The International Consortium on Agricultural Biotechnology Research (ICABR)


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Modern Biotechnology for Small-Scale Farmers in Developing Countries: Contradiction or Promising Option?
Matin Qaim
Center for Development Research (ZEF)
University of Bonn – Germany



On the threshold to the 21 st century, hunger and poverty are still persistent phenomena in large parts of the world. Against the background of limited land and water resources, the rapid demographic and economic development will further deteriorate the situation, unless sustainable ways of agricultural productivity augmentation can be identified and realized on a global basis. Biotechnology is a promising alternative in this respect, since it could contribute to an increased food production without the need for ever more chemical farm inputs. Moreover, agricultural biotechnology could effectively promote overall economic growth in developing countries, where the farm sector is often the most important source of income and employment. However, critics believe that high-tech – particularly genetic engineering – is inappropriate for the use in developing countries. And, if applied in these countries, they argue, the technology would be biased towards the larger farmers, entailing a further asset concentration among the rich. Such reservations are mostly based on past experiences with mechanization and green revolution technologies in low and middle-income countries. Advocates, on the other hand, argue that biotechnology, an innovation being embedded into the seed, is scale-neutral and could benefit large and small-scale farmers alike – even those located in marginal agroecological zones. Empirical evidence to back the different viewpoints is so far hardly available and policymakers are hesitant about appropriate strategies.

The current paper attempts to contribute to this discussion by evaluating potential socioeconomic effects of a transgenic virus-resistance potato technology in Mexico. The basic technology has been transferred by the private US Company Monsanto under a royalty-free licensing agreement. Several locally used transgenic potato varieties have already been field-tasted in Mexico, and commercial application is expected to start from the year 2000 onwards. A thorough analysis of Mexican potato farming systems constitutes the basis for an ex ante assessment of the likely technology impacts. Projected enterprise budget calculations for different farm sizes demonstrate that the transgenic virus-resistant varieties hold great potentials to increase the productivity of national potato production. In fact, benefits could be greatest for the small-scale farmers, because they are currently facing the higher virus-induced yield losses as compared to the larger producers. Still under the given potato seed distribution system in Mexico, it is likely that the small-holder access to the technology will be only limited, with concomitant low adoption rates among this group of farmers. By means of an economic surplus model it is shown that the virus-resistance technology could lead to an increasing income concentration, in spite of its higher suitability for small and resource-poor producers. This, however, could be prevented if appropriate policy measures were implemented to address the technology dissemination constraints. A scenario consideration, in which a targeted seed distribution mechanism for small-scale farmers is assumed, even results in a considerable improvement of the current income distribution situation. This analysis illustrates that modern biotechnology in general can be very beneficial for small-scale farmers in developing countries, but that appropriate policy support will be needed to achieve the desired development objectives.