 2009, MoA (now known as MoARA) issued 3 GMO safety certificates to 2 insect-resistant rice varieties developed by HZAU( Huazhong Agricultural University) and 1 transgenic phytase maize co-developed by CAAS( Chinese Academy of Agricultural Science) and Origin Seed, but the remaining procedures were stalled due to strong public opposition after a series of GM food-related scandals.
The GM grain crops announced this time are 2 maize and 1 soybean developed by indigenous institutions, and the traits and permitted planting regions are as follows:
GM Food Crop
Da Bei Nong Group
Bt Cry1Ab, CP4 EPSPS
Spring maize zone in Northern China
Ruifeng Biotech and Zhejiang University
Cry1Ab/Cry2Aj, G10evo EPSPS
Shanghai Jiao Tong University
soybean zone in Southern China
Given the fact that no biosafety certificate was issued to GM rice this time, the most influential and controversial food crop, the timing and reasoning behind seemed worth pursuing.
According to the “13th Five-Year Plan for the National Scientific and Technological Development” issued in 2016, China is scheduled to take concrete steps towards the commercialization of GM cotton, maize and soybean by 2020, giving China a mere one year to fulfill the commitment.
Since January 2019, Spodoptera frugiperda has effected 13.33 million hectares of farmland, posing an acute threat to maize production. As an invasive pest, Spodoptera frugiperda is difficult to be controlled in China, where natural enemies or ecological control was absent, which made insect-resistant maize an increasingly attractive option as preventative measure. It was also reported that some homegrown Bt-Cry1Ab maize showed positive effects against Spodoptera frugiperda. The corn borer is a frequently found insect, and it was expected to generate a crop loss of 10% to 20%. Thus, If if half of the maize land in the northeast region was planted with insect-resistant maize, the output recovered will would be at least 5 million tons per year.
At present, GM maize has already been surreptitiously planted in the northeast region and similar cases have been recorded across the region. Most of the GM seeds are from small businesses, but several large seed companies have also been involved. This phenomenon has been interpreted by the industry as “a jump-start ahead of the commercialization of GM food crop”, but, mostly as the result of market selection.
Facing Costs and Pressure
China has been supporting GM research actvities for over three decades, with a dramatic boom in 2008, when China invested 20 billion yuan to breed several new GMO varieties. Now, despite China’s title as the second strongest GM developer after the US, the commercial development of GM grains has been at a virtual standstill for more than ten years. The 3 GM food crops approved in 2009 have been repeatedly renewed after the expiry of GMO safety certificate yet none of them passed the variety examination or seed license.
The seed industry is a heavily invested area. Indigenous seed companies need at least 100 million yuan annually to maintain a decent performance, but many of them have been forced out of the race due to the current stale situation. Origin Seed, the co-developer of transgenic phytase maize, also the first Chinese GM developing company listed at NASDAQ Stock Exchange, has almost disbanded its GM research group. The state-backed company China Seed also split its GM research business.
Chinese GM developers have also tried to sidestep such restraints, which have hindered commercialization for years. Instead of waiting for fruitless administrative procedures to move forward in China, these developers have saught commercial approval in less-regulated countries. HZAU submitted its full safety data to the US authorities including FDA, USDA and EPA, etc., who finally accepted the importation of BT rice and relevant rice products. On 27 Feb 2019, the Argentine Agriculture Secretariat approved a glyphosate-tolerant and glufosinate-tolerant soybean developed by Da Bei Nong Group. It somehow sounds ironic that a homegrown GM crop not allowed to be planted in China be planted in other countries and finally imported into and consumed in China.
MoARA’s consultation this time has refueled this discsussion across the Chinese seed industry and investors and listed companies have surged to their trade limits.
As the upside in agricultural products’ price from the current level is very limited, growers are sensitive to the price of all agricultural inputs. Once China approves the plantation of GM grains, GM seeds may quickly occupy the market due to their labor-saving, insect and herbicide-tolerant properties, which are expected to have a far-reaching effect on China’s pesticide market.
China’s total maize area reached 42.4 million hectares in 2018, so based on a glyphosate dose of 1.65-2.4 kg ai/hectare, glyphosate demand related to herbicide-tolerant GM maize is expected increase by 6,30 to10,000 tons per year. Soybean has a little higher glyphosate rate –the acreage was 9.3 million hectares in 2019—with demand levels of GM soybean expected to grow by 4000 to 5000 tons per year.