Life-Science Economics and Policy

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1 Life-Science Economics and Policy Winter Term 2011/12 Dr. Maarten J. Punt Technische Universität München - Weihenstephan maarten.punt@tum.de

2 GMO adoption by countries What is present where and WHY? 2

3 Learning objectives Knowledge of key GMO crops Familiarity with main biotech countries Reasons for adoption Reasons for differences in adoption

4 Adoption of GMOs worldwide In perspective: The FAO estimate of total arable land is: 1380 M ha 4

5 Adoption of GMOs: Major crops 5

6 Adoption rates for major crops worldwide 6

7 Countries with Biotech crops Honestly stolen from: Clive James,

8 Country Million Hectares Crops USA 66,8 Maize, Soybean, Cotton, Canola, Sugarbeet, Alfalfa, Papaya, Squash Brazil 25,4 Soybean, Maize, Cotton Argentina 22,9 Soybean, Maize, Cotton India 9,4 Cotton Canada 8,9 Canola, Maize, Soybean, Sugarbeet China 3,5 Cotton, Tomato, Poplar, Papaya, Sweet Pepper Paraguay 2,6 Soybean Pakistan 2,4 Cotton South Africa 2,2 Maize, Soybean, Cotton Uruguay 1,1 Soybean, Maize Source: Clive James, 2010

9 Relative shares in GMO area Source: Clive James, 2010

10 Main biotech crops 10

11 Main crops HT Soybeans (Glycine max) Tolerates herbicides (mainly glysophate or Roundup) Advantages Decrease in highly toxic herbicides/tilling Increase soil conservation Increase in yield (if weed pressure is high) Flexibility in herbicide appliance Disadvantages Increase in glysophate use Glysophate resistant weeds Increase seed costs 11

12 Main crops Bt- Maize (Zea mays) Protection from insects, European Corn Borer (Ostrinia nubilalis) Insecticide inside Advantages: Decrease in pesticide use Increase in agrobiodiversity Increase in yield (if pest pressure is high) Disadvantages Possibility of resistance Increased seed costs Also available: HT maize Stacked varieties Photo: Christian Fischer

13 Main crops Bt-Cotton (Gossypim sp.) Insecticide inside Protection from insects, pink bollworm, cotton bollworm Advantages: Decrease in pesticide use Increase in agrobiodiversity Increase in yield (if pest pressure is high) Disadvantages Possibility of resistance Increased seed costs Also available: HT cotton Stacked varieties

14 Main crops Canola (Brassica napus) Tolerates herbicides (mainly glysophate or Roundup) Advantages Decrease in highly toxic herbicides/tilling Increase soil conservation Increase in yield (if weed pressure is high) Flexibility in herbicide appliance Disadvantages Increase in glysophate use Glysophate resistant weeds Increase seed costs Photo: John O Neill 14

15 Other crops and their traits Bt-crops Poplar Potato Rice Virus resistent Sweet Pepper Papaya Squash Plum HT crops Sugarbeet Alfalfa Rice Delayed ripening Tomato 15

16 Why would a farmer adopt/not adopt biotech crops? Adoption: Increased yield Decreased costs Flexibility advantages Time saving Etc. No adoption: Increased seed costs Loss of other traits (e.g. drought tolerance of local varieties) Consumer acceptance (i.e. marketing) Regulation 16

17 Consumer acceptance Accept if: Product is of similar quality or better (given price) Product is safe Product is cheaper Decline if: No extra benefits Increased (perceived) risks 17

18 Study of GM bananas in Uganda (Kikulwe et al., 2011) Study before introduction Bananas = staple food GM bananas, disease resistent, better quality Results: 2 groups Supporters Poor farmers Not self sufficient Value producer benefits Opponents City dwellers Self sufficient Value consumer benefits Health risk and environment concerned Benefits distribution is important What s in it for me? 18

19 To boldly go where no one has gone before 19

20 What s coming? The first generation biotech Pesticide Herbicide tolerance Virus resistance Main beneficiaries: Farmers The second generation biotech Increased vitamin A (Golden rice) Modified oil content (Maize, Soybean) Gluten-free wheat Extended shelf-life (Tomato, Apple, Raspberries, Melons) Third generation Pharmaceuticals Main beneficiaries: Consumers Main beneficiaries: Consumers 20

21 Regulation US: several crops approved Canada: several crops approved EU: de facto moratorium on new crops BUT Import is allowed, if labeled Existing crops (Bt maize, Spain) are allowed Several developing countries have approved GMO crops 21

22 References James, C., Global Status of Commercialized Biotech/GM Crops: ISAAA, Ithaca, USA. Kikulwe, E.M., Birol, E., Wesseler, J., Falck-Zepeda, J., A latent class approach to investigating demand for genetically modified banana in Uganda. Agricultural Economics 42(5):

Adoption of GE Crops by U.S. Farmers Increases Steadily

Adoption of GE Crops by U.S. Farmers Increases Steadily Farmers are more likely to adopt new practices and technologies if they expect to benefit from them. Benefits are usually thought of in monetary