The International Consortium on Agricultural Biotechnology Research (ICABR)
Agricultural Biotechnology: why would farmers adopt?
Over the past few years discussions on benefits and costs of genetically engineered crops has intensified in many countries. This might be expected as debates on genetic engineering generate as much skepticism as they do enthusiasm. This is because food products often entail cultural, religious and even political visions of society.
A number of benefits are expected from the use of modern biotechnology methods in agriculture. These include: the decreased use of harmful pesticides, higher yields from reduced crop losses and increased profitability for farmers. In addition crops with specific quality traits such as improved nutritional content, disease resistance or improved taste and texture could also provide consumers with a wide variety of nutritional and health benefits.
While the adoption of GE crops has been very widespread, since their introduction 5 years ago, should we expect all farmers to adopt GE crops within the next few years? A positive response is based on two types of expected gains: higher yields from reduced crop losses and cost reductions. Though seed costs are higher due the proprietary nature of the traits incorporated in the seed and restrictions on their use, decreased use of other inputs should outweigh these. Labour costs may also be down with their cropping and management flexibility these crops are expected to provide. The combined effects should explain the rapid stimulus to adopt these crops, from a rational economic perspective. But do they do so? Could farmers be adopting even with no significant added economic benefit?
The paper reviews some of the major studies undertaken in the adoption of genetically engineered varieties
How well have the GE crops performed compared to the conventional varieties? Data, to permit a rigorous evaluation of yields, pesticide and herbicide use as well as that on profitability are limited and those that do exist are difficult to use in a comparative manner. Furthermore, evaluations of economic performance of GE crops are also often location specific making it difficult to generalise the results.
These estimates reflect very high rates of technology adoption during the first years of their commercialisation and are particularly impressive when compared to that of other seed technologies, such as hybrid maize (Benbrook, 1999). For instance, adoption of HR soybean in the first four years exceeds that of hybrid maize adoption over the first seven years (Kalaitzandonakes, 1999). Are yields higher for GE varieties? Is there a reduction in pesticide use and costs? Do GE crops provide for easier and more flexible crop management and cultivation than do conventional varieties? Overall empirical evidence suggests that these answers vary substantially between crops and regions and years (Fernandez Cornejo, 1999, 2000, 20001;Carpenter and Gianessi, 1999, 2000, Benbrook, 2000, 2001, Mara et al. 1999, Duffy ,2000). Since the empirical evidence does not strongly indicate, that in general, they provide either significantly lower pesticide costs or higher yields or higher profits, many analysts attribute the benefits of GE crops to management flexibility, which these varieties provide (Giansessi and Carpenter, 1999, 2000, 2001, Benbrook, 2000, ERS, OECD, 2001). Yet when farmers were asked why they were adopting these varieties, the only 6.4%, of farmers indicated that the reason was for planting HR soybeans, was flexibility in management ( that is easier rotation, used reduced tillage or no-till systems, etc.), 2% to adopt more environmentally friendly techniques and 6.8% other reasons, 6.8%.
Could it be that adoption increased so rapidly because of belief in its expected high performance? Or could it simply be a bandwagon effect for technology adoption regardless of actual monetary benefits. It is simply better to be numbered among the adopters than not. Certain researchers have remarked that farmers like to have clean fields , which RR varieties can provide and this could in fact be a factor in their adoption (Benbrook, 2000). Similar behaviour occurs in investment and stock market behaviour with the now common bubble paradigm (Shiller, 1986).
Though available data and studies are limited, and generally find that in terms of profits, yields and pesticide and herbicide use, genetically engineered crops give very varied results across regions, crops and years. The data on yields do not show that RR varieties outperform conventional varieties consistently, even where the RR varieties have performed the best, that is in Illinois. While there may have been some reduction in herbicide use in the case of soybeans, but much debate exists on the extent of the reduction in active ingredients compared to other programs of weed control. For Bt maize, yields tend to be higher for adopters than non-adopters but the effect on profitability is less certain as it is tied to infestation levels of ECB. There is also substantial variability in the susceptibility to the pest across regions, thus there may not be any economic advantage to their adoption in many areas As in the case of HR soybeans, Bt maize is relatively easy to use and avoids scouting for ECB. Profitability of Bt maize is found linked to the probable severity of pest infestations, which has varied in past years..
Though almost all ex-ante estimates of profitability predicted substantial increases in variable profits from the adoption of GM crops, ex post studies of GM crop varieties does not give consistent evidence of profit increases for adopters compared to non adopters, in general. Increased costs of the technology are not uniformly compensated for by yield increases or reductions in pesticide and herbicide use. It is probably too early to properly assess the farmers response as well as the economic benefits and yield effects of these technologies. Furthermore, there are risks to the development of resistant weed and insect resistance, which could in the longer run affect the economic valuations of these technologies.
Given the present evidence and unanswered questions which they provoke, further survey work on adoption reasons need to be undertaken to better understand the rapid, widespread adoption. Given the relatively short period of their market availability, it is perhaps too early to provide a rigorous assessment of the benefits and costs of the use of genetically engineered technologies in agriculture. . Only with a longer time series of observations , both from field trials and on farm practices will one be able to evaluate with confidence the overall economic impact of these crops.
 The views expressed in this paper are those of the author and do not necessarily correspond to those of the OECD Secretariat or of member governments of the OECD.
2. At present several commodities dominate the market for genetically engineered crops: soybeans, maize, cotton, canola and potatoes. And those most widely used focus on specific agronomic traits such as resistance to specific herbicides (soybean, cotton, maize) or particular insects(corn and cotton). While most crops carry only one agronomic trait some crop varieties incorporate two traits, for instance, there are herbicide and insect varieties of maize and cotton.
 Adopting GE varieties requires no special skills, in fact one might assume, that it reduces need for farming skills. This is in contrast to RBst to stimulate milk production, which may require higher management skills and some considere better adapted to larger more mechanised dairy operatio ans.