“Socio-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
 90 million hectares  Six countries cultivated 96% of this area
     

USA Argentina Canada China Paraguay India

50.0 17.1 5.8 3.3 1.8 1.3

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

multiple technologies, very few have reached farmers

In developing countries
 Argentina, Brazil, China and India represent close

to 90% adoption in developing countries
 Only two countries planting locally-developed

public sector technologies: India and China
 Three countries in Africa planting GM crops: South

Africa, Burkina Faso and Egypt
 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? –
 A review of 187 peer

reviewed studies
 Different impact domains
 Farmers, household and

 Industry and markets  Consumers  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, profitable—but averages mask variability by agro-climate, host cultivar, trait, farmer
 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 – need to improve overall cotton productivity • Probability of a negative return can be as high as 38% with a full technology fee charge – negotiate the fee…

West Africa


Bt cotton

On average, profitable—but averages mask variability by agro-climate, host cultivar, trait, farmer (2)
 Some Ex post studies conducted by IFPRI and

country partners

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/authors— generalizations should not be drawn yet...need more time to describe adoption
 Focus on existing crops/traits
 Insect protected/ herbicide tolerance  Four crops: corn, cotton, canola, soybeans

 Concern over potential estimates bias

Next decade: Cross cutting issues for further study and the need for improved methods
 Issues
 Gender, health and generational  Institutional

 Information and knowledge flows
 Impacts on poverty and inequality  Externalities

 Need for improved methods
 Household modeling  Risk and uncertainty

 Address selection bias and endogeneity