Jose Falck Zepeda presentation on biotechnology and developing countries Georgetown University april 2014

Program for Biosafety Systems – http://pbs.ifpri.info/
“Biotechnology and Developing Countries”
José Falck Zepeda
Senior Research Fellow
International Food Policy Research Institute - Program
for Biosafety Systems (IFPRI - PBS)
Presentation made at Georgetown University,April 2014

Content
1. Background and conceptual framework
2. Biotechnology as a tool
3. GM biotechnology as the regulated technology
4. Socioeconomic assessment experiences
5. Concluding comments

The challenge according to FAO
• To feed a population of 9 billion persons by 2050,
without allowing for additional imports of food,
continents have to increase their food production
roughly:
– Africa 300%
– Latin America 80%
– Asia 70%
– Even the US has to increase food production by 30% just
to supply food for the projected population of 348 million
person

“New” constraints
• Erosion, water and irrigation problems
• Climate change => Global warming?
• Soil fertility
• Urbanization and land being retired from production
• Consumer concerns about intensive agriculture: Organic, Fair
Trade
• Competition from biofuels production
• Social, philosophical, ethical and religious concerns over the
food production system
• Concerns over globalization and corporate control of
agriculture
• …

The Green Revolution
• Transformation of agriculture during
1940s-1970s that lead to significant
increases in yields
• Firmly based on:
– Agricultural production needs to keep
pace with population growth
– Agricultural sciences philosophy of
maximizing production per unit of land
– Plant breeding developments of the late
19th early 20th centuries
• Initially focused on a few crops (Wheat,
rice, maize) but has been expanded

The Green Revolution: A 1967 Frame of Mind
• Haiti Can’t- be-saved
• Egypt Can’t-be-saved
• The Gambia Walking Wounded
• Tunisia Should Receive Food
• Libya Walking Wounded
• India Can’t-be-saved
• Pakistan Should Receive Food
- Paul and William Paddock, 1967 book
“Famine 1975!”

Norman Bourlag: Father of the Green
Revolution
• Developed the wheat program
that later became CIMMYT in
1963
– Shuttle breeding
– Incorporate short-stature genes into
wheat
– Increased yield and rust resistance in
wheat
• Mexico:
– 1948 self sufficient wheat producer
– 1965 Net exporter
• Won Nobel Peace Prize in 1970
and World Food Prize
• Genesis of the Consultative
Group of International
Agricultural Research ( CGIAR)

How was the Green Revolution possible? An agronomist
perspective on a technological triumph as an engineering feat…
• Incorporation of a dwarfing genes from natural
populations into wheat and rice
• In maize: more vertical orientation of leaves, reduces
self-shading while allowing planting of narrower rows
and thus increases in densities
• Plants bred to dedicate a larger share of photosynthesis
efforts to grain rather than to stems and leaves
– Harvest index of older varieties was 20% whereas HYV around 50-55%
• Relatively insensitive to day length – can be planted in a
wider range of latitudes
• Increased responsiveness to fertilizer and water

Green Revolution: Successes
• Significant increases in yields and production
– From 1950 to 1992, the world’s grain output rose from 692 million tons
produced on 1.70 billion acres of cropland to 1.9 billion tons on 1.73
billion acres
– India: food production increased from 50 to 205 million tons during the
last 5 decades
– But, barely happened in Sub-Saharan Africa
• Economic output per hectare increases significantly
• 30% increase in cereal and calorie availability per person
• Poverty reductions—some studies show this is attributed to GR
raising farmers incomes

Green Revolution: Social and Economic
Criticisms
• Does not address underlying social, cultural, ethnical and
institutional constraints that create vulnerability and thus affect
livelihoods
– Is hunger and food insecurity a question of production or unequal
distribution of resources?
• Increased mechanization affected rural labor employment
• Debt effects and credit institutions necessary
• Technology not scale neutral
– Uneven adoption as larger/wealthier farmers adopted first capturing larger
share of benefits
• Landowner/Landholder displacement
• Dependence on pesticides and fertilizers

Green Revolution: Environmental/Ecological
Criticisms
• Loss of agricultural biodiversity, not so clear effect on
wild biodiversity
– Focus on few crops => monocultures
• Increased used of pesticides and the pesticide
treadmill
• Increased use of fertilizers
• Irrigation
– Negative impacts of salinization, damage to soils, and
lowering of water tables
– Need to build dams and irrigation systems

Lessons Learned
• Increasing agricultural productivity is necessary but not
sufficient to guarantee food security
• Scale neutral technologies
• Knowledge transfer to/from farmers
• Need to consider agriculture within the social,
political, economic, national/international context
• We can’t continue proposing “technology-only solutions”
to complex problems....nevertheless technological
responses are indeed critical to the “solution”
• Learn from mistakes and inexperience to come up with
better alternatives => Policy options, strategies and
outcomes

CGIAR Changing Paradigm
Agronomic
Paradigm
• Increase
production
• Maximize
yields
• Improve
fertilizer and
water
efficiency
Sustainable
Agriculture
Paradigm
• Improve and/or
maximize livelihoods
• Reduce vulnerability
• Environmental /
ecological
• Gender
• Collective action
• Sustainable
intensification
Time
Production
Economics
Paradigm
• Maximize profit
or net
returns...is not
the maximum
yield

2. Biotechnology as a tool

What is biotechnology?
• Manipulation of living organisms for a useful purpose
• Definition that covers a broad range of techniques
– Traditional: Plant breeding, tissue culture, micro-
propagation
– Modern: Marker assisted selection, Genetic Modifications
and Genomics
• Only GM products are currently regulated for
biosafety

GM Biotechnology – What is its
status?

A reality check?

Diffusion to developing countries

Implications for developing country
agriculture
• Majority expansion is in four crops and two traits
(insect protection and herbicide tolerance) produced
by industrialized countries for its agriculture
• Diffusion to developing has been a (fortunate)
development
• Challenge now is meeting explicit needs of
– Developing countries
– Smallholder / resource poor farmers
– Crop / traits

R&D and innovation for and by
developing countries
• Crops and traits of interest/value have been
produced
• Capacity to develop GM crops and other
biotechnologies
– Advanced => China, Brazil, Mexico, India, Argentina
– Medium- Advanced => Philippines, Thailand, Indonesia
• Next Harvest documented 270 technologies in 16
developing countries
Why aren’t these technologies in the hands of famers?

Why GM biotech?
• Embodied technologies
• Address specific productivity constraints
not easily addressed by conventional
means
• Can be deployed in low resource use
production systems
• Flexible – fit with other production
systems
– GM and Integrated Pest Management
– GM and organic production methods (!!!)
• Impacts can be non-pecuniary, indirect,
and scale neutral
• Scalable

3. Biotechnology as a regulated R&D
activity

Biosafety as a process…
Contained Use
Experiments
Confined
Field Trials
Deliberate
Release
Post
Release
Deregulation
Regulatory decision points
Familiarity
Learning

R&D and product development life cycle
1 – 3 yrs. 1 – 3 yrs. 1 – 3 yrs.
Product
Concept
Discovery Early Product
Testing &
Development
Integration
& Product
Selection
Product
Ramp Up
Market
Introduction
1 2 3 4 5 6
Confined Field Trials
Author: Ramaeker-Zahn

Regulatory processes, decision making and
assessments
Environmental
and Food/Feed
Safety
Assessment
Socio-
Economic
Assessments
(plus others?)
Decision
Making

Impacts on biodiversity
• Which biodiversity?
Agricultural vs. Wild
• Agricultural biodiversity –
intraspecific vs interspecific
• Tradeoffs between land use
and the maintenance of the
agricultural frontier and
encroachment in protected
and/or “wild” areas
• Biodiversity valuation issues
and measuring taxonomic
diversity and richness
• Ecosystem services

Environmental biosafety assessments: A
Roadmap under review at the Cartagena
Protocol on Biosafety
• Impacts on non-
target organisms
• Gene flow
• Impacts on sexually
compatible species
– Increase in weed
behaviour
– Competitive
advantage/fitness

Example from seed adoption sector
“Farmer preferences for Milpa diversity and genetically modified
maize in Mexico” (Birol, Villalobos and Smale 2007)
• “Milpa” is crop production system in Mexico and C. America
– Private economic value: food security, diet quality and livelihoods
– Public economic value: conserving agrobiodiversity, especially that of
maize landraces (potential to contribute unique traits for future plant
breeding efforts
• Subject to multiple externalities which have a negative impact
• Farmer heterogeneity is an issue identified by the study
– (i) Landrace Conservationists
– (ii) Milpa Diversity Managers
– iii) Marginalized Maize Producers
• Contrast results with the 2004 Commission for Environmental
Cooperation report

Food/Feed Safety Assessments
• CODEX Alimentarius guidelines (CAC/GL 46-2003)
• Procedure roadmap
A) Description of the recombinant-DNA microorganism;
B) Description of the recipient microorganism and its use in food production;
C) Description of the donor organism(s);
D) Description of the genetic modification(s) including vector and construct;
E) Characterization of the genetic modification(s);
F) Safety assessment:
– expressed substances: assessment of potential toxicity and other traits related
to pathogenicity;
– compositional analyses of key components; evaluation of metabolites, effects
of food processing
– assessment of immunological effects, assessment of viability and residence of
microorganisms in the human gastrointestinal tract, antibiotic resistance and
gene transfer; and nutritional modification.

What is socio-economic impact
assessment?
• Different levels
– Household, Farm, Communities,
Industry, Consumer, Trade
• May be done before or after
adoption of the technology (ex
ante or ex post)
• Compare effects of intervention
against a counterfactual
– Economics => monetary costs and
benefits
– Sociology /Anthropology => impact
on people

4. What do we know about the socio-
economic impact of GE technologies?

What do we know from the economic impact
assessment literature to date?
• A review of 187 peer
reviewed studies
• Examined studies with
a focus on:
– Farmers, household
and community
– Industry and markets
– Consumers
– Trade
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

Food Policy Review 10 conclusions
• On average LMO crops have a
higher economic performance
— but averages do not reflect
the variability by agro-climate,
host cultivar, trait, farmer
• Too few traits, too few
cases/authors—
generalizations should not be
drawn yet...need more time to
describe adoption
These conclusions are no different than
those for most technologies released to
date…

Food Policy Review 10 conclusions
• Address cross
cutting issues for
further study
including impacts of
poverty, gender,
public health,
generational
• Develop improved
methods and multi-
disciplinary
collaborations to
examine broader
issues

A meta-analysis paper by Areal, Riesgo and
Rodriguez-Cerezo (2012)
“GM crops perform better than their conventional
counterparts in agronomic and economic (gross
margin) terms”
“GM crops tend to perform better in developing
countries than in developed countries, with Bt
cotton being the most profitable crop grown”

How does a producer benefit? Insect resistance
traits
The case of Bt cotton
Producer Profit
Producer Surplus
Cost to Benefit
Additional
Cost of
Using the
Technology
Tech fee:
US$80/ha
0
+
-
Decrease
pesticide
application
cost
-Insecticide
-Machinery &
Equipment
Yield /
Reduction
in damage
-Timing
applications
-Reduced
damage bolls
Price change
due to increase
in supply
Additional
cost of
controlling
secondary
pests
Amenable to
IPM and/or
controlled
easily
Labor
Labor

Black Sigatoka Resistant Bananas in Uganda
 Consider irreversible and
reversible cost and benefits by
using the Real Option model
 One year delay, forego
potential annual (social)
benefits of +/- US$200 million
 A GM banana with tangible
benefits to consumers
increases their acceptance for
58% of the population
Photos credits: Kikulwe 2009 and Edmeades 2008
Kikulwe, E.M., E. Birol, J. Wesseler, J. Falck-Zepeda. A
latent class approach to investigating demand for genetically
modified banana in Uganda Agricultural Economics 2011.

Bt cotton in Uganda
 Positive yield impacts and net
benefits
 Smaller rate of return
probably explained due to low
base yields
 Need to improve overall cotton
productivity
 Probability of a negative
return can be as high as 38%
with a technology fee as
charged elsewhere
Photos credit: © Horna 2009
Horna, et al. (2013) . “Economic Considerations in the Approval
Process of GM Cotton in Uganda: Designing an Ex-ante
Assessment to Support Decision-making. “IFPRI Monograph.

Bt maize in the Philippines
• Growing Bt maize
significantly increases
profits and yields
• Significant insecticide use
reductions
• Adopters tend to be
– Cultivate larger areas
– Use hired labor
– More educated
– have more positive perceptions
of current and future status
Change in economic surplus
(mill pesos)
Producer Surplus 7906
Seed Innovator 703
Total Surplus 8609
Producer Share (%) 92
Innovator Share (%) 8
Bt maize studies in Philippines led by Dr. Jose
Yorobe Jr. with 466 farmers in 16 villages Isabela
Province, Luzon, South Cotabato Province,
Mindanao

Bt cotton in Colombia
 Evidence of yield
enhancement rather than
pesticide reductions
 Bt farmers benefited where
the target pest is
economically important
 Sampling bias important:
adopters were better–off
farmers
 Institutional context critical
Photos credit: © Zambrano 2009
Source: Zambrano, P., L. A. Fonseca, I. Cardona, and E. Magalhaes. 2009. The
socio-economic impact of transgenic cotton in Colombia. In Biotechnology and
agricultural development: Transgenic cotton, rural institutions and resource-poor
farmers, ed. R. Tripp. Routledge Explorations in Environmental Economics 19.
London: Routledge. Chapter 8. Pp. 168-199

Bt maize in Honduras
 Excellent target pest control
 Bt yield advantage 893-1136 Kg
ha-1 yield (24-33%)
 Bt maize yields preferred even
by risk averse producers
 100% higher seed cost than
conventional hybrid
 Institutional issues important
Photos credit: © Sanders and Trabanino 2008
“Small “Resource-Poor” Countries Taking Advantage of the New Bioeconomy
and Innovation: The Case of Insect Protected/Herbicide Tolerant Maize in
Honduras.” Jose Falck Zepeda, Arie Sanders, Rogelio Trabanino, Oswaldo
Medina and Rolando Batallas-Huacon. Paper presented at the 13th ICABR
Conference “The Emerging Bio-Economy”, Ravello, Italy June 17-20, 2009.

Concluding comments
• Biotechnology and Genetically Modified Crops are still only
technologies
• Similarities and differences with other technologies
• Actual and potential benefits from GM technology
adoption…important tool to consider. Cannot disregard
• Developments in the public sector in developing countries
• Additional crops/traits of interest whose limitations can
probably be only addressed through biotechnology means,
will be available if we manage to resolve institutional and
regulatory issues.

José Benjamin Falck-Zepeda, Ph.D.
Senior Research Fellow / Leader Policy Team Program for
Biosafety Systems
IFPRI
2033 K Street NW
Washington, DC 20006-1002
USA
j.falck-zepeda@cgiar.org
Brief bio/pubs: http://www.ifpri.org/staffprofile/jose-falck-zepeda
Blog: http://socioeconomicbiosafety.wordpress.com/
Follow me on Twitter: @josefalck

Jose Falck Zepeda presentation on biotechnology and developing countries Georgetown University april 2014

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Jose Falck Zepeda presentation on biotechnology and developing countries Georgetown University april 2014