Seed World

As Mexico Continues to Look at GM Corn Ban, Here’s Some Reactions to Keep in Mind

Mexico has revised its ban on GM corn, but the discussions are still ongoing.

In January 2021, Mexican President Andrés Manuel López Obrador issued a decree that would effectively eliminate the use of genetically modified (GM) corn in Mexico by 2024.

Lopez Obrador specifically mentioned that this order would ban GM corn in the diets of Mexicans and end the use of the glyphosate herbicide by Jan. 31, 2024 — a decree that not only affects corn imported by Mexico, but corn exported to Mexico from the U.S.

Since that initial decree in 2021, Mexico and the U.S. have been in discussions on the ramifications of such a legislation, and, because the initial decree was unclear in its meaning, there have been quite a few updates.

“In January 2021 a decree came in force, effectively giving a deadline for the total elimination of genetically modified corn on Mexican soil, but in the case of planting, the ban practically took effect immediately in 2021. In the case of food or feed, or for processing, the mandate was until 2024,” says Luis Alberto Osorio, executive director of Proccyt. “Derived from the fact that this decree was actually unclear, the government decided to issue a new one that repealed the previous one, that is, it eliminated it.”

The new decree, modified and issued in February 2023, eliminated the deadline to ban GM corn for animal feed and industrial use— the new decree instead retains plans to prohibit use of grain for human consumption, as well as the glyphosate ban. In addition, the new decree also continues to maintain the prohibition of planting GM corn on Mexican soil.

Why did Lopez Obrador issue this decree?

“The Government of Mexico considers, according to many of the statements issued by the President, that genetically modified corn is harmful to people’s health, but up to now it has not been able to prove this,” Osorio says. “In addition, it states that the decision to prohibit its planting is ‘a special measure of protection for native corn, the milpa, biocultural wealth, peasant communities, gastronomic heritage…’”

Now, with an update to the initial decree, Mexico and the U.S. are still in discussions about the effects and ramifications of the revised legislation. On March 6, the Office of the U.S. Trade Representative (USTR) announced it was requesting technical consultations with the Government of Mexico under the Sanitary and Phytosanitary Measures Chapter of the United States-Mexico-Canada Agreement (USMCA). The intent is that through this process, the two countries can reach an outcome that respects each other’s sovereignty and benefits the U.S., Mexico, and their agricultural producers and stakeholders. Importantly, these consultations will examine whether Mexico’s actions comply with the trade obligations agreed to under the USMCA.

“Mexico is an important partner, and we remain committed to maintaining and strengthening our economic and trade ties. A robust, transparent agricultural trading relationship, founded on rules and science, is vital to ensuring food security, mitigating the lingering effects of food price inflation, and helping to address the climate crisis. Innovations in agricultural biotechnology play a key role in advancing these critical, global objectives,” said Agriculture Secretary Tom Vilsack in the release from the USTR. “While we appreciate the sustained, active engagement with our Mexican counterparts at all levels of government, we remain firm in our view that Mexico’s current biotechnology trajectory is not grounded in science, which is the foundation of USMCA.”

As discussions continue between the U.S. and Mexico concerning the modification of the decree, Seed World checks in on reactions from the Mexican seed sector and the U.S. seed sector.

U.S. Reacts

In the U.S., the country’s still trying to determine what a ban like this could mean for exports.

According to the University of Illinois’s Farm Policy News, Mexico buys about 17 million tons of mostly GM yellow corn from the U.S. annually, most of which is used for animal feed. For associations like the American Seed Trade Association (ASTA), the news of the ban is disappointing.

“Mexico is one of our oldest and strongest trading partners. Their decision to ban GM corn is not only disappointing, it is not based in science and it is out of step with the commitments they agreed to under USMCA,” ASTA says, in an emailed statement to Seed World. “The United States has a long track record of using GM corn. Numerous studies have demonstrated that GM corn is safe for use in food and safe for cultivation in the environment. Mexico’s recent actions also contradict its previously long and predictable track record of approving GM corn products.”

When it comes to the U.S. seed sector, ASTA says many stakeholders along the corn value chain are still grappling with how the ban will be felt by U.S. companies.

“For the seed sector, Mexico’s proposed ban threatens to lead to a chilling effect in crop innovation, because it introduces significant uncertainty into the industry’s ability to develop genetically improved corn varieties using biotechnology,” ASTA says. “Data has shown that existing international regulatory uncertainty has stifled the development and commercialization of biotech products. Over the past 20 years, biotech research and development efforts been diverted away from many crops due to high regulatory compliance costs. From 2005-2015, regulatory asynchrony in major markets caused regulatory costs to increase 50% for row crops (Cossey, 2016; Kalaitzandonakes, et al. 2016). Larger regulatory costs affect small market crops and small, innovating firms disproportionately, leading to greater industry concentration and a possible lack of competition (Sachs 2016; Fuglie, et al., 2011).”

But, more broadly, the association believes the seed sector supports major industries that stand to loses significant amounts of revenue should Mexico walk away from GM corn. Particularly, the corn farming, corn wet milling, ethanol, and transportation sectors would feel the biggest effects in Mexico—not only raising Mexico’s food prices, but also inhibiting Mexican farmers from accessing the most innovative seeds. The ban would also have widespread effects on the U.S. economy as well.

“Some studies show that over the 10-year forecast period, the Mexican ban on GM corn could cause the U.S. economy to lose $73.89 billion in economic output, and Gross Domestic Product (GDP) could contract by $30.55 billion over 10 years. Additionally, the U.S. could lose 32,217 jobs annually with labor income falling $18.38 billion,” ASTA says.

ASTA was pleased to see that the USTR will begin technical consultations with Mexico under USMCA. Though the outcomes haven’t come to light yet, ASTA says this sends a strong signal on trade enforcement.

“The dispute mechanisms in trade agreements like the USMCA were negotiated to ensure that trade barriers do not prevent U.S. farmers from accessing innovative tools. Seed innovations are necessary to sustainably produce food for our ever-growing world population,” ASTA says.

Mexico Reacts

As the Mexican seed sector comes to terms with the new decree, Osorio said a few things came to mind.

First: most corn seed companies in Mexico had already stopped sales of GM corn seed prior to the initial decree in 2021.

“This is due to the fact that a group filed a lawsuit in 2013 with the purpose of claiming that the planting of genetically modified corn affects biological diversity, as well as the rights to food and health,” he says. “This trial is still ongoing, that is, there is still no final sentence, however, there is a provisional measure since 2013, which prevents the planting of genetically modified corn. For this reason, the companies have opted to sell seeds of hybrid maize and are currently working with them.”

One of the other stated reasons for this decree was to help “protect” native Mexican corn species, as Osorio mentioned previously.

However, most corn planted and grown in Mexico doesn’t fall into this “native” category — instead, Osorio mentions that growers tend to favor hybrid corn production for a few different reasons.

“Despite the fact that Mexico has an enormous large-scale maize production, this production is not of native maize, but hybrid maize,” he says. “Due to their characteristics, native maize is not attractive to large-scale producers, since not only it does not have high yields, but its use is very limited, in such a way that this type of maize is mainly in the hands of peasant communities. It is important to note that this type of maize cannot compete with hybrids in terms of resistance and productivity.”

Growers in Mexico remain concerned with longer term productivity in the corn industry. Primarily, Osorio sees one major concern coming to mind: producers are concerned with the disadvantages they see in relation to productivity with other countries that have access to GM seeds. For the moment though, producers aren’t demanding GM technology — instead, they’re seeking more robust hybrids.

“Currently, Mexican producers do not have access to genetically modified seeds, since seed companies do not have them in their portfolios in Mexico,” Osorio says. “In this sense, it is not expected that there will be changes in the behavior of the corn seed trade, since I reiterate that there is no offer of genetically modified corn seeds in the portfolios of the seed companies.”

Stats to Keep in Mind

  • 32,217 is the amount of jobs potentially lost if Mexico bans GM corn.
  • $3.56 billion is the projected amount of economic loss in the first year of the ban to the U.S. corn industry.
  • $7.65 billion is the projected amount of losses the U.S. corn wet milling industry would suffer from the GM corn ban over a 10-year forecast period.
  • $521.5 million is the net loss the U.S. ethanol industry (including DDGS) would incur after accounting for gains from lower GM corn prices after a GM corn ban from Mexico.
  • $3.33 billion is the amount the U.S. rail industry would lose in economic output over 10-years if the ban went through.

Source: Sept. 2022 World Prospective Report, Consumer Price Impacts of Mexican Restrictions on GM Corn: An Economic Analysis