Bridges Trade BioRes • Volume 5 • Number 22 • 9th December 2005

EC Approves Danish Tax on GM Crops for Co-existence

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The European Commission on 23 November authorised a Danish law that requires farmers growing GM crops to pay an annual tax of 13.4 Euros (US$15.84) per hectare of land into a fund to compensate conventional and organic farmers whose crops are contaminated by genetically modified (GM) crops. The Commission’s authorisation will allow Denmark to enforce its co-existence law, under which the funds will be used to pay compensation to conventional or organic farmers whose crops have more than 0.9 percent of GM material as a result of gene flow from neighbouring farmers’ GM fields. The amount of the compensation will be limited to the price difference between a crop for which no labelling is required and the market price of the crop that will have to be labelled as containing GM material because its GM content exceeds the threshold for labelling established by the EU. In a statement released the same day, the Commission said that it “finds that such aid contributes to a successful co-existence of GM crops with conventional and organic crops” given that private insurance products for liability for cross-contamination or “admixture” of GM and non-GM crops is not on the market. However, the compensation will not free GM farmers from civil or criminal liability under Danish law.

The EU does not currently have a GM-specific co-existence and liability schemes, although they are currently working on such rules (see Bridges Trade BioRes, 10 March 2003). This has raised the ire of critics who say that responsibility for any financial losses as a result of the transfer of GMOs to conventional and organic fields, as well as potential environmental or health damages, must be clarified. Similar questions have also arisen regarding transboudary transfers of GM crops, most notably in negotiations on liability and redress in the context of the Cartagena Protocol on Biosafety (see Bridges Trade BioRes, 27 May 2005). Negotiations have been held up by disagreements between the Europeans, who would with the support of Africa like a broad liability regime, and the US, who would prefer to focus on national liability regimes and analyse liability on a case-by case basis.

“Commission authorises Danish state aid to compensate for losses due to presence of GMOs in conventional and organic crops,” EC PRESS RELEASE, 23 November 2005; “Denmark may compensate for GMO contamination -EU,” REUTERS, 23 November 2005, “European Commission Rules Danish Tax On Genetically Modified Crops Permitted,” WTO Reporter, 28 November 2005.