Impacts on Farmers

Our review of 137 published papers in the economics literature was disaggregated by the typical sampling levels used in field research examining adoption and impact of Genetically Engineered technologies. The levels include farmer, consumer, trade and industry. Here we present salient notes from the impact on farmers.

During the first decade of their use by smallholder farmers in developing economies, peer-reviewed research has indicated that, on average, transgenic crops—and in particular Bt cotton—provide economic advantages for adopting farmers.

There are several methodological limitations associated with the first generation studies which have been identified in most cases by the authors themselves. These limitations have implications for findings and for policy formulation. They should also be addressed (and are been addressed) in the next generation of studies.


Some lessons
 

Chinese Bt cotton, China

•    Majority of studies reviewed used primary field data collected from farmers, farm records or from field trials conducted by researchers
•    Most ex post (after deliberate release) studies have used methods such as partial budgeting/farm accounting and a specification of a model grounded on theoretical economics frameworks such as production functions or random utility models.
•    Few studies have been ex ante (before deliberate release). Most of these use field data and a econometric estimation to then project potential economic impacts.
•    Most studies focused on Bt cotton and were conducted in India, China and South Africa.  This outcome is not surprising as this was one of the first and most widely diffused technology in developing countries.
•    A set of studies in Mexico and Argentina examined the implications of intellectual property rights on economic benefits earned by farmers.


Reference
Smale, Melinda; Zambrano, Patricia; Gruère, Guillaume; Falck-Zepeda, José; Matuschke, Ira; Horna, Daniela; Nagarajan, Latha; Yerramareddy, Indira; Jones, Hannah. 2009. Measuring the economic impacts of transgenic crops in developing agriculture during the first decade: Approaches, findings, and future directions. (Food policy review 10) Washington, D.C.: International Food Policy Research Institute (IFPRI) 107 pages
http://www.ifpri.org/sites/default/files/publications/pv10.pdf  
 http://dx.doi.org/10.2499/0896295117FPRev10

What do we know about the economic assessments' literature done in developing countries?

At IFPRI we conducted in 2008 a literature review of 137 publications.  The 137 publications were chosen from those in an initial Google Scholar search that yielded more than 10,000 hits.

The large number of hits had to be reduced to a more manageable number by establishing the criteria of selecting only those publications with an identifiable peer review process, stated economic assessment method, as a requisite for publication.

We classified studies depending on the unit of assessment studied including measuring impacts on farmers/households, trade, industry/national, and consumers.

Chinese Bt cotton, China

Our literature review showed that:

• Most studied crop  and trait combination is Bt cotton
• Most of the studies conducted in China, India and South Africa
• On average, economic impact from the adoption of Genetically Modified crops was profitable—but averages mask variability by agro-climate, host cultivar, farmer

• This collection of studies identified that too few traits have been studied and too few cases/authors implementing such studies. Taking this into considerations lesson generalizations to all GM crops should not be drawn yet…
• Assessment methods need improvement especially those dealing with household decision making processes, risk and uncertainty, different types of selection bias and endogeneity
• Need more time to describe adoption and better methods to describe adoption in an ex ante setting.
• Next decade need to concentrate more on:

                 o    Information and knowledge flows (to/from farmer )
                 o    gender, generational and other cross-cutting issues
                 o    impacts on poverty and inequality,
                 o    externalities and other institutional issues

Citation

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

http://www.ifpri.org/sites/default/files/publications/pv10.pdf

http://dx.doi.org/10.2499/0896295117FPRev10