Natalie Moll, a director at Europabio, the European Association for Bioindustries, told FoodNavigator.com: "The agricultural industry is lacking courageous people who are willing to take the chances in an area where the market is uncertain. Only big companies can survive."
As European member states struggle to agree on a biotech policy, with different countries applying their own bans and restrictions on GM research and cultivation, research and development is being sacrificed.
At the moment, the only type of GM crop grown in the EU is maize, which was approved in 1998. It is not cultivated for human consumption, but for animal feed only.
GM crop cultivation is expanding in Europe, with over 110,000 hectares of biotech crops harvested in seven EU member states last year, representing a 77 per cent increase.
Still, consumers and environment organisations maintain caution over GM products, fearing their possible long term health risks and effects on the environment. One of the main concerns is regarding cross-contamination with conventional crops.
Friends of the Earth campaigner Clare Oxborrow said: "Consumers in Europe have rejected GM foods, and labelling rules allow us to avoid foods with GM ingredients."
According to Moll, there is a backlog of 30 or 40 products waiting for approval in Europe. Last year, there were only four approvals out of 45. Many smaller companies just cannot afford to wait the customary 10 years for the process to be completed.
This means only leading companies in the industry are able to commit their time and money to biotech research.
"There is disappointment for the SME area," said Moll. "There should be competition in the market, but this is not really possible."
Seeking competition elsewhere
Moll's comments came after biotech company BASF Plant Science sought to intensify its activities in Asia Pacific with an agreement with China's National Institute of Biological Sciences (NIBS).
"Asia is emerging as a key player in plant biotechnology both in research and cultivation and we are striving to intensify partnerships in this dynamic region. Europe, on the contrary, is losing its competitiveness due to slow and contradictory political decisions," said Hans Kast, President and CEO of BASF Plant Science.
While Asia Pacific is getting more competitive, offering a more interesting challenge for biotech research, Europe's market is facing the challenge.
Mette Johansson, BASF manager of communications said: "Politicians are making is more and more difficult for farmers to grow these products. Furthermore, Europe has a very high quality of researchers and we are concerned about how these political decisions will affect this standard, as research will only continue if the new products will be used.
Commenting on this business move, Moll said she thought it likely other companies would pursue business activities elsewhere, but this would not represent a refocus out of Europe.
"There has always been a large international business for European biotech companies," said Moll. "Our farmers are still showing they are interested in applying biotech, so as long as there is still a need, research will continue in Europe."
Other victims of the tough political situation placing challenges on the biotech industry are universities.
Moll said the number of biotech university courses in Europe has dramatically decreased as students do not want to enter an industry where the future is uncertain.
She said: "There is a severe lack of European innovative power. When is Europe going to take farmers needs more seriously and develop a biotech policy that supports them?"
Ricardo Gent, managing director of the German Association of Biotechnology Industries, told FoodNavigator.com that universities are afraid to enter into GM field trials in Germany, because liability regulations mean they would have to foot a large bill should neighbouring fields become contaminated.
Again, this means large companies are the only ones able to carry out extensive biotech research, draining the industry of competition.
European GM situation
Austria enforced a ban on the import and processing of Monsanto's MON810 and Bayer's T25 maize in June 1999.
The Commission has been debating whether to force the country to lift its restrictions since 2005, as Austria has never produced the necessary scientific evidence to contest the positive assessment of the products by Europe's food safety authorities.
France has complicated the matter when it chose to extend its temporary ban on the cultivation of MON810, applying the same EU measure by arguing the costs to health posed by GM crops.
Last month, the European Commission was given yet more time to bring member states in compliance with trade obligations on GM crops after failing to meet its original deadline.