23 June 2007 -- A Lincoln University study says it is too early to forecast what economics benefits, if any, are to be gained from New Zealand establishing a commercial biopharming industry.

Biopharming - the production of pharmaceuticals compounds from genetically modified crops and livestock - is touted by some as an emerging success story in both agriculture and the pharmaceutical industry.

Its advocates say biopharming has the potential to dramatically cut the cost of manufacturing compounds used in medicine, food manufacturing and dietary supplements.

A preliminary economic study by the Agribusiness and Economics and Research Unit (AERU) says that may be the case, but there is still scant information about the final cost of producing biopharmaceuticals, the demand from consumers, and possible impacts on New Zealand's reputation.

AERU Research Officer Dr Bill Kaye-Blake says until more is known about the value of biopharmaceuticals, including technical issues around their production, suggestions of the benefits of having a biopharming sector in New Zealand should be treated with caution.

"We need to be very clear that any forecast of the potential economic benefits of biopharming is impossible to verify. Several essential dimensions are still unknown, such as the total costs, the impacts of competing technologies, the actual market demand, and the impact on our existing primary sector industries and export markets."

The economic study, produced for the Constructive Conversations project, aims to provide New Zealand industries and policy makers with an economic overview of the biopharming sector internationally, and to set in place a map for use in new territory. Funded by the Foundation for Research, Science and Technology, Constructive Conversations aims is to enable better risk-assessment and decision-making for emerging biotechnologies such as biopharming by developing ways to improve knowledge of the contexts in which the technologies would operate.

The global biopharmaceuticals industry is valued at around $41billion, with an annual growth rate of 20 per cent. Biopharmaceuticals, which can cost $1000 per gram, are currently produced in expensive contained facilities. Previous research has estimated that using biopharming to produce these compounds on farms could reduce the production costs to around one-tenth to one-fiftieth of current levels.

The AERU study has taken a broad definition of biopharming, covering any modification to a crop that enhances it either medically or nutritionally. Dr Kaye-Blake says when considering how to apply biopharming, New Zealand should consider whether to develop a novel technology or adopt an existing one. It must also identify the possible spill-over effects on New Zealand agriculture, such as impact on the clean-green reputation, and whether these would outweigh the benefits.

"The potential impacts of biopharming are a function of the benefits and costs from one type of production system to another, coupled with the product advantages that the new system might afford.

"Therefore the impact of biopharming in its broad sense, including biopharmaceuticals, nutraceuticals and functional foods, will depend on how each of these dimensions change and how those dimensions contribute to the value of the products."

In addition to providing a stocktake of biopharming internationally, the study attempted to quantify the benefits of biopharming two specific products for New Zealand: recombinant human lactoferrin in cows' milk, and low-GI potatoes. Dr Kaye-Blake says that, again, much of information required for a complete assessment remains unknown.

Biopharming is one area of a much larger industry producing biological compounds of pharmaceutical interest. In biopharming, plants and animals are genetically modified to produce or express compounds such as proteins, antibiotics and enzymes.

The expression of these compounds may occur in part of the organism, eg in the seed of a corn crop, or the milk of a dairy herd.

Commonly biopharmed crops include rice, corn and tobacco leaves. International research has found there are currently around 95 approved bio-pharmaceuticals in use for the treatment of various human diseases, including diabetes mellitus, growth disorders, neurological and genetic maladies, inflammatory conditions and blood dyscrasis.

Almost all are produced with standard production methods, using cell culture, which requires major capital investment for growing, harvesting, processing and distribution.

For more information about the Constructive Conversations project, please visit www.conversations.canterbury.ac.nz or contact the Principal Investigator, Dr Joanna Goven, at joanna.goven@canterbury.ac.nz

The Agribusiness and Economics Research Unit (AERU) provides research expertise for a wide range of organisations on trade, agribusiness, environment and social issues.

Founded in 1962, the Unit has five main areas of focus: trade and environment; economic development, business and sustainability; non-market valuation; and social research. Research clients include Government Departments, international agencies, New Zealand companies and organisations, individuals and farmers.