Widespread planting of genetically modified crops would net Australia $8 billion during the next decade, government researchers estimate.
NSW and Western Australia have the most to gain from the controversial practice of GM cropping, which would boost yields and cut costs, a glowing report by the Australian Bureau of Agricultural and Resource Economics (ABARE) found.
GM crops would even help the environment and increase biodiversity, the report claimed.
ABARE's executive director Phillip Glyde says the report shows that banning GM crops would cost farmers dearly.
"Delaying GM uptake means we are foregoing significant economic benefits for regional Australia," Mr Glyde said.
Most GM crops are banned in Australia, where the states decide what can be sown. Farmers can plant GM cotton, and NSW and Victoria have allowed GM canola from this year.
Critics say there could be health risks from GM foods and warn GM crops would contaminate areas that are trying to stay GM-free, tarnishing their clean, green image.
But the ABARE report - Economic impacts of GM crops in Australia - focused on the positives, predicting an economic bonanza for farmers.
If all GM crops were allowed now, the economy would benefit by $8.5 billion by 2018, the report found.
NSW would benefit the most, by $3.5 billion, followed by Western Australia with a gain of $2.4 billion.
GM crops were more resistant to pests and weeds, meaning fewer chemicals had to be used, leading to lower costs and increased yields. Further savings were seen in labour, machinery and fuel costs.
"Managing GM crop production is generally easier and less time consuming than non-GM crop production," the report says.
Delaying the introduction of GM canola in Western Australia by five years would lead to "foregone benefits" of $97 million, while South Australia's loss would be $66 million in the next decade.
Canola was rated as having the most potential as a GM crop, with soy beans also looking good. GM wheat and rice could generate significant benefits, but further down the track. GM maize was of uncertain economic benefit because of high costs.
The report found GM crops could be good for the environment, since reduced crop spraying would mean less contamination of soils and groundwater.
Lower use of pesticides could also see the return of beneficial insects, boosting biodiversity, and farmers could see health benefits because they would handle toxic chemicals less often, the report found.
ABARE noted that some costs would be higher for GM crops - seed prices, technology fees, and the cost of segregating crops on farms. But those costs were outweighed by the benefits, except possibly in the case of maize.
The report was funded by the federal Department of Agriculture, Fisheries and Forestry.
