Socioeconomic aspects of biotechnology

  • The economic problem & NEPAD Agengy’s role

The challenge of the new millennium is to provide solutions for a growing population including attaining food security and food safety, managing climate change and the limited fossil fuel resources while combating disease, poverty and inequity. The nature of the challenge is not only to increase global future production but also increase it where it is mostly needed by those who need it most…with special focus on smallholder farmers, women and rural households and their access to land, water and high quality seeds … and other modern inputs (Jacques Diouf, 2008). This resonates particularly with Africa, a continent recognized for its high agricultural potential yet low productivity characterized by low product diversity and the existence of biotic and abiotic stresses. As a consequence, Africa is a net importer of food. The three basic economic problems to resolve for any system are what to produce, how to produce it and who gets what is produced. Concerning how to produce to meet societal needs, modern biotechnology has been identified as a tool for agricultural productivity and food security in meeting the global needs for food, feed, fiber, and fuel. Proponents argue that biotechnology could be used to address challenges that have been difficult to resolve using conventional approaches.

The New Partnership for Africa’s Development (NEPAD), among other objectives, seeks to eradicate poverty, place African countries on a path of sustainable growth and development and halt the marginalization of Africa in the globalization process and enhance its full and beneficial integration into the global economy. A thriving African bioeconomy within the global market place is possible if premised on enabling biosafety laws and an ability to make timely and appropriate regulatory decisions. Economics is one of the key drivers of change within a bioeconomy and plays a major role in assessing and improving a regulatory process (Figure 1).

  • What are the socioeconomic issues related to GM Crops?
  1. Adoption of biotechnology

Socio-economic Benefits and Concerns for GE Adoption

Area under GM crops and the number of countries and farmers planting GM crops globally have been monitored since commercialization in 1996. James (2012) in his annual report on the global status of commercialized GE crops observes an annual growth rate of 6% for the 17-year period of commercial cultivation and that there was an unprecedented 100-fold increase in biotech crop hectarage from 1.7 million hectares (ha) in 1996 to 170.3 million ha in 2012. By 2012, 17.3 million farmers in 28 countries of which more than 90% were resource-poor farmers in developing countries had planted GM crops. The report estimates that the global value of the biotech crop market in 2012 was US$14.84 billion and this represented 23% of the US$64.62 billion global crop protection market. The share of biotech crop seeds in the estimated US$34 billion global commercial seed market was 35% in 2012. This valuation of the global biotech crop market was based on both the sale price of biotech seed and associated technology fees. The report further indicates that the cumulative global value with respect to farm incomes for the fifteen-year period (1996-2011) was an estimated US$98.2 billion. Brookes and Barfoot (2009) also note that the direct global farm income benefit from GM crops was $10.1 billion in 2007 and that since 1996, farm incomes have increased by $44.1 billion. About $20.5 billion of the total cumulative farm income benefit (46.5%) was attributed primarily to yield gains and to some extent facilitation of a second crop while the remaining 53.5% was due to reductions in the cost of production. The contribution of GM insect resistance technology to the observed yield gains was estimated at 68% while GM herbicide tolerance contributed the remainder.

Of the 28 countries that commercially cutltivated GE crops, 20 were from developing countries while 8 where industrial countries. The cumulative economice benefits from 19996 – 2011 for developing countries was US$49.6 billion compared to US$48.6 billion (46.5%) for industrial countries. For 2011, the economice benefit for developing countries was US$10.1 billion and US$9.6 billion for industrial countries. The US had the largest share of global biotech crop plantings in 2012 accounting for 69.5 million hectares. Other major growers were Brazil with 36.6 million ha, and Argentina with 23.9 million ha. Other notable mentions were Canada, India, China, Paraguay, South Africa and Pakistan. The eleven GE crops deployed in 2012 were alfalfa, canola, cotton, maize, papaya, poplar, soybean, squash, sugarbeet, sweet pepper and tomato. Of these, maize, cotton and soybean were the most cropped in terms of number of adopter countries (Figure 2).

Source of data: James, 2012

The three crop traits adopted were herbicide tolerance, insect resistance, and stacked traits. Available statistics suggest stacked double and triple traits appear to be increasingly more popular with farmers compared to insect resistance traits. Double stacks conferred pest resistance and herbicide tolerance while the triple stacks conferred resistance to two insect pests plus herbicide tolerance. In 2012, 13 countries planted 43.7 million hectares to GM crops with stacked traits (James, 2012).

Some Continent Specific Statistics

Currently, farmers in the US grow more GM soybean, maize, cotton and canola than conventional varieties. The scenario is not different in Canada for GM soybean, maize, and canola. The benefits accruing to adopter farmers in these countries are well documented (see James 2009; Brookes and Barfoot, 2009). Five EU countries namely Spain, Portugal, Czechia, Slovakia and Romania planted a total of 129,071 hectares of biotech Bt maize. Spain alone accounted for 90% of this total.

Brookes and Barfoot (2009) report that both small- and large-scale farmers have adopted GM crops and that the size of operation appears not to influence adoption. The four leading countries growing GM crops in Asia are India, China, Pakistan and the Philippines. In India where Bt cotton remains the only commercialized GM crop, 10.8 million hectares was planted by 7.2 million small-scale farmers to the crop in 2012. With an adoption rate of 93 percent, India enhanced farm income by US$3.2 billion in 2011 and by US$12.6 billion for the period 2002 – 2011. For the 7.1 million small- and resource-poor farmers who benefited from cultivating Bt cotton in China, studies conducted by the Center for Chinese Agricultural Policy (CCAP) indicated that, on the average, small-scale farmers increased their yield by 9.6%, reduced insecticide use by 60% (which had positive implications for both the environment and the farmers’ health), and generated a substantial US$220/ha increase in farm income (James, 2009) and in 2012, 7.2 million small resource poor farmers in China grew 4.0 million hectares of Bt cotton. Small-scale farmers who grew Bt maize in the Philippines were also reported to have gained from the crop in 2008. A socio-economic impact study reported that these farmers gained an additional farm income from Bt maize of about US$135 per hectare during the dry season and about US$125 per hectare during the wet season of the 2003-2004 crop year (James, 2009).

At present, only 4 African countries (South Africa, Burkina Faso, Egypt, and lately Sudan) commercially cultivate GM crops. South Africa is the first African country to commercialize GM crops. In 2012, South Africa cultivated Bt maize, Roundup Ready soybean and Bt cotton on an estimated 2.9 million ha, a 17% increase over the previous year. In 2012, Burkina Faso planted approximately 300,000 ha of Bt cotton while Sudan planted about 20,000 ha of Bt cotton, under both rainfed and irrigation schemes. Egypt planted hybrid Bt yellow maize and still remains the only country in North Africa to have commercialized GM crops.

Studies have reported farm-level benefits that have translated into increased adoption rates. Yield gains exceeding 40 percent have been reported to in comparison with conventional cotton in addition to reduced spraying costs by 42 percent, reduced number of pesticide sprayings from 10 to 4 sprays per season, reduced production costs resulting in higher gross margins ranging from US$ 70–130 /2 ha of cotton (Ismael et al., 2002; Morse et al., 2005; AfricaBio, 2007).

From an initial 197,000 hectares in 2001, the area planted to GM crops increased to 2.3 million hectares in 2011 and 2.9 million hectares in 2012. Of the three GM crops grown, Bt maize is the leading crop in terms of hectarage under cultivation with a share of 83.7 percent of all GM crops. In addition, Bt maize occupies 86 percent of all land cultivated to Maize, be it conventional or GM. The net benefits from biotech crops for South Africa was estimated at US$98 million in 2011 while the accumulated benefits from 1998 to 2011 was US$922 million (Brookes and Barfoot, 2009).

A study by Gouse et al. (2005) on Bt maize involving 368 small-scale and resource-poor farmers compared to 33 commercial farmers was quite revealing. The commercial farmers were grouped into two, those cultivating under irrigation and those under rain-fed production systems. Higher yields were observed for farmers who cultivated under irrigation systems. This group obtained 12.1 MT /ha, an 11 percent increase over the previous year’s yield. These farmers also obtained cost savings in insecticide use of US$18/ha representing a 60 percent reduction and an increased income of US$117/ha. Farmers who grew Bt maize under rain-fed conditions obtained 3.4 MT/ha, also an 11 percent yield gain over the previous year’s yield. Cost savings on insecticide use for this group was US$7/ha representing a 60 percent reduction and the combined effect was an increase in income of US$35/ha.

The smallholder Bt maize farmers group was compared to others who grew conventional hybrid and open pollinated maize varieties in terms of yield per hectare (Gouse et al., 2005). Bt maize recorded yield gains of 31 percent and 134 percent over conventional hybrids and open-pollinated varieties respectively. Another study that used longitudinal study over 9-year period (2000 to 2008) reported that small-scale Bt maize farmers in South Africa gained an additional US$ 267 million (Goose and Van der Walt, 2008).

In 2012, 500,000 hectares were planted to soybean in South Africa with 90 percent planted to herbicide tolerant soybean. This was achieved after eight years of commercialization. The impressive adopter rate has been attributed to cost savings from reduced insecticide use and facile crop management. The adoption rate for GM cotton remained at 100 percent of which 95 percent were stacked traits (James, 2012).

Burkina Faso

Cotton is the principal cash crop in Burkina Faso generating over US$ 300 million in annual revenues representing about 60 percent of the country’s export earnings (ICAC, 2006). Despite this contribution, the agricultural sector in the country is beset by a number of challenges including low yields, drought, poor soil, insect pests and lack of infrastructure and inadequate credit. Though approximately 475,000 hectares of conventional cotton was planted in 2008, the crop continues to record low average yields of 367 kg per hectare. Studies have also reported crop losses in excess of 30 percent due to insect-pests of cotton (Goze et al., 2003; Vaissayre and Cauquil, 2000).

At the national level, the annual cost for insecticides for the control of cotton bollworms and related insect-pests is around US$ 60 million per year (Toe, 2003 cited in Karembou, 2009). However, insecticides are proving ineffective, with losses due to bollworm as high as 40 percent even with full application of insecticides (Traoré et al., 2006). As a result of these challenges, Burkina Faso’s cotton production decreased to 0.68 million bales in 2007/08 from 1.3 million bales in 2006/07.

After 5 years of conducting confined fields trials, approval was granted for the commercial cultivation of Bt cotton. In 2008, Burkina Faso for the first time planted approximately 8,500 hectares of Bt cotton for seed production and initial commercialization, becoming the 10th country globally to grow commercial Bt cotton. Vitale et al., (2008) estimate that cultivation of Bt cotton would result in yield increases of 20 percent and a decreased need for insecticides that would generate US$ 106 million per year for Burkina Faso.

Reasons for the fast adoption

For any agricultural technology, benefits are usually quantified in monetary terms. However, non-monetary benefit considerations including ease of operation, time savings, and lesser exposure to chemicals also inform farmer decisions (Fernandez-Cornejo and Caswell, 2006). Consequently, farmers’ adoption of new technologies is influenced by both monetary and non-monetary expectations of net benefits. Farmers normally choose technologies and practices that they expect to earn the greatest benefits based on yield performance, taste and preferences, farm characteristics, savings in management time, demand for produce/product, and costs. The observed annual increments and growth in global biotech crop adoption have been attributed to a number of factors including continued increases in the number of countries growing GM crops (adopter countries), additional crop acreage deployment in adopter countries, the introduction of a new GM crops and traits, farm profitability, and the introduction of stacked or multi traits (James 2009; Brookes and Barfoot, 2009).

Similar considerations have driven the rapid increase in the adoption of GM crop varieties in countries that commercialized cultivation. Beyond farm profitability, other less quantifiable (non-pecuniary) benefits have been observed to have had important influences for technology adoption (Brookes and Barfoot, 2009). These benefits have received mention across adopter countries by farmers and were attributed to herbicide tolerant (HT) and insect resistant (IR) crops (Boxes 1 & 2).

Box 1: Herbicide tolerant crops Factors influencing farmer adoption of herbicide tolerant crops include:
  • Ease of use associated with broad-spectrum, post-emergent herbicides and the increased/longer time window for spraying;
  • Reduction in damage to crop arising from the application of post-emergent herbicide;
  • Ability to use alternative production technologies such as no/reduced tillage practices ;
  • Time and fuel savings from the adoption of no/reduced till compared to equivalent conventional crop husbandry practices;
  • Ease of weed control leading to cleaner crops hence reduced harvesting costs, and time spent for harvesting. Resultant effect is improved harvest quality and premium price for quality;
  • Avoidance of potential damage from soil-incorporated residual herbicides in follow-on crops;
  • Improved quality of family life arising from social benefits derived from time savings made from crop husbandry practices.

 

Sources: Brooke & Barfoot, 2009; James, 2009; Karembou et al., 2009; Personal communication, 2008 – 2013

Box 2: Insect resistant crops Factors influencing farmer adoption of insect resistant crops include:
  • Reduced risks from crop loss associated with insect pests;
  • Convenience associated with less time spent on crop walking and/or applying insecticides;
  • Savings in fuel use – mainly associated with less spraying;
  • Savings in the use of machinery (for spraying and possibly reduced harvesting times);
  • Improved quality (e.g. lower levels of mycotoxins in GM IR maize);
  • Improved health and safety for farmers and farm workers (from reduced handling and use of pesticides);
  • Easier crop husbandry practices;
  • Facilitated second crop cultivation;
  • Triggered subsidiary benefits for bee keepers as fewer bees were now lost to insecticide spraying;
  • Improved family welfare and education for women and children.

Sources: Brooke & Barfoot, 2009; James, 2009; Karembou et al., 2009; Personal communication, 2008 – 2013

Yet despite this rapid growth, the industry has been beset by a wide-ranging and often emotionally charged debate on issues pertaining to the environment, human health, economics, ethics and politics. The socio-economic concerns include dependence of farmers on large corporations for seed; unaffordable planting materials; possible unsuitability of GM crops for small-scale farm operations and for resource poor farmers (interestingly 90% of GM crop farmers are small-scale and resource-poor farmers in developing countries); unethical patenting of life; possible limited access and increased price of seeds due to technology fees; lack of food distribution infrastructure rather than simply producing more; products needed in developing countries not being developed due to market or profit considerations; and developing countries having to eat food others had rejected. It must however be noted that these concerns are not peculiar to GM crops but rather are challenges inherent in the agricultural sector. Discussions on and in-depth analysis of the benefits and perceived risks associated with GM crops are required but have been hindered by lack of information, lack of access to impact assessment analyses and in some cases misperceptions. The goal of public policy is to maximize the welfare of all its citizens and biosafety regulation can help achieve that by providing certainty, stability and disciplinary rigour to the social framework required for risk assessment, management and communication.

  1. Coexistence (biotech, conventional and organic crops)
  2. Labeling
  3. Patenting
  4. Saving of Seeds
  5. Ethical Issues
  6. Labour/Employment
  7. International Trade