The previous chapter discussed the difficulty of attributing changes in health outcomes directly to foods from new crop varieties, whether genetically engineered or conventionally bred. Assessing social and economic effects1 of genetically engineered (GE) crops is similarly challenging. GE crops were introduced to farmers in rural communities with varying social structures and heterogeneous, and often complex, farming systems. Those systems vary in numerous ways, including type of crop or crops grown, production location, farm size, farmer education, level of government policy support to farms (including incentive systems for particular crops or farming practices), and availability of credit to farmers. GE crops themselves are products of an innovation system that incorporates conventional plant breeding, molecular biology, and other agricultural sciences into an embodied technology—that is, a seed or other vegetative material. The crops also have to fit into pre-existing legal systems, which include national laws and international agreements governing patents and international trade. Inventors and regulators of GE crops have had to figure out whether and how these crops fit into the existing systems.
The literature largely supports the conclusions that insect-resistant (IR) traits can reduce or abate damage caused by biotic agents and that herbicide-resistant (HR) traits tend to reduce management time and in-
1 A number of international treaties, including the Cartagena Protocol on Biosafety, the Convention on Biological Diversity, and the World Trade Organization use the term socioeconomic considerations. For clarity purposes and to maintain uniformity with previous National Research Council reports, the committee chose to use the term social and economic effects.
crease time available for securing off-farm income. Those two traits are parts of a portfolio of traits that may be introduced into crops. The relative magnitude of damage reduction by IR traits and effects of other GE traits will likely vary depending on the context of the technology’s use. The implication of that statement is that the social and economic effects of GE traits will also vary, especially in light of the diversity of places where crops with such traits are grown and of the end users of the technology.
Any analysis must be nuanced and acknowledge that social and economic effects of GE crops will vary in time and space and among farmers and households. This chapter assesses what is known about the social and economic effects that have occurred since GE crops were introduced by pursuing a strategy that examines a broad set of individual studies and a mix of systematic reviews and meta-analyses to identify relevant issues and effects related to GE crop adoption and use.2 The chapter first looks at social and economic effects on or near the farm pertaining to income, small-scale farmers, farmer knowledge, gender, rural communities, and the choices available to farmers with respect to seeds and practices. It then looks beyond the farm to the effects of specific GE crops related to consumer acceptance and awareness of food derived from GE crops in the marketplace, issues related to trade, costs and benefits associated with innovation and regulatory, intellectual-property issues, and food security.
Some aspects of social and economic effects related to GE crops have been studied in more depth than others. The committee decided that, even though there was less available literature on some topics such as gender and farmer knowledge, it was still important to review and present this information in its report. The chapter focuses its attention on evidence not covered in previous reports by the National Academies of Sciences, Engineering, and Medicine.
This section begins with a review of GE crops’ effects on farmer incomes. The outcomes of such assessments can be affected by spatial and temporal differences; farmer, household, and consumer diversity; statistical and
2 The committee did not pursue a systematic review of all the literature available in all major languages. Such an approach would have required an extraordinary amount of time and financial resources that were beyond the committee’s capability. That approach was pursued by a European Union project, “GMO Risk Assessment and Communication of Evidence” (GRACE, 2012–2015, available at http://cordis.europa.eu/project/rcn/104334_en.html, accessed May 9, 2016). It took 3 years to complete the search protocol and the literature review but did not complete the analysis (see Garcia-Yi et al., 2014). To review social and economic effects on or near the farm, the committee reviewed over 140 studies published between 2010 and March 2016 that were not covered in systematic reviews and formal meta-analyses.
sampling biases; and survey methods (Smale et al., 2009; Klümper and Qaim, 2014). Therefore, it is expected that the effects observed will include a variety of benefits, costs, and risks. After the review, the committee looks at the relationship between genetic-engineering technology and other dimensions at the farm level, such as gender, community, and farmer knowledge.
Agronomic effects such as changes in yield and insecticide and herbicide applications for GE crops with IR or HR traits, respectively, were discussed in Chapter 4. In addition to an agronomic effect, a farmer may also experience an economic effect from an increase or decrease in yield or changes in the amount of money or time spent on applying herbicides or insecticides. Most of the evidence presented in the literature on the effects of GE crops on income usually refers to changes in gross margins, which is the difference between gross income and variable costs.3 Changes in gross margins can affect whole-farm income, household income, or both. Changes in gross margins cannot be used to extrapolate or to draw definitive conclusions about whole-farm or household income because, in most situations, whole-farm and household incomes may be sourced from on-farm and off-farm activities. The report uses the term income effects to capture the effects on any of the income components, with the proviso that the usage will be flexible.
There is no way to know in advance whether statistical bias and uncontrolled confounding variables may raise problems or how great the problems may be. However, knowing that it is possible for them to raise problems in studies of early adoption, Smale et al. (2009) and Smale (2012) strongly recommended that testing for these issues become standard operating procedure. The committee believes that there is no way to determine whether or to what extent studies conducted in the first decade of GE crop adoption have been affected by uncontrolled confounding variables and biases. It is necessary to revisit those studies, if possible, to test them quantitatively. More recent studies have explicitly considered these issues and have used methods to attempt to correct for biases and uncontrolled confounding variables.
At the time the committee was writing its report, few assessments of income effects had been conducted on such traits as virus resistance or drought tolerance or on quality traits that had only been on the market for a short time (such as nonbrowning of the flesh of potatoes and apples or high oleic acid in soybean). The following review concentrates on the effects of IR and HR traits.
Economic Assessments of Genetically Engineered Crops in General
Systematic reviews and formal meta-analyses of the performance of GE crops (Raney, 2006; Qaim, 2009; Smale et al., 2009; Tripp, 2009b; Finger et al., 2011; Sexton and Zilberman, 2012; Areal et al., 2013; Mannion and Morse, 2013; Klümper and Qaim, 2014; Racovita et al., 2015) have consistently shown reductions in yield damage by insects, reductions in insecticide applications for target insect pests, decreases in management time and increases in flexibility related to HR crops, increases in gross (in some cases net) margins due to the adoption of GE crops, or combinations of all the above.
It is necessary, however, to contextualize the results because they do not imply that every farmer or group of farmers (whether adopting or not) gained from the introduction of GE crops. Other literature reviews have focused on the limitations of research and critiques of methods (Smale et al., 2009; Glover 2010). In some cases, the literature focuses on the assessments of Bt cotton (Gossypium hirsutum) grown in China and India, whereas the literature on Bt maize (Zea mays), HR maize, HR soybean (Glycine max), crops with both HR and IR traits, and less widely grown GE crops, such as canola (Brassica napus) or sugar beet (Beta vulgaris), is much less extensive.4 Finally, one needs to address the issue of uncontrolled confounding variables, biases, and other methodological limitations that field researchers face in defining adoption and effects of GE crops, especially during the first decade of adoption and in places where researchers have binding restrictions to research such as access to data or inadequate funding (Boxes 6-1 and 6-2; Smale et al. 2009; Smale, 2012).
Klümper and Qaim (2014) analyzed findings of 147 studies of HR soybean, maize, and cotton and Bt maize and cotton in 19 countries.5 They found that profit increased by an average of 69 percent for adopters of those crops, largely because of increased yields (21.5 percent) and decreased insecticide costs (39 percent). Another meta-analysis of findings of studies of the same crops in 16 countries6 reported that production costs were greater for GE varieties than for non-GE varieties but that gross margins were higher on the average for the GE varieties, in large part because of their greater yields (Areal et al., 2013). Raney (2006) reviewed studies con-
5Klümper and Qaim (2014) included ex-ante and ex-post studies conducted in Argentina, Australia, Brazil, Burkina Faso, Canada, Chile, China, Colombia, Czech Republic, Germany, India, Mali, Pakistan, Philippines, Portugal, Romania, South Africa, Spain, and the United States.
6Areal et al. (2013) included ex-ante and ex-post studies conducted in Argentina, Australia, Canada, Chile, China, Czech Republic, France, India, Mexico, Mozambique, Philippines, Portugal, Romania, South Africa, Spain, and the United States.
ducted in Argentina, China, India, Mexico, and South Africa and concluded that GE cotton, maize, and soybean provide economic gains to adopting farmers in these countries; however, the effect was highly variable and depended on national institutional capacity to help poorer farmers to gain access to suitable innovations.
Economic Assessment of Insect-Resistant Traits
Klümper and Qaim (2014) analyzed the economic benefits of IR crops separately from HR crops, but they did not separate Bt maize from Bt cotton. They found that profit increased by an average of 69 percent for adopters of the crops, largely because of increased yields (25 percent) and decreased insecticide costs (43 percent). Most of the IR studies that they reviewed were of Bt cotton planted in India and China. Areal et al. (2013) examined Bt maize and Bt cotton separately. Differences in production costs and yield were statistically significant in most cases. Production costs for Bt cotton were €13/hectare higher than those for non-GE varieties, but gross margins were larger. Production costs for Bt maize were also higher, €14/hectare more than for non-GE varieties. Areal and colleagues also found that gross margins were higher for Bt maize producers. It should also be noted, on the basis of the findings in Chapter 4, that the yield differences between Bt crops and the non-Bt counterparts may have been due to the effect of the Bt trait, to enhancement of yield potential of Bt
varieties owing to conventional breeding, or to a combination of the two. Differences in resources and productivity between farmers who did and did not grow the Bt varieties could also have contributed to differences in crop performance.
Finger et al. (2011) analyzed studies of Bt cotton from seven countries; most of the data were from India, South Africa, China, and the United States. They also included data on Bt maize in 10 countries; most of the studies were conducted in Germany, Spain, South Africa, and Argentina (Finger et al., 2011). They reported that gross margins for Bt cotton were not different for non-GE cotton in India and South Africa. In China, the adoption of Bt cotton saved expenditures on insecticides and labor but did not increase yields or gross margins. U.S. adoption of Bt cotton could not be explained by lower insecticide costs inasmuch as U.S. farmers had alternative insect-control options available to them. The authors hypothesized that nonmonetary effects may provide a better explanation of the use of Bt cotton in the United States in spite of lower gross margins.
For maize, gross margins were not different for farmers using Bt varieties than non-GE varieties in Spain, South Africa, and Argentina. Insecticide costs were also significantly lower for Spain and Germany, which was the main reason for adoption of Bt maize by German farmers, in addition to better insect-pest control. Management and labor-cost information was either unavailable or not significant.
Finger et al. (2011) emphasized the heterogeneity of the data that they examined. The effects related to income (for example, yield, labor expenses, and insecticide costs) for Bt cotton varied widely between countries included in the survey, and they observed that the heterogeneity increased when data were analyzed at the regional level. Regional variation within countries was also apparent in the analysis of Bt maize studies.
Bt Cotton. Cotton farmers in China started adopting Bt varieties in the 1990s. Huang and colleagues have conducted multiple in-depth surveys there since 1999 (Pray et al., 2001; Huang et al., 2002a,b,c, 2003, 2004). Evidence presented in their studies suggests that the experience with Bt cotton in China has been sustained and widespread. Adoption of Bt cotton in China has had favorable effects on farm profits, insecticide use, health, and the environment. Pray et al. (2011) reported previously unpublished findings from China on net revenue from Bt cotton versus non-Bt cotton for 2004, 2006, and 2007. Revenue was slightly higher from Bt cotton than from non-Bt cotton in 2004 and 2006 but roughly 40 percent higher in 2007. However, the 2006 and 2007 results were not robust: only 14 and 4 farmers, respectively, who were surveyed reported growing non-Bt cotton in those years. Other authors have raised issues related to regional variations in benefits accruing to farmers that were due to variations in variety
performance, insect-pest pressures, farmers’ practices, and seed quality (Fok et al., 2005; Pemsl et al., 2005; Yang et al., 2005; Xu et al., 2008). Fok et al. (2005), for example, provided evidence of the favorable effects of Bt cotton adoption in the Yellow River region, but adoption has not been as successful in the Yangtze River Valley. Insect-pest pressures were lower in the Yangtze River Valley than in the Yellow River region, and the cotton varieties deployed seem to be less adapted to agroclimatic conditions.
Those results can be examined in light of longer-term studies. Qiao (2015) looked at country-wide data from before the adoption of Bt cotton in China in 1997 to 2012, using quantitative methods to correct for bias in input costs and labor use. The author reported that increased seed costs had been more than offset by reductions in expenditures on insecticides, reductions in labor costs, and increases in yields but that there was variability in space and time. The author estimated that the economic benefit of Bt cotton because of reductions in yield damage from bollworm (Helicoverpa armigera) and reductions in insecticide use and labor amounted to 33 billion yuan over 15 years.
Huang et al. (2010) used farm-level data collected in 1999–2007 on 16 villages in four provinces of China. The stratified random sample included information from 525 households that planted Bt cotton, non-Bt cotton, or both on 3,576 plots of land. The quantitative assessment controlled for biases by pursuing an approach that separates the effect of Bt cotton adoption from that of insecticide use to control the targeted insect pest; results of the quantitative assessment were thus adjusted for biases. Study results showed that the targeted insect pest (bollworm) had declined over the 10-year period in the area surveyed. Furthermore, the authors provided evidence that suppression of bollworm populations had benefited farmers of Bt and non-Bt cotton and that insecticide application rates continued to decrease over the period studied.
Bt cotton has been grown in some parts of India since 2002. Romeu-Dalmau et al. (2015) compared Bt cotton Gossypium hirsutum L. with non-Bt cotton G. arboreum under rain-fed conditions in Maharashtra, India, using interviews with 36 farmers who had less than 5 hectares of land. G. arboretum had been grown commonly in India before G. hirsutum, a species commonly grown in the United States, was introduced in the 1980s. The authors found that farmers growing Bt G. hirsutum spent more money than growers of G. arboretum on insecticides, fertilizers, seeds, and harvesting. Although yields for Bt G. hirsutum were greater, those farmers did not take in substantially higher revenue. In fact, farmers of G. arboretum received a higher market price for their cotton than did farmers of Bt G. hirsutum. The authors suspected that G. arboretum commanded a premium price because it was scarce (less than 3 percent of the cotton area in India). Overall, they found that the net revenue was not statistically different
between the two varieties but that the net revenue for farmers of Bt G. hirsutum was less variable. However, the small number of interviews and observations (36) and the number of treatments (Bt versus non-Bt, irrigation versus non-irrigation, and G. hirsutum versus G. arboretum) limit the generalizability of the results of the study.
Kathage and Qaim (2012) conducted a set of four surveys with a panel of Indian cotton farmers in 2002–2008. Surveys included farmers in 63 villages in 10 districts of southern India (Maharashtra, Karnataka, Andhra Pradesh, and Tamil Nadu). A total of 533 farm households were included, but only 198 participated in all the surveys, so the analysis used an estimation approach for an unbalanced panel. The authors controlled for nonrandom selection bias related to technology adoption. Results showed that Bt cotton adoption increased yield by 24 percent and improved cotton profits by 50 percent. The results also provided evidence that adoption of Bt cotton raised household consumption expenditures (a proxy for household living standards) by 18 percent during 2006–2008.
In a summary report on GE crops in the United States, Fernandez-Cornejo et al. (2014) recounted that net returns were reported to have increased for adopters of Bt cotton in all seven studies that they examined (which were published between 1997 and 2007). Gardner et al. (2009) found evidence that Bt cotton provides household labor savings, but the evidence was not robust. Luttrell and Jackson (2012) did not conduct an economic analysis of Bt cotton versus non-GE cotton for U.S. farmers. However, they concluded that farmers in 2008 perceived benefits of planting Bt cotton even though many of them still had to spray for bollworm (Helicoverpa zea [Boddie]). Bollworm was less susceptible to Cry1Ac and Cry2Ab2 than was tobacco budworm (Heliothis virescens [F.]), but the protection that the Bt toxins provided against tobacco budworm appeared to be worthwhile to U.S. cotton farmers inasmuch as more than 75 percent of all U.S. cotton planted was Bt varieties in 2008. That was the case despite farmers’ expressed concern about the expense of insecticide on top of the technology fee for the Bt traits.
Bt Maize. In a review of six U.S. studies of Bt maize, Fernandez-Cornejo et al. (2014) reported variable outcomes on net returns to adopters of Bt maize. Net returns increased in one study, decreased in one, and depended on the extent of targeted insect-pest infestation in the other four. The studies were published in 1998–2004. The findings of Gardner et al. (2009) on household labor savings were in line with the results of studies covered by Fernandez-Cornejo et al. Gardner and colleagues found that Bt maize did not provide any savings to household labor. That result was not unexpected inasmuch as it had previously been reported that many U.S. farmers do not conduct alternative forms of control for European corn
borer (Ostrinia nubilalis); using Bt maize targeted for that insect pest does not replace an action that they would take otherwise.
In a province in the Philippines during the 2010 wet season, Afidchao et al. (2014) found that fertilizer costs were higher for Bt maize than for non-GE maize and that there was no difference in insecticide expenditures between the two varieties. The authors concluded that Bt maize needed more fertilizer to promote the production of the Bt toxin and that farmers’ concerns about insect pests other than Asian corn borer (Ostrinia furnacalis [Guenée]) caused them to continue to spray insecticides even when Bt maize was planted. Average net income and return on investment did not differ between non-GE growers and Bt growers.
In four provinces in the Philippines in the wet season of 2004–2005, Gonzales et al. (2009) reported that, on the basis of the average yield of each province, Bt maize was equivalent to conventionally bred hybrids in cost efficiency. Bt maize was more cost-efficient than conventionally bred hybrids in the dry season of 2004–2005. In the wet season of 2007–2008, Bt maize was slightly more cost efficient than conventionally bred hybrids in four provinces on which there were data.7 The same was true for the dry season of that year, although in two of the provinces cost efficiency had decreased since 2004–2005. In the wet season of 2004–2005, net income in the four provinces reporting data was 5 percent higher for Bt maize growers than for non-GE growers on the basis of average yield; in the dry season, it was 48 percent higher. Three years later, net income was 7 percent higher for Bt producers in the wet season and 5 percent higher in the dry season. The findings may have been limited by the authors’ use of aggregated (official) statistics, which may not give a sense of outcome variability for yields and cost efficiency. Thus, this estimate can be seen as rough estimate of gains from Bt maize adoption in the country.
Bt Eggplant. Bt eggplant (Solanum melongena) was first planted commercially by 20 farmers in Bangladesh in 2014, so no farm-level analysis was available to the committee when it was writing its report in 2015. However, ex ante studies8 have been performed in Bangladesh, India, and the Philippines to anticipate economic effects if Bt eggplant were adopted. The committee felt it was important to include the results, recognizing that the studies are best estimates and not guaranteed outcomes.
Islam and Norton (2007) conducted an ex ante study of economic effects on Bt eggplant farmers in Bangladesh. They surveyed 60 farmers, 30 in each of two regions, for information on input costs, crop varieties, seed
7 Three of the four provinces were the same as those reporting in 2004–2005.
8Ex ante means “before the event.” Ex ante studies are conducted to estimate the potential effects of a change event, such as a new technology, before its introduction.
sources, losses due to eggplant fruit and shoot borer (Leucinodes orbonalis), and crop yields. They obtained information on expected changes in yield and variable costs from scientists and more information on preferred varieties, seed sources, losses due to eggplant fruit and shoot borer, and expected extent of Bt eggplant adoption from industry experts. On the basis of the data collected, the authors assumed that insecticide costs would decrease by 70–90 percent and seed, fertilizer, and harvesting costs would increase slightly. Yield was expected to increase by 30 percent. They projected that the increase in gross margins of Bt eggplant over non-Bt eggplant would be 46.5 percent in one of the surveyed regions, 40.7 percent in the other region, and 44.8 percent throughout Bangladesh. The results from their study in Bangladesh are qualitatively similar to those obtained by Francisco et al. (2012) for the potential use of Bt eggplant in the Philippines.
Krishna and Qaim (2008) also conducted an ex ante study of the economic effect of Bt eggplant, although theirs was conducted in India. They surveyed 360 eggplant farmers in 2005 in areas of India that accounted for 42 percent of eggplant production. The farmers reported that average gross margins were 66,106 rupees/hectare in one region and 24,230 rupees/hectare in another region. The farmers reported average revenue losses of 27,778 rupees/hectare to eggplant fruit and shoot borer in the season before the survey. On the basis of field trials of Bt eggplant but accounting for expected lower yields on farms than in field trials, Krishna and Qaim (2008) assumed that insecticide use against eggplant fruit and shoot borer would drop by 75 percent, thereby decreasing the amount spent on insecticides. Seed costs and harvesting costs were expected to increase but so was yield of marketable fruit. The overall economic result for farmer gross margins would be a 61-percent increase to 106,351 rupees/hectare in one region and a 182-percent increase to 68,269 rupees/hectare in the other region.9
Economic Assessment of Herbicide-Resistant Traits
Much less information is available on crops with HR traits than on those with IR traits. Finger et al. (2011) did not include HR soybean or canola in their meta-analysis because they did not identify enough studies for statistical analysis. Of 99 studies included in the Fischer et al. (2015) review of social and economic effects of GE crops, only 20 focused on HR crops. According to Areal et al. (2013), production costs for HR soybean were €25/hectare lower than those for non-GE varieties, but the authors noted that this result is not robust, being based on only six studies. Klümper and
9 The committee again emphasizes that the studies of the economic effects of Bt eggplant were anticipatory and, as was discussed in Chapter 3, Bt eggplant had not been approved for commercial release in India or the Philippines at the time the committee wrote its report.
Qaim (2014) looked at HR soybean, maize, and cotton together and found that profit increased by 64 percent for adopters of HR crops, largely because of increased yields (9 percent) and decreased herbicide costs (25 percent).
In the United States, Fernandez-Cornejo et al. (2014) summarized the findings of studies of net returns of HR soybean, HR maize, and HR cotton. Of eight studies published in 1998–2004, three reported that net returns for HR soybean adopters were the same as for farmers of non-GE soybean, and five reported an increase for adopters. Fernandez-Cornejo et al. were able to identify only three studies that produced information on net returns for adoption of HR maize and three for HR cotton. For HR maize, a 1998 study found net returns to be the same between adoption and nonadoption; in two 2002 studies, one reported a small increase in net returns to HR maize farmers, the other an increase. For HR cotton, a study from 1998 reported that net returns were the same; two studies from 2000 stated that net returns had increased for HR cotton farmers.
Gardner et al. (2009) focused specifically on labor savings in the United States from HR soybean, HR and Bt-HR maize, and HR and Bt-HR cotton. Their analysis showed that HR soybean saved household labor an average of 14.5 percent, enough to provide an incentive to use the technology. There was no evidence that HR maize offered household labor savings, and the evidence that Bt-HR maize saved household labor was extremely weak. The evidence in this study that HR or Bt-HR cotton provided labor savings was also weak. Fernandez-Cornejo et al. (2005) also provided strong evidence that herbicide resistance in soybean saved labor because it saved time spent on management. Their results showed that the adoption of HR soybean allowed labor to shift from farm management to off-farm employment, a shift that led to higher off-farm income. Their results did not show a correlation between the adoption of HR soybean and on-farm income. Results for HR soybean and labor allocation in the United States are qualitatively similar to those reported by Smale et al. (2012) for HR soybean in Bolivia, where HR soybean was identified as saving labor. A previous National Research Council report (NRC, 2010a) and Marra and Piggott (2006) also reported that nonmonetary considerations (such as savings in the time and effort spent on labor or management, savings on equipment, better operator and worker safety, improved environmental safety, and increased overall convenience) may be important in explaining HR crop adoption in the United States and in other countries.
Gonzales et al. (2009) summarized cost-efficiency and profit data reported on HR maize and Bt-HR maize in the Philippines in the wet and dry growing seasons of 2007–2008. Looking at the average yield, they found a small but constant advantage in cost efficiency for the HR varieties compared with conventionally bred hybrids in both seasons. The same was true of Bt-HR varieties. Afidchao et al. (2014) looked at economic results
on HR maize and on HR maize that also contained at least one Bt trait in 2010. Fertilizer costs were higher for HR maize hectares than for non-GE maize hectares. The same was true when they compared Bt-HR maize with non-GE maize. Expenditures on herbicides and insecticides for both GE varieties did not differ from such expenditures for non-GE maize, and farmers did not report labor savings as a reason for adopting GE varieties. The net incomes of Bt-HR maize producers and HR maize producers were not statistically different from those of non-GE producers, and no profit advantage was found for either GE variety over non-GE maize. Further regression analysis led Afidchao et al. to conclude that even though Bt-HR maize had drawbacks with respect to seed and fertilizer costs, better control of insects and weeds probably provided adopters with an economic advantage.
In 2007, the first year of GE sugar beet production in the United States, Kniss (2010) compared 11 glyphosate-resistant sugar beet fields in commercial production with comparable non-GE sugar beet fields in Wyoming. Growers managed each pair of fields independently of outside advice. Growers paid a $131/hectare royalty for the HR sugar beet seeds. There was little difference in the number of herbicide applications between the two sets of fields, but herbicide costs were much lower for the fields on which glyphosate was applied because glyphosate was less expensive than the herbicides used on the non-GE sugar beet. On the HR sugar beet fields, growers spent less time tilling those fields, and no hand-weeding was done, whereas all non-GE fields were hand-weeded at an average cost of $235/hectare.10 Root yield was 15 percent greater in the HR sugar beet fields, and their harvest costs were therefore greater than for non-GE sugar beet fields. Sugar content was similar in the two types of fields. Total sucrose content of the HR sugar beet fields exceeded that of the non-GE fields by 17 percent. Despite higher harvesting costs and the expense of the technology fee, Kniss found that the net economic return to growers of HR sugar beet was $576/hectare more than that of growers of non-GE sugar beet. The study could not be repeated in the following year to see whether results were similar because adoption of HR sugar beet had become so high that comparable non-GE fields could not be identified for study.
Income Effect of Early Adoption
10Kniss (2010) noted that the cost of hand-weeding was higher than other sugar beet growing areas because of a shortage of labor in Wyoming. He also stated that growers in other sugar beet growing areas of the United States often substituted herbicide applications for hand-weeding.
the first to adopt new technologies. Their focus was to identify the constraints on technology adoption and the potential income gains available to early adopters compared with late adopters. Their work was in line with previous research on new technologies in agriculture (Ryan and Gross, 1943). Early adopters of a technology gain economic benefits as their yields increase. However, as commodity prices drop because of increased production, later adopters may get yield increases but smaller economic benefits, so they earn less income than early adopters. Despite their late adoption, however, they are better off than those who chose not to adopt the technology; nonadopters earn even less income, and this can ultimately contribute to the loss of the farm. That phenomenon, termed the technology treadmill by Cochrane (1958), has been observed in the outcomes of the Green Revolution technologies in developing countries (Evenson and Gollin, 2003) and in the consolidation in ownership of U.S. farmland (Levins and Cochrane, 1996).
In the specific case of GE crops, Glover (2010) and Stone (2011) noted that the first farmers to use genetic-engineering technology in a new crop or a new location are not random; early adopters are more likely to be successful farmers. A similar observation was made by Smale and Falck-Zepeda (2012). The committee points out that many economic analyses examined in this chapter were carried out in the first decade of GE crops; the earlier gains found in those studies may taper off over time (see Box 6-1).
The available evidence from studies examined above indicates that the commercialization of HR soybean, Bt maize, Bt cotton, Bt-HR maize, and Bt-HR cotton has generally had favorable results in economic returns to producers who have adopted genetic-engineering technology, but there is high heterogeneity in outcomes. As has been pointed out in much of the same literature, the results are dated or not comprehensive. There have been few long-term, cross-sectional, or longitudinal studies. Studies have concentrated on one trait–crop combination (Bt cotton) in three countries (India, South Africa, and China). Furthermore, Smale et al. (2009) concluded from a review of many of the same studies covered in the meta-analyses discussed above that most of the studies have used a partial-equilibrium approach in which other sectors of the economy are assumed to be fixed and by design not allowed to adjust to changing economic conditions. That limitation may lead to an incomplete assessment because other approaches may allow for such adjustments. Studies of the first decade of GE crop adoption have faced substantial data limitations and methodological gaps that limited the robustness of their results, but methods have become more sophisticated and types of analyses have increased.
In general, studies of income effects have not looked as much at other widely grown crops with input traits such as HR canola and HR sugar beet or crops with resistance to viruses, including papaya and squash. Their high adoption rates where they have been approved and grown11 imply that they provide an economic benefit to adopters. Studies conducted in Canada provide evidence on the economic benefits to adopters of HR canola (see Phillips, 2003; Beckie et al., 2006; Gusta et al., 2011; Smyth et al., 2014a). Studies of income effects after adoption of more recently commercialized crops, such as Bt eggplant or drought-tolerant maize, have yet to be done.
Although the existing economic-assessment literature points to overall gains to farmers of the most widely grown GE crops, there may be substantial variations in costs and benefits among producers, regions, and trait–crop combinations and over time. Pemsl et al. (2005), Raney (2006), Tripp (2009a,b), Glover (2010), Gouse (2012), and Fischer et al. (2015) noted that institutional issues influence whether farmers—especially small-scale, resource-poor farmers—are able to tap into the purported benefits of GE crops. In the next section, the intersection of the institutional variables is examined to determine the benefits of genetic engineering to small-scale and other farmers. Although the section focuses on small-scale farmers, the institutional issues are not exclusive to them.
FINDING: The available evidence indicates that GE soybean, cotton, and maize have generally had favorable outcomes in economic returns to producers who have adopted these crops, but there is high heterogeneity in outcomes. Earlier economic studies had data and methodological limitations, but there is progress in advancing methods and in the number of issues addressed in analyses beyond economics.
FINDING: In situations in which farmers have adopted GE crops, especially those with herbicide resistance, the committee finds that nonmonetary considerations are probably driving adoption of GE crops despite the absence of a readily identifiable economic benefit related to their production.
11 HR varieties were grown on 97.5 percent of canola hectares in Canada and 93 percent of canola hectares in the United States in 2012 (James, 2012). Adoption was lower in Australia, which approved HR canola for commercial production in 2008. In 2015, HR canola was planted on 30 percent, 13 percent, and 11 percent of canola hectares in the three Australian states that permit HR canola to be grown, for a total of 436,000 hectares (Monsanto, 2015). Ninety-seven percent of sugar beet planted in the United States in 2012 was herbicide resistant (James, 2012). USDA estimated that most of the 14,200 hectares of sugar beet planted in Canada in 2012 was herbicide resistant (Evans and Lupescu, 2012).
Benefits to Small-Scale Farmers
The question of the benefit of genetic engineering to farmers is tricky. Who is the farmer in question? Most studies of GE crops in developing countries have focused on the benefits of the technology at the farm level. Most confirm that farmers have benefited from adopting and using the technology on the basis of such metrics as gross income, extent of insecticide use, and yields. However, the question of benefits of genetic engineering by size of farmer land holding needs to be discussed in more detail. There are important differences among countries, crops, and type of production system. In addition, attention needs to be paid to the separation of benefits of crop improvement from conventional breeding and benefits of a GE trait.
This section discusses the utility of both the existing GE trait–crop combinations and the technology itself to small-scale farmers. The committee considered small-scale farmers as defined in the studies examined. Globally, small-scale farmers are considered to be those who manage 5 hectares or less, but this definition does not fit all small-scale farmers (Box 6-3; HLPE, 2013; MacDonald et al., 2013). The category of small-scale farmers includes those who are resource-poor—that is, they are constrained in terms of capital and labor.
Farm size is generally seen as a proxy for or indicator of economic resources available to farmers. The committee received many comments asserting that commercially available GE crops have benefited large-scale farmers more than small-scale farmers. Farm size is influenced by factors other than the type of crops grown (see discussion of “disappearing middle” in Box 6-3 and Tripp, 2009a), but it is still relevant for assessing the social and economic benefits of GE crops.
The committee concentrated its review on these smaller operators for a number of reasons. Large-scale farmers of crops with GE traits have adopted them widely in the countries where they are approved; that circumstance, combined with the economic benefits reviewed above, leads the committee to conclude that genetically engineered IR and HR crops have generally been useful to these farmers so far. Whether those crops and genetic engineering itself are relevant to small-scale farmers is less clear, in part because they are such a diverse group with different livelihood portfolios and competing goals, only one of which may be yield optimization (Soleri et al., 2008; Jayne et al., 2010; Giller et al., 2011).
Benefits of Existing Genetically Engineered Crops
The most widely grown GE crops—HR soybean, Bt maize, Bt cotton, Bt-HR maize, Bt-HR cotton, and HR canola—were first commercialized in the United States, where they were grown primarily on large-scale farms.
However, some of these trait–crop combinations, particularly Bt cotton, have been adopted by small-scale farmers in different regions of the world. Most of the studies focused on developing countries—India, China, and Pakistan—that have large numbers of smallholder farmers show gains from the adoption and use of GE crops. In the case of cotton, a substantial body of evidence shows that countries that have become world leaders in cotton production (India, China, and Pakistan) use Bt cotton and that the use of those varieties has created benefits to smallholder farmers. However, there is also evidence that the benefits of these crops to small-scale farmers in other regions have been mixed.
Bt Cotton. Glover (2010) was doubtful of Bt cotton’s benefits to small-scale farmers in less developed countries and equally critical of the narrative that he identified in the scientific literature and popular press that supported IR crops as a “pro-poor technology.” Among his criticisms was that although Bt traits in cotton provided yield protection in seasons with heavy pressure from target insects, in seasons without high infestations adopters of Bt cotton have paid more for the GE trait or traits but have not received any economic benefits. Bt traits also did not protect cotton growers from potentially increased populations of secondary insect pests, whose control could be expensive in insecticide expenditures, labor costs, or time required. Those circumstances would be true for all adopters of Bt cotton, but Glover’s point was that small-scale farmers are in a more financially precarious position than large-scale farmers; if economic benefits do not materialize, small-scale farmers are more adversely affected by their lack of return on the investment in the Bt trait.
In their comparison of 36 farmers who grew either Bt cotton Gossypium hirsutum L. or non-Bt cotton G. arboreum under rain-fed conditions in Maharashtra, India, Romeu-Dalmau et al. (2015) found that there was a positive correlation between how much farmers of G. arboreum spent on inputs, such as insecticides, and how much revenue they received. In contrast, there was no correlation between how much farmers of Bt G. hirsutum spent on inputs and how much net revenue they received; this suggested to the authors that adopters of Bt varieties, many of whom are small-scale farmers, did not have adequate skills to optimize their return on investment with Bt G. hirsutum. Glover (2010) pointed out that insecticide overapplication on Bt cotton fields was also observed by Qaim (2003) in India and Pemsl et al. (2005) in China. Qaim and Pemsl et al. attributed insecticide overapplication to poor dissemination of knowledge about using the technology; overapplication tended to decrease or disappear when farmers learned more about the technology.
Earlier studies of the economic returns to small-scale farmers from the adoption of Bt cotton in the Makhathini Flats of South Africa found gains
from the adoption and use of the technology (Gouse et al., 2005; Gouse, 2009). However, follow-up studies in the region—some conducted by the same authors as the original studies—have documented the poor long-term durability of the gains. Those studies pointed out the need for examining institutional issues related to the use of such technologies, especially in developing countries. One study found that, despite labor savings, Bt cotton varieties in smallholder farming systems that were not operated intensively did not make economic sense because of the high price of seed and the continued need to spray chemicals for pests not affected by Bt (Hofs et al., 2006). The Hofs et al. study benefited from multidisciplinary collaboration, use of isogenic lines as counterfactual comparator, and detailed daily data, but it used a small number of farmers (20 in total) in close proximity to one another (Smale et al., 2009).
Initial adoption of Bt cotton was strong among smallholders in the Makhathini Flats in 1997–2001, rising to nearly 3,000 farmers (90-percent adoption rate) in 2001 (Gouse, 2012). However, once extension services and available credit from a private cotton-ginning company that monopolized the buyer’s market ended in 2001, the number of smallholders who continued to use Bt cotton declined dramatically (Gouse, 2009, 2012; Schnurr, 2012). Fok et al. (2007) reaffirmed the conclusion reached by multiple earlier studies that smallholder adopters of Bt cotton in the Makhathini Flats accrued economic benefits in a time period characterized by high target-insect pest pressure. The authors raised a cautionary tale about focusing only on the economic benefits without discussing the particular institutional context in which the cotton was deployed.
The institutional context becomes apparent when later Bt cotton production in the region was encouraged by another monopoly that became the region’s sole cotton buyer in 2002. It supplied Bt seed but favored large-scale operations or entered into joint ventures with smallholders to operate their land as larger units. The number of independent smallholder farmers cultivating cotton (Bt or non-Bt) in the Makhathini Flats fell from 2,260 in 2007–2008 to 210 in 2009–2010 (Gouse, 2009, 2012). Schnurr (2012) reported that average yield in 2009–2011 for smallholders was 8 percent greater than it was in 1996–1998 (before Bt cotton was introduced), much different from the 40-percent increase reported after the initial adoption period around 2001. In general, cotton production—GE or otherwise—has declined in South Africa for large and small farmers since the 2003–2004 season because of a downturn in the price of cotton compared with the prices of maize, soybean, and sunflower (Helianthus annuus) (Gouse, 2012).
Dowd-Uribe (2014) observed a similar connection between reliable credit and Bt cotton production in Burkina Faso. An entity controlled partly by the government that supplied credit allowed Burkinabè cotton
farmers to purchase seed, fertilizers, and insecticides; it also provided a guaranteed market for the cotton, putting farmers in a more secure position to pay the premium for Bt cottonseed. The state’s pricing structure contributed to the crop’s adoption after its market introduction in 2008. Burkinabè cotton farmers paid for Bt cottonseed by the hectare rather than by the seed stack, so they were able to adjust planting density to local conditions, including rainfall variability, without a price penalty. Those institutional supports could create longevity for the adoption of Bt cotton in Burkina Faso, the only African country with GE crop production in which smallholders farm most of the agricultural land. However, Dowd-Uribe (2015) expressed doubt about the value of GE cotton to resource-poor smallholders in Burkina Faso on the basis of his observations about the price of seed, the lack of refugia (which is likely to lead to insect resistance), and government corruption. That skepticism has received some confirmation: Burkina Faso has since begun phasing out GE cotton (Dowd-Uribe and Schnurr, 2016). One of the suggested reasons for the phase out is that the particular GE variety was deemed inferior to other non-GE varieties. However, the authors also documented various institutional challenges—such as loss of credit access, market disruptions, the failure to cross the Bt trait into local varieties, and the high cost of seed in South Africa and Burkina Faso—as related to declining interest in GE cotton (Dowd-Uribe and Schnurr, 2016). Vitale et al. (2008, 2010) found that economic gains from Bt cotton adoption among Burkina Faso farmers were subject to how the value-chain structure is organized in Burkina Faso and to changing economic conditions related to the international cotton market, in which low-cost producers—such as India, China, and Pakistan—dominate different segments of the market.
Bt and HR Maize. With regards to maize, Gouse (2012) noted that, although GE maize varieties had been widely adopted in South Africa by large-scale farmers, adoption by smallholders had been minimal because of the difficulty of getting seed to them. In the Hlabisa municipality, where he conducted household surveys over eight seasons, he observed that farming was not the main income of smallholders, and this was also the case for most South African smallholders.12 He examined the effects of the adoption of GE white maize by households in this community, where white maize is a subsistence crop. A Bt variety of white maize was first commercialized in 2001, and this was followed by an HR variety in 2003 and a Bt-HR variety in 2007. Gouse compared non-GE, Bt, HR, and Bt-HR varieties in
12 Surveyed households in Hlabisa received most of their income from pensions, government grants for children, remittances, and off-farm income.
the seasons of 2005–2006, 2006–2007, 2007–2008, and 2009–201013 and found that Bt-HR maize had greater yields that were statistically significant in each year in which it was grown. However, when it came to net farm income, the HR variety was the top performer over non-GE, Bt, and Bt-HR varieties in three of the four seasons, even though the Bt variety had greater yields in most seasons. The HR variety’s advantage was partly because of greater yields but mostly because of the time savings on family labor. Surveyed farmers told interviewers that they were interested in having the HR trait incorporated into the older, less expensive, more drought-tolerant popular maize hybrid (PAN 6043) commonly grown in the region.
In an earlier study of the Hlabisa municipality, Gouse et al. (2006) found that Bt maize grown by smallholders over three seasons was economically more profitable than non-GE hybrids but only in years and locations where there was substantial insect-pest infestation. Farmers have no way of predicting pest levels before investing in the higher seed costs—a problem similar to that stated in Glover’s (2010) critique of Bt cotton production on small farms. However, the findings of Klümper and Qaim (2014) qualify that critique with the argument that for smallholders in developing countries, despite higher prices for GE seed, the costs of inputs (chemical and mechanical pest controls) decline; this partially explains why Bt varieties were more profitable for smallholder farmers in developing countries. This outcome then connects Bt varieties with the access to credit.
Mutuc et al. (2013) used a dataset consisting of 470 farmers (107 Bt and 363 non-Bt maize farmers) from Isabela Province in Northern Luzon in the Philippines for crop year 2003–2004. The authors found—after taking into consideration and correcting for the effects of statistical biases and for the fact that some data for insecticide use are only partially known—a small but statistically significant effect of Bt maize adoption on yields and profits and reductions in the likelihood of insecticide use and demand. The authors also showed an influence of Bt maize adoption in reducing fertilizer use. Their study obtained qualitative results similar to those of an earlier study by Mutuc et al. (2011) that used a different estimation method. Also in the Philippines, Yorobe and Smale (2012) reported results of a study of 466 maize farmers in 17 villages in Northern Isabela in Luzon and South Cotabato in Mindanao in 2007–2008. The total sample consisted of 254 Bt and 212 non-GE hybrid users. The authors corrected for selection bias by using statistical estimation methods for biases and the effects of unobserved variables. The study showed that adoption of Bt maize increased yields and net farm, off-farm, and household income compared with non-GE hybrids
13 In 2005–2006 and 2006–2007, non-GE, Bt, and HR varieties were compared. In 2007–2008, all four varieties were compared. In 2009–2010, non-GE, HR, and Bt-HR varieties were compared.
used in the Philippines. It is important to note that these studies tend to show that adopting farmers in the Philippines are better off—that is, have higher income, more education, and a favorable view of technology in general—than nonadopting farmers.
In contrast, Afidchao et al. (2014) reported that small-scale, including resource-poor, farmers in the Philippines adopted GE maize after large-scale farmers. The authors used purposive sampling, which implies that it is not statistically representative of the population and may lead to questions about the generalizability of the results. Farmers seem to have adopted GE maize because they were curious and because they expected better yields and insect control and reduced input costs. However, Afidchao and colleagues conducted a survey and found that some small-scale farmers who had adopted Bt maize did not think their economic status had improved after adoption of the technology. About 25 percent of survey respondents who adopted maize with Bt and HR traits said that they no longer agreed with the statements that GE maize is worth investing in and could improve farmer livelihoods. In a 2014 study, Afidchao and colleagues assessed the economic effect of Bt, HR, and Bt-HR varieties of maize on Filipino small-scale farmers in one province;14 the results are described in the section above on income effects. With respect to benefits, the authors concluded that farmers with more economic capability were more likely to avail themselves of the advantages that GE crops offer. Farmers who could not afford herbicides were likely to continue manual weeding even when HR or Bt-HR varieties of maize were planted. Other farmers continued to use insecticides to control insect pests not targeted by Bt. Afidchao et al. noted that the high costs of GE seeds in combination with high interest rates associated with credit decreased the potential economic advantages of GE maize varieties. They concluded that the social and economic conditions observed with respect to seed costs and lending costs and the inability to exploit the technology’s potential could keep GE maize varieties from being economically advantageous compared with non-GE varieties for resource-poor farmers in the Philippines. That outcome could explain the results of their survey, which found that many adopters did not think GE varieties had been worth the investment.
HR Soybean. As mentioned above in the discussion of income effects, HR soybean has been studied far less than other GE varieties. HR soybean is the most widely grown GE trait–crop combination in medium-income and high-income countries; most of the hectares planted are produced on large farms in the United States, Brazil, and Argentina. One study of smallholders producing HR soybean in Bolivia was identified, with the caveat that small-
scale soybean farmers surveyed in 2007–2008 by Smale et al. (2012) were considered to be those who planted less than 50 hectares. Those farmers made up 77 percent of soybean producers in Bolivia; large-scale operators managed farms of more than 1,000 hectares and made up only 2 percent of farmers. It is of note that even small-scale Bolivian soybean producers had access to farm machinery. Smale et al. (2012) found that HR soybean growers in Bolivia were likely to operate more farmland, have more education, and own more farm machinery than nonadopters and were more likely to own their farms. A problem reported by the authors was finding the small-scale nonadopters, who had different characteristics from adopters and were more likely to take advantage of a government program that would subsidize their production if they planted non-GE soybean. Nearly all HR soybean growers said that management of targeted weeds was easier than with non-HR soybean. Their yields were greater than those on non-HR soybean farms, and 76 percent reported that HR soybean production required less time devoted to labor by members of the family who were not the primary farm operator. That reduction allowed family members more time to earn off-farm income, which contributed to the higher total household income of adopters than of nonadopters.
Høiby and Zenteno Hopp (2014) reported that by 2013 almost all the soybean crop in Bolivia, regardless of farm size, was planted with HR soybean. They noted criticism has been made that small-scale farmers had no options other than HR soybean because of private-sector control of the seed and credit markets. It is not clear whether farmers wanted non-GE soybean varieties and did not get access to them or whether non-GE varieties are not available because there is no demand for them. Those questions need further research. However, Høiby and Zenteno Hopp also recounted that government efforts to support non-HR soybean production were unsuccessful because credit and seed were not delivered to farmers in a timely manner, whereas private-sector companies supplied GE seed, credit, and technical support to farmers punctually.
Bt Eggplant. Bt eggplant had not been commercialized long enough or widely enough for the committee to assess whether smallholders will find this product useful. However, it is a GE crop that could provide benefits to smallholders. In India and Bangladesh alone at least 1.5 million smallholders grow eggplant (Kumar et al., 2010; Choudhary et al., 2014), and eggplant is an important crop throughout Asia. Eggplant fruit and shoot borer is frequently cited as one of the most destructive pests in the region (Islam and Norton; 2007; Krishna and Qaim, 2008). Ex ante assessments of the economic and health effects of Bt eggplant have reported numerous benefits to farmers’ bottom lines through costs savings and to their health through reduced insecticide use (Islam and Norton, 2007; Krishna
and Qaim, 2008; Kumar et al., 2010; Francisco et al., 2012; Gerpacio and Aquino, 2014). However, those projections were called into question in Andow’s critique of the Indian government’s environmental risk assessment of Bt eggplant. Andow (2010) noted that the Bt eggplant variety evaluated by India’s regulatory authority was a hybrid and therefore unlikely to be useful to smallholders who grow one or more open-pollinated varieties (OPVs). He concluded that adoption of a hybrid variety, which could not be self-propagated, would adversely affect smallholders’ economic security. He declined to comment on the utility of OPVs with the Bt trait—which private-sector developers had plans to make available to farmers at a minimal cost—because the varieties had not yet been brought forward for regulatory approval. Andow also posited that the Bt trait would be less useful to smallholders than to large-scale growers because smallholders have more options to use damaged fruit than do large-scale growers. He suggested that increased income from Bt eggplant would be only 8,025 rupees/hectare for smallholders if they even adopted the hybrid and that integrated pest management (IPM) with non-Bt varieties could make the same inroads in combating eggplant fruit and shoot borer, reducing insecticide use, and increasing income for smallholders (by 164,923 rupees/hectare in his estimate) with more certainty than would adoption of Bt eggplant.
Andow’s review was conducted when only hybrid Bt eggplant was available. That is no longer the case (Kolady and Lesser, 2012). A two-track approach was planned for the release of the technology, in which the private company MAHYCO would pursue hybrid Bt eggplant and two agricultural universities would pursue the development of OPVs of Bt eggplant. The distinction that Andow made between the hybrids and the OPVs for regulatory purposes would therefore cease to be an issue. Regulatory approval for the trait in India is currently limited to a specific host variety; use of the genetic construct in other varieties requires an expedited permit. That used to be an issue when approval in the Indian system had to be for the event-variety combination, but this is not the case anymore.
The comparison of Bt eggplant with non-GE eggplant with IPM may be partially incorrect if estimates Andow presented were for net returns from IPM, which may be for complete adoption of the IPM practices. In most cases, IPM adoption is incomplete and net return may be much smaller. If Andow chose to have a relative number to separate adoption from partial adoption (say adopt 5 of the 10 practices in the IPM package to be considered an adopter) and the net return reflected that, this may not be an overestimation. Furthermore, Andow (2010) cited incorrectly Krishna and Qaim (2008), who compared Bt eggplant with non-GE eggplant, and stated that these authors base their estimates solely on experimental trials. In fact, Krishna and Qaim also conducted a survey of 360 eggplant farmers in three states to calculate farm-enterprise budgets.
Krishna and Qaim discussed pricing and the effect of the strategy of pursuing hybrids and OPVs for Bt eggplant in India. This is an important discussion in that it affects other public-private partnerships that seek deployment of GE crops to farmers in developing and even developed countries. In their view, selling Bt eggplant OPVs at a much lower price than Bt eggplant hybrids may increase social welfare inasmuch as some resource-poor farmers, who previously were income-constrained or lacked access to credit, may be able to tap into the technology. However, some farmers who were planting eggplant hybrids may opt for the OPV Bt eggplant because it may have a lower cost. The latter would affect the revenue stream for the private-sector developers.
Kolady and Lesser (2006) reported on the results of a survey of 290 farmers in Maharashtra, India, conducted in 2004–2005. Survey participants included eggplant and non-eggplant vegetable farmers who grew cultivated hybrid and OPVs. Results of the estimated adoption statistical model show that farmers using hybrids were likely to adopt a Bt hybrid eggplant whereas OPV eggplant farmers were likely to adopt a Bt OPV. The proposed public–private partnerships that would develop Bt hybrids and OPVs for different farmer target groups had a reasonable chance of being successful. Farmers who have shown a preference for greater yields (hybrid-eggplant farmers) were likely to adopt Bt hybrids even if Bt OPVs were available at a lower price than the Bt hybrids.
The ex ante studies reviewed above suggest there are economic opportunities for small-scale eggplant farmers associated with adoption of Bt hybrids or OPVs, but at the time the committee was writing its report, only a small number of farmers in Bangladesh were using Bt eggplant varieties. The experience of smallholder Bt eggplant farmers remains to be seen.
Virus-Resistant Papaya. Genetically engineered virus-resistant (VR) papaya was adopted rapidly in the U.S. state of Hawaii when it was commercialized in 1998. Papaya production in the state had fallen by more than 30 percent from 1992 to 1997 because of the damage to fruits and ultimately the death of papaya trees due to papaya ringspot virus (VIB, 2014). Hawaiian small-scale growers (0.4–2.4 hectares) were the quickest to adopt the variety when it became available in the late 1990s because they were losing more area to the virus than were larger growers (Gonsalves et al., 2007). In 2000, adoption of the VR variety was 42 percent; it had grown to 77 percent by 2009 (USDA–NASS, 2009). The number of hectares planted with papaya held steady over that time. Scientists in China developed a VR papaya that targeted local strains of the ringspot virus in 2007. By 2012, more than 60 percent of papaya hectares in China produced VR varieties (VIB, 2014).
Unlike HR crops, VR papaya is not associated with labor savings, and insecticides need to be sprayed on VR papaya the same as for non-GE
papaya. However, there are no additional inputs or capital investments needed to grow the GE variety; it is wholly substitutable for its non-GE counterpart (Gonsalves et al., 2007). Also, no economies of scale are peculiar to VR papaya relative to non-VR papaya, according to Gonsalves et al. (2007), the developers of the VR papaya. Intellectual-property issues were negotiated for the Hawaiian-grown crop between public universities and the private sector, and the seeds were initially provided to growers at no cost.
The United States is a small producer of papaya on the global stage. In 2013, India was the world’s largest producer, followed by Brazil, Indonesia, Nigeria, and Mexico (FAOSTAT, 2015). Commercial-scale production takes place in those countries and elsewhere, but in many developing countries papaya is often grown on a small scale or even in people’s yards as a subsistence crop. VR papaya varieties to combat local papaya ringspot virus strains have been developed and field-tested but not commercialized in Brazil, Taiwan, Indonesia, Malaysia, Australia, Jamaica, Thailand, Venezuela, and the Philippines (Gonsalves et al., 2007; Davidson, 2008; VIB, 2014). The reasons for the lack of commercialization include organized opposition by nongovernmental organizations, the absence of a biosafety regulatory framework, and consumer wariness of VR papaya (Davidson, 2008; Fermin and Tennant, 2011). Therefore, although VR papaya appears to have many qualities that are conducive to production by small-scale farmers, its utility cannot be rigorously evaluated because it has been adopted in only two countries. The growth in adoption rates in the United States and China can be interpreted as preliminary evidence that papaya growers find the VR trait useful.
Apart from the benefits of any specific trait-crop combination, the amount of control that smallholders perceive to have over their own production practices and decisions may be an issue of concern related to existing GE crops. In one study in Brazil, smallholders interviewed felt that an adverse consequence of GE crops was the loss of control over their production practices and decisions (Almedia et al., 2015). The farmers indicated their perception that companies’ control of the production of GE seeds may threaten their independence. Similarly, Macnaghten and Carro-Ripalda (2015) provided evidence that farmers in Mexico, India, and Brazil lack trust in the organizations and institutions responsible for delivering GE seeds and a concern about the loss of indigenous seeds. A study of Argentine smallholders found that many perceived that GE crops contributed to detrimental social changes, specifically, renting of their land for commercial production of HR soybean, which led to the loss of skills and identity as farmers and to rural emigration (Massarani et al., 2013). Tripp (2009a:20) argued that “farmers’ control over a technology is deter-
mined by the quality of information available regarding its characteristics, information about relevant alternatives, and opportunities to test and adapt the technology to local conditions. Neither states nor markets have been particularly successful at supporting opportunities for farmers to master new technology.” It is important to note that farmers’ perceptions of a loss of power and control are not limited to smallholders or to the adoption of GE crops. A number of farmers in many parts of the world, including the United States, have expressed a loss of autonomy, often linked to declining profitability and the changing structure of agriculture beyond the introduction of GE crops (Key and MacDonald, 2006; Pechlaner, 2010).
Prospects and Limitations for Genetically Engineered Crops in Development for Small-Scale Farmers
At the time that the committee’s report was written, only a few GE traits had been incorporated into crops, and Bt eggplant, the only GE crop that had been specifically developed to address the needs of small-scale, resource-poor farmers, was planted by fewer than 150 farmers worldwide. However, many such traits that were designed with small-scale producers or poor consumers in mind were in development in 2015.
As discussed in Chapter 5, Golden Rice has been designed to have beneficial health outcomes for consumers in developing countries. In its information-gathering phase, the committee heard about additional genetic-engineering efforts under way on (McMurdy, 2015; Schnurr, 2015):
- Disease-resistant cassava in Nigeria, Uganda, and Kenya.
- Drought-tolerant maize in Tanzania and Uganda.
- Insect-resistant cowpea in Nigeria, Burkina Faso, and Ghana.
- Banana biofortified with vitamin A in Uganda.
- Disease-, insect-, and nematode-resistant banana in Uganda.
- Virus-resistant potato in South Africa, Indonesia, and India.
- Nutritionally enhanced sorghum in Kenya and South Africa.
- Virus-resistant sweet potato in Kenya and South Africa.
- Climate-resilient rice in Nigeria, Ghana, Uganda, India, and Bangladesh.
- Climate-resilient wheat and millet in India.
These efforts are being supported by a number of private–public partnership models (McMurdy, 2015). Schnurr (2015) posited that many of the GE crops, if commercialized, may be available to farmers with no technology fee for the GE traits. However, the only concrete examples that the committee had of how the technologies may be offered free as an intended policy are the Golden Rice project and Water Efficient Maize for Africa.
Some authors have argued that for the amount of investment in genetic-engineering approaches, solutions could have been found through non-GE means (Cotter, 2014; Gurian-Sherman, 2014) and greater investments in agroecological improvements. Furthermore in some situations, other investments may have higher priority. For example, Tittonell and Giller (2013) argued that small-scale farmers in Africa cannot take advantage of improved plant genetics until soil fertility and nutrient availability are addressed. However, many traits being developed with genetic engineering are not attainable with conventional breeding or agroecological approaches. For example, there is no resistance to maruca pod borer (Maruca vitrata) in sexually compatible relatives of cowpea (Vigna unguiculata) and no agroecological strategies that control the insect pest.
The argument that non-GE approaches cost less needs to be qualified in the context of regulatory systems and of the development of the systems around the world. Several active stakeholder groups have pushed for more and more complex regulations, inclusion of broader social and economic considerations, and other policy developments, which probably have introduced additional regulatory barriers and may have increased time to and cost of deployment or reduced the technologies delivered to farmers (Paarlberg and Pray, 2007; Paarlberg, 2008; Smyth et al., 2014b). Such policy outcomes were unquestionably influenced by political efforts by groups both for and against stricter regulation of GE crops (Scoones and Glover, 2009; Schnurr, 2013).
Some authors have indicated that the focus of commercialized traits on closing the gap between actual yield and potential yield and on the linkage of trait performance with such inputs as herbicides and insecticides ignores the priorities of some small-scale farmers (Hendrickson, 2015). The committee has documented benefits of GE crops to small-scale farmers in this chapter and in Chapter 4, but it recognizes that the traits, and sometimes the varieties in which a GE trait is available, are not appropriate for some small-scale farmers. For example, in maize and sometimes in cotton, most GE traits have been bred into hybrid varieties, but hybrids—genetically engineered or not—may not be the best or most desired option for all farmers with respect to economic returns. When a truly appropriate hybrid is available, it will generally outperform the best OPV under any conditions (including marginal production conditions without other inputs), but such hybrids often are not available. Langyintuo and Setimela (2007) found that to be the case with maize in Zimbabwe. Although it might be most appropriate for countries to develop hybrids that fit into subsistence agricultural systems, such investments are rare. Furthermore, a resource-poor farmer’s investment in hybrid seed may be unacceptably risky unless the farmer has a reasonable probability of achieving or exceeding a minimum yield that depends on the market price of the crop (Pixley, 2006). Production of OPV
seed is generally simpler and less expensive than production of hybrid seed, and farmers who grow OPVs can save their own seed for planting in the next season with often negligible loss of yield. Finally, many smallholder farmers grow crops for self-consumption rather than for the market, and their choice of variety to plant may be based on preferences and traditions quite removed from market considerations; an example is the South African maize farmers who would have preferred an HR trait in an older, locally grown, drought-tolerant variety (Gouse, 2012).
The committee heard from a number of presenters who stressed that for genetic-engineering technology to contribute to resolving issues of small-scale farmers, particularly those who are resource-poor, concurrent investments are needed in soil fertility, integrated pest management, optimized plant density, credit availability, market development, storage, and extension services (Hendrickson, 2015; Horsch, 2015; McMurdy, 2015; Schnurr, 2015). Furthermore, the committee recognizes that criticism of the level of investment in research and development (R&D) for GE crops would be especially relevant if a disproportionate amount of investment was directed exclusively to GE crops. That does not seem to be the case, as documented for Latin America (Falck-Zepeda et al., 2009) and Africa (Chambers et al., 2014). Hence, a diversified portfolio of R&D activities and investment in resolving production and institutional issues needs to focus on small-scale farmers. That approach needs to consider the overall investment strategies in developing innovative capacity in a country (Box 6-4).
There is a growing body of evidence that GE crop adoption has benefited many farmers in developed and developing countries. It is noteworthy, however, that several studies report mixed results regarding the benefits of commercialized GE crops for small-scale farmers. The higher price of GE seed and access to credit may have been important barriers—among other institutional issues—for some of these farmers to adopt the GE crops that have been commercially available since the 1990s. Although the GE varieties often produce greater yields and sometimes reduce other input costs, the committee examined a few case studies in which it was not always economically feasible for small-scale farmers to adopt GE crops or to continue planting in seasons after initial adoption. Those outcomes may be a result of GE crop varieties’ being more expensive than alternatives and that available traits require additional inputs such as herbicides or insecticides. When credit has been provided, small-scale farmers have tended to adopt the crops and have had some success, but adoption declines when credit options disappear. Given those challenges, it is often the more economically prosperous small-scale farmers who plant GE varieties.
There is evidence that HR maize in South Africa and HR soybean in Bolivia have been useful to smaller producers because the decrease in the time needed to plant seeds and weed fields has freed up family labor to pursue off-farm income. However, a small number of studies and reports have suggested that some small-scale farmers in Brazil have also reported a loss of autonomy because of reduction in seed choices and because of farm consolidation since the introduction of GE crops.
In some locations where GE crops were adopted and used, they did not prove economically advantageous to small-scale farmers in part because of credit constraints and the money and time spent on redundant insecticide applications. Those outcomes indicate an initial lack of familiarity with genetic-engineering technology and the need for extension services for small-scale farmers, especially in initial deployment. The committee heard from several presenters that such services were necessary whether or not GE crops are adopted. It also heard that small-scale farmers need
assistance with many other agricultural practices—such as improving soil fertility, increasing nutrient availability, and optimizing plant density—with or without the introduction of GE crops.
The benefits to small-scale farmers of the GE crops that were commercially available to them in 2015 depended on the crop and the agricultural situation. In many cases, such conditions as available credit, affordable inputs, and extension services appeared necessary for those farmers to find genetic-engineering technology advantageous. From the information presented to the committee and other available information, it seems likely that a number of GE crops developed with small-scale farmer needs in mind may be commercialized as early as 2017. Unlike the first generations of HR and IR maize, soybean, and cotton released earlier to farmers, the crops listed above were being developed in collaboration with research institutions in countries for which they are designated (Chambers et al., 2014; Horsch, 2015; Schnurr, 2015).
FINDING: GE maize, cotton, and soybean have provided economic benefits to some small-scale adopters of these crops in the early years of adoption. However, sustained gains will typically—but not necessarily—be expected in those situations in which farmers also had institutional support, such as access to credit, affordable inputs, extension services, and markets. Institutional factors potentially curtail economic benefits to small-scale farmers.
FINDING: VR papaya is an example of a GE crop that is conducive to adoption by small-scale farmers because it addresses an agronomic problem but does not require concomitant purchase of such inputs as pesticides. Other technologies currently in the R&D pipeline—such as insect, virus, and fungus resistance and drought tolerance—are potential candidates to accomplish the same outcome especially if deployed in crops of interest to developing countries.
RECOMMENDATION: Investments in GE crop R&D may be just one potential strategy to solve agricultural-production and food-security problems because yield can be enhanced and stabilized by improving germplasm, environmental conditions, management practices, and socioeconomic and physical infrastructure. Policy-makers should determine the most cost-effective ways to distribute resources among those categories to improve production.
Aspects of Farmer Knowledge
The subject of farmers’ knowledge, practices, and customs appears commonly in agricultural research (Millar and Curtis, 1997; Bentley and Thiele, 1999; Grossman, 2003; Ingram, 2008; Oliver et al., 2012) but generally is not specific to GE crops.15 There are many reasons that farmer knowledge, practices, and customs are of interest when focusing on GE crops. As one of the invited speakers remarked to the committee, “knowledge of actual farmer practice, and the farming systems in which it is embedded, is crucial to understanding the positive and negative impacts of any technology” (Hendrickson, 2015). Thus, the committee sought to examine the literature that it could find on different aspects of farmer knowledge as it pertained to GE crops, including the potential contribution of farmer knowledge in policy and regulatory formation, farmer-adaptive approaches to solving production constraints that GE crops also seek to address, and farmer skillsets as it relates to GE crops.
With regards to farmers’ ability to contribute to regulatory structures, Mauro and McLachlan (2008) found that Canadian farmers of HR canola identified management benefits of GE crops, such as easier weed control, but they also noted a wide array of risks, including technology-use agreements and increased seed costs. Furthermore, perceptions of risks associated with HR canola tended to increase among farmers of smaller farms. The authors concluded that farmers’ understanding of the performance of GE crops, such as volunteer weeds, could help to inform regulators but that regulators had ignored this type of practical knowledge.
Focusing specifically on how regulatory regimes respond to the potential contamination of food through the open-air production of biopharm plants, Goven and Morris (2012) argued that regulatory regimes of the United States, the European Union (EU), Canada, and New Zealand tend to exclude, even if unintentionally, farmer knowledge related to establishing regulatory policies. Their study focused on how seed farmers’ experiential knowledge of managing seed-crop purity might inform biopharming regulation, which they argued is difficult to incorporate into existing risk-assessment and risk-management regulatory regimes. Although Mauro and McLachlan (2008) reported that regulators ignore farmers’ knowledge because of the view that it is subjective and unreliable, Goven and Morris (2012) concluded that the lack of use of farmer knowledge is endemic in the operation of the regulatory system.
With respect to farmers’ adaptive skills, McMichael (2009) was critical of private-sector efforts to patent “climate-ready” genes to develop
15 The discussion in this section is about knowledge practices at the farm level as opposed to debates surrounding the patenting of indigenous plants, or properties of the plant, by corporations.
drought-tolerant varieties of maize when farming women in West Africa were already managing recurring drought by selecting seeds conducive to the challenging conditions. Settle et al. (2014) showed that cotton farmers in Mali can adopt IPM systems through community-based educational programs that can markedly lower their use of and expenditures on insecticides without adversely affecting yields and without investments in new technology. However, beyond small scale or temporary successes, adoption of IPM by small scale farmers is very low (World Bank, 2005; Morse, 2009; Parsa et al., 2014) even though the IPM paradigm has been promoted since the 1960s. Widespread implementation will require careful investment and confrontation of practical problems (Parsa et al., 2014).
Some researchers have suggested that GE crops are actually contributing to a loss of skills among farmers. The concept of “deskilling” in agriculture emerged in the 1990s (Fitzgerald, 1993) and has been used intermittently to describe the consequences of technology for producers. The deskilling process has been defined as the “appropriation of labor whereby industry effectively eliminates skilled workers by introducing new technologies that defray labor costs and increase profits” (Bell et al., 2015:8). One of the first studies to apply the concept to agriculture had to do with hybrid maize. Fitzgerald (1993) argued that hybrid maize meant that farmers no longer relied on their own knowledge for seed selection, which often came through years of experimentation and conversations among farmers. Stone (2007) and Stone et al. (2014) made a similar claim with respect to Bt cotton producers in one district of India. They noted that agricultural deskilling preceded the arrival of Bt cotton in the district, with fads for some seeds being observed. In their analysis of 11 years of seed choices by farmers in the district, they found that the proliferation of Bt cotton seeds available to farmers created an environment that was inconsistent (because insect-pest population size could not be correlated with Bt efficacy), unrecognizable (because of the number of varieties available), and plagued by accelerated technological change (Bt cotton had first reached the district in 2005; by 2009, six Bt events were incorporated into 522 different hybrids). The confusion inherent in such an environment was, the authors concluded, consistent with exacerbation of agricultural deskilling (Stone et al., 2014).
Stone (2007) has acknowledged problems with using the concept of deskilling. Most notably, he stated that the concept implies the existence of an unrealistic, even romanticized, indigenous farmer skillset (see also Tripp, 2009a). However, employed carefully, the concept can highlight how a new technology can interrupt farmers’ learning processes in relation to their social and ecological conditions (Stone, 2007).
Considerable attention has been given to farmer knowledge and practices related to the evolution of resistance in weeds and insects in GE cropping systems (Llewellyn and Pannell, 2009; Mortensen et al., 2012; Ervin
and Jussaume, 2014). In the United States, survey data from 2005–2006 revealed that most farmers were unaware that glyphosate-resistant weeds were evolving or that their actions were contributing to this evolution (Johnson et al., 2009). In contrast, a survey of Iowa farmers showed that as of 2012 nearly one-third were aware that they had fields with weeds resistant to glyphosate and just over one-tenth indicated that corn rootworm (Diabrotica spp.) resistant to Bt was in their fields (Arbuckle, 2014). Most of the surveyed farmers relied on and trusted their chemical dealers when faced with weed and insect-pest problems far more than they relied on or trusted any other source of knowledge, including the U.S. Department of Agriculture (USDA) and university extension services. In the case of Iowa, most farmers surveyed saw resistance as inevitable; this is not ideal for implementing “widespread, coordinated pest management practices and strategies” for slowing pest resistance (Arbuckle, 2014:7). Arbuckle (2014) expressed concern because those findings indicated a sense of powerlessness and a lack of knowledge, whereas the evolution of resistance could at least be slowed with widespread and coordinated efforts. However, the author concluded that Iowan farmers were ready to engage in coordinated resistance-management strategies that would involve an array of actors, including the private sector, commodity groups, farmers, and university personnel (Arbuckle, 2014).
Several studies have emphasized the importance of incorporating farmers into weed and insect pest-management programs (Tripp, 2009a; Ervin and Jussaume, 2014). Ervin and Jussaume (2014:407) stressed that weed-management programs must address the human dimensions to slow herbicide-resistant weeds, noting that most programs ignore sociological variables, including “the nature and strength of community ties (such as shared grower perceptions of what is going on in their fields), shared personal values (for example, attitudes towards evolution, environmental stewardship, and neighboring farmers’ well-being), and the ways in which farms are incorporated into financial hierarchies (whether farmers have outstanding bank loans).”
Mortensen et al. (2012) warned that weed management in agriculture demands the need for knowledge-intensive approaches among farmers. Reliance on single or simple technologies (such as HR crops) does not provide such an approach. In the case of HR crops, overcoming the enticement of the short-term economic advantages of using one herbicide to instead focus on long-term economic benefits is one of the larger changes for mitigating the evolution of resistant weeds (Ervin and Jussaume, 2014).
Overall, the study of the effects of GE crops on farmers’ skills and the interaction of farmer knowledge with GE crops remains limited to a few studies in specific locations. A more systematic study of farmer knowledge is needed to improve the regulatory structures in which farmers function
and to value and preserve farmers’ skills and capabilities. There is clear evidence that farmers’ participation in and knowledge of weed and insect-pest management is important for slowing the evolution of pest resistance in fields (Mohan et al., 2016).
FINDING: There is some evidence suggesting that farmers have insights helpful to regulators of GE crops but that regulators do not make use of this knowledge.
FINDING: A few studies have suggested that HR and Bt crops contribute to farmer deskilling.
RECOMMENDATION: More research to ascertain how farmer knowledge can help to improve regulations should be conducted. Research is also needed to determine whether and to what degree genetic-engineering technology in general or specific GE traits contribute to farmer deskilling.
Few studies have explicitly focused on GE crops and gender (Chambers et al., 2014), although attention given to women and gender in the food system has increased since the 1970s. Women made up 20 percent of the agricultural labor force in Latin America, over 40 percent in Asia, 50 percent in sub-Saharan Africa, and 43 percent in all developing countries in 2010 (FAO, 2011). Women are also being integrated as low-cost “skilled” labor into export value chains (FAO, 2011). In the United States, Australia, and New Zealand, the proportion of women in farming grew between 1980 and 2010, though the proportion of women involved in agriculture declined in Japan and throughout Europe in general (FAO, 2011). As research has focused on women, the emphasis placed on understanding gendered agricultural production systems has expanded. A gendered analysis allows for recognition that agricultural practices undertaken by women and men differ in diverse locations, and these differences need to be acknowledged when conducting agricultural research and development (Bock, 2006).
The research on gender and genetic engineering in agriculture has focused primarily on developing countries (Bennett et al., 2003; Subramanian and Qaim, 2010; Zambrano et al., 2012, 2013). However, on the basis of previous analyses of gender and agriculture (for example, Feldman and Welsh, 1995; Schafer, 2002; Sundari and Gowri, 2002; Prugl, 2004), there is little doubt that gender is relevant to the adoption, production, and marketing of GE crops in both developed and developing countries. Scholars have consistently found that women are often uniquely constrained in their production practices; these constraints limit female producers’ abilities to enhance their
incomes and, in subsistence-farming households, to improve household food security. There are constraints on access to education, information, credit, inputs, assets, extension services, and land (Ransom and Bain, 2011; Quisumbing et al., 2014). Although the roles of women in agriculture in developed countries may differ from those of women in developing countries, the constraints on female producers have many similarities. Not unlike women in developing countries, women in developed countries have historically been marginalized from farming by being denied access to the material resources needed for success, such as land, labor, and capital (for example, Leckie, 1993). Those gendered constraints are probably relevant to GE crops.
One major theme that has emerged from the few studies that have been done is that commercialized GE crops differentially affect men and women depending on the gendered division of labor and cultural roles. For example, in India, it was found that female laborers benefited from the increased work hours—and thus increased income—associated with increased yields from Bt cotton because women pick the cotton (Subramanian and Qaim, 2010). Conversely, male laborers generally spray chemicals, so they saw a reduction in their labor time. Similarly, a study of 32 small-scale farmers in the Makhathini Flats of South Africa found that the planting of Bt cotton was beneficial for women in the household; in this case, it was because women did not have to spray the crops, so their energies could be diverted to other activities (Bennett et al., 2003).
In Burkina Faso, fewer insecticide applications were needed for Bt cotton and that meant women spent less time in fetching water (Zambrano et al., 2013). In Bolivian households that adopted HR soybean, the second major contributor to production in the household—often the wife—had more time to work off the farm (Smale et al., 2012). Female farmers in Colombia who adopted Bt cotton preferred IR varieties because they reduced the number of laborers needed, whereas men reported that Bt cotton increased yields and overall benefits (Zambrano et al., 2012). In contrast, HR cotton in Colombia resulted in the hiring of fewer women for weeding, traditionally a female task (Zambrano et al., 2013). Female maize farmers in the Philippines, whether they grew Bt varieties or not, reported that Bt saved labor, but men who planted maize did not note a time-saving aspect to either Bt or non-Bt varieties (Zambrano et al., 2013).
Another theme that has received some support in the literature on GE crops in commercial production is the role of women in decision-making in farming households. In Colombia, in the case of Bt cotton, women were found to participate with men in decision-making and supervision of Bt cotton. Similarly, in the Philippines, women and men reported that they collaborated in most activities related to Bt maize, including decision-making (Yorobe and Smale, 2012; Zambrano et al., 2013). The increasing
importance of women in decision-making in farm households is further supported by other, non-GE focused research. It has been observed in Australia that women’s involvement in decision-making about planting new crop varieties and soil conservation has increased in farm households (Rickson et al., 2006).
The issue of gender-appropriate technologies is also relevant to GE crops. In many regions, specific types of agricultural technologies are associated with masculinity; for example, large machinery, such as tractors, is usually seen as falling within the male domain (Brandth, 2006). However, GE crops may fit within more traditionally female-associated technologies. In specific regions, such as the United States and Europe, female farmers tend to be concentrated in alternative agricultural systems (Chiappe and Flora, 1998; Peter et al., 2000; Rissing, 2012). What makes that relevant to GE crops is that many of the alternative agricultural systems, particularly in developed countries, have not used GE crops, primarily for philosophical reasons (Rissing, 2012) or, in the case of USDA organic certification, because of the outright restriction on using GE crops. In both developed and developing countries, women are more likely to farm on a smaller scale (SOFA Team and Doss, 2011; Hoppe and Korb, 2013). Therefore, although GE crops are more likely to be considered a female-appropriate or gender-neutral technology, the types of farming systems of which women are the primary farmers tend not to have high adoption rates for GE crops.
FINDING: GE crops with Bt and HR traits differentially affect men and women in the agricultural labor force, depending on the gendered division of labor for the specific crop and for particular localities.
FINDING: There is a small body of evidence that women’s involvement in decision-making about planting new crop varieties and soil conservation has increased in farming households in general, including households that have adopted GE crops.
The connection between changes in agriculture and their effects on communities, particularly rural communities, has received scrutiny among social scientists for decades in the United States. The Goldschmidt thesis, completed in 1948, argued that industrial agriculture adversely affects the quality of life in rural communities (Carolan, 2012). Much more recent research in the United States continues to find support for the general thesis, although the causal mechanisms that drive such outcomes remain under debate (Lyson et al., 2001; also see Lobao and Stofferahn, 2008, for summary of 51 studies). The implication of the Goldschmidt thesis is that
if the adoption of particular technologies contributes to further industrialization of the farming sector, with increased consolidation and decreasing family farms, there will probably be deleterious consequences for rural communities.
Specific to the present report is the concern over how GE crops and genetic engineering affect communities. Few studies have focused explicitly on commercialized GE crops and communities, but inference can be drawn from other studies that have focused on the intersection of agricultural technologies, farm organizations and scale, and communities (Lobao and Stofferahn, 2008). As a previous National Research Council report (NRC, 2010a:12) concluded, “Research on earlier technological developments in agriculture suggests that there are likely to be social impacts from the adoption of GE crops.” The extent of the social effects of the introduction of GE crops is unclear, in part because little research has addressed the subject, but effects may include changing “labor dynamics, farm structure, community viability, and farmers’ relationships with each other” (NRC, 2010a:3). Social and economic consequences related to commercialized GE crops are not inherently new or unique but rather contribute to changes that have been seen after previous technology adoption (NRC, 2010a). Thus far, the small numbers of studies that touch on community effects of GE crops tend to focus on adverse effects, such as reduced employment for weeding, as discussed above in the section “Gender.” However, because of the lack of attention to measuring change at the community and household levels, it is difficult to draw any overarching conclusions related to specific GE crops or to genetic engineering in general and community and household effects.
Seed Availability and Cost
There is some evidence of a correlation between the substantial rise in the amount of land planted with GE crops and a decline in the amount of non-GE seeds used (Pechlaner, 2012). The availability of non-GE varieties for purchase and planting by farmers in the United States declined by 67 percent for maize, 51 percent for soybean, and 26 percent for cotton from 2005 to 2010 (Heinemann et al., 2014). A number of explanations for these declines are possible. The committee reviewed publicly available maize hybrid trials in three of the top four maize-producing states in the United States (Iowa, Illinois, and Minnesota; Nebraska is ranked third in the value of maize crop, but the trial results do not differentiate GE and non-GE hybrids). In 2014 in the three states, 86 non-GE hybrids were tested compared with 544 GE hybrids (13.7-percent non-GE, 86.3-percent GE). The prevalence of hybrids with stacked GE traits is illustrated in the results from Minnesota: of the 219 GE hybrids tested, 198 contained two or more GE traits, and only 21 contained solely the HR trait for glyphosate
(90.4 percent of the hybrids contained stacked GE traits). Observations in Brazil also show a decline in the availability of non-GE maize hybrids (from 302 to 263) and an increase in GE maize hybrids (from 19 to 216) from the time when GE maize was approved in 2008 to 2012 (Parentoni et al., 2013).
For the United States and Brazil, it is clear that where GE varieties have been widely adopted by farmers, the supply of non-GE varieties has declined, although they have not disappeared. However, there is uncertainty about the rate of progression of the trend. The general trends indicate that nonadopters and partial adopters of GE varieties had fewer choices for hybrids or varieties in 2015 than they did before GE crops were introduced. That was also demonstrated by Krishna et al. (2016), who assessed varietal diversity available to cotton growers in India, representing full adoption, partial adoption, and nonadoption of Bt cotton.
More research is needed to ascertain whether a change in varietal diversity and availability of all crops in all countries has occurred.
For farmers who want to grow GE crops, the cost of GE crops may limit their adoption by smallholders, particularly resource-poor smallholders. The price of GE crop seeds tends to be higher than that of other types of seed. That limitation is binding only if the seed price is not compensated for by higher net income, for example, through reduced insecticide applications, reduction in damage to yields, or saved labor. The important point is what percentage of total costs seed represents and how a farmer recovers this cost. In most situations, seed cost is a small fraction of total costs of production, although it may constitute a financial constraint because of limited access to credit. In addition, small-scale farmers may face a financial risk when purchasing a GE seed upfront if the crop fails; this may be a substantial risk consideration for small-scale farmers.
Finger et al. (2011) found that seed cost for Bt cotton was significantly higher than that for non-GE cotton in South Africa, India, and the United States but not in China. The difference between the price of non-GE seed and the price of Bt cottonseed was 97 percent in South Africa, 222 percent in the United States, and 233 percent in India. The authors noted that there had been a change in government policy in India since the time when many of the studies included in their meta-analysis were conducted. The Indian government invested in the market in 2006, and this lowered the price difference between Bt and non-Bt to 68 percent. In the same study, Bt maize seed was 9.9 percent more expensive than non-Bt seed in Spain, 17 percent more expensive in Germany, and 36 percent more expensive in Argentina (Finger et al., 2011). The price of seed appeared to be influenced by the region within a country and the extent of infestation by the target insect pest. That is, the price of Bt seed was lower where target insect-pest populations were small and Bt varieties were less likely to close the gap between actual
and potential yields. In a 2010 survey of maize farmers in the Philippines, Afidchao et al. (2014) reported that seed costs were 60 percent higher for all GE maize types (Bt, HR, and Bt-HR) than for non-GE maize. Some initiatives have attempted to address cost through humanitarian-use licenses that allow researchers to develop GE crops without concern about having to pay royalty fees to agricultural biotechnology firms (Takeshima, 2010).
Because of producer and consumer preferences, GE crops have been separated into different supply chains from non-GE crops that may be produced with synthetic fertilizers and pesticides and non-GE crops that are cultivated with practices that meet standards set for organic production.16 GE crops and nonorganic, non-GE crops both may use synthetic fertilizers and pesticides, so USDA distinguishes them as GE conventional production and non-GE conventional production; the third category is known as organic production (Greene et al., 2016). To simplify terminology, the committee will refer to the production process that uses GE seed as “GE,” the production process that may use synthetic inputs but not GE seed as “non-GE,” and the production process that uses organic practices as “organic.”
The separation begins on the farm, where efforts are made to prevent gene flow between GE crops and non-GE or organic varieties of the same species and between GE crops and related plant species such as wild relatives. Efforts are also made to keep seed separate so that producers have a choice of kind of seed to grow (organic, non-GE, or GE) and markets to sell to. When crops leave the farm, different supply chains exist for each production system.
Managing and maintaining separation among three production processes is known as coexistence. It is a particular issue for farms in the United States, where all three production processes occur, sometimes close to one another. Coexistence issues on the farm are also present in other countries that grow GE crops, but the United States is the best example in that it grows more hectares of GE crops and more species of GE crops than any other country. Therefore, much of the literature and experiences discussed in this section are based on the United States, although the findings are likely to be applicable to other locations.
16 In the United States, organic is a process-based certification granted by USDA’s National Organic Program (NOP). Among other metrics, organic growers may not use synthetic insecticides or herbicides or GE seeds to produce their crops, and they must take reasonable steps to prohibit the presence of GE content in the final product. Because the certification is process-based, NOP does not specify a tolerance level of GE content. In other jurisdictions, such as the EU, food produced organically can be rejected as organic if test results show GE content beyond a set threshold.
Coexistence is not an issue that has only appeared since GE crops were commercialized. Farmers growing high-value specialty crops—such as popcorn, soybean for tofu, and low-linolenic acid canola—have long protected their crops from accidental mixing with lower-value crops to prevent adventitious presence. Farmers who grow crops for seed production also isolate their crops from related crops to ensure the purity of the seed variety and thereby avoid adventitious presence. With regards to agriculture in general, adventitious presence refers to unintended low levels of impurities in seeds, food, feed, or grains from crops.
In the case of GE crops, adventitious presence is the unintended and accidental presence of low levels of GE traits in seeds, grains, or foods. This unintended and accidental presence can be introduced to organic or non-GE crops in the field in several ways. Pollen from GE crop fields has the potential to cross-pollinate nearby non-GE crops of the same species or of a related species. GE seed can be accidentally mixed with non-GE seed; planting of the intermixed non-GE seed would lead to the growth of some plants with GE traits in the field. Seeds with GE traits left over from the previous season can germinate in a field that has been planted with non-GE seed in the following season.
Preventing adventitious presence is valuable for social reasons.17 Farmers want the freedom to decide what crops to grow based on their skills, resources, and market opportunities. That freedom can be constrained by adventitious presence from nearby farms that use a different production process.
Preventing adventitious presence is also important for economic reasons. First, seed—whether organic, non-GE, or GE—commands a higher price (that is, a price premium) compared to bulk grain, so it is critical for the farmer’s bottom line that its purity be maintained regardless of the crop’s method of production.18 Farmers of seed and high-value crops have put identity-preservation systems in place to help to ensure purity, and they need the price premium to help to pay for these systems (USDA Advisory Committee, 2012).
18 For example, seed companies of crops with GE traits and farmer trade associations have developed programs, guidelines, and best management practices to reduce the incidence of unwanted low-level presence of GE traits. Companies have sponsored the Excellence Through Stewardship Program, which develops best management practices to prevent gene flow during testing and field trials of GE crops and to minimize inadvertent introduction of unwanted GE traits (Excellence Through Stewardship, 2008, updated 2014). The American Seed Trade Association has guidelines to ensure the production of high-quality seed stock and to comply with certification standards developed by the Association of Official Seed Certifying Agencies and the International Seed Testing Association.
Second, at the other end of production, the segregation of end-use markets for organic, non-GE, and GE crops because of consumer preferences has created a price premium for organic and non-GE crops. A meta-analysis by Crowder and Reganold (2015) indicated that the global price premium related to a variety of organic crops ranged from 29 to 32 percent but that organic crops cost more to grow (because of higher labor inputs and lower yields) than nonorganic crops. Therefore, higher price premiums are critical for the profitability of organic farmers. USDA’s Economic Research Service (ERS) reports that U.S. organic maize and soybean prices are generally two to three times higher than the price of non-GE varieties (Greene et al., 2016).
To protect that premium and because of USDA’s National Organic Program requirements, organic farmers in the United States take measures to prevent adventitious presence, such as planting buffer strips or taking land that borders a GE crop field out of production (Box 6-5). Farmers of non-GE crops may do the same to avoid cross-pollination from neighboring GE crop fields. There is a growing demand for food and feed from non-GE crops, particularly in countries in which there is strong consumer opposition to GE products, few if any GE crops have been approved, or GE foods must be labeled. Depending on supply and market demand, non-GE crops may carry a market price premium. In late 2015, USDA–ERS reported non-GE price
premiums for food soybean 8–9 percent higher than average food-soybean prices and 12–14 percent higher for non-GE soybean for feed (Greene et al., 2016). As a result, growers in the United States and in other agricultural export regions around the world may decide to meet such demand by avoiding GE seed and growing their crops to meet the required regulatory and market specifications for non-GE crops.
Third, prevention is important because cross-contamination among crops from the three production processes has economic costs. In the United States, the organic certification is process-based, so low-level presence of GE content in organic food products does not threaten a grower’s certification or prevent the end product from being marketed as “USDA organic” (USDA–AMS, 2011). However, the private sector may impose standards that go beyond USDA’s requirements. U.S. food retailers, restaurants, and food manufacturers are requiring non-GE supplies for “non-GMO” marketing and labeling campaigns (for example, Schweizer, 2015; Strom, 2015). Through contract requirements, growers of organic or non-GE crops may have to supply products that do not exceed a threshold of GE content set by a private company, a strict market (for example, the EU), or a voluntary certifier (for example, the Non-GMO Project, a private voluntary certifier). The grower bears the risk of losing the market premium if the supplied crop is rejected because it does not meet a contractually established standard. However, because contracts between growers and buyers are private, it is difficult to find documented information about how extensively growers are contracting to meet specific non-GE standards or to what extent farmers of organic or non-GE crops are incurring economic losses as a result of being unable to meet contracts because of cross-contamination. In 2016, USDA–ERS released a survey that showed that the percentage of organic farmers reporting economic losses due to the unintended presence of GE materials in their crops varied by region and by the presence of GE crop varieties in their area. In Illinois, Nebraska, and Oklahoma, 6–7 percent of organic farmers reported losses; on a national level, 1 percent of all certified organic growers in 20 states reported losses, including expenses for preventive measures and testing, in 2011–2014. Those losses were estimated at $6.1 million (Greene et al., 2016). USDA–ERS stated that the percentage of organic farmers reporting economic losses would probably have been higher had the study been limited to organic farmers growing crops with a GE counterpart, instead of all organic farmers.
Another economic cost that can be connected to coexistence is the management of seed rights. GE seed is protected by patents and by legal agreements between seed sellers and buyers that restrict the grower’s use of the seed, including prohibitions on seed saving and resale (for more discussion of patents, see section “Intellectual Property” below). An economic conflict can occur if a farmer who has not purchased GE seed discovers
that gene flow from other farms has caused GE traits to be mixed in with his or her crops. Farmers could be legally liable for patent infringement if they knowingly use GE traits in their fields for which they have not paid (Kershen, 2003).
Despite the acknowledged difficulties of managing the coexistence of different agricultural production processes in a geographic area and questions related to responsibility and liability (Box 6-5), the evidence indicates that many areas are successfully growing organic, non-GE, and GE crops. Carter and Gruère (2012) demonstrated that countries producing the four most widely grown GE crops (maize, soybean, cotton, and canola) are also still producing and exporting non-GE and organic varieties to meet global niche-market demand (Table 6-1). Gruère and Sengupta (2010) have documented how South Africa provides for a non-GE maize identity-preservation program even though most growers plant GE varieties.
A particularly difficult challenge for coexistence arises from the situation in which a GE trait that has not received any regulatory approval is accidentally released into the food supply. The unapproved GE trait may
TABLE 6-1 Successful Coexistence Schemes in Selected Countries That Produce and Market Genetically Engineered (GE) and Non-GE Cropsa
|Australia||GE and organic||GE and non-GE|
|Brazil||GE||GE and non-GE||GE and organic|
|Burkina Faso||GE and organic|
|Canada||GE, non-GE, and organic||GE, non-GE, and organic||GE, non-GE, and organic|
|China||GE and organic|
|India||GE and organic|
|Pakistan||GE and organic|
|South Africa||GE and non-GE||GE||GE and organic|
|Spain||GE, non-GE, and organic|
|United States||GE, non-GE, and organic||GE, non-GE, and organic||GE and organic||GE, non-GE, and organic|
a Non-GE crops include those produced with synthetic fertilizers and pesticides and those produced with practices that meet organic standards. The former is described in the table as “non-GE”, the latter as “organic.”
SOURCE: Carter and Gruère (2012).
escape from field trials through gene flow to neighboring crops of the same species, or, more typically, the seeds of the variety being tested may be commingled with the seeds of non-GE crops or commercialized GE crops. When such accidental releases are detected, they can lead to both domestic market turmoil and international trade disruptions. All growers of the same crop in which the unapproved trait has been found—whether GE, non-GE, or organic—will face substantial costs of testing to ensure that the unapproved trait is not present in their production. If the unapproved trait were discovered at any level, the food or feed would have to be destroyed because the sale of any food or feed with an unapproved GE trait would be unlawful. Such incidents also disrupt trade because importers are unlikely to want to buy crops with any levels of GE traits that have not yet been approved for commercialization. Examples of such market disruptions include:
- The detection of an unapproved HR trait in U.S. rice supplies, which led to the closure of EU markets to rice imports from the United States. U.S. rice producers and exporters experienced losses at the time and a loss in their share of the EU market to other exporting countries. EU rice importers suffered substantial losses “because of the need to recall products from the supply chain, the higher costs due to additional testing, the disruption to the rice supply and the damage to their brands” (Stein and Rodríguez-Cerezo, 2009:20).
- The closure of Japanese and South Korean markets to U.S. soft white wheat due to the discovery of unapproved HR wheat in Oregon. The markets were closed even though no HR wheat was found in the commercial wheat supply (Cowan, 2013).
FINDING: Strict private standards mean that producers may meet government guidelines for adventitious presence but fail to meet private contract requirements.
FINDING: The question of who is economically responsible for adventitious presence is handled differently by different countries.
When crops leave a farm, they may end up in a market just down the road, a livestock feedlot, or a barge headed to a market on the other side of an ocean. Most GE crops commercially available in 2015 were bulk commodity crops traded worldwide, but even GE specialty crops, such as papaya, are exported. Thus, commercialized GE crops intersect with consumers, the international trade regime, and the global food-distribution
system. The extent to which they are developed and grown is influenced by intellectual-property rules and regulatory-system costs.
Consumers’ Acceptance and Marketplace Awareness
The analysis of consumers’ acceptance and purchasing intention for food derived from GE crops has been the focus of several studies in the last two decades. Those studies have relied on survey research, choice experiment, and hedonic analyses among other methods (see Costa-Font et al., 2008; Frewer et al., 2011; Rollin et al., 2011). More than 100 studies on consumers’ willingness to pay (WTP) for food derived from GE crops in over 20 countries have been conducted. WTP estimates whether (and if so, how much) price premiums are necessary for consumers to use or avoid a GE crop. Colson and Rousu (2013) summarized the state of the literature on WTP, including work conducted by Lusk et al. (2005), Dannenberg (2009), and Lusk (2011). They found that consumers’ WTP for food derived from GE crops is lower than that for food with no ingredients from GE crops and that the magnitude of the consumers’ discount for food from GE crops depends on the type of genetic change made, the type of food product, and how the genetic change altered the final product. They also reported that U.S. consumers were more accepting of food derived from GE crops than were European consumers. Along similar lines, Colson and Huffman (2011) found that consumers’ WTP was influenced by the information available to them when they made their decisions. Information that highlighted the benefits of genetic-engineering technology increased the WTP for food derived from GE crops. Phillips and Hallman (2013) concluded that consumers assess food from GE crops on the basis of how the food is presented—that is, whether the food presents benefits or risks—but that the assessments vary when levels of consumers’ pre-existing knowledge and other factors are taken into account.
Colson and Rousu (2013) raised important questions about the existing literature and its limitations. Specifically, WTP studies may not shed much light on consumer acceptance because most consumers are not aware that food derived from GE crops is available in the marketplace. The authors also questioned the variability in the results of the studies that they reviewed and the ability of such studies to reflect consumers’ behavior when they make purchases.
Research has also been conducted in several countries on the question of labeling foods derived from GE crops.19 Polls conducted in United States in the last 15 years have shown growing support for labeling among the American public, from 86 percent saying “yes” to requiring labels in 2000
to 93 percent in 2013 (Runge et. al, 2015). A 2006 survey conducted in one city in India, with a complementary Internet survey, found that over 90 percent of respondents considered labeling as somewhat or very important; however, support fell to around 60 percent when costs associated with a 5-percent rise in prices due to labeling were introduced to the question (Deodhar et al., 2007). A 2015 poll in Canada reported that 88 percent of Canadians wanted mandatory labeling of GE foods (CBAN, 2015); voluntary labeling was already in place at the time. When mandatory labeling of GE foods went into effect in Taiwan in 2001, 83 percent of those surveyed were in favor of it (Ganiere et al., 2004). Labeling of foods derived from GE crops has been in place in the EU since 2001. There is no international standard for labeling. The Codex Alimentarius Committee on Food Labeling reached an impasse in 2011 on developing guidelines and standards for labeling GE foods, leaving the issue up to Codex members to consider approaches to labeling “consistent with already adopted Codex provisions” (CAC, 2011).
Labeling can be required by a governmental body or can be voluntary. In the United States, the U.S. Food and Drug Administration (FDA) has the authority to require label information to ensure the safe use of a product or to prevent marketplace deception; because FDA has determined that all commercialized GE crops are not materially different from conventionally bred crops, it has not found cause to mandate labeling of GE foods under its authority (see Chapter 9).
A mandatory label requiring the disclosure of GE content in food imposes costs on food manufacturers, some of which could be passed on to consumers in the form of higher prices (Golan et al., 2000). Claimed estimates of the total costs of mandatory labeling of foods derived from GE crops vary widely, depending primarily on whether short-term or long-term costs are included. Short-term costs are those associated with changes in labels and marketing efforts. Long-term costs are those associated with changes in the value chain and markets that result from the implementation of a labeling policy. They may include expenses related to segregation, traceability, and identity preservation of products and reorganizations of value chains. For example, a general retail mandatory-labeling model by FDA considers the short-term cost of one-time changes in retail labels, such as UPC codes and product labels (Muth et al., 2012). The model finds that the cost of new labeling requirements decreases over 42 months; at that point, label changes could be accommodated within the normal business cycle “at minimal additional cost.” The need to reprint labels is likely to entail a relatively trivial cost, which by itself would be unlikely to affect consumer prices (Shepherd-Bailey, 2013).
Estimated costs of mandatory labeling of GE foods are considerably higher, however, if longer-term market-response scenarios are included.
If required to label, manufacturers would probably reformulate products to avoid labeling by using non-GE ingredients where possible instead of putting on a label that will lead to a loss of sales. In the EU, most food manufacturers have reformulated their products to avoid having to label their products under the EU mandatory-labeling regime (Wesseler, 2014). The time and expense of reformulating products and the use of substitutes for GE ingredients would entail additional costs. Furthermore, if a company reformulated its products to avoid labeling, it would still be required to test each of its ingredients for GE content to ensure that it was complying with labeling requirements. How difficult and expensive that task would be depends largely on the level at which tolerances of GE content were set before labeling would be required. Maintaining adequate segregation to achieve the EU level of 0.9 percent would be much more expensive than, for example, meeting a 5-percent tolerance level.
Cost estimates that include testing, segregation, and identity preservation vary widely. Comparisons are difficult because assumptions are often unstated; indeed, Teisl and Caswell (2003:16) noted in their review of cost studies that estimates range “from very modest to significant increases in costs” in part because of different assumptions and different kinds of costs. One market response would probably be downstream market pressure on farmers to grow non-GE crops to supply food manufacturers with materials that would enable them to avoid labeling; an increase in non-GE sources could lead eventually to a decrease in ingredient costs.
The benefits of mandatory labeling depend on the extent to which consumers use the information to choose products that they want (or avoid ones that they do not want) and on their WTP for such attributes. The assumption is that consumers would use the information to avoid food derived from GE crops, although the percentage of consumers who would do so is likely to differ from country to country. Most of the economic studies that compared a mandatory-labeling requirement of GE foods with a voluntary “non-GE” label have concluded that a voluntary “non-GE” label is a more efficient way to provide information to consumers and to permit consumer choice. However, that analysis considers all consumers to be uniformly affected. Gruère et al. (2008) argued that mandatory labeling is less likely to lead to expanded consumer choice in that companies are likely to withdraw products with GE content from the market because consumers are assumed to ascribe an adverse connotation to the label.
Ultimately, of course, countries may choose policies that favor values other than economic efficiency, including consumer “right-to-know” policies that express preferences for consumer autonomy and fairness. For example, if non-GE labeling is voluntary, many products would have no label information about GE content. Consumers would not know whether the product contained GE ingredients and so would be deprived of the ability to
make an informed choice about each product. Mandatory labeling provides the opportunity for consumers to make their own personal risk-benefit decisions (regardless of the regulatory determination of safety) and to express a preference for a method of production. A voluntary non-GE label places the burden on consumers who want to avoid GE foods to search for non-GE products and provides no information to consumers who may not be actively searching for the information but who might be informed by the label. Voluntary labeling also may not help consumers who cannot afford the kinds of foods that will be voluntarily labeled.
FINDING: Consumers’ willingness to pay for non-GE food is price-sensitive.
FINDING: The economic effects of mandatory labeling of GE food at the consumer level are uncertain.
Constraints on Trade
Starting in the 1980s, global trade in agriculture has become more liberalized through a series of international free-trade agreements, including those negotiated under the World Trade Organization. Although harmonization of standards has advanced, there remain issues or products that countries do not treat in the same way and about which they have disagreements. The disagreements, some of which are related to genetic engineering in agriculture, have economic implications.
GE crops are approved by national governments, not by an international body or under an international agreement. This approach is logical and appropriate; countries should have sovereignty over regulatory decisions. However, making regulatory decisions at the national level creates a situation in which a GE crop may have been approved for production in one country but has not yet been approved for importation into another. Alternatively, the GE trait–crop developer might not seek regulatory approval in importing jurisdictions, which raises the possibility that a product approved in one country may inadvertently reach a different country where the product has not been approved. These two situations are known collectively in the international trade and regulatory literature as asynchronous approval20 (Stein and Rodríguez-Cerezo, 2009; Gruère, 2011; Henseler et
20 There is no unified definition of the term asynchronous approval; different countries and organizations have similar but not the same definition (FAO, 2014). The committee recognizes that the term asynchronous approval can be framed within a policy discourse context and that it may have some different interpretations by different audiences. However, this is the term of art used in the literature examining trade and regulatory issues with varying definitions.
al., 2013). The consequence of asynchronous approval is that exports of crops with GE traits must be segregated from exports of non-GE crops so that exporters only send non-GE crops or GE crops that have been approved into the importing jurisdiction. The presence of unapproved GE crops in non-GE crop imports could cause a shipment to be rejected, which incurs costs. Therefore, a segregated export supply chain must be maintained, which also adds expense and requires testing and segregation systems to keep GE crops out of shipments intended for import markets that have not yet approved the GE crops (Box 6-6).
If maintaining testing and segregation systems is not economically feasible, trade of the product in question between two countries may cease. Before 1997, the United States shipped 4 percent of its maize exports to the EU; by 2004, the EU share of U.S. market exports were less than 0.1 percent because U.S. maize growers were planting GE varieties not approved in the EU (PIFB, 2005). GE papaya from Hawaii could not be exported to Japan between 1998 and 2011 because the top Japanese importer would not accept GE papaya; during that period, Hawaii went from supplying 97 percent of Japan’s papaya imports to less than 15 percent (VIB, 2014).
Asynchronous approvals can also have multisector effects tied to restriction on imports and increases in costs and price. The EU is a large importer of soybean, predominantly to feed its livestock. The United States, Brazil, and Argentina dominate the export market for soybean for livestock feed, and almost all soybean produced in these countries has GE traits. A 2007 European Commission report modeled the effects of trade disruptions between the EU and its livestock-feed suppliers. The EU supplies much of its own maize, so the effects of trade disruptions due to asynchronicity in that crop would not be substantial. However, if the EU lost soybean imports from the three largest suppliers at the same time because of asynchronicity, the price of soybean and soymeal would increase by over 200 percent in the following year or two. It would be difficult for farmers to respond quickly with substitute feeds, so the number of livestock in the EU would decrease. The decrease in numbers would persist over a long term wherever substitute feeds could not be supplied. The decline in livestock would have substantial adverse effects on a sector that represents 40 percent of the EU’s agricultural production (LEI et al., 2010).
Finally, asynchronous approvals may deter the development and adoption of new GE traits or new GE crops because farmers producing for an export market may be reluctant to grow varieties that incur the risk of not gaining regulatory approval. For example, in the mid-2000s, U.S. wheat farmers’ concern about acceptance of HR wheat by export markets led them to reject the variety that Monsanto was developing; as a result, Monsanto withdrew the product (Schurman and Munro, 2010). Developers also may delay the commercialization of a new GE crop until it has been
approved for import in all major markets. If an importing country does not start its regulatory review process until the new crop has first been approved in the producing country, the delay from first regulatory approval to commercialization is at least 2–3 years (Fraley, 2014). Some developers of new GE crops have introduced their products with plans to ensure a separate distribution channel for the crops from conventionally bred varieties until export market approval has been received (Richael, 2015). Growers associations may also work with farmers producing for export markets to
ensure that they are aware of the regulatory status of GE crops in other countries before they select varieties for the next planting season.21
An important consideration is that the tolerance that a country sets for the presence of unapproved GE traits has substantial economic implications. The lower the tolerance, the more expensive the efforts to test and
21 For example, see the National Corn Growers Association’s Know Before You Grow. Available at http://www.ncga.com/for-farmers/know-before-you-grow. Accessed November 6, 2015.
segregate products throughout the food production and distribution chain. The issue is complicated by the fact that testing equipment can now detect GE content at very low levels; this may encourage national governments to reduce their tolerances. However, achieving complete segregation is not possible. Indeed, a 2010 National Research Council report on sustainability found that “zero tolerance for the presence of GE traits in non-GE crops is generally impossible to manage and is not technically or economically feasible” (NRC, 2010b:171). That report was presumably referring to the GE varieties of bulk commodity crops on the market in 2015 rather than to specialty crops, such as papaya, but there is an unresolved tension between importing countries, which often set tolerances based on the degree of product purity that can be tested, and exporting countries, which are constrained by the degree of product purity that can be achieved.
Stein and Rodríguez-Cerezo (2009) and Parisi et al. (2016) posited that problems posed by asynchronous approval are likely to worsen as more traits are introduced into a wider variety of crops and as the gaps between regulatory approvals grow. The committee agrees that this is likely and that trade disruptions related to crops with GE traits—whether because of asynchronous approvals or violations of tolerance thresholds—are likely to continue to occur and to be expensive for exporting and importing countries.
FINDING: Trade disruptions related to crops with GE traits due to asynchronous approvals and violations of tolerance thresholds are likely to continue to occur and to be expensive for exporting and importing countries.
Effects of Regulation on the Development and Introduction of New Genetically Engineered Crops
The development and introduction of new GE crops are affected by regulatory-approval processes. In the case of GE food and crops, as with other products, the purpose of any regulatory product-approval system is to benefit society by preventing harm to public health and the environment and preventing economic harm caused by unsafe or ineffective products (as defined by the relevant regulatory or legal standard). In effect, regulations operate as a bar to market entry of products that do not meet legal requirements for safety and efficacy. Regulations also provide a social and market benefit by helping to ensure consumer confidence in the safety and efficacy of new products (Stirling, 2008; Millstone et al., 2015).
Regulatory-approval systems also impose a variety of costs. Regulations impose direct costs on product developers to compile the data required to complete regulatory review. The time, delay, and uncertainty
associated with regulatory review and approval before a product can be marketed also constitute an indirect cost for product developers.
In addition to increased costs for product developers, regulations can create broader social costs. To the extent that a new product provides agronomic, economic, or other benefits, such as those for GE crops discussed elsewhere in the chapter, any delay in bringing the product to market associated with the regulatory review process defers the benefits and thus imposes indirect costs on those who would otherwise have enjoyed the benefits of the new product. Furthermore, regulatory processes are by nature knowledge-learning processes, and the possibility exists that regulators will make mistakes, such as type I errors which entail approving unsafe or ineffective technologies and type II errors which entail rejecting beneficial technologies (Carpenter and Ting, 2005, 2007; Hennessy and Moschini, 2006; Ansink and Wesseler, 2009).22 Either type of error imposes unnecessary societal costs. Quantifying and comparing direct and indirect costs and benefits are notoriously difficult. As discussed elsewhere in the chapter, benefits associated with adopting GE crops may be estimated by ex ante or ex post studies but with substantial caveats and uncertainties. Similarly, estimating the benefits of regulation (including harm avoided) is at least equally challenging. The benefits of harm avoided is evident in some of high-profile cases already mentioned in Chapter 5 and earlier in this chapter’s section “Constraints on Trade.” Aventis CropScience, the maker of StarLink™ maize, paid over $120 million to settle various lawsuits (Cowan, 2013; see “Food Allergenicity Testing and Prediction” section in Chapter 5). Journalists have estimated the total economic damage at nearly $1 billion (Lueck et al., 2000). The cost of LibertyLink rice to the European rice industry has been estimated at €50–110 million, which is equivalent to 27–57 percent of the total market’s gross margin (Stein and Rodríguez-Cerezo, 2009). Furthermore, weak regulatory oversight led to the overuse of glyphosate in maize, cotton, and soybean crop production, which has been credited with the emergence of glyphosate-resistant weeds (Livingston et al., 2015). One USDA study found that maize growers with glyphosate-resistant weeds lost $148–165/hectare compared with maize growers who did not face glyphosate-resistant weeds (Livingston et al., 2015). Glyphosate resistance might have been delayed if regulators had followed the advice of some weed scientists who foresaw the problem and made recommendations (Mortensen et al., 2012).
An important issue is that estimates of regulatory costs do not capture less easily monetized issues. For example, it is difficult to measure the cost to farmers and society of losing the herbicide glyphosate because it is con-
22 Although all references describe models that incorporate regulatory errors in decision-making, the committee was not aware of any studies that apply these approaches explicitly to GE crops.
sidered more benign than many of the chemicals that it replaces (Mortensen et al., 2012). It is similarly difficult to capture the cost of a loss of public trust in a product, an industry, or the legitimacy of a regulatory system (Stirling, 2008; Millstone et al., 2015).
As discussed in Chapter 9, regulatory systems vary in their approaches to balancing potential costs and benefits. Regulatory systems that are more precautionary and weighted toward preventing type I errors can impose relatively higher costs and uncertainty for producers to complete regulatory review.23 Whether any one particular regulatory approach does better than another in terms of achieving optimal net social welfare through balancing costs (such as innovation lag) and benefits (such as harm avoided) is a topic well beyond the scope of this report. Furthermore, the tradeoffs of benefits and costs involve policy value choices likely to differ among societies and stakeholders (see Chapters 5 and 9).
One of the predominant concerns raised about the costs associated with regulatory approval of new GE crops and foods is that they may operate as a barrier to innovation in GE crops (Kalaitzandonakes et al., 2007; Bayer et al., 2010; Graff et al., 2010; Phillips McDougall, 2011). The costs of obtaining regulatory product approval for new GE products may operate as a barrier to entry particularly for public-sector and small private firms (Falck-Zepeda et al., 2012; Smyth et al., 2014c). Jefferson et al. (2015) and Graff and Zilberman (2016) have argued that regulations can be “excessively strict” and result in unnecessary barriers.
23 A “real-options model” has been used in several studies to estimate the effect of a decision-making model that compares a precautionary approach that favors delaying a regulatory approval pending additional information with a decision-making model that favors making an immediate decision with existing information (Beckmann et al., 2006; Wesseler et al., 2007; Wesseler, 2009). Kikulwe et al. (2008) used the real-options model to examine the potential adoption in Uganda of banana with genetically engineered resistance to black sigatoka fungus. Their estimations considered reversible and irreversible costs and benefits and showed that the opportunity cost for regulatory delays implies forgoing benefits of $179–365 million per year. Furthermore, the authors estimated that if social irreversible benefits of about $303/hectare are considered, farmers who adopted the GE banana would not be willing to pay more than $200/hectare for transaction, R&D, and regulatory costs. When area planted with bananas in the country was taken into consideration, the results implied that the total cost of development, including regulatory costs and technology transfer, cannot be higher than $108 million for Ugandan farmers to adopt the GE banana.
Demont et al. (2004) and Wesseler et al. (2007) used the real-options model to examine the effects of the potential introduction of HR sugar beet and Bt and HR maize into the EU for cultivation. Their results indicated that there may be good economic reasons and incentives for producers to adopt and use the technology as measured by the aggregation of income accruing to farmers. However, estimated effects on a country’s income are expressed on a per capita basis and estimated favorable income effects are quite small; thus, it may be reasonable to postpone the decision of whether to approve both crops in the EU. In other words, estimated benefits accrued to a small number of producers and there was no effect in the welfare of all citizens.
The published literature, however, provides only an incomplete understanding of the marginal direct and indirect costs associated with the regulatory-approval process for GE crops that would be needed to assess the effects of regulatory costs on innovation and market entry. Understanding the effects of regulatory costs requires, for example, the exclusion of costs of research and product development that would be necessary to get a product to market even in the absence of a regulatory-approval process. Typically, however, firms zealously guard product-development estimates because they may provide a competitive advantage to competitors in tight and often imperfectly competitive markets (Kalaitzandonakes et al., 2007). The published studies of the cost of regulatory approval have not used a consistent methodology, and it is not always clear what costs are included and how they have been estimated. Cost estimates in the literature vary substantially and can be influenced by many factors, including overhead and management costs and costs of basic early discovery and R&D.
One study estimated that it costs private-sector firms about $35.1 million to achieve regulatory compliance, which encompasses approval of the commercial cultivation of a GE crop in at least two countries and import approval of the crop for food and feed purposes in at least five markets (Phillips McDougall, 2011). Relying on a Monsanto document, Graff et al. (2010) estimated that costs of commercializing a single trait range from $50 to $100 million and that about 70 percent of that goes for the development stage in which regulatory compliance is secured. Estimates by Kalaitzandonakes et al. (2007) were much lower: They calculated that the range of direct compliance costs of obtaining regulatory approval of a private-sector–developed GE event in 10 markets (Argentina, Australia, Canada, China, the EU, Japan, Korea, the Philippines, Taiwan and the United States) was $7.1–14.4 million for IR maize and $6.2–14.5 million for HR maize.
The committee heard directly from large and small companies about the cost of regulation. Representatives of Bayer CropScience, Dow AgroSciences, Dupont Pioneer, and Monsanto made presentations to the committee at its public meeting in December 2014. The representatives of Dupont Pioneer and Dow AgroSciences cited the estimated cost of regulatory compliance in the Phillips McDougall (2011) study (Endicott, 2014; Webb, 2014). The Dupont Pioneer representative noted that the development of a GE variety was similar to the development of a conventionally bred hybrid variety but that it typically takes 13 years to bring a GE variety to the market (versus 7 years for a conventionally bred hybrid) because of the regulatory requirements (Endicott, 2014). The reason for that difference is that, although compositional analyses are often performed on new varieties to demonstrate that they are within normal genetic variation, toxicity tests and environmental assessments that are not performed on conventionally bred crops are
performed on GE crops (Fraley, 2014). The Monsanto representative stated that the regulatory costs are manageable for large-area crops such as maize but are problematic for small-area crops (Fraley, 2014). The representative of Bayer CropScience posited that unnecessary data requirements and lack of harmony in regulatory systems among countries make regulatory frameworks too expensive for developing countries to operate, and this discourages them from adopting available GE crops (Shillito, 2014a). The lack of regulatory harmony on the international scale also curtails dissemination of new GE varieties because companies cannot afford the costs of registering the same GE variety multiple times for different markets. Some developers have opted to limit the distribution of their products to a country or a region to minimize expenses of complying with varied regulatory requirements in different countries (Shillito, 2014b).
The committee heard from representatives of smaller companies in a number of webinars. A representative of Forage Genetics International, which has developed GE varieties of alfalfa, estimated that it cost $50–75 million to commercialize a new GE variety. That estimate included trait development, product development, and regulatory approvals in the countries where the alfalfa would be grown or where harvested alfalfa would be sold; roughly half the costs could be attributed to meeting regulatory requirements in countries growing or buying GE alfalfa (McCaslin, 2015). A Simplot Plant Sciences representative estimated that the cost of getting the company’s first nonbrowning potato variety through the U.S. regulatory system was $15 million (Richael, 2015); this estimate was for regulatory costs alone and did not include varietal development costs. The cost was presumably higher for its second nonbrowning potato variety which, unlike the first variety, included a plant-incorporated protectant that provides resistance to the late blight fungus (Richael, 2015). The estimate also did not include costs associated with regulatory approval in export markets. The president of Okanagan Specialty Fruit, an eight-person company that developed the nonbrowning apple, suggested that the out-of-pocket regulatory costs of the company’s first approved product were much lower, around $50,000. However, the long timeframe to gather the field data for the submission to the U.S. and Canadian regulatory agencies (5–6 years) and to respond to and wait for responses from the regulatory agencies before regulatory approval (5 years for the United States, over 3 years for Canada) entailed a substantial cost in staff salaries during a time in which the company had no commercial product. Total costs were estimated to be about $5 million (Carter, 2015; N. Carter, Okanagan Specialty Fruit, personal communication, January 12, 2016). Unlike Forage Genetics International and Simplot Plant Sciences, Okanagan Specialty Fruit did not pursue regulatory clearance from other markets because there were no plans to export.
The committee also heard from a government scientist and a university researcher who developed GE fruit trees and took them through the U.S. regulatory process. Researchers at Cornell University and the University of Hawaii cleared the U.S. regulatory process for the VR papaya in 1998 (Gonsalves, 2014). Regulatory compliance was also sought in Japan because it is a large export market for U.S. papaya. The process started in 1999 and was finished in 2011; part of the reason that it took so long was that the U.S. scientists did not have the time or funding to devote full-time attention to navigating the regulatory process (Gonsalves, 2014). Scientists at USDA’s Agricultural Research Service began the regulatory-compliance process in 2003 for a GE plum variety with resistance to plum pox virus; the process was completed in 2011 (Scorza, 2014). The VR papaya was the only commercialized GE crop grown in the United States in 2015 that was developed through the public sector. The president of the Two Blades Foundation, a research organization that supports the development and deployment of durable disease resistance in crops, told the committee that many GE traits for disease resistance have been demonstrated by university scientists but that the existing regulatory-compliance costs are prohibitive for these researchers or their institutions to turn a proof-of-concept study into a commercial product (Horvath, 2015).
Costs of regulatory compliance are considered even more constraining for developing countries, in which a small firm or public research organization may consider compliance too expensive and the uncertainty too great (Bayer et al., 2010). Estimates of direct regulatory costs for four GE crop events (Bt eggplant, VR tomato, Bt rice, and VR papaya) being advanced by public institutions in the Philippines when the Bayer et al. study was conducted in 2007–2009 were reported to range from $249,500 to $690,680. Those costs are substantially lower than the $2.6 million estimated by Manalo and Ramon (2007) for the technical and commercial development of Monsanto’s IR maize event, MON810, in the Philippines. Cost discrepancies in the Philippines studies can be attributed partially to the fact that the direct costs for the four public-sector events were for a small number of activities taking place in the Philippines and excluded R&D, technology transfer, and compliance testing for the events or their novel proteins that took place outside the Philippines or had already been completed for like products. The cost of MON810 commercialization in the Philippines reflects the studies and activities conducted from the gene-discovery phase to the first set of laboratory and greenhouse experiments in the United States, as well as costs incurred in the Philippines. Furthermore, if the approval were to scale beyond the Philippines to the standard discussed above (approval of cultivation in two countries and import approval in at least five markets), the estimate for regulatory compliance would be about $55 million (Pray et al., 2006).
Cost estimates in some of the published studies, particularly in the developing countries where regulatory frameworks are still in development, are more of the ex ante type; hence, costs are derived from “best-guess” estimates. In the after-the-fact studies, the approach simply followed the collection of data on costs of complying with regulation. The estimates do not include social costs, such as government-sector regulatory costs, social-welfare losses, or transitional and indirect costs (Falck-Zepeda, 2006), nor do the studies reflect opportunity costs of capital that potentially could be invested elsewhere, as is done in the pharmaceutical industry (DiMasi et al., 2003).
The results available in the literature showcase the need to use robust, consistent, and rigorous methods to estimate the cost of regulations and the effects of regulation on innovation. The methods chosen will need to be flexible enough to accommodate a changing regulatory environment that may affect activities performed to demonstrate safety or to obtain regulatory approval by the appropriate regulatory agency and to promote cost efficiency within the system, especially in developing countries. There is also a need to acknowledge that regulations refer to more than biosafety concerns and include a broad array of social, cultural, economic, and political factors that influence the distribution of risks and benefits, such as the intellectual-property and legal frameworks that assign liability. Such concepts as responsible innovation refer to efforts to move beyond expert-driven biosafety assessments and to implement inclusive and deliberative approaches to assess and distribute risks and benefits (Macnaghten and Carro-Ripalda, 2015). Such governance issues are discussed in more detail in Chapter 9.
FINDING: Regulation of GE crops inherently involves tradeoffs. It is necessary for biosafety and consumer confidence, but it also has economic and social costs that can slow innovation and deployment of beneficial products.
FINDING: Estimates of the regulatory costs of GE crop development vary widely by study and by trait-crop combination.
RECOMMENDATION: A robust, consistent, and rigorous methodology should be developed to estimate the costs associated with taking a GE crop through the regulatory-approval process.
The outputs of research can exist as private goods or as public goods. A private good must be purchased to be used, and its use by one person
makes it unusable by another person; thus, private goods are excludable and rivalrous. A public good is available to people without payment, and its use by one person does not make it unusable by others; thus, public goods are nonexcludable and nonrivalrous. Public goods are traditionally associated with the public sector (universities and government laboratories) and private goods with the private sector (industry), although this distinction is becoming less obvious. GE crops research outputs can exist as private or public goods, depending on what kind of intellectual-property restrictions developers use to limit access to the outputs.
For much of the history of agricultural crop research and improvement, crop seeds have been treated as having characteristics consistent with public goods. Farmers regularly saved a portion of their harvest as seed to be planted in the next year (Kloppenburg, 2004). Seeds from open-pollinated and self-pollinated crops under those circumstances were nonexcludable in that the farmers did not pay for them and nonrivalrous in that seeds could be propagated, replanted, and exchanged. Therefore, as Halewood (2013:285) noted, “For millennia, very little (or no) human effort was expended to exclude access to plant genetic resources for food and agriculture.” Until the 20th century, seeds were considered public goods (Halewood, 2013). However, beginning in the early 20th century, some crop seeds started to transition to private goods with changes in the ability of developers to limit access through intellectual property and other instruments. In the United States, that shift occurred through a number of biological, legislative, and judicial changes and culminated in the potential to patent all plants (Box 6-7).
Intellectual-property regimes, especially patents, play a substantial role in shaping the kinds of products available (and often therefore the planting decisions available) to farmers. Patent law, seed-market concentration, and public-research investment can have various social and economic effects. Because of the large contributions that U.S. companies and U.S. universities make to research in crop improvement, much of the discussion and literature focuses on the intellectual-property regime of the United States.
There are benefits of a strong intellectual-property regime, especially patents. First, patents make an innovation publicly known through publication, as opposed to trade secrets, which limit information exchange (Dhar and Foltz, 2007). Second, by providing protection to an inventor, patents create an incentive to invest in R&D in that there is a chance to secure a return on the initial investment. Third, patents can facilitate the assigning of risks and responsibilities for an invention in the cases of unintended consequences. In the specific cases of agricultural crop R&D, the applica-
tion of patent protection to GE crops means that firms can secure a return on their research investments in GE seeds and thus have an incentive to apply their resources to more agricultural crop research and innovation (Fuglie et al., 2012).
Despite those benefits, a number of concerns have been expressed about the application of the patent system in the United States. A National Research Council report from 2004 on how to update the U.S. patent sys-
tem for the 21st century concluded that high rates of innovation indicated that the patent system should not be changed in any fundamental way. However, the report also highlighted legal and economic changes over the last few decades that were “putting new strains on the system” (NRC, 2004:1). The report was about the U.S. patent system in general and not specific to innovation in agricultural crops, but some of the strains noted are relevant to challenges and concerns associated with the application of
utility patents to plants, including GE crops. The report found that the volume of patenting activity had increased and that patent-holder rights had been strengthened in the United States and internationally. It also observed that some firms were engaging in strategic patenting to gain access to others’ technologies and to avoid future infringement litigation24 and that the costs of the patent system were increasing. Of specific relevance to agricultural crops, the report concluded that new fields of research (such as living organisms) had become patentable, but their effects on patent law had not been systematically studied. Furthermore, the report conceded that it was possible that patents on foundational discoveries and research tools might impede scientific progress. The report asserted that the right policies are needed to promote synergy among the U.S. patent system, innovation, and economic growth.
The findings of the 2004 National Research Council report need to be examined in relation to the application of patents to GE crops as well as conventionally bred crops. A growing body of work questions whether patents are conducive to innovation in agriculture. The claim is that patents limit farmer and crop-researcher experimentation and development (Kloppenburg, 2010). Since the mid-1990s, a broad array of biotechnology researchers have recognized the need to “examine the effects of intellectual property protection on the development, dissemination, and utilization of research tools” (NRC, 1997:viii). In the biomedical field, the National Institutes of Health (NIH) recognized that the goal of commercialization could conflict with the broad dissemination of research findings and research tools and established a policy for its grant recipients to promote the sharing of findings and tools (NIH, 1999). After NIH’s policy change, the U.S. Congress amended the 1980 Bayh-Dole Act in 2000 to include this statement: “‘It is the policy and objective of the congress to use the patent system to promote the utilization of inventions arising from federally supported research and development . . . to ensure that inventions made by nonprofit organizations and small-business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery’” (emphasis added by Reichman et al., 2010:3). However, a policy similar to that of NIH has not yet been implemented in the United States for agricultural research.
An effort has been made to use biological open-source arrangements to establish a protected plant genetic-resource commons (Jefferson, 2006;
24Cahoy and Glenna (2008) have described the problem of patent thickets in bringing a new agricultural crop to market. The United States tends to allow a private ordering to overcome the patent thickets, which generally occurs when a large company purchases or makes a strategic alliance with a smaller company to secure the smaller company’s patents. Private ordering may be an efficient strategy for sorting out thickets, but it has adverse outcomes, the most prominent being greater economic concentration (see section “Seed-Market Concentration” below).
Kloppenburg, 2010). Protecting the commons means that genetic resources are not treated as part of the public domain because that would make crop improvements vulnerable to private appropriation. Rather, protecting the commons is a strategy for creating intellectual-property protection so that the commons cannot be appropriated (Kloppenburg, 2010).
That effort has led to the creation of the Open Source Seed Initiative (OSSI) at the University of Wisconsin, an organization dedicated to bringing together farmers, breeders, and small seed companies to share plant genetic resources. Another organization with a similar mission is CAMBIA-BiOS (Biological Innovation for Open Society). Founders of those organizations have acknowledged that there are substantial differences between computer software (the basis for the open-source model) and agricultural germplasm (Jefferson, 2006; Kloppenburg, 2010). Halewood (2013:292) observed that the costs of software creation are “trivial compared to those associated with globally dispersed costs and time associated with the generation, maintenance and sharing of” plant genetic resources for food and agriculture. However, Jefferson (2006) and Kloppenburg (2010) both emphasized that OSSI and CAMBIA-BiOS are building on the open-source computer-software model to promote their organizational missions.
There is good reason to draw comparisons with the software model. Pearce (2012) noted that open-source software is outperforming the intellectual-property–protected software generated by the Microsoft Corporation, one of the largest and most powerful private companies in history. Furthermore, Pearce reported that many existing technologies could solve numerous problems and save millions of lives if intellectual-property protections were not limiting access. Giving smallholder farmers in developing countries greater control over their seeds, with other forms of agricultural knowledge and technology, may be foundational to promoting their social welfare (Kloppenburg, 2010; Wittman, 2011).
Some have argued that patents on GE crops should be regulated under the 1970 Plant Variety Protection Act or the 1978 Convention of the International Union for the Protection of New Varieties of Plants (Ervin et al., 2000). Such a policy change would enable university scientists to conduct research without concern about patent infringement; that would be in line with a suggestion made by the 2004 National Research Council report to shield university researchers from liability related to the noncommercial use of patent inventions (NRC, 2004). In addition to promoting crop innovations, such a policy change might increase biodiversity (Hubbell and Welsh, 1998; Ervin et al., 2000) and would allow farmers to save, replant, and crossbreed patent-protected crops legally.
In 2015, the legal constraints were such that when a crop invention—GE or non-GE—was patented, users had to pay a licensing fee or otherwise gain permission for the right to plant it and to conduct research on it.
Reactions to those constraints have played out in complex ways around the globe, with crops like Bt cotton in India and HR soybean in Brazil. In both cases, farmers saw advantages to using what Herring (2016) referred as “stealth seeds.” National governments and private companies have sought to control the spread of stealth seeds because of the potential biosafety risks and the lost licensing revenue for the patented seeds (Herring, 2016).
The implication of those legal constraints for university and government researchers has been that they must secure material-transfer agreements to gain access to patented materials for research purposes; this has been cited as a potential obstacle to innovation (Wright, 2007; Lei et al., 2009; Glenna et al., 2015). Some academic researchers contend that patenting GE crops facilitates university–industry knowledge-sharing, innovation, and the commercialization of useful goods; that the outcomes enhance social welfare; and that barriers to university–industry collaborations should be overcome (Etzkowitz, 2001; Bruneel et al., 2010). However, some studies indicate that intellectual-property protections may be hindering research and innovation (Lei et al., 2009) in that a firm or university holding a patent on plant germplasm may legally block research on the crop. The Public Intellectual Property Resource for Agriculture, a clearinghouse for intellectual-property information in agricultural biotechnology, was developed to address some of the concerns raised by patents on GE crops, such as patent thickets and constraints on research (Graff and Zilberman, 2001). However, university scientists report that patent protections limit their ability to publish research findings, constrain university research freedom, inhibit research that might be useful in evaluating the efficacy and environmental effects of a GE crop, and, in the long term, may reduce innovation (Wright, 2007; Waltz, 2009; Glenna et al., 2015). As discussed above, the 2004 National Research Council report on the U.S. patent system recommended that there be “some level of protection for noncommercial uses of patented inventions” (NRC, 2004:82).
Results from studies on the overall effects of intellectual-property protections on crops are mixed. In 2005, the International Seed Federation commissioned a study of the revenue lost to farmers saving seed (Le Buanec, 2005). It is generally recognized that most farmers in developing countries rely on seed-saving, but seed-saving is also common in developed countries. After surveying 18 countries to determine the extent of farmers’ saving seed of improved crops, the author concluded that each year seed firms lost nearly $7 billion and the average plant-breeder royalty losses were just over $472 million (Le Buanec, 2005). From farmers’ perspective, that is about $7 billion that they do not need to pay for seeds each year. For private seed firms, that is lost revenue and a disincentive to invest in seed R&D. There are broad policy questions about getting the balance right to
promote innovation in the seed sector while recognizing the tight margins that farmers face.
However, in the specific case of intellectual-property protection on private investments, there is robust evidence in developed and developing countries that the effects have been positive (Fernandez-Cornejo, 2004; Eaton et al., 2006; Pray and Nagarajan, 2009). In a study in India, Kolady et al. (2012) examined the effect of improving seed policies that incorporated intellectual-property protection on private investments and on yields of selected crops. In the study, hybrid crops (maize and pearl millet) had enhanced intellectual-property protection under the improved seed policy regime, whereas self-pollinated crops (rice and wheat) did not. The study found a statically significant effect on yields of hybrid crops after changes in the seed-policy regimes that included intellectual-property protection but no effect on yields of self-pollinated crops. The study provided evidence that policy reforms without some intellectual-property protection are insufficient to enhance private investments in the seed sector. Results from the Kolady et al. (2012) study were similar to those on the effect of the Plant Variety Protection Act on yields of selected crops in the United States (Naseem et al., 2005; Kolady and Lesser, 2009).
A separate concern about the patent system as it is applied to GE crops is related to the responsibilities for a patent holder and for those who purchase the right to use the patent. Some research has indicated that judicial decisions in the United States and Canada have led to the “technology developers gaining some of the most important benefits of ownership while remaining exempt from its liabilities” (Pechlaner, 2012:13). On the one hand, farmers’ rights to ownership of the GE crop seeds that they purchase are limited to planting the seeds and selling the grain. They cannot save the seed. Because the GE trait cannot be separated from the germplasm, the company effectively owns the germplasm. On the other hand, farmers in the United States and Canada are held responsible for gene flow if they plant seeds that they know were fertilized by GE pollen from a neighboring farm. That creates a double standard in that the firm maintains ownership of the gene when the farmer wants to replant it, but the firm does not bear responsibility for any damage caused by the gene when it blows into a neighbor’s field. If the patent rights were applied consistently, the firm would own the gene and be responsible for the damages from gene flow or the farmer would own the plant and be responsible for the damages (Kinchy, 2012; Pechlaner, 2012).
Finally, intellectual-property regimes need to be appropriately applied and checks and balances are needed to ensure that patents and other intellectual-property protection instruments do not overstep intended boundaries or objectives, which could cause unnecessary legal disputes. The case of the yellow bean (Phaseolus vulgaris) is a cautionary tale about
the inappropriate application of utility patents to crops, in this case to a conventionally bred variety. Two varieties of traditional yellow beans were developed independently in Peru and Mexico. Mexican bean breeders eventually crossed the two varieties to create a new yellow bean, and many Mexicans adopted yellow beans into their diets. In the 1990s, a firm in the United States obtained yellow bean seeds, planted them for 3 years, and then applied for a patent on the bean, claiming that the color was novel. The U.S. Patent and Trademark Office awarded the patent, so farmers and marketers who were growing and selling the yellow bean in the United States were now infringing on a patent. Patents are only valid in the issuing country, however, so someone from Latin America who tried to export yellow beans to the United States could find himself or herself infringing on a patent. The patent was later revoked because scientists at the University of California, Davis used DNA fingerprinting technology to demonstrate that the yellow bean was not novel (Pallotini et al., 2004). That case has at least two implications: Molecular-genetic research techniques can be useful in disqualifying patents on conventionally bred crops, and the granting of utility patents on crops has favorable and unfavorable social effects. Whether a patent is applied to conventionally bred or GE crops, institutions with substantial legal and financial resources are capable of securing patent protections that limit access by small farmers, marketers, and plant breeders who lack resources to pay licensing fees or to mount legal challenges. The patent on the yellow bean was thrown out because a group of researchers at a land-grant university took an interest in the case, but not all farmers, breeders, and seed and grain marketers have the resources to challenge such inappropriately issued patents.
Another concern related to utility or plant patents for GE crops is their potential contribution to the concentration of the seed market. Concentration is a concern because the purported benefits of a competitive market, such as fair prices, are likely to be diminished (Glenna and Cahoy, 2009). Market concentration can be documented in at least three ways. First, one can look at the change in the market share of the largest firms in an industry. Fuglie and Toole (2014) used the four-firm concentration ratio. According to that measure, when four or fewer firms control more than 40 percent of a market, a market is considered to be potentially concentrated (Breimyer, 1965; Connor et al., 1985). Fuglie and Toole found that globally four firms controlled 21.1 percent of the seed-market share in 1994, 32.5 percent in 2000, and 53.9 percent in 2009. Such growth indicates a steady increase in market concentration may be correlated roughly to the period of the introduction and widespread adoption of GE crops
A second way to document market concentration is to show how a small number of large companies have gained control of the intellectual property associated with GE crops. Since GE crop research began in the 1980s, 37 companies have secured patents on GE maize and 118 companies have secured patents on non-maize GE crops. However, through buyouts and strategic alliances, just three companies controlled 85 percent of patents on GE maize in 2008, and three companies controlled 70 percent of patents on non-maize GE crops (Glenna and Cahoy, 2009). That constitutes substantial concentration.
A third way is the Herfindahl-Hirschman Index (HHI), which is an indicator that the U.S. Department of Justice (DOJ) uses to measure market concentration. The HHI is used to determine the average market share of firms in an industry. The HHI is calculated by summing the squared market shares (expressed as fractions or whole percentages) for all firms in an industry. DOJ defines a market as being moderately concentrated when it reaches an HHI score of 1,000; a score above 1,800 indicates high concentration. Fuglie and Toole found that the HHI for the global crop-seed sector was 171 in 1994, 349 in 2000, and 991 in 2009. However, their calculations included the entire seed sector and the entire world, as opposed to only maize, soybean, and cotton in the United States. Schenkelaars et al. (2011) found that the maize, soybean, and cotton sectors in the United States had HHI scores well above 1,800 by 1999; that high score has continued into the 2000s.
Nevertheless, the ability of a firm to exercise market power may not imply that market power is having an adverse effect. Falck-Zepeda et al. (2000) showed that even though IR cotton adoption occurred in a market in which the firm that developed it had substantial market power—indeed, that firm was the only supplier of the technology—the innovator firm’s share of additional benefits produced from Bt cotton adoption was similar to the share captured by producers that adopted Bt cotton. Kalaitzandonakes et al. (2010) and Kalaitzandonakes (2011) found evidence of moderate market power in the seed industry in the United States but also dynamic market efficiency derived from observed firm profits and investments in R&D, innovation, and product stewardship efforts from 1997 to 2008.
More research is needed to determine whether market power is affecting GE seed prices. Stiegert et al. (2010) showed that the prices of seeds with mul-
25 This situation in agricultural markets is not unique to crop seeds. Fuglie and Toole (2014) found similar levels of concentration in crop chemicals, animal health, farm machinery, and animal genetics.
tiple traits (also referred to as stacked traits, see Box 3-1) are lower than the sum of individually priced traits. The implication is that firms are attempting to capture additional gains from farmers by segmenting markets or bundling products with differentiated pricing mechanisms and demands or that economies of scale and scope are shaping seed markets. As Shi et al. (2008, 2010) have shown, the prices of individual traits were larger when added together than the prices of the stacked variety with all traits. Subadditive pricing, in which the sum of the individual traits is less than the stacked final product, is consistent with economies of scope in seed production. Economies of scope arise when it is cheaper to produce two products together than to produce them separately. Shi et al. (2009) showed increased market concentration as a causal factor in higher seed prices, but they also indicated that price increases may have been dampened by other market factors. Another issue that needs to be studied is how trait stacking may lead to the sale of more expensive seed than farmers might otherwise need. For example, a farmer might want only the HR trait in a maize variety but be unable to find a maize variety that does not also include Bt traits (see discussion of resistance evolution and resistance management in Chapter 4); this may lead to higher seed costs for the farmer in that the farmer does not need the added trait but is paying for it.
Increasing seed-market concentration has at least two potentially adverse outcomes. First, if the market is noncompetitive, farmers are likely to face higher than competitive market pricing. The 2010 National Research Council report on farm-level impacts of GE crops in the United States noted that seed prices increased dramatically for GE crops from 1994 to 2008. It also noted that various other factors—including yield increases, reduced expenditures on other inputs, labor savings, and improved weed control—outweighed the added costs (NRC, 2010a). However, research has not yet determined whether farmers would have even greater cost savings if the market for seeds were more competitive.
Second, market concentration in the hands of private firms may be a factor behind public concerns about GE crops. Studies have revealed varied public uncertainty and public trust in the institutions that are generating and testing GE crops and the food that is produced from them. For example, the public tends to trust university scientists, medical professionals, consumer-advocacy organizations, environmental organizations, and farmers but tends to have less trust in the federal government, mass-media sources, grocers, and the agricultural-biotechnology industry (Lang and Hallman, 2005; Lang, 2013). Huffman and Evenson (2006) picked up on variation in public trust when they observed that nearly all GE crops have been developed by agricultural-biotechnology firms to reduce costs for farmers. They contended that products from public-sector research that generated benefits for consumers “would do much to alleviate political concerns regarding [GE] foods” (Huffman and Evenson, 2006:285).
Because many of the largest firms developing GE crops are transnational corporations, the concerns about market concentration and the resulting social and economic consequences may extend to international markets. Those firms have aggressively sought to get international intellectual-property protections that are as strict as GE crop patents are in the United States (Strauss, 2009). According to Strauss (2009), the U.S. government’s support and the efforts of leading firms that developed GE crops were two factors that led to the establishment of the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights. Another implication is that, if U.S. patent policy is contributing to the curtailment of agricultural research, it is likely eventually to affect agricultural R&D globally (Jefferson et al., 2015).
Investment in Public Research
The 2010 National Research Council report on farm-level impacts of GE crops in the United States listed four kinds of contributions required of the public sector. First, the private sector lacks adequate incentive to focus on basic research because the time between research and application is often long; the public sector must meet this need. Second, a strong and independent public sector is needed to contribute to regulatory review of the products that private firms seek to market. Third, both public-sector and private-sector researchers have contributed and will probably continue to contribute to crop improvement. Fourth, as in the case of basic research, the private sector lacks adequate incentive to invest in minor and orphan crops;26 GE crops are research-intensive and therefore expensive to create and promoting R&D in the public sector that focuses especially on generating public goods will be essential to generating GE crops that enhance economic, social, and ecological well-being broadly (NRC, 2010a).
Because of the private sector’s lack of incentive to invest in research on minor and orphan crops, university and government researchers typically have been responsible for it. However, Welsh and Glenna (2006) found that, with the rise of GE crop research and university collaborations with the private sector to generate GE crops, university crop-research portfolios have begun to focus more on major crops than on minor crops. The shift in effort is probably related more to the passage of the 1980 Bayh-Dole Act, which enabled universities to claim title to inventions and to license them
26 The U.S. Food Quality and Protection Act of 1996 defined a major crop as a crop grown on more than 121,405 hectares (or 300,000 acres). Of the more than 600 crops grown in the United States, fewer than 30 qualify as major crops. The term minor crop applies to the rest. Orphan crops are those, such as cassava and cowpea, typically grown by resource-poor, small-scale farmers.
to the private sector, than simply to the increase in GE crop research. Since the passage of the act, U.S. universities have made modest revenues from technology transfers and licensing revenue; however, this has come at the cost of changes in university incentive structures (Huffman and Evenson, 2006). Because patented crops are expected to return licensing revenue to the university, policy-makers have been prone to use the returned money to justify reducing public support of research universities (Glenna et al., 2007). Huffman and Evenson (2006:291) suggested that the tradeoff may be beneficial for the university and the private sector, but they acknowledged that some of the changes made to attract private investment, research collaborations, and other private activities “may be seen as being in conflict with public interest or responsible behavior of a public institution.”
There is a continuing debate over whether private funding and the pursuit of intellectual-property protections are crowding out public-interest research (Fuglie and Toole, 2014). Crowding out refers to the use of public funds to do research that should otherwise be done by the private sector. It can be used to describe such a scenario as when a university researcher who is collaborating with a private firm becomes more focused on generating private goods than on generating public goods or conducting public-interest research. Some research has indicated that many scientists who are involved in public–private research collaborations and who are generating intellectual property are also generating more public goods in the form of journal publications (Bonte, 2011) or that university research tends to complement industry research (Toole and King, 2011). If either is the case, crowding out is not occurring directly. However, other studies have found evidence of at least partial or temporary crowding out (Buccola et al., 2009) and in some cases substantial crowding out (Alfranca and Huffman, 2001; Hu et al., 2011). Huffman and Evenson (2006) noted that clear definition of public and private institutional responsibilities may reduce confusion and promote synergistic cooperation. However, they also stated that a greater involvement by universities in GE crops R&D would foster the proliferation of more public goods from GE crop research and might even help to “alleviate political concerns regarding [GE] food” (Huffman and Evenson, 2006:285). Schurman and Munro (2010) supported the latter perspective when they explained that active stakeholders may raise questions about the effects of GE crops on human health and the environment but really be more concerned about the ethical implications of patenting living things, private agricultural firms gaining a greater share of the agriculture and food system, whether industry scientists and regulatory agencies can be trusted when so much profit is at stake, whether universities and university scientists are shifting their research agendas toward the private interest at the expense of the public interest, and whether small farmers in industrialized and developing nations will be helped or harmed by the institutional ar-
rangements that accompany the technology. Although the questions raised by active stakeholders cannot necessarily be generalized to the broader public, their concerns reflect underlying conflicting theories of justice that may provide an explanation of differences in perspectives about the value of GE crops. Social scientists have spent many decades in generating empirical evidence to further the ethical debates, even though the debates remain unresolved (Fuglie and Toole, 2014). More research, policy-maker attention, and public deliberation are needed to determine whether new policies and resources should be directed at contributing to the social welfare derived from GE crops.
King and Heisey (2007) made a strong case for supporting the generation of public knowledge in agricultural R&D, particularly as related to GE crops. Their research indicated that vibrant public research institutions have yielded important social benefits. Lopez and Galinato (2007) used data from rural Latin America to contrast the social benefits that resulted from public subsidies for the creation of private goods with the benefits that resulted from public investment in the creation of public goods. Their findings supported findings of studies around the world that public subsidies for private goods fail to lead to higher investments, employment, or productivity, whereas rates of return on funding for public goods are high. After a review of research into crop-productivity gains during the 20th century, Piesse and Thirtle (2010:3036) concluded that the crop-productivity achievements “required massive and sustained expenditures on R&D” and that there is “no doubt that R&D expenditures have led to these productivity gains.” Conversely, although private expenditures on plant breeding increased by nearly 250 percent in real dollars from 1980 to 1996 (Heisey et al., 2002), Fuglie et al. (2012) found that private-sector R&D does not contribute to agricultural productivity.
Of course, crop-productivity gains do not equally enhance social welfare for everyone inasmuch as greater yields can depress commodity prices to the detriment of farmers. However, enhanced agricultural productivity can contribute to greater availability of food for many people and thus enhance social welfare. A substantial portion of the productivity gains has resulted from public funding of research in public institutions, and that funding can lead to what might be thought of as stocks of knowledge that can be drawn on later. One study estimated the total investment in the United States in 1850–1995 and found that the stock of agricultural knowledge in the United States in 1995 was 11 times more than the actual agricultural output for that year; that is, every $100 of agricultural output was developed by drawing on $1,100 in stock of knowledge (Pardey and Beintema, 2001). The point of these calculations was to demonstrate that scientific knowledge is cumulative and that many years of public investment in scientific research are drawn on in each year of agricultural development, especially
because new crop varieties typically take 7–10 years to develop. Specifically in the case of GE crops, research indicates that universities tend to do the basic research, start-up companies apply the findings, and large companies intervene to move the applications to commercialization (McMillan et al., 2000; Graff et al., 2003). Findings from other research indicate that U.S. university scientists wrote nearly three-fourths of the papers cited in agricultural-biotechnology patents (Xia and Buccola, 2005). Vanloqueren and Baret (2009) noted that studies like those demonstrate how important publicly funded scientific research is for agricultural innovation.
Bozeman (2002) warned that overreliance on market mechanisms can lead to a scarcity of providers of public goods. The trend in agricultural research toward the private-sector model rather than the public-sector model is of particular concern for the United States because, according to estimates by Alston et al. (2010), the United States accounted for nearly one-fourth of the world’s agricultural and food R&D in 2000. Thus, institutional changes that affect crop R&D in the United States are likely to have global effects. A decline in public-research investment may mean a decline in informative scientific endeavors that are not likely to yield a private return on investment, such as research on subjects related to broad understanding of social welfare and equity, self-pollinated and minor crops, and human and environmental well-being (Huffman and Evenson, 2006; Fuglie and Toole, 2014). If the public sector is going to make these necessary contributions to public-interest research, government support for that research will need to be increased.
FINDING: There is disagreement in the literature as to whether patents facilitate or hinder university–industry knowledge-sharing, innovation, and the commercialization of useful goods, and utility patents on GE crop germplasm legally block research on a crop.
FINDING: Whether a patent is applied to conventionally bred or GE crops, institutions with substantial legal and financial resources are capable of securing patent protections that limit access by small farmers, marketers, and plant breeders who lack resources to pay licensing fees or to mount legal challenges.
FINDING: There is evidence that the portfolio of public institutions has shifted to mirror that of private firms more closely.
RECOMMENDATION: More research should be done to document benefits of and challenges to existing intellectual-property protection for GE and conventionally bred crops.
RECOMMENDATION: More research should be done to determine whether seed-market concentration is affecting GE seed prices and, if so, whether the effects are beneficial or detrimental to farmers.
RECOMMENDATION: Research should be done on whether trait-stacking is leading to the sale of more expensive seeds than farmers need.
RECOMMENDATION: Public investment in basic research and investment in crops that do not offer strong market returns for private firms should be increased.
Several authors have proposed that genetic-engineering technology can be a key tool in solving hunger in the world (for example, Borlaug, 2000; Fedoroff, 2011; Juma, 2011). The evidence reviewed indicates that GE crops may be a means of contributing to crop-productivity gains (Anthony and Ferroni, 2012), but the effect of GE crops on hunger will depend on development of appropriate crop varieties and the appropriate political, social, and cultural context. As was discussed in Chapter 4, no GE food crop has a commercial record of increasing the potential yield of a crop; GE crops that have affected yield have done so by protecting yield. At the subsistence-agriculture level, protection of yield from biotic stresses (insects and pathogens) and abiotic stresses (drought and temperature extremes) should decrease the year-to-year variation in food availability, and that is important in preventing hunger. GE crops that have already been commercialized have the potential to protect yields in places where they have not been introduced, and GE crops in development, such as those reviewed earlier in this chapter in the section “Prospects and Limitations for Genetically Engineered Crops in Development for Small-Scale Farmers” may protect yields of a wider array of crops (for example, disease-resistant cassava and climate-resilient rice). However, as was also discussed in that section, GE crops, like other technological advances in agriculture, are not able by themselves to address fully the wide variety of complex challenges that face smallholders. Such issues as soil fertility, integrated pest management, market development, storage, and extension services will all need to be addressed to improve crop productivity, decrease post-harvest losses, and increase food security. All farmers will need tools to deal with increasing constraints on resources (Box 6-8). As Glover (2010:6) noted, “Gene splicing is not intrinsically capable of surmounting obstacles like poor roads, inadequate rural credit systems and insufficient irrigation.” Nonetheless, increased yield potential and increased nutritional quality are important
for smallholders. Chapter 8 addresses the potential for genetic-engineering technology to increase potential yield and enhance nutritional traits.
More important, it is critical to understand that even if a GE crop may improve productivity or nutritional quality, its ability to benefit intended stakeholders will depend on the social and economic contexts in which the technology is developed and diffused (Tripp, 2009a). There are more GE crop developers emanating from developing countries, especially, India and China, but also African countries (Parisi et al., 2016), and this holds promise that future GE crops will be developed with specific regions, countries, or farmers in mind, thereby improving productivity or nutritional content unique to a region. The complex problems associated with
smallholder farmers and food-insecure consumers need to be addressed if food insecurity is to be reduced. There is enough food in the world today, but about 1 out of every 9 people do not have enough food to eat (FAO, 2015). GE crops can contribute to a broader food-security strategy, but complex problems, like food insecurity, require “multi-pronged solutions” (Qaim and Kouser, 2013:7).
FINDING: The ability of crops with GE traits to address food-security concerns will depend on the types of traits introduced and the social and economic contexts in which the traits are developed and diffused.
There is a tremendous amount of diversity in the world’s farmers, the types of crops that they grow, and the conditions under which they grow those crops. Introducing genetic-engineering technology into the mix creates the potential for distinct social and economic effects.
Having reviewed the literature available on social and economic effects, the committee finds that the research on the topic is not sufficient. Much of the literature focuses on one or two trait–crop combinations and does not have sufficient coverage especially of new crops in the R&D pipeline. There has been little or no investigation of the return on investment in genetic engineering versus alternative investment aimed at low external input technologies (LEIT), such as agroecological improvements. Tripp (2006) observed that, without the development of more robust institutional capacity to meet the needs of small farmers, LEITs are no more likely to benefit smallholder farmers than GE crops. However, after a critical review of various reports and arguments in favor of LEIT, Tripp (2006:209) concluded that “there is no doubt that support for this kind of technology development needs to be sustained and increased.” A more systematic study of farmer knowledge would be useful as would more information on whether the concentration of the seed market is affecting farmers’ options and welfare.
On the basis of the research that is available, the committee concludes that existing GE crops have generally been useful to large-scale farmers of cotton, soybean, maize, and canola. The same GE crops have benefited a number of smaller-scale farmers, but benefits have varied widely across time and space, and are connected to the institutional context in which the crops have been deployed. Small-scale farmers were more likely to be successful with GE crops when they also had access to credit, extension services, and markets and to government assistance in ensuring an accessible seed price.
Genetic-engineering technology that is of most use to small-scale farmers or farmers of specialty crops will probably have to emerge from
public-sector institutions or from public–private collaborations because current intellectual-property regimes do not offer incentives for private-sector firms to pursue research in those crops. However, growth in investment in public agricultural research in the United States has been declining since the 1960s and was almost $2 billion less than private-sector investment in 2009 (NRC, 2014). In developing countries, the situation regarding R&D investment is highly variable. In some countries, investment in public sector R&D has increased substantially; in others it has not. Furthermore, there has been a rise in development assistance focused on agriculture, including investment in genetic engineering. Decreases in support for the public sector may reduce the potential diffusion of new GE crop innovations.
To contribute to alleviation of hunger in food-insecure populations on and off farms, more GE crops and GE traits will need to be developed in ways that increase potential yield, protect yield from biotic and abiotic stresses, and improve nutritional quality. Even if that is accomplished, the ability of GE crops to alleviate hunger will depend on the social and economic contexts in which the technology is developed and diffused.
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