³Socio-Economic Impact Assessments and Biotechnology: The Experience to Date´ ´

José Falck Zepeda
Research Fellow Leader Policy Team Program for Biosafety Systems (PBS) IFPRI

From left to rigth: a) Damage by Asia corn borer and b) Bt maize plot in Barangay Conel, Mindanao, The Philippines, c) Transgenic Garden, UP-LB Los Banos, Luzon, Philippines

Current status 2009
y 90 million hectares y Six countries cultivated 96% of this area
y y y y y y

USA Argentina Canada 5.8 China Paraguay 1.8 India

50.0 17.1



y Mainly four crops and two technologies y Private sector dominates product development y Public sector in developing countries developed multiple

technologies, very few have reached farmers

In developing countries
y Argentina, Brazil, China and India represent close to 90%

adoption in developing countries
y Only two countries planting locally-developed public sector

technologies: India and China
y Three countries in Africa planting GM crops: South Africa,

Burkina Faso and Egypt
y Confined Field Trials in Kenya, Uganda, Nigeria, Philippines,

India, China, Brazil, Guatemala, Honduras, Mexico, Argentina, others...

What do we know from the economic impact assessment literature to date? ²
y A review of 187 peer reviewed

y Different impact domains
y Farmers, household and

y Industry and markets y Consumers y Trade

Citation: Smale, Melinda; Zambrano, Patricia; Gruère, Guillaume; Falck-Zepeda, José; Matuschke, Ira; Horna, Daniela; Nagarajan, Latha; Yerramareddy, Indira; Jones, Hannah. 2009. Measuring the economic impacts of transgenic crops in developing agriculture during the first decade: Approaches, findings, and future directions. (Food policy review 10) Washington, D.C.: International Food Policy Research Institute (IFPRI) 107 pages

On average, profitable³but averages mask variability by agro-climate, host cultivar, trait, farmer
y Some Ex ante results from studies conducted by IFPRI and

country partners

Fungal resistant bananas Bt cotton

Representative findings
‡ If approval delayed, forego potential annual (social) benefits of +/US$200 million ‡ Countries are worse off by not adopting ‡ Smaller net benefits and returns than other studies ‡ Negotiating downward the technology fee is key ‡ Positive yield impacts on net benefits ‡ Smaller IRR probably explained due to low initial yields ² need to improve overall cotton productivity ‡ Probability of a negative return can be as high as 38% with a full technology fee charge ² negotiate the fee«

West Africa


Bt cotton

On average, profitable³but averages mask variability by agro-climate, host cultivar, trait, farmer (2)
y Some Ex post studies conducted by IFPRI and country


Bt maize

Representative findings
‡ Excellent control of target insects ‡Yield advantage 893-1136 Kg/ha yield (24-33% higher yield Bt) ‡ Bt maize preferred even by risk averse producers based on yield only ‡ 100% higher seed cost than conventional hybrid ‡ Adopters tend to be larger, use hired labor and are more educated. ‡ Growing Bt maize significantly increases profits and yields ‡ Significant insecticide use reductions ‡ Evidence of yield enhancement rather than pesticide reductions ‡ Bt farmers benefited from the technology for one of the two regions in the study, where the target pest is economically important ‡ Sources of bias important: farmers who adopt are those that are better off ‡ Institutional context crucial


Bt maize


Bt cotton

Bt cotton production parameters
Parameter India China South Africa 11 41 Argentina, Mexico 9 Yield Advantage (n) Min (%) Median (%) Max (%) Reduction in insecticide Applications (n) Min (%) Median (%) Max (%) Profit (n) Min (%) Median (%) Max (%) 40

-0.17 0.42 0.92 29

-0.06 0.06 0.55 7

-0.36 0.56 1.29 29

-0.03 0.32 0.65 8

-0.83 -0.3 0.83 16 -0.65 0.47 1.36

-0.82 -0.66 -0.56

-0.95 -0.53 0.68

-0.81 -0.51 -0.02

Estimates potential GM crop adoption

Source: Qaim 2009

Too few traits, too few cases/authors³ generalizations should not be drawn yet...need more time to describe adoption
y Focus on existing crops/traits
y Insect protected/ herbicide tolerance y Four crops: corn, cotton, canola, soybeans

y Concern over potential estimates bias

Next decade: Cross cutting issues for further study and the need for improved methods
y Issues
y Gender, health and generational y Institutional y Information and knowledge flows y Impacts on poverty and inequality y Externalities

y Need for improved methods
y Household modeling y Risk and uncertainty y Address selection bias and endogeneity

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