The UK is divided on the issue of genetically modified crops. The UK Government's policy for England is to recognise that GM technology can be used as one of a range of tools to address global food security, climate change and the need for more sustainable agricultural production, provided that it is used safely and responsibly.

By contrast, the Scottish and Welsh Governments and the Northern Ireland Executive have joined over half of EU Member States in choosing to take advantage of EU rules on GM introduced in March last year. These rules allow EU countries to opt out of existing and future EU authorisations that would otherwise allow GM crops to be grown.

In August, Richard Lochhead, the Scottish Rural Affairs Secretary, expressed the view that a ban on GM crops in Scotland would "protect and further enhance our clean, green status". Following that announcement, however, a group of 30 agricultural, academic and scientific organisations wrote to him arguing that the decision risks inhibiting Scotland's contribution to research and access to agricultural innovations that could increase the sustainability of farming. The First Minister has subsequently confirmed that the Scottish Government's decision is not primarily based on scientific considerations but, instead, takes into account the potential wider economic ramifications that growing GM crops might have for Scotland.

Firms interested in cultivating genetically modified organisms (GMOs) in Scotland will want to familiarise themselves with the rules, including considering whether the Scottish Government's approach is based on the necessary "compelling grounds".

GM in the EU

There are currently no GM crops grown commercially within the UK, a position largely mirrored throughout the EU. The only exception is an authorised variety of genetically modified pest-resistant maize (MON 810) produced mainly in Spain and marketed by US bio-technology firm Monsanto. However, it represents only 1.3% of the area of maize cultivated in the EU.

Any GM firm seeking approval to cultivate a GMO in the EU must follow a lengthy process. In the first stage of this process the European Food Safety Authority (EFSA) issues a scientific risk assessment of the proposal. This is followed by a political process in which Member States can reject an application by majority, failing which the European Commission can approve the application based on a favourable risk assessment from EFSA.

Opt-out procedure

The rules introduced last year give increased flexibility to EU governments by allowing them to issue a "demand" to be excluded from the territorial extent of a GMO application. In reality this is more akin to a request, as it remains open to the GM firm to "confirm" that it nevertheless wishes to include the territory in question. From April to October, Member States were also given the opportunity to use the same procedure to demand an exclusion from pre-existing authorisations, which the Scottish Government exercised in respect of all authorisations made to date.

So far, every opt-out demand made by Member States has been accepted. However, even if no demand is made at the application stage, or one is made and rejected (i.e. the GM firm issues a confirmation), a national government can still adopt measures restricting or prohibiting the cultivation of the GMO in its territory as long as those measures are based on "compelling grounds". The rules provide a non-exhaustive list of available grounds, which cover: environmental policy objectives; town and country planning; land use; socio-economic impacts; cross-contamination; agricultural policy objectives; and (together with other grounds) public policy.

Getting to grips with the detail

A government may, for example, seek to justify an exclusion based on certain anticipated socio-economic impacts. There may be a concern that cultivating GM crops within the government's territory could lead to the 'cross-contamination' of conventional or organic crops, which could ultimately reduce a consumer's ability to choose only non-GM products. The government might conclude that it would be impractical, impossible or just too expensive to implement measures to avoid the unintended presence of GMOs, and therefore that a ban was necessary.

Any such justification would require a detailed analysis of specific geographical conditions (for example, the presence of small islands or mountain zones), particular farm structures, systems or cropping patterns or other natural conditions and the associated risks and costs of cross-contamination. Likewise, measures justified on environmental policy grounds would have to relate to detailed objectives such as maintaining local biodiversity or certain types of landscape features. The national government's reasoning must also be distinct from and complementary to the risk assessment conducted by EFSA.

In addition, any measures must not breach overarching internal market rules prohibiting restrictions on imports or otherwise hindering trade between EU Member States. Such restrictions can only be justified under separate specified grounds relating to non-economic objectives. Any wider economic objectives must be secondary to one of the stated grounds.

One such ground is the protection of health and life of humans, animals or plants. Measures justified on that basis must form part of a seriously considered policy and meet a genuine and identified risk. Another available ground of justification is public policy, though the European courts will only allow that where the restriction on trade reflects a genuine and sufficiently serious threat to a fundamental interest of society. This is a difficult test to meet.

Finally, any restrictions must not discriminate between national and non-national products and must be no more restrictive than is necessary to achieve the government's objectives (i.e. they must be proportionate). This requires a detailed assessment of the risks using the most recent and reliable scientific data available.

Looking forward

Scotland's food and drink sector forms an important part of the Scottish economy. The latest figures from 2013 value the industry at £14.3 billion, which Scotland Food & Drink, the industry body, aims to grow to £16.5 billion by 2017. The Scottish Government is keen to protect the reputation Scotland has for high quality organic produce.

The EU rules provide greater flexibility to Member States on restricting GM crops. However, national governments must demonstrate that there are good reasons for adopting measures restricting or prohibiting GMOs, and that those measures are proportionate to the stated reasons. EU law treats the wider economic objectives of national governments as secondary to the ultimate goal of realising an internal market in which goods move freely.

The availability of GM crop technology in any Member State (opt-out or no opt-out) will of course still depend on the EU first authorising the crop or technology concerned. Beyond that, firms seeking to cultivate GMOs may wish to focus their efforts in countries such as Spain and England, which are more receptive to GMO cultivation, but review and, if necessary, challenge the adequacy of any national restrictions and the reasoning on which they might be based.

Whatever happens, both national governments and GM firms will need to grapple with the continually evolving science surrounding GM technology.