An evaluation of the returns to biotech canola considering health, production and environmental externalities

ABSTRACT

Rising health care cost in Canada and other developed countries, as well as the pressure for climate change mitigation, reflects the importance of consumption and production-related externalities in agriculture. This study assesses the economic returns to the biotech canola industry in Canada, considering potential health care savings and greenhouse gas (GHG) emissions reduction associated with canola oil consumption and canola seed production. It is shown that the indirect benefits of consumption and production-related externalities associated with the canola sector are substantial aspects of the gains from agricultural research investments and the impacts of agriculture policy. Our estimates suggest that the external implications of increased canola production and consumption could exceed 20% of the economic effect of biotechnological improvements in canola. The impact on research policy and improvement in overall social welfare are also discussed.

Introduction

In Canada, canola (also called oilseed rape in some countries) has become a dominant crop in terms of both commodity sales and area seeded (e.g.,^1–3). In most years over the last two decades, canola has earned farmers in Canada more revenue than any other crop. In a recent assessment of the impact of the canola industry, GlobalData² estimated that the average direct total economic activity from growing canola and developing the hybrid seed for planting was $18.7 billion^a(CND^b) per year. Much of the gain in area seeded to canola has been attributed to the impact of biotechnology innovations that facilitated weed control, crop rotations, and hybridization of the canola seed¹. The direct impacts of those innovations were estimated at $1 billion per year for Canadian producers in 2013, relative to non-biotech options.⁴ Other sectors, including canola crushers, seed providers, and retail providers of canola oil and canola meal, also experienced direct impacts from the growth in area and total production.

However, the adoption of canola as a crop at the field level and canola oil by Canadian consumers as a staple salad oil and frying oil has also affected environmental services within soils and public health costs, resulting in indirect or external environmental and health care cost benefits. In 2019 Malla and Brewin wrote:

There is a wide range of literature on R&D investment that substantiates the importance of agricultural research and technical change. Based on the summary of … research investment studies, the following inferences could be drawn:

▪ investment in agricultural R&D results in high rates of returns in general; in particular, returns to canola, … research have been high; and there have been substantial producer benefits from adopting new technologies; …

▪ new canola varieties (resulting from agronomic improvement and technical changes through biotechnology) provide significant environmental benefits in the form of positive externalities (e.g., better weed control; reduced tillage; reduced herbicides; and a reduction in carbon release), and these externalities augment direct economic benefits;

▪ new canola varieties (resulting from quality improving technical changes) could also provide health benefits in the form of positive externality (such as healthcare savings), hence these externalities also augment direct economic benefits.”;

(p.137)

There have been few studies assessing the consumption-related externalities (health benefits and health care cost savings) or production-related externalities (environmental benefits, climate change mitigation, and GHG reduction) in the Canadian canola sector. Gray and Malla⁵ examined the economic impact of switching from rapeseed to canola varieties (low glucosinolate and low erucic acid) and the healthcare savings due to increased consumption of canola oil (monounsaturated fatty acids). There are three main types of fatty acids: saturated, found in animal sources such as beef, cheese, pork, lard, and butter, and tropical oils such as coconut and palm oil; monounsaturated, such as canola oil; and polyunsaturated, such as soybean oil. “High levels of saturated fatty acids have been linked to elevated blood cholesterol levels and contribute to cardiovascular disease like coronary heart disease … In 1984, for the first time, it was shown that consumption of monounsaturated fatty acids also lowered cholesterol and that these fatty acids were, in fact, preferable to polyunsaturated fatty acids because the monounsaturated fatty acids lowered LDL (harmful) cholesterol levels but not HDL (beneficial) cholesterol levels (for example, Ferro-Luzzi et al. 1984⁶). This research made canola oil preferable, from a health perspective, over oils high in polyunsaturated fatty acids.” (Gray and Malla, 2001⁵, p. 222–223). Gray and Malla⁵ concluded, “In the late 1980s, nutritional research created positive health information about canola that increased demand and raised the price of canola oil relative to soybean oil by an estimated $32 per metric ton … Given a $1.67 per kilogram externality, such a demand shift would reduce health costs by an estimated $25 million per year in Canada.” (p. 235). Malla et al.⁷ also examined the potential health benefits of trans-fat-free canola oil using the example of Natreon canola oil (Nexera, produced by Dow Agroscience, Inc). Malla et al.⁷ estimated that annual healthcare savings from reduction in daily trans fatty acids intake ranged from $1.818 billion to $639 million, while equal to $1.094 billion for the base scenario.

Smyth et al. (2011)⁸ examined environmental issues associated with HR canola adoption and estimated, “1 million tonnes of carbons either sequestered or no longer released under land management facilitated by HT canola production, as compared to 1995. The value of this carbon off-set is estimated to be CAD$5 million.” (p.403). Brookes⁹ estimated that the carbon emission savings from HT crops were around 56.8 billion kg in global agriculture from 1997 to 2020. For 2020, Brookes estimated 1.19 billion kg for the Canadian canola crop. Biden et al.¹⁰ evaluated GHG emission savings or opportunity costs associated with delaying the adoption of GM canola in Australia relative to Canada. They estimated that cost at 24.2 million kilograms summing from 2004 to 2014. Kovak et al.¹¹ evaluated that the carbon emission savings or opportunity costs from delaying the adoption of GM crops in the EU at 33 million tons of CO2 equivalents per year, equal to 1.4 tons of CO₂-equivalents per hectare per year in 2017. These studies suggest that the indirect or external economic benefits associated with canola production and consumption are unlikely to be trivial.

Malla and Brewin³ argued that there can be significant under investment in production if positive externalities like improved environmental goods and lower public health costs are not reflected in markets and considered by investors.

The objective of this paper is to estimate the relative importance of environmental and health externalities related to the increase in canola production and consumption in Canada. To begin, we must update past estimates of the direct impacts of biotechnical changes in the canola market, including the direct producer benefits of new technologies as canola was converted to a major biotech crop starting in 1996. We then explore the estimated impacts of the externalities associated with that biotechnology, in the form of environmental and health-related public goods, and compare them with the market-driven direct producer benefits. The study is timely, given concerns regarding climate change and rising health care costs. Lastly, the study will examine the implications of the results for the formulation of research policy and how alternative policies could enhance overall research productivity, economic growth, and individual well-being.

Accounting for all of the major indirect or external benefits and costs related to any innovation activity is vital as it allows us to provide an accurate estimate of the total return to research investments. This has significant implications for research policy and the appropriate government role in agriculture R&D and increases the impetus for evidence-based policy development and improved measures of externalities.

Canola Industry Overview

As we seek to estimate the relative importance of the economic externalities of canola in Canada, we must start with a general overview of the crop’s market and its development as a crop and market over time. This overview provides some understanding of the scale of the crop in Canada and the world to justify potential scaling up of both direct and external gains and costs later in the paper. Canola is now grown in many countries worldwide, and similar direct gains and externalities may apply in these areas.

Canola has become a dominant crop in terms of area and is now regularly the largest earner of farm income among commodities (e.g.,^1–3). Figure 1 shows the growing area of canola over time as the wheat area has been falling. As of their last report, Agriculture and Agri-Food Canada (AAFC) noted that Canola was worth $715/tn in 2023 and yielded 2.2tn/ha, while spring wheat yielded 3.5t/ha but was worth $317/ha. Roughly half of the canola crop is exported as seed to foreign buyers, and the other half is converted to oil and meal at 13 crushing plants across Canada. Since 2020, China has been the largest buyer, importing 68% of all Canadian seed in 2024(CCC, 2024). 27% of the 2024 oil produced in the plants and 88% of the meal was consumed domestically by Canadians¹³. The US is the largest buyer of oil produced in Canada’s crushing plants. In 2024, this was nearly 95% of oil exports¹³. US imports of canola oil are expected to hit a record 7.1 billion pounds in the 2023/24 crop year. Those imports made up around 81% of the total US consumption of canola oil (USDA, 2025) (Figure 2).

Figure 1.

Area of wheat and canola in Canada 1984 to 2024¹².

Figure 2.

Us total canola oil demand, edible demand production and Imports¹⁴.

In the US, edible canola oil consumption has increased 464% from the 1993/94 crop year to 2023/24. From 2006 to 2023, the share of oil and fats consumed by Americans supplied by canola oil increased from 6.6% to 16.4% (USDA, 2025). The impact of tariffs in the spring of 2025 is unclear at the time of writing. The Altona crushing plant, close to the US border in Manitoba, has reduced its seed price by around 15% from February 28 to March 14, 2025¹⁵. This drop is not nearly as much as the 25% tariff on oil would have suggested if US vegetable oil consumers were setting the market price¹⁶. This may indicate that canola has specific demand in the US that is willing to cover some of the tariff. Whatever the result of trade deals between Canada and the US in the coming months, canola appears to be a preferred oil in some American households and processing firms. That means some of the health externalities we discuss below regarding Canadian oil consumption will also be important within the US.

In Canada, the growing demand for canola oil in the US has led to expanding canola seed processing and seed production. Over the last two decades, the canola crop has increased from just under 10 million tonnes in 2005 to over 20 million in 2023 and 2024, and it is estimated to be at 25 million in 2025. With this growing production, the capacity to crush the seed in Canada has also increased from under 5 million tonnes in 2005 to over 10 million tonnes in 2024, with further expansion planned¹³.

Direct Benefits of Biotech Canola

Malla and Brewin⁴ estimated the total direct benefits to Canadian canola growers from biotech innovations at over $1 billion Canadian dollars per year. These gains are based on reduced herbicide costs and higher yields that swamp higher seed costs when any one of three HT seed systems was used. Roundup Ready (RR) varieties allowed farmers to spray Roundup on the canola crop to control weeds. Liberty Link (LL) and Clearfield allowed the application of two other herbicides. By 2012, 93% of the seeds used by farmers in Canada were either RR or LL, and most were also produced with hybrid strains. The yields in Malla and Brewin⁴ were based on the 2011 crop, with an average yield of 1.9 t/ha, and on prices for the 2011/12 crop year. As of 2023, the yield had improved to 2.17t/ha, and prices had increased to $715/t¹⁷. The area seeded also increased from 8 million ha in 2011 to 8.86 million ha in 2023 (AAFC, 2025).

Table 1 shows an updated estimate of Malla and Brewin⁴ study using 2023/24 data. The yields and area are from 2023 in Canada, and the price is based on the 2023/24 average price (AAFC, 2025). With higher yields, prices, and increased area, the value of the direct impacts of biotech changes to canola on Canadian farmers was just under $2 billion in the 2023/24 crop year. At the time of writing, the price has come back down but was trading above $610/t for most of the last three years (AAFC, 2025).

Table 1.

HT gains to canola farmers by seed system relative to open pollinated in 2023/24.

Farmer system costs	Roundup ready	Liberty link	Clearfield	Open pollinated
Seed Cost ($/ha)	$97.74	$91.76	$91.64	$33.84
Herbicide Cost ($/ha)	$12.35	$28.55	$33.76	$74.10
TUA ($/ha)	$37.05	$25.56	$30.21	$0.00
System Cost ($/ha)	$147.14	$145.88	$155.61	$107.94
Gross Returns
Yield (tne/ha)1	2.17	2.18	1.96	1.79
Commodity Price ($/tn)1	$715	$715	$715	$715
Expected Gross ($/ha)	$1,552	$1,560	$1,405	$1,282
Less System Costs ($/ha)	($147)	($146)	($156)	($108)
Net Farm Returns ($/ha)	$1,404	$1,414	$1,249	$1,174
Area by System (Ha)1	40,75,600	41,64,200	5,31,600	88,600
Gain over Open	$ 938,532,579	$ 998,186,180	$ 3,97,74,200

Source: Authors, Malla and Brewin⁴ and ¹AAFC (2025).

GlobalData² estimated the direct economic contribution of canola farmers and the seed companies that supply these new seed systems at $13 billion per year in Canada. The value of canola to the rest of the Canadian canola value chain, including exporters, crushers, oil bottlers, and meal feeders, as well as the benefits to the end users, was estimated to generate another $5.7 billion in Direct Economic Impact.

Malla and Brewin³ introduced a theoretical model of socially optimal investment in crop research. The presence of significant externalities from a trading crop can lead to considerable underinvestment in public research. Most researchers who have examined Canadian research investment in crop innovations focus on the direct effect and have suggested that they are underinvesting because of poor property rights (e.g., Alston et al., 2010;^18,19). The underinvestment has improved for the canola sector with a path toward Intellectual Property Rights (IPR) in herbicide tolerant and hybrid seed systems. However, it is still lower than expected given the estimated high rates of returns to canola research investment as well as the potentially significant returns to firms that discover the next great canola seed²⁰. However, even if research effort was optimal to meet the needs of the current sector in terms of private returns, there could be underinvestment if canola production generates environmental and health related public goods for Canadians. In the next section, we explore the indirect externalities estimated from a number of different studies to see if Canada needs to reconsider incentives to improve canola seed production.

Indirect Benefits in the Biotech Canola Industry

There is an important link between agricultural research, agricultural production, health, and the environment. The United Nations²¹ report entitled Food and Climate Change: Healthy Diets for a Healthier Planet concluded, “What we eat, and how that food is produced, affects our health but also the environment.” However, the literature lacks an assessment of the Canadian canola industry’s agricultural research investment, including both production and consumption externalities (indirect effects), such as environmental benefits, climate change mitigation, health benefits, and healthcare cost savings. This section assesses the potential indirect benefits associated with the canola sector, distinguishing between consumption-related externalities (i.e., healthcare cost savings associated with canola oil consumption) and production-related externalities (i.e., GHG reductions associated with canola production).

Consumption-Related Externalities: Health Benefits and Health Care Cost Savings

This study utilizes the cost of illness (COI) approach to estimate healthcare savings associated with canola oil consumption.^c It is widely use in health cost studies and uses the changes in treatment costs and earnings, representing the direct and indirect costs of coronary heart disease (CHD) (i.e., the total cost of disease, disability, and premature death). According to Malla, Hobbs, and Perger⁷ “Health economists measure the potential benefits of improved health through a variety of methods, including: COI (consisting of medical expenditures and forgone earnings), preventive expenditures, willingness to pay, cost – benefit analysis, and cost – utility analysis (e.g., Berger et al., 1987²²; Gyrd-Hansen, 2003²³)” (p.119). The main advantage of the COI approach is its ability to quantify the total economic burden of a specific disease on society. COI was the first economic evaluation technique used in the health field. COI analysis is considered a foundational and essential measurement and evaluation technique in health, healthcare and medical sciences. It also provides vital information for evidence-based public health policy and resource allocation. COI studies have been widely used by organizations such as the World Bank, WHO, the US National Institutes of Health, and the Centers for Disease Control and Prevention and are the most common economic studies in healthcare worldwide. The simplest COI approach assumes that a 1% reduction in the incidence of the diseases will result in a 1% reduction in the COI in the long run (e.g.,^5,7).

The COI methodology employed in the study consists of three steps: Step 1: calculate the change in blood cholesterol due to increased canola oil consumption; Step 2: calculate the CHD risk reduction due to changes in the blood cholesterol profile; and Step 3: calculate healthcare cost changes due to changes in CHD incidence. Each methodological step is supported by scientific evidence from the health sciences literature (e.g., epidemiological studies, clinical trials, meta-analyses) and/or statistical data.

There has been significant scientific evidence linking canola oil consumption and reduced cholesterol levels (e.g.,^{24–28;29–31}). A systematic review and meta-analysis of randomized controlled trials, which is an analysis of analysis by Ghobadi et al.²⁶, identified 1979 records, while 27 articles met the eligibility criteria (27 trials, comprising 1359 participants up to December 2018) to quantify the effects of canola oil on lipid parameters. Ghobadi et al.²⁶ concluded that “Results of this study showed that CO [canola oil] consumption significantly reduced TC [Total Cholesterol] (−7.24 mg/dl, 95% CI, −12.1 to −2.7), and LDL (−6.4 mg/dl, 95% CI, −10.8 to −2), although it had no effects on HDL, TG, Apo B, and Apo A1. … This meta-analysis suggested that CO consumption improves serum TC and LDL, which could postpone heart disease progression.” (p. 158). Hence, Ghobadi et al.²⁶ meta-analysis estimated that canola oil consumption reduced total cholesterol TC by 7.24 mg/dl (or, 0.402 mmol/L) compared to other edible oils.

Amiri et al.²⁴ conducted another systematic review and meta-analysis up to January 2020 to examine the effects of canola oil on cardiovascular risk factors. Specifically, they systematically reviewed controlled clinical trials investigating the effects of canola oil on lipid profiles, apo-lipoproteins, glycemic indices, inflammation, and blood pressure compared to other edible oils in adults. A total of 8955 articles were initially identified, of which 42 met the study’s inclusion criteria. Amiri et al.²⁴ concluded that “CO significantly reduced total cholesterol (TC, −0.27 mmol/l, n = 37), low-density lipoprotein cholesterol (LDL-C, −0.23 mmol/l, n = 35), LDL-C to high-density lipoprotein cholesterol ratio (LDL/HDL, −0.21, n = 10), TC/HDL (−0.13, n = 15), apolipoprotein B (Apo B, −0.03 g/l, n = 14), and Apo B/Apo A-1 (−0.02, n = 6) compared to other edible oils (p < .05) … CO significantly improved different cardiometabolic risk factors compared to other edible oils.” (p. 2133). Hence, Pourrajab et al.²⁸ meta-analysis estimated that canola oil consumption reduced total cholesterol TC by −0.27 mmol/l (or 4.86 mg/dl) compared to other edible oils.

Pourrajab et al.²⁸ performed a systematic review and meta-analysis of randomized controlled trials to investigate the effects of canola oil compared to olive oil consumption on the serum lipid profiles in adults. A total of 1088 records were initially identified, while 13 eligible trials or studies were included in this meta-analysis. Pourrajab et al.²⁸ concluded that “The results showed that the CO consumption, significantly reduced serum LDL-c (WMD: −6.13 mg/dl, 95%CI: −9.79, −2.46, p = .001), TC (WMD: −8.92 mg/dl, 95% CI: −13.52, −4.33, p < .001) and LDL-c/HDL-c ratio (WMD: −0.30; 95% CI, −0.53, −0.06, p = .01) levels compared to OO [olive oil] … The results of this review suggest that CO consumption has beneficial effects on LDL-c, TC, and LDL-c/HDL-c ratio compared to OO. Therefore, its replacement with OO can have cardioprotective impacts.” Hence, Pourrajab et al.²⁸ meta-analysis estimated that canola oil consumption reduced total cholesterol (TC) by 8.92 mg/dl (or 0.495 mmol/l) compared to olive oil.

Shen et al.²⁹ systematically reviewed and summarized the latest studies on functional or health-benefiting components of rapeseed oil. Shen et al.²⁹ concluded that “Apart from unsaturated fatty acids, there are nine functional components in rapeseed oil that contribute to its anti-microbial, anti-inflammatory, anti-obesity, anti-diabetic, anti-cancer, neuroprotective, and cardioprotective, among others. These nine functional components are vitamin E, flavonoids, squalene, carotenoids, glucoraphanin, indole-3-Carbinol, sterols, phospholipids, and ferulic acid, which themselves or their derivatives have health-benefiting properties.” Consequently, canola or rapeseed oil has health-promoting effects on CHD, obesity, cancer, diabetes, and other diseases.

To sum up, based on Ghobadi et al.²⁶ and Amiri et al.²⁴ meta-analysis, it could be inferred that canola oil consumption reduced total cholesterol (TC) on average by 0.336 mmol/L or 6.05 mg/dl (ranging from 0.27 mmol/l to 0.4 mmol/L, or from 4.86 mg/dl to 7.24 mg/dl) compared to other edible oils. Pourrajab et al.²⁸ meta-analysis also reinforces the health beneficial effects of canola oil consumption on total cholesterol; however, given the comparison to olive oil only, it is not included in the average calculation. Further, a cholesterol value of 0.336 mmol could also be expressed as a percentage of the midpoint of a typical or reference range, which is equal to 7.73% or could be expressed as a percentage of a typical or reference value (like the desirable target for total cholesterol), which is equal to 6.72%.^d In this study, the 6.72% reduction in total cholesterol will be used, as it represents a more conservative estimate.

Consequently, this study will apply the average effect estimate for canola oil consumption on total cholesterol reduction of 0.336 mmol/L (6.72%) to estimate healthcare savings associated with CHD risk reduction. Considering only the effects of canola oil consumption on CHD risk provides a conservative estimate of its health-promoting effects²⁹.

A second set of medical studies has drawn a strong link between total blood cholesterol and CHD. The relationship between serum cholesterol and CHD has been studied for over 30 years. Specifically, Malla et al.⁷ stated that “An early attempt to measure the relationship recorded that an 8.5% reduction in total cholesterol resulted in a 19% reduction in CHD in middle-aged men³². The US National Cholesterol Education Program’s Expert Panel concluded that: ‘epidemiologic studies and clinical trials provided consistent evidence that for individuals with serum cholesterol levels initially in the 250 to 300 mg/dl range, each 1% reduction in serum cholesterol level yields approximately a 2% reduction in [CHD]’³³ p. 38]. When the total cholesterol and CHD relationship was examined in the long run, the ratio was found to be even higher: for every 1% reduction in cholesterol reduced the risk of CHD by 3% (Davis et al. 1990³⁴; National Cholesterol Education Program 1992³⁵)” (p. 134–135). The American Heart Association (AHA) and National Institutes of Health (NIH) often cite a 2–3% risk reduction for each 1 mg/dL reduction in total cholesterol in their cardiovascular disease prevention guidelines³⁶.

Based on the above scientific evidence and following Gray and Malla⁵ and Malla et al.⁷, we assume in this study that every 1% reduction in cholesterol level reduces the incidence of CHD by 2%, or a 1:2 relationship between cholesterol level reduction and CHD risk reduction (3% for the High scenario). Combining the relationship between canola oil consumption and serum cholesterol and that between serum cholesterol and CHD allows a calculation of the expected reduction in heart disease due to canola oil consumption. Specifically, given that canola oil consumption reduces total cholesterol by 0.336 mmol/L (or 6.72%), then based on the one-to-two relationship between serum cholesterol and CHD risk, CHD risk decreases by 13.44% (or 0.672 mmol/L) (20.16%, 1.01 mmol/L for the High scenario based on a 1:3 relationship).

The final step in the health care savings estimation due to canola consumption involves the relationship between CHD risk reduction and disease costs. According to Brunham et al.,³⁷ “The costs of CVD [cardiovascular disease] are extremely high. The last complete assessment of CVD cost in Canada was performed in 1998 when CVD was determined to be the most costly disease entity in Canada, totalling CAD$21.2 billion in direct and indirect costs, and representing 11.6% of the total cost of illness according to diagnostic category. Of the $7.8 billion of direct costs, hospitalizations accounted for 61%, drugs for 26%, and physician care for 12%. Indirect costs of CVD are those associated with short-term disability, long-term disability, and premature mortality, which totalled $13.4 billion, or 63% of the total costs of CVD in Canada. In 2000, the cost of CVD in Canada was estimated by the Public Health Agency of Canada at $22.2 billion, making it the second highest cost among all diagnostic categories, second only to musculoskeletal diseases at $22.3 billion. More recently updated and precise data on global and provincial CVD costs in Canada will be essential to allow better planning and resource utilization.” (S5).

Specifically, the Government of Canada, Public Health Agency of Canada³⁸ estimated that “In 2000, a conservative cost estimate of CVD [cardiovascular disease] in Canada was $22.2 billion. … The total costs for CVD included $7.6 billion for health care costs (direct costs), and $14.6 billion for indirect costs due to lost economic productivity. For both the direct and indirect categories, CVD were among the leading contributors to economic costs in Canada.” (p.10). Consequently, the latest estimate of CHD costs totals $22.2 billion in direct and indirect costs in Canada. There are no newer reported data available at this point in time.

Based on the COI approach, we assume a linear 1:1 ratio between reduced CHD risks and health care cost savings in the long run; thus, if CHD is reduced by 1%, the related costs will be reduced by 1%. The medical and nutritional studies suggest that canola oil compared to other edible oils results, on average, in a 0.336 mmol/L (or 6.72%) reduction in total blood cholesterol and, on average, a 13.44% (or 0.672 mmol/L) reduction in the incidence of CHD. If we apply this 1:1 ratio, a 6.72% reduction in coronary heart disease is accompanied by a $2.99 billion reduction in the cost of the disease. Hence, the health care savings associated with canola consumption are estimated at $2.99 billion annually. Bringing the 2000 cost to 2024 values, the estimated health care savings in Canada due to canola consumption are to $4.7 billion annually.^e

Overall, the indirect benefits or consumption-related externalities associated with the canola sector are substantial but largely neglected aspects of the economics of agricultural and research policy. A summary of the health-related externalities related to canola oil consumption is presented in Table 2.

Table 2.

Canola consumption-related externality: health care savings.

Study		Results
Step 1: Calculate cholesterol change due to increased canola oil consumption
Ghobadi et al.26, meta-analysis, initially identified 1979 records, selected 27 articles/trials comprising 1359 participants, up to December 2018.	Canola oil consumption reduced total cholesterol (TC) by 0.402 mmol/L (or, 7.24 mg/dl) compared to other edible oils.
Amiri et al. 24, meta-analysis, initially identified 8955 articles, selected 42 articles, up to January 2020.	Canola oil consumption reduced total cholesterol (TC) by 0.27 mmol/l (or 4.86mg/dl) compared to other edible oils.
Overall Results: Canola oil consumption reduced total cholesterol TC on average by: 0.336 mmol/L (or 6.05mg/dl), ranging from 0.27 mmol/l to 0.4 mmol/L (or from 4.86mg/dl to 7.24 mg/dl), compared to other edible oils. A total cholesterol of 0.336mmol/L is approximately 7.73% relative to the midpoint of a typical or reference range, or 6.72% of a typical or reference value. Selected Estimated Result: 0.336 mmol/L (or 6.72%) total cholesterol reduction due to canola oil consumption.
Step 2: Calculate CHD risk reduction due to changes in the cholesterol profile
Based on the scientific evidence and following Gray and Malla5 and Malla et al.,7, there is: a 1:2 relationship between cholesterol level reduction and CHD (3% for the High scenario). Estimated Results: Given that canola oil consumption reduces total cholesterol by 6.72%, then based on the 1:2 relationship between serum cholesterol and CHD risk, CHD risk decreases by 13.44% (or 0.672 mmol/L) (20.16%, 1.01 mmol/L for the High scenario based on a 1:3 relationship).
Step 3: Calculate healthcare cost changes due to changes in the CHD incidence
COI approach and following Gray and Malla5 and Malla et al.7, we assume a linear 1:1 ratio between reduced CHD risks and health care cost savings in the long run. Based on the latest available estimates, CHD costs totalled $22.2 billion in direct and indirect costs in Canada (2000). Estimated Results: Canola oil, compared to other edible oils, reduces total blood cholesterol by 0.336 mmol/L (6.72%) and reduces the incidence of CHD by an average of 13.44% (0.672 mmol/L). A 6.72% reduction in CHD is accompanied by a $2.99 billion reduction in the disease’s costs. Converting the 2000 cost to 2024 values, this is a $4.7 billion reduction.
Overall Results: Estimated health care savings in Canada due to canola consumption: $4.7 billion annually (2024 values).

Production-Related Externalities: Environmental Benefits, Climate Change Mitigation, and GHG Reduction

There has been significant scientific evidence linking canola production and genetically modified (GM) crop biotechnology, to environmental benefits such as climate change mitigation, GHG reduction, increased carbon sequestration, reduced soil and water contamination, reduction in herbicide application, chemical use and toxicity (e.g.,^{9–11,8,39–46}).

Smyth et al.⁴⁵ provided a recent review of research exploring the linkages between GM crop biotechnology and sustainability. Specifically, they provide an analysis and evaluation of peer-reviewed evidence on the contribution of crop biotechnology to climate change mitigation and adaptation. The study assesses the academic literature on the impacts of agricultural biotechnology on changes in land conservation, carbon sequestration, chemical use and toxicity, GHG emissions, land use and soil health. The literature search was based on the above five key research domains as search terms. It initially identified in excess of 250 candidate articles while 91 articles fit their research purpose and were included in the analysis.

Smyth et al.⁴⁵ examination of the literature structure and analysis offers several insights into the impact of GM crops:

● The carbon sequestration literature establishes that the genetics provided by herbicide tolerant (HT) crops allows for changes in agronomic practices, predominantly the removal of tillage as a form of weed control. …

● Studies show that the genetics of HT and insect resistant crop innovations has resulted in significant agronomic impacts … chemical use, GHGs, and land use.

● … evidence is amassing that confirms that GM crops reduce chemical applications … with the reduction in chemical use contributing to reductions in GHG emissions … The literature on changes in chemical use has a lengthier publication history than other domains, accounting for this concentration. … The evidence for GHG emissions is most often integrated with carbon sequestration. The evidence concludes that GHG emissions are reduced and carbon sequestration is increased. The leading driver of reduced emissions is the reduction in tillage practices and in-crop chemical applications. Increased carbon sequestration results from the decline in summer-fallow practices and the transition to continuous cropping land management practices.

The category with the most substantial literature is that of changes in land use, which for the purposes of this article is the change from intensive tillage to minimum or zero tillage. Much of the literature discusses the benefits from land use changes, especially increased soil organic matter (SOM) and soil organic carbon (SOC) … Soil health improvements have a limited number of studies, but those that exist report soil health improves following the introduction of GM crops. (p. 152–153).

Smyth et al.⁴⁵ concluded “ … the cross citations illustrate the research complexity of research regarding climate change mitigation … The available literature offers some compelling evidence that GM crops contribute substantially to climate mitigation, but more is needed to fully understand the complex interactions between variable cropping systems, the local ecosystem and global climate and the local economic and social systems … Complicating this is both the paucity of randomly controlled trials and the lack of studies that quantify agronomic impacts while also measuring and assessing impacts on climate variables and the SDGs [Sustainable Development Goals].” (p.167–165)

Klümper et al.⁴² meta analysis assessed the impacts of GM crops and quantified the benefits of GM crops regarding reduced chemical usage. There were 24,079 studies initially identified through keyword searches in literature databanks, while 147 studies were included in the analysis. Klümper et al.⁴² concluded, “On average, GM technology adoption has reduced chemical pesticide use by 37%, increased crop yields by 22%, and increased farmer profits by 68%. Yield gains and pesticide reductions are larger for insect-resistant crops than for herbicide-tolerant crops. Yield and profit gains are higher in developing countries than in developed countries.”

In their most recent assessment, Brookes and Barfoot³⁹, examined the environmental impacts of GM crop use from 1996 to 2018 in global agriculture. They focused on the environmental effects associated with changes in pesticide use and GHG emissions arising from the use of GM. Brookes and Barfoot³⁹ concluded “The adoption of GM insect resistant and herbicide tolerant technology has reduced pesticide spraying by 775.4 million kg (8.3%) and, as a result, decreased the environmental impact associated with herbicide and insecticide use on these crops (as measured by the indicator, the Environmental Impact Quotient) by 18.5%. The technology has also facilitated important cuts in fuel use and tillage changes, resulting in a significant reduction in the release of GHG emissions from the GM cropping area … Aggregating the carbon sequestration benefits from reduced fuel use and additional soil carbon storage, the total carbon dioxide savings in 2018 are equal to about 23,027 million kg, equivalent to taking 15.27 million cars off the road for a year. This is equal to 48% of registered cars in the UK.” (p. p.215, 224)

Brookes⁹ examined the environmental impacts of GM crop use on carbon emissions in global agriculture from 1996 to 2020. Brookes⁹ updated the findings of the earlier analysis presented by Brookes and Barfoot³⁹ by integrating data from 2019 and 2020. Brookes⁹ concluded “Over the 24 year period examined to 2020, the wide-spread use of GM insect resistant and herbicide tolerant seed technology has led to important cuts in on-farm fuel use and facilitated farmers moving from plow-based systems to reduced and no tillage systems that they have continued to operate for a number of years. This has led to a significant reduction in the release of GHG emissions from the GM cropping area, which in 2020 was equal to a saving of 23,631 million kg of carbon dioxide, equivalent to taking 15.6 million cars off the road for a year (equal to 49% of registered cars in the UK).” (p.242). Regarding the Canadian canola, the carbon emission savings from both sources of fuel-related savings and soil carbon storage, aggregating these benefits result in the total carbon dioxide savings in 2020 equal to 1.19 billion kg, or 143.25 kg/ha.^f

Biden et al.¹⁰ evaluated the economic and environmental costs of delayed adoption of GM canola production in Australia over the period 2004 to 2024. Biden et al.¹⁰ noted “The environmental opportunity costs from delaying the adoption of GM canola in Australia include an additional 6.5 million kilograms of active ingredients applied to canola land; a 14.3% increase in environmental impact to farmers, consumers and the ecology; 8.7 million litres of diesel fuel burned; and an additional 24.2 million kilograms [or 3.46 kg/ha] of greenhouse gas (GHG) and compound emissions released. The economic opportunity costs of the SEC-based moratoria resulted in foregone output of 1.1 million metric tonnes of canola and a net economic loss to canola farmers’ of AU$485.6 million.”^g (p.9). GHG emission savings are derived solely from reductions in fuel use. The study illustrates that GM canola has a lower environmental impact than non-GM canola by applying lower amounts of less toxic herbicides and reduced GHG emissions.

Kovak et al.¹¹ evaluated whether GM crops support climate change mitigation. In particular, they provided an assessment of EU agricultural GHG emissions. Kovak et al.¹¹ considered two components of GHG emissions: the carbon opportunity costs (COCs) of land use (soil/land carbon storage), and production emissions (PEMs) (based on fertilizer and energy input used in agricultural production). Kovak et al.¹¹ concluded, “GM crops can help reduce agricultural [GHG] emissions. In addition to possible decreases in production emissions, GM yield gains also mitigate land-use change and related emissions … We find that growing GM crops in the EU could reduce GHG emissions by 33 million tons of CO₂ equivalents per year (MtCO2e/y) [or 33,000 million kg], which is equivalent to 7.5% of the total agricultural GHG emissions of the EU in 2017.” (p.627).

They concluded that had the EU adopted GM crops as timely as in North America, total emissions would have been significantly reduced. Regarding the Canadian canola, the carbon emission savings from both sources of net avoided emission from the carbon opportunity costs (COCs) of land use (soil/land carbon storage) and net avoided emission from reduced production emissions (PEMs) (based on fertilizer and energy input used in agricultural production) aggregating these benefits result in the total carbon dioxide savings in 2017 about equal to 1.4 tons of CO₂-equivalents per hectare and year [or, 1400 kg/h].^h

To sum up, based on Brookes⁹, the carbon emission savings from both fuel-related savings and soil carbon storage are equal to 23.6 billion kg in global agriculture, while equal to 1.19 billion kg, or 143.25 kg/ha, for Canadian canola (in 2020). Further, based on Biden et al.¹⁰ GHG emission savings equal 24.2 million kilograms [or 3.46 kg/ha] in Australia (opportunity costs from delaying the adoption of GM canola as in Canada, 2004–2014). The GHG emission savings in Biden et al.¹⁰ study are derived from reductions in fuel use only. Lastly, based on Kovak et al.¹¹ the carbon emission savings from both sources of avoided emissions (COCs and PEMs) equal to 33 million tons of CO₂ equivalents per year (MtCO2e/y) [or, 33,000 million kg] in the EU (opportunity costs from delaying the adoption of GM crops as in North America), while about equal to 1.4 tons of CO₂-equivalents per hectare and year [or, 1400 kg/h] for the Canadian canola (in 2017).

In this study, the Brookes⁹ estimate of 143.25 kg/ha (or 1.19 billion kg) (2020) GHG emission savings will be used as it represents a recent assessment of GHG emission savings for Canadian canola, including both sources of the fuel-related savings and soil carbon storage and it represents a more conservative estimate. Brookes⁹ study is also the most recent out of a series of his GHG emission savings assessment publications. Considering only the effects of canola production on GHG emissions denotes a conservative estimation of the canola sector’s environmental benefits⁴⁵.

As in consumption effects, the indirect benefits or production-related externalities associated with the canola sector are also substantial but often ignored aspects of the economics of agricultural and research policy. Based on the above analysis, the carbon emission savings are 1.19 billion kg, or 143.25 kg/ha, for Canadian canola. In Canada, at the time of writing, the value of the Carbon tax, except for consumer fuel charges, is still set at $65/tn of carbon equivalents and is planned to increase to $170/tn by 2030⁴⁷. At the value of $65/tn, Brookes estimate works out to a value of $9.13/ha or around $77.3 million in 2022. In 2024 dollars, the value would be $82.1 million in 2024.ⁱ Hence, the estimated GHG emission reduction due to canola production is equal to $82 million annually (value of the carbon offset) (2024 values). A summary of the environmental externalities related to canola seed production is presented in Table 3.

Table 3.

Canola production-related externality: GHG emissions reduction.

Study	Context of Savings	GHG emission reduction
Biden et al.10, 2004–2014, Australia, opportunity costs from delaying the adoption of GM canola as in Canada.	GHG emission savings are derived from reductions in fuel use only	24.2 million kilograms [or 3.46 kg/ha] (2004–2014)
Kovak et al.11 2017, EU, opportunity costs from delaying the adoption of GM crops, as in North America, Canadian canola.	GHG emission savings from both sources of the carbon opportunity costs (COCs) of land use (soil/land carbon storage), and production emissions (PEMs) (based on fertilizer and energy input used in agricultural production).	1.4 tons of CO2-equivalents per hectare and year [or, 1,400 kg/ha] for Canadian canola (in 2017)
Brookes9, 1996 – 2020, global agriculture, Canadian canola	GHG emission savings from both fuel-related savings and soil carbon storage	1.19 billion kg, or 143.25 kg/ha for Canadian canola (in 2020).
Range of GHG emission reduction: 3.46 kg/ha − 1400 kg/ha 10,11
Selected Estimated GHG emission reduction due to canola production: 143.25 kg/ha9 –or, $82 million annually (value of the carbon offset) (2024 values).

Conclusion and Policy Implications

The consumption- and production-related externalities (or indirect benefits) associated with the canola sector are substantial but largely neglected aspects of the economic impact assessment of R&D investment and research policy. This paper sheds light on this important issue.

The goal of the paper was to broaden our understanding and evaluate consumption-related externalities (health benefits and health care cost savings) and production-related externalities (environmental benefits, climate change mitigation, and GHG emissions reduction) in the agricultural sector. Specifically, the study assessed the returns to agricultural research in a privatized biotech canola industry in Canada, while accounting for health and environmental externalities. The evaluation of the direct and indirect benefits and costs of canola research investment while accounting for both consumption and production externalities has not been assessed in academic literature.

We have explored the potential savings in health care costs from reducing CHD risk in Canada, and recent models suggest a value of $4.7 billion per year due to increased use of canola oil and reduced use of less healthy oils. The environmental benefits of increased canola area since the adoption of HT varieties have generated as much as 1.4 t/ha per year but more likely around 143 kg/ha/yr in reduced GHG which would earn about $82 million in offsets at the most recent taxed value of carbon ($65/tn) and as much as in $214 million using carbon prices for 2030 in Canada.

This means that positive externalities are conservatively estimated to generate around $5 billion in indirect benefits to Canadians, on top of the $18 billion in direct benefits the sector earns for farmers, crushers, retailers, and exporters. This means externalities could account for 21.7% of the total economic impact of changing canola technology. The rate of return from investment in canola agricultural research has been very high. These high rates of return on canola research investments suggest underinvestment in canola agricultural research and strongly indicate that additional research is desirable. Public investments to increase canola production in Canada or to increase the consumption of canola oil may be warranted.

Consequently, there is a role for public support of agricultural research in the Canadian biotech canola industry, especially for seed varieties with health or environmental benefits where the private sector cannot capture all the research benefits, and the industry may lack adequate incentives to invest.

Another economic policy option could be a subsidy on the costs of inputs for producers of varieties with environmental and health benefits, or a consumption subsidy to encourage consumption by lowering their prices for consumers.

While first generation biotech crops focused on improving agronomic traits to benefit farmers, second-generation agricultural biotechnology research has focused more on improving the “functional” attributes or nutritional quality of crops and reducing environmental footprints. Second-generation GM crops offer an opportunity to address public health and environmental issues related to nutritional deficiencies, reduce healthcare costs, and promote environmental sustainability.

Increasing consumers’ awareness of the benefits of GM crops, the potential functional properties of different crop varieties, their contribution to human health, and their effects on environmental sustainability are also crucial issues. Public health officials could utilize methods of communication such as media coverage, in-store educational campaigns, social media, and school educational programs.

Measuring these externalities is very difficult. Our estimates have focused on canola because some previous work has attempted to measure some form of benefit or cost related to canola in the past. Given the growing area seeded to canola in the US and Australia, these effects should be explored in all related markets. Given the measurement challenges, the external effects of canola oil consumption and canola seed production warrant further investment in research, especially in improving our measurement of externalities.

To sum up, increased investment in the biotech canola industry could significantly reduce environmental footprints and increase health care cost savings, with substantial benefits for breeders, producers, consumers, the entire canola industry, and the Canadian economy. Economic impact assessment of agriculture R&D investment should account for all direct and indirect or external benefits and costs so as to provide a more accurate assessment of total returns to research. Public research is vital, especially in varieties with environmental and health benefits to facilitate further growth and development of these types of innovating varieties. Other policy options include consumer education and support or incentives to foster R&D, consumption or production.

Funding Statement

The author(s) reported there is no funding associated with the work featured in this article.

Disclosure Statement

No potential conflict of interest was reported by the author(s).