GMOs have been in the farming industry now for 20 years as the first plantings occurred in 1996. Their usage has been on a steady increase. They are not going away. In fact, a recent Purdue University study, Eliminating GMOs Would Take Toll on Environment, Economies, by Wally Tyner, Farzad Taheripour, and Harry Mahaffey (February 29, 2016), opined that "[h]igher food prices, a significant boost in greenhouse gas emissions due to land use change and major loss of forest and pasture land would be some of the results if genetically modified organisms in the United States were banned."

Think about that statement and then consider this one from the World Bank, "The world needs to produce at least 50 percent more food to feed 9 billion people by 2050. But climate change could cut crop yields by more than 25 percent. The land, biodiversity, oceans, forests, and other forms of natural capital are being depleted at unprecedented rates."

So, you may ask, what's the problem or concern? Why are some people so concerned with GMOs in their food? What's the concern for the insurance industry? Where's the coverage? Let's see if we can answer some of these questions.

What Is a GMO?

First off, let's get to a generally acceptable definition of what a GMO is. Simply stated, when a gene from one organism is purposely moved to improve or change another organism in a laboratory, that's a GMO.

The World Health Organization, according to its website, has defined genetically modified foods as "foods derived from organisms whose genetic material (DNA) has been modified in a way that does not occur naturally, e.g. through the introduction of a gene from a different organism."

However, we also need to understand that "gene editing" will be considered a genetically engineered (GE) product in many circles. This is when a genetic item is removed from an item. For instance, recently scientists have been able to isolate the DNA from white button mushrooms that is responsible for browning these mushrooms in their aging process. They didn't add an item to the product/vegetable, they deleted one.

Whichever definition you prefer, let's also understand that we will also hear these synonyms for GMOs—GE products and transgenics. We can use these interchangeably.

In the past, classical breeding reproduction would only occur between closely related species (e.g., corn to corn or a closely related species). With GE products, any gene from any organism can be transferred to another organism. As an ongoing example, DNA from a bacterium such as Bacillus Thuringiensis (BT) can be transferred into corn or cotton.

Originally, GE crops were planted with but one concept in mind: to make the crop weed resistant or more resistant to a particular pest. Now we see what are called "stacked" traits, where more than one action is ongoing with the plant species. The manufacturer may be trying to fight both pests and weeds (or similar combinations) within the same GM seed.

What GE Crops Are Grown in the United States?

The growth of GMO crops has steadily increased since their introduction in 1996. In the United States alone, more than 181 million acres are planted with GE seeds. Also, as of that same time, some 28 countries have more than 448 million acres planted with GE crops. The top 10 crops in the United States (according to 2014 USDA statistics), in order of the most prolific growth or agricultural adaptation, are:

1. Corn
2. Soybeans
3. Cotton
4. Potatoes
5. Papaya
6. Squash
7. Canola/rapeseed
8. Alfalfa
9. Apples
10. Sugar beets

What Are the Concerns?

What are the concerns? The majority of consumers seem to be focused on one primary issue: what's in my food? A simple way to say this is "food labeling." Second, some consumers and other interest groups are concerned about unknown allergies or similar issues. Other concerns that crop up (pun intended) include the following.

• Might there be toxic effects to beneficial animals?
• Will overuse cause resistance by pests and weeds (superweeds)?
• Might there be growth with GE seeds in unwanted areas?
• Is outcrossing (transmission of characteristics from one crop to another) possible?

Some of these questions are already answered (or in the process of being answered), and some are not.

Like it or not, our federal government just passed, and the president just signed, a federal food labeling law that is to go into effect in 2018. Like most laws, the devil will be in the details. The people who write the rules of the law have 2 years to achieve their rulemaking. All we know at this time is that, because the rules have to be written, this topic will be in the news for the next couple of years. The one thing that the passage of this federal law did was to prohibit the enforcement of any state GMO labeling laws. Vermont's somewhat stringent law that went into effect as of July 1, 2016, is now no longer enforceable.

Achieved Results

Have GMO crops achieved their purpose of increased crop yields while battling the pests they were intended to defeat? For the most part, yields have increased with the utilization of GE seeds. There has also been a reduction in the use of pesticides and herbicides on GE crops.

Back to that Purdue study. Their crop models show that, if we were to eliminate all GMOs in the United States, the following things would occur.

• Corn yields would decline some 11.2 percent.
• Soybeans would lose some 5.25 percent of their yields.
• Cotton would see a reduction in yield of 18.6 percent.

They further estimate that, to make up for that loss of yield, about 250,000 acres of US forest and pastureland would need to be converted to cropland. Globally, the impact would be even greater.

Effect on Insurance Coverage

What about insurance coverages? How, you may ask, might our current crop of insurance policies respond to some potential GMO-related losses? Let's consider a few possible loss situations.

• Assume you have a food processor that normally handles organic products. Unwittingly, she takes in a nonorganic GMO crop, and it leaves residue behind that mixes into the next crop that she processes. Now she needs to clean her processing equipment so she can return to working with her organic clients. Where, we may ask, is the coverage for this?
• Your farmer uses GMO seed. Some of his seed, during its application, migrates to a neighboring property that grows non-GMO crops. There is a mixture of the two crops on that section of land that impacts the organic farmer and his ability to send his crop to market. Where's the coverage?
• You have an insured that has purchased product recall coverage as part of his risk management strategy. By mistake, some of his GE product is mislabeled and sent to market. Will there be a coverage trigger for this sort of event?
• Your insured's GMO crop is alleged to have caused an allergic reaction in some of the people that have ingested it. Is there coverage under the farmer's farm liability coverage?

The answers will vary depending upon the (1) type of loss, (2) cause of loss, (3) alleged wrong, and (4) the manner in which the coverage was written. There are far too many variables for us to consider in this commentary. Suffice it to say that the above loss scenarios are all considerations to think about when providing risk management strategies for clients.

Risk Awareness

By being aware of the risks—both potential and feared—of utilizing GMO seeds and crops, our clients can become more proactive in their application of their risk management practices. Awareness of risk directly leads (in most cases) to the implementation of risk management practices. After all, we cannot manage that which we do not understand or see. The implementation of risk management practices leads our customers to consider risk transfer, avoidance, or other considerations in their farm and land management practices.

In the future, I find it possible that our growers may need to provide some sort of environmental impact study or report as a future condition of growing specific crops in specific areas. Perhaps if that comes to fruition, the environmental liability policies that we use will respond in a manner beneficial to the insured. In recently speaking with one environmental insurer, I asked the question, "If my client's GMO crop migrates to a neighboring property, is their coverage under your environmental liability (pollution) coverage form?" The answer was a quick "no."

Here Is What I Am Certain of

GMOs—like it or not—are already an integral part of the food chain. Efforts are being made to further this pattern. Think of BT eggplant (an area staple) being grown in Bangladesh and the Philippines or C4 Rice being developed to increase yields to offset the loss of cultivable land.

Failing to engage our customers in risk management discussions regarding their use of GMO crops/seeds could prove a costly lesson for all of us. After all, one way or another—either via passive or active retention—one still has the risk. Some things (as of this writing) are still uninsurable. The discussion is sure to continue.

One Final Question—Do You Like Salmon?

Finally, in case you missed it, the Food and Drug Administration at the end of 2015 approved a salmon that has been engineered to grow twice as fast as its natural growing counterpart. AquAdvantage, starting with the genome from an Atlantic salmon, took a growth hormone out of a chinook salmon and combined it with a gene from an ocean pout to make a salmon that will grow twice as fast to arrive at your dinner plate twice as soon as the normal growth of a salmon would take. No word on whether or not it will cook twice as fast as wild salmon.