Economics and Finance


Contamination of Farms by Genetically Modified Organisms (GMOs): Options for Compensation

Authors: John Paull

There is no satisfactory legal remedy for farmers in Australia whose farm has been contaminated by genetically modified (GM) material. This is a deficiency of Australia’s Gene Technology Act 2000 and it has not been remedied. In the Marsh v Baxter case (2010-2016) an organic farm in Western Australia (WA) was contaminated with GM canola from a neighbouring farm. The organic farm lost its certification (along with the price premium for organic produce). The organic farmer (Marsh) sued the GM farmer (Baxter) for the agreed damages of A$85,000. The case was lost in the WA Supreme Court, then in the Court of Appeal, and finally it was rejected by the High Court of Australia. The legal fees were in the order of A$2,000,000, which is quite disproportionate to the agreed loss. A Parliamentary Inquiry (2017-2019) in WA examined “Mechanisms for compensation for economic loss to farmers in Western Australia caused by contamination by genetically modified material”. There were 121 submissions to the Inquiry and 22 public hearings. Seven ‘mechanisms’ were considered: (i) Do nothing; (ii) a GM Levy; (iii) a GM Technology Licence Bond; (iv) Non-GM farmer Insurance; (v) GM farmer Insurance; (vi) a Compulsory Third Party (CTP) GM Scheme; and, (vii) the Government pays. After its deliberations, the Standing Committee on Environment and Public Affairs did not recommend any change from the present unsatisfactory state of affairs where reliance on the common law offers no effective protection for non-GM farmers against contamination by genetically modified organisms (GMOs) (as witnessed in the Marsh v Baxter case). The ‘Do nothing’ option, which was supported by Monsanto and pro-GM farmer groups, prevailed. This paper explores the context and content of the Parliamentary Inquiry, presents the six proposed proactive options for compensation (of which only four appeared in the Inquiry Report), and the twelve findings of the Inquiry. Ultimately the Committee was timid where it might have been bold. The Inquiry was a lost opportunity for righting a known wrong. The Inquiry outcome will ensure that GM-farming remains a very contentious issue in WA and continues to lack any semblance of a social licence. However, the WA Parliamentary Inquiry (in toto, viz. the submissions, the hearings, and the Report) provides a rich trove of views and material for legislators and regulators in other jurisdictions who face the exact same issue of GM contaminations.

Comments: 16 Pages.

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Submission history

[v1] 2019-08-27 04:43:42

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