The Commission presents its report on socio-economic implications of GMO cultivation on the basis of Member States contributions, as requested by the Conclusions of the Environment Council of December 2008. Through questionnaires, Member States were invited to report ex post on the socio-economic impact of GMOs cultivated in their territory, and also assess ex ante the possible socio-economic implications of future cultivation of GMOs.

Analysis of the answers : the Commission identified the following main elements:

understanding of the meaning and scope of the socio-economic dimension of GMO cultivation varies widely among the Member States and stakeholders. The questionnaire helped to frame thinking, but several participants regretted that the terms, indicators and baseline for comparison (conventional and/or organic sectors) were not sufficiently defined; many contributions appeared to be raw catalogues of the wide diversity of opinions on GMO cultivation at national level, without further filtering or analysis by Member States on the ground of relevance or quality before being forwarded to the Commission. It was therefore difficult, and often impossible to pinpoint clear positions or trends at national or European levels; in general, the contributions seemed to reflect polarised opinions built upon a limited fact-based background on the specific European context, and influenced by the initial positive or negative perception of contributors on Bt and HT crops cultivation in Europe and worldwide. The core of the discussion concerns the co-existence between the GM and conventional/organic approaches all along the seed-to-shelves chain (control of GM adventitious presence in neighbouring fields, constraints of GM/non-GM products segregation along the feed/food chain, consumer's choice), impact on biodiversity, modification of farming practices and marketability of products, with a wide range of different views on almost all these matters; answers covered all the items raised in the questionnaire, though comments largely focused on the social and economic impacts of GMO cultivation at the initial stages of the seed-to-shelves chain (i.e. seed production, cultivation, apiculture, and livestock breeding);

The scientific literature and studies referred to by contributors were mostly focused on economic impacts of GMO cultivation on the in-farm level. Member States’ national studies show the following results :

(i)Bt maize yields would increase in regions infested with corn-borers. For instance, Estonia mentioned a study performed by the (JRC)

showing that, for some pest-infested Spanish provinces, Bt maize growers experienced higher average yields than conventional farmers

over a period of 3 years (up to 11.8% in the province of Zaragoza) as well as increased gross margin.

(ii)Romania reported that HT soybean cultivated on the Romanian territory until 2007 generated yield gains of an average of 31%.

(iii) certain contributions included detailed suggestions on whether and how to analyse socio-economic factors and address them in the management of GMO cultivation in Europe. Several Member States also made reference to the legislation and experience of NO on consideration of socioeconomic elements in the authorisation of GMOs.

(iv)many contributions underlined that, if carried out in the future, the evaluations of socio-economic factors should also consider ethics, and take into account other European policies (internal market, Common Agriculture Policy, environment protection), as well as the legal opportunities and constraints at international levels.

The report goes on to discuss the Commission’s review of knowledge of the socio-economic dimensions of cultivation of GMOs in Europe and worldwide, through different channels, including European an international research programs and scientific publications. It notes that economic analyses have provided a good picture on economic impacts at farmer level world-wide, but less on social impacts.

Next steps : the contributions provided by Member States have been helpful in clarifying where statistically relevant data on socio-economic impacts of GMO cultivation in Europe are already available (mainly economic impacts on farming). Otherwise, facts and statistics pertinent to the European context are missing to support the views expressed by the respondents. Therefore the contributions highlight that, for the time being, the present or future socio-economic impacts of GMO cultivation in Europe, across the food chain and the society as a whole, are often not analysed in an objective manner.

The Commission considers that it would be inappropriate to perform a more targeted analysis of the peculiar items developed in the individual contributions provided by the Member States. Nevertheless, it believes that discussions on this sensitive topic should be deepened, to move from polarised perceptions to more tangible and objective results. Therefore the Commission suggests grouping the primary highlights of this consultation together with other initiatives on socio-economics impacts of GMOs (e.g. research projects under the 6th Framework Research Programme and, when relevant, findings in third countries), and initiating an advanced reflection at

European level, with sound scientific basis, aiming at:

d efining a robust set of factors to properly capture the actual ex ante and ex post socio-economic consequences of the cultivation of GMOs, from seed production to consumers across the EU. A methodological framework should be built-up to define precise socio-economic indicators to be monitored in the long run, and the appropriate rules for data collection. The pool of consulted parties should embrace all the regulatory and economic actors of the "seed-to-shelves" chain, as well as the wider society; exploring different approaches to make use of the increased understanding of these multi-dimensional socio-economic factors in the management of GMO cultivation in the EU. Member States’ expertise and that of stakeholders should be taken into consideration.

By Commission Decision 98/294/EC of 22 April 1998 concerning the placing on the market of genetically modified maize ( Zea mays L. line MON810 ), it was decided that consent was to be given for the placing on the market of that product.

On 3 August 1998, the French authorities granted consent for the placing on the market of genetically modified maize. However, the Hungarian authorities informed the Commission on 20 January 2005 of their decision to provisionally prohibit the use and sale of the genetically modified maize in question and gave reasons therefore. The Commission sought the opinion of the European Food Safety Authority (EFSA), which considered that the information submitted by Hungary did not constitute new scientific evidence which would invalidate the environmental risk assessment of Zea mays L. line MON810 and therefore would justify a prohibition of the use and sale of this product in Hungary.

The Commission took note of the declaration of the Environment Council on 24 June 2005, which, in order to indicate its opposition to a proposal requesting another Member State to repeal its safeguard clause measure on the same GMO, stated that there was still a degree of uncertainty in relation to the safeguard measure associated with the placing on the market of MON810 maize and called on the Commission to gather further scientific evidence and to further assess whether the national measure was justified and whether the authorisation of the GMO under Directive 90/220/EEC still met the safety requirements of Directive 2001/18/EC.

Therefore, the Commission consulted EFSA in November 2005 as to whether there was any scientific reason to believe that the continued placing on the market of the GMOs subject to the safeguard clause measures, including Zea mays L. line MON810 , was likely to cause any adverse effects to human health or the environment under the conditions of consent, and requested EFSA to take account of any further scientific information that has arisen subsequent to the previous scientific opinions that assessed the safety of these GMOs. It was considered appropriate to await this new EFSA opinion on Zea mays L. line MON810 before taking any action on the corresponding safeguard measure notified by Hungary.

In its opinion of 29 March 2006, EFSA concluded that there is no reason to believe that the continued placing on the market of Zea mays L. line MON810 is likely to cause any adverse effects for human and animal health or the environment under the conditions of their respective consents. Therefore, the Commission prepared a draft Decision asking Hungary to repeal its measures concerning Zea mays L. line MON810 .

The Committee established under Article 30 of Directive 2001/18/EC did not deliver an opinion on the measures laid down in a draft Commission Decision, following its consultation, so the Commission was required to submit a proposal to the Council relating to the measures to be taken. The Environment Council indicated its opposition to the proposal by qualified majority. In its Decision, the Council referred to the environmental risk assessment as provided in Directive 2001/18/EC and indicated that 'the different agricultural structures and regional ecological characteristics in the European Union need to be taken into account in a more systematic manner in the environmental risk assessment'.

Hungary submitted to the Commission on 30 November 2007 additional information regarding the cultivation of Zea mays L. line MON810 to support its measure. Consequently, EFSA was requested to assess whether the information submitted by Hungary comprises information affecting the environmental risk assessment such that detailed grounds exist to consider the above maize, for the uses laid down in the corresponding consent, constitute a risk to the environment. In its opinion of 2 July 2008, EFSA reaffirmed its previous conclusions on the safety of Zea mays L. line MON810 and stated that it did not identify any new data subject to scientific scrutiny or scientific information that would change the previous risk assessments conducted on this product. EFSA also concluded that the Hungarian submission did not supply scientific evidence that the environment of Hungary was different from other regions of the EU sufficient to merit separate risk assessments from those conducted for other regions in the EU.

Under these circumstances, Hungary should repeal its safeguard measure with regard to the use and sale of Zea mays L. line MON810 . Therefore, following the Council Decision of February 2007, and in accordance with Article 5(6)(2) of Council Decision 1999/468/EC, the Commission re-submitted its proposal relating to the measures to be taken and informed the European Parliament.

The Commission presents a proposal regarding giving consent to the placing on the market, in accordance with Directive 2001/18/EC of a carnation genetically modified for flower colour. In accordance with Article 13 of Directive 2001/18/EC, the Dutch authorities received in October 2006 by Florigene Ltd, Melbourne, Australia, a notification concerning the placing on the market of a genetically modified carnation (Dianthus caryophyllus L., line 123.8.12). The notification covers import, distribution and retailing of Dianthus caryophyllus L., line 123.8.12 as for any other carnation.

In accordance with the procedure provided for in Article 14 of the Directive, the Dutch competent authority prepared an assessment report, which concluded that the genetically modified carnation (Dianthus caryophyllus L., line 123.8.12) should be placed on the market for import, distribution and retailing as for any other carnation.

The Commission forwarded the assessment report to all other Member States some of whom raised and maintained objections to the placing on the market of the products in terms of monitoring plan, allergenicity and toxicity, and detection of the product.

In light of these objections, the European Food Safety Authority (EFSA) was consulted and delivered its opinion in March 2008 concluding, from all evidence provided, that cut flowers of the genetically modified carnation (Dianthuscaryophyllus L., line 123.8.12) are unlikely to have an adverse effect on human and animal health or the environment in the context of its proposed ornamental use. The EFSA also found that the scope of the monitoring plan provided by the consent holder is in line with the intended use of the carnation.

The Commission, in accordance with Article 18 of Directive 2001/18/EC, is required to take a decision in accordance with the procedure laid down in Article 30(2) of the Directive to which Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

A draft of the measures to be taken was submitted in accordance with the relevant comitolgy procedure. The Committee, consulted on 15 September 2008, has not delivered an opinion, which requires that the Commission, in accordance with Article 5(4) of Decision 1999/468/EC, shall, without delay, submit to the Council a proposal relating to the measures to be taken and inform the European Parliament. The European Parliament may consider appropriate to take a position in accordance with Article 8 of the above Decision.

Article 5(6) of Decision 1999/468/EC provides that the Council may, where appropriate in view of any such position, act by qualified majority on the proposal within a period set at three months in accordance with Article 30(2) of Directive 2001/18/EC. If within that three-month period, the Council has indicated by qualified majority that it opposes the proposal, the Commission shall re-examine it. If, on expiry of that period, the Council has neither adopted the proposed implementing act nor indicated its opposition, then the proposed implementing act shall be adopted by the Commission.

The Commission has presented a proposal for a Council Decision concerning the placing on the market, in accordance with Directive 2001/18/EC of the European Parliament and of the Council, of a potato product (Solanum tuberosum L. line EH92-527-1) genetically modified for enhanced content of the amylopectin component of starch.

In accordance with Directive 2001/18/EC, the Swedish authorities received from BASF Plant Science a notification (Reference C/SE/96/35-01) concerning the placing on the market of a potato (Solanum tuberosum L. line EH92-527-1) genetically modified for enhanced content of the amylopectin component of starch. In accordance with the Directive, the Swedish competent authority forwarded to the Commission its assessment report of the notification, which concluded that genetically modified potato should be placed on the market for its intended uses.

On 9 December 2005, BASF Plant Science informed the Swedish competent authority of its intention to exclude feed uses from the notification under Directive 2001/18/EC, limiting its scope to cultivation and production of starch for industrial uses. The Commission forwarded the assessment report to all other Member States, some of which raised and maintained objections to the placing on the market of the products in terms of molecular characterisation, allergenicity, toxicity, an inadequate monitoring plan and the detection method of the product.

In light of these objections, the Commission consulted with the European Food Safety Authority (EFSA), which delivered its opinion on 24 February 2006 concluding that, from all evidence provided, the genetically modified potato (Solanum tuberosum L. line EH92-527-1) is unlikely to have an adverse effect on human and animal health or the environment in the context of its proposed uses.

A draft of the measures to be taken was submitted for opinion to the Committee set up in accordance with Article 30 of Directive 2001/18/EC. The Committee which was consulted on 4 December 2006 has not delivered an opinion. Therefore, the Commission shall, without delay, submit to the Council a proposal relating to the measures to be taken and inform the European Parliament; the European Parliament was informed on 8 December 2006. The European Parliament may consider appropriate to take a position in accordance with Article 8 of the above Decision.

On 26 February 2007, in the light of a report published by the World Health Organisation listing kanamycin and neomycin as 'critically important antibacterial agents for human medicine and for risk management strategies of non-human use', the European Medicines Agency issued a statement highlighting the therapeutic relevance of both antibiotics in human and veterinary medicine.

On 23 March 2007, taking into account this statement, EFSA confirmed its previous assessment of the safe use of the antibiotic resistance marker gene nptII in genetically modified organisms and their derived products for food and feed uses. Decision 1999/468/EC provides that the Council may, where appropriate in view of any such position, act by qualified majority on the proposal within a period set at three months in accordance with Article 30(2) of Directive 2001/18/EC. If within that three-month period the Council has indicated by qualified majority that it opposes the proposal, the Commission shall re-examine it; whereas if, on expiry of that period, the Council has neither adopted the proposed implementing act nor indicated its opposition, then the proposed implementing act shall be adopted by the Commission.

A number of strict conditions are included in the proposal. The specified conditions include the following requirements:

the consent will be valid for a period of ten years starting from the date at which the consent is issued; the unique identifies of the products are BPS-25271-9; the consent holder provides positive and negative control samples of the product and its genetic material and reference material to the competent authorities; a detection method specific to the modified potato is made available, which has to be validated by the Community Reference Laboratory; the product is adequately labelled in accordance with EU provisions; operators and users are informed on the safety and general characteristics of the product; in view of the fact that the Decision covers only cultivation and industrial use, BASF Plant Sciences is obliged to ensure that the modified potato is: i) physically separated from potatoes for food and feed uses during planting, cultivation, harvest, transport, storage and handling ii) that they are delivered exclusively to designated starch processing plants for processing into industrial starch, avoiding any co-mingling with material derived from potatoes intended for food or feed; and iii) only processed into industrial starch. Any by products from the process should be used exclusively for industrial purposes or destroyed.

Strict monitoring conditions have also been set out including, inter alia, monitoring for any adverse effects on human and animal health or adverse effects on the environment, the submission of annual reports and the preparation of a monitoring plan.

In accordance with the requirement in Article 31.6 of Directive 2001/18/EC, the Commission reports on experience of Member States with GMOs placed on the market under Directive. All Member States (MS) were required to submit three-year reports to the Commission for the period 17 October 2002 – 17 October 2005, on the measures taken to implement the provisions of the Directive, including a brief factual report on their experience with GMOs placed on the market in or as products under the Directive. All MS except Portugal submitted their three-year reports to the Commission. The report also includes experience with GMOs for purposes other than placing on the market, i.e. research and development (Part B of the Directive) as well as contributions from other stakeholders such as industry/trade organisations, farmers' associations and environmental NGOs.

Placing on the market of GMOS as or in products (Part C of the Directive): a total of 26 Part C notifications for GM plants was submitted under the Directive to eight MS. However, following the introduction of Regulation 1829/2003/EC on GM food and feed, thirteen applications remained under the Directive. Out of these 13 applications, 5 products have been authorised, 4 from Monsanto. The majority of MS concur that the implementation of the Directive has helped to restore confidence in the authorisation process for the placing on the market of GM products. A number of MS have commented on the largely negative attitude of non-industry stakeholders towards new authorisations. Industry reported that, in its experience, the implementation of Directive 2001/18/EC has not helped to restore confidence in the EU decision making process for Part C applications and points in particular to the fact that no consents for cultivation have been issued since 1998.

On thresholds , MS reported difficulties with managing conventional seed lots which may contain adventitious presence of authorised GMOs, in the absence of seeds' thresholds for adventitious presence. Industry reported on the need to establish thresholds for authorised GMOs as well as for those not yet authorized in the EU, but which have already been approved for deliberate release in third countries. NGOs and some MS have demanded that thresholds be set at the level of detection of GM traces. Industry noted that many EU farmers are reluctant to grow GM varieties in many MS where large food processors, traders and retailers remain cautious about the use of GM material in the light of increasingly negative public opinion and of the costs associated with traceability. In addition, as first generation GMO products become obsolete and are no longer commercially marketed, industry has requested proportionate renewal procedures to cover any remaining adventitious traces of these GMOs in order to ensure legal certainty following the expiry of consents.

A majority of MS reported that there is a need for a more consistent approach to post-market monitoring while retaining the possibility for specific monitoring depending on the specific climate and natural environment in a MS. Several MS considered that monitoring plans submitted to date had tended to lack detail and a clear allocation of responsibilities. NGOs reported that, as more GMOs are marketed, there would be a need for a more coordinated approach with allocation of responsibility to an independent body rather than to the consent-holder alone, to carry out assessment of all monitoring and surveillance data relating to deliberate releases.

Many MS have reported that the protocols included in Recommendation 2004/787/EC on technical guidance for sampling and detection of genetically modified organisms are complex, time-consuming and expensive and that results are not in proportion to the time and expense involved.

Concerning the presence of antibiotic resistance marker genes , the majority of MS reported that the Opinion of the GMO Panel of the European Food Safety Authority (EFSA) dated 2 April 2004 has proven useful for the phasing-out of such genes. NGOs however have called for a new assessment of ARM genes to look solely at potential adverse effects on human health and the environment, without reference to their use by industry as a means to ensure the efficient selection of transgenic events in plants.

Research and Development (Part B of the Directive): 245 applications for the release of GMOs for purposes other than for placing on the market were submitted to 13 MS during the reporting period of 17 October 2002 – 17 October 2005. The highest numbers of applications were submitted in Spain (89), France (54), Germany (25), Hungary (21), Sweden (18) and Netherlands (13). Twelve MS did not receive any applications. Of the total of 245 applications 191 consents were issued, and 27 applications were refused. The highest percentage of refusals was in Hungary. A majority of MS consider that the Directive has provided a more transparent and predictable regime. Concerns were expressed, however, about the lack of consistency among MS, given that the authorisation process is largely at the national level, and about the possibility of contamination of neighbouring crops from Part B trials. A number of MS also highlighted the specific issue of clinical trials on gene therapy, given that some MS currently apply the provisions of Directive 90/219/EC on contained use whilst others apply Directive 2001/18/EC on deliberate release into the environment. This issue will be discussed with the competent authorities appointed under both pieces of legislation in 2007.

Industry also called for greater harmonisation of Part B applications across the EU, citing differences amongst MS regarding data requirements, timelines and information to the public which decreased the predictability of the current system. Industry expressed particular concern about the timing of consents which were sometimes issued after the planting season.

A majority of MS considered that the Commission had provided clear guidance on what is required in the environmental risk assessment . Nevertheless a number of MS would appreciate additional guidance on what are considered to be acceptable and unacceptable risks and on long-term cumulative effects. Industry also called for more harmonisation of the environmental risk assessment requirements. NGOs pointed to the need for stronger guidelines for allergenicity testing.

Industry also expressed concern about the release of the exact location of field trials which often resulted in the harassment of farmers and ultimately in the destruction of the trials by anti-GM activists. This had clear adverse effects on biosafety research and on biotechnology product development in the EU. NGOs called for information of public interest to be easily and quickly accessible.

Conclusions: those Member States which have handled applications are generally positive about their experience with the implementation of the Directive, despite a number of technical issues which have yet to be adequately addressed such as a cost-effective and practical sampling and detection system, as well as greater consistency, more detail and better allocation of responsibilities in post-market monitoring measures. Other stakeholders have tended to be less positive in their assessment of the Directive.

The Commission is committed to working with EFSA to further develop guidelines as part of an overall framework for risk assessment with a view to increasing the overall transparency of, and confidence in, the evaluation process. The majority of Member States would also welcome increased harmonisation on the process for Part B releases, including gene therapy trials, the definition of “location” of field trials, additional guidance on environmental risk assessment and management measures to prevent contamination of neighbouring crops.

Lastly, the majority of Member States has emphasised the need for a legal instrument establishing seeds’ thresholds, based on the difficulties they have experienced in managing the labelling and traceability of conventional seed lots without such thresholds for adventitious presence. The Commission is currently exploring various options in relation to this issue.

The Commission presents this report which specifically concerns Directive 2001/18/EC and the deliberate release of GMOs, although the wider legislative framework is also considered.

It should be noted that this first report relates only to 15 Member States given that the reporting period in question ended prior to the date of entry for accession countries (1 May 2004). Subsequent three-year reports will, however, include these additional Member States.

The Commission also includes a specific report on the operation of part B and part C of the Directive which includes issues such as an assessment of its implications; the feasibility of various options to improve further the consistency and efficiency of this framework, including a centralised Community authorisation procedure and the arrangements for the final decision making by the Commission; the socioeconomic implications of deliberate releases and placing on the market of GMOs.

Given that the Directive became fully applicable as of 17 October 2002, there is still relatively little experience of its implementation. The lack of transposition by a number of Member States also hinders implementation. Nevertheless, there is general agreement that the Directive, together with the recent Regulations on GM Food and Feed and Traceability and Labelling, help to increase confidence in the legislative framework and to increase the predictability of the decision-making process.

Currently, most concerns relate to the need for guidance in interpreting elements of the Directive such as post-market monitoring, the phasing out of antibiotic resistance marker genes which may have adverse effects on human health and the environment, and non-plant GMOs. In addition, guidance is required on the interaction of the various pieces of legislation.

Lastly, the Commission and Member States are already working on guidance for post-market monitoring and antibiotic resistance marker genes.