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

Socio-Economics and the Cartagena Protocol on Biosafety

Article 26.1 of the Cartagena Protocol (see below) opened the possibility of including socio-economic considerations as part of the decision making process. Important issues to consider are that implementation of this article is voluntary and that it has a limited scope to those factors affecting biodiversity especially regarding its value to indigenous and local communities.

The Cartagena Protocol does not mandate the inclusion of socio-economic considerations, although countries have the sovereign right of doing so in their national laws and regulations, but being consistent with their international obligations.

Introduction of broader socio-economic considerations into GMO biosafety analysis and the decision making process is controversial as there are many approaches an options for regulatory design, development and implementation, which in turn have implications in terms of costs, benefits, risks and tradeoffs in terms of technology use, safety, gains in knowledge and regulatory impact.

It is certainly prudent for countries to consider all of these issues, starting from the most basic question of why each country wants to include socio-economic considerations into their technology decision making processes. Regardless of whether a country has made a decision in the matter, for transparency purposes, policy and decision makers have to have a clear response to this question. I will cover later in future posts, many issues, options and tradeoffs related to this policy issue. 

Article 26 of the Cartagena Protocol on Biosafety
SOCIO-ECONOMIC CONSIDERATIONS
1.     The Parties, in reaching a decision on import under this Protocol or under its domestic measures implementing the Protocol, may take into account, consistent with their international obligations, socio-economic considerations arising from the impact of living modified organisms on the conservation and sustainable use of biological diversity, especially with regard to the value of biological diversity to indigenous and local communities.
2.     The Parties are encouraged to cooperate on research and information exchange on any socio economic impacts of living modified organisms, especially on indigenous and local communities.

Source: Cartagena Protocol on Biosafety as part of the Convention on Biodiversity.

What is Biosafety Anyway?

There are several definitions of safety and its mirror concept risk. Similar latitude of definitions exists for biosafety.

One potential definition, describes biosafety as the regulatory systems and other risk analysis measures designed to ensure that applications of modern biotechnology (in particular Genetically Modified Organisms) are safe for human health, agriculture, and the environment. This definition augments the scope of a biosafety assessment that centers on risk and its assessment, to include broader issues in a comprehensive biotechnology decision making process that may lead to the approval the technology for release into the environment.  Therefore, in this definition Biosafety is a principle that tempers the adoption of GM technology with careful consideration of its potential effects on all stakeholders and the environment.

EcoLomics International procedural definition:

“The Protocol does, however, specify in Article 4 the scope of this agreement which is part of the Convention on Biological Diversity, administered by the United Nations Environment Programme: "This Protocol shall apply to the trans boundary movement, transit, handling and use of all living modified organisms that may have adverse effects on the conservation and sustainable use of biological diversity, taking also into account risks to human health." Contrary to the definition, the specification of the scope of an international agreement is a crucial requirement for its application, and in the case of this Protocol it was in fact one of the most difficult issues to negotiate. These difficulties were resolved by providing importing countries with much stronger rights to restrict imports of GM seeds and fish than for GM commodities destined for feed or food because the former represent a far bigger threat to the protection of biological diversity.”

In turn the Convention of Biological Diversity Secretariat FAQ  http://www.biodiv.org/biosafety/faqs2.aspx) introduces the following procedural definition.

“Biosafety is a term used to describe efforts to reduce and eliminate the potential risks resulting from biotechnology and its products. For the purposes of the Biosafety Protocol, this is based on the precautionary approach, whereby the lack of full scientific certainty should not be used as an excuse to postpone action when there is a threat of serious or irreversible damage (see "What is the precautionary approach?"). While developed countries that are at the center of the global biotechnology industry have established domestic biosafety regimes, many developing countries are only now starting to establish their own national systems.”

Some Definitions

It is important to clearly define terms used in biosafety and biotechnology issues related to agriculture. Note that biotechnology is a broad concept as it includes many techniques and methods which range from conventional plant breeding, tissue and cellular culture, marker assisted selections to genetic transformations. Note that the only technologies regulated in most countries under current agreements are Living Modified Organisms. The fact that a specific technology is an LMO constitutes the regulatory trigger. An exception to this rule is Canada which does not regulate based on whether a product is an LMO, rather if the product itself is novel compared to existing applications.

Biotechnology: 1. “Any technological application that uses biological systems, living organisms, or derivative thereof, to make or modify products or processes for specific use” (Convention on Biological Diveristy).  2. “Interpreted in a narrow sense...a range of different molecular technologies such as gene manipulation and gene transfer , DNA typing and cloning of plants and animals” (FAO Statement on biotechnology).

Biodiversity: The variability among living organisms from all sources including, inter alia, terrestrial, marine and other ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems. Synonyms: biological diversity, ecological diversity.

Biosafety: Referring to the avoidance of risk to human health and safety, and to the conservation of the environment, as a result of the use of research and commerce of infectious or genetically modified organisms.

Living Modified Organisms: Living organisms that posses a novel combination of genetic material obtained through the use of modern biotechnology (Convention on Biological Diversity). Synomym of Genetically Modified Organisms (GMO), but restricted to organisms that can endanger biological diversity.

Genetically Modified Organisms: An organism that has been transformed by the insertion of one or more transgenes.

Transgene: An isolated gene sequence used to transform an organism. Often, but not always, the transgene has been derived from a different species than that of the recipient.

Source: FAO Glossary of biotechnology for food and agriculture, 2001 (Available online - click here)

Welcome to my new Blog!!!

Here I will discuss the many issues related to the potential inclusion of socio-economic considerations into decision making as related to the implementation of Article 26.1 of the Cartagena Protocol on Biosafety and national laws, policies and regulations. This discussion cannot be separated from its agricultural, political and environmental context, as well as from those efforts addressing poverty reduction strategies, growth and prosperity building,science and technology and livelihoods in developing countries.

I will address the many issues related not only to biosafety and biotechnology policy and regulatory development but also implementation in developing countries. Furthermore I will examine the cost, benefits and risk from technology adoption and use and from the potential regulatory implementation activities.

Developing countries are now at critical juncture where they needs to decide whether they wants to become a failed states with a bleak future or follow the path of responsible growth and prosperity that strives to be sustainable. We still have time, if we decide to do things the right way. There is no magical medicine and nobody has all the answers, so lets take one issue at a a time and then have the will to do the right thing. Let follow this journey together and learn from each other.
 
Most of the time I will write in English, others in English, occasionally in Spanish. I will normally post every single comment sent to me, but hope that even if you disagree radically from my opinion, that your comment includes the rationale behind your position and the arguments against my own positions. I think this is a fair process.h