Trade-offs for Benefits of Biotech Crops

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Renewed efforts by the U.S. and EU to develop a free trade agreement for the two economies require addressing some intractable agricultural issues.  The cultivation and use of biotech crops is one of them.  As U.S. Trade Representative Ron Kirk said in a speech at the London School of Economics on U.S.-EU trade policy, “if food and agricultural imports are blocked by health- or safety-related measures, then those measures must be supported by sound science and risk assessment.”

While the political opposition to biotech crops in the EU is well entrenched, analysis reported in Social Stigma and Consumer Benefits: Trade-offs in Adoption of Genetically Modified Foods by researchers at the University of Otago in New Zealand offers hope that consumers in the EU understand the tradeoffs involved.  The researchers set up fruit stands in New Zealand, Sweden, the United Kingdom, Belgium, France and Germany and offered ‘certified organic’, ‘low residue, local designation’ and ’100 percent spray free, genetically modified’ fruit (actually all the fruit was from the same source and of the same quality and no GM varieties of common fruits are available).  Prices were varied at the average market price, 15 percent above and 15 percent below.  Customers also filled out questionnaires to compare ‘stated preferences’ with ‘revealed preferences’ from actual purchases.

The researchers found a marked preference for the organic option when all three options were offered at the market price.  Substantial price sensitivity for the GM option was shown when there was a 15 percent premium price for organic and a 15 percent discount for the GM fruit.  Except for Belgium were imported grapes were used, the GM market share was 30-60 percent at the lower price.  In open ended comments, the ‘spray free’ designation seemed to be the key factor in the purchasing decision.  Consumers will consider buying GM products if there is a clear consumer benefit in addition to price and the benefit is communicated effectively.

Benefits of biotech crops that consumers can most easily grasp are environmental ones associated with changes in insecticide use and reduced greenhouse gas emissions (GHG) from minimum tillage practices.  Estimates of these benefits are provided for 2010 and accumulative for 1996-2010 in GM Crops: Global Socio-economic and Environmental Impacts 1996-2010 by Graham Brookes and Peter Barfoot of PG Economics Ltd, UK.  Benefits of pesticide reductions are measured by the reduction in the amount of active ingredients in insecticides used and the annual Environmental Impact Quotient (EIQ), a measurement developed by Cornell University that integrates the various environmental impacts of individual pesticides into a single ‘field value per hectare’.  The EIQ is multiplied by the amount of active ingredient used per hectare to produce a field EIQ value.

The environmental benefits are clearly seen for insect resistant biotech cotton and corn.  For the U.S. in 2010, biotech insect resistant cotton compared to conventional cotton reduced the insecticide active ingredients applied by 23.2 percent and the annual field EIQ by 25.7 percent.  China, the largest producer of cotton, had similar results with insecticide active ingredients down by 22.5 percent and the field EIQ down by 21.7 percent.  India, with the largest acreage planted to cotton, had a 36.7 percent decline in active ingredients in insecticides in 2010 compared to the entire crop as conventional cotton and a 43.5 percent decline in field EIQ.  Australia had the largest declines for the countries analyzed with 73.0 percent decline in active ingredients and a 75.0 percent decline in field EIQ.

The percentage of acres using insect resistant corn is not as large as cotton because not all farms have insects that can be controlled by insect resistant corn.  In the U.S. in a typical year about 10 percent of the corn crop is treated with insecticides for corn boring insects and 30 percent is treated for corn rootworms.  The widespread use of insect resistant corn has resulted in ‘area wide’ suppression of pests like the European corn borer resulting in conventional crops benefiting from less insect pressures.  In 2010 the use of insect resistant corn in the U.S. resulted in active ingredients of insecticides declining by 83.8 percent compared to all conventional insecticide use and a decline of 82.3 percent in annual field EIQ load.  In Brazil about 50 percent of the corn acreage is treated with insecticides and the number of sprays per field is reduced from five to two.

The availability of herbicide tolerant crops has also facilitated the shift in North and South American to no-till and minimum-tillage cropping systems which require less tractor use and increase sequestration of soil carbon.  Brookes and Barfoot estimate that lower fuel use for biotech crops in 2010 reduced GHGs by 1.72 billion kilograms (kg) of carbon dioxide, the equivalent of removing 760,000 cars for a year.  Increased carbon sequestration from no-till and minimum-till has been 17.4 billion kg of carbon dioxide, the equivalent of removing 7.8 million cars.  Reduced soil erosion is another benefit of these tillage systems, but it was not measured.

According to Brookes and Barfoot, about 55 percent of the environmental benefits of use of biotech crops since 1996 have been in developed countries and 45 percent developing countries.  About 75 percent of the benefit in developing countries has been from insect resistant cotton because the world’s two largest cotton producers are China and India.

The European Food Safety Authority (EFSA) continues to affirm that biotech crops are safe for humans, animals and the environment.  The EFSA’s Panel on Genetically Modified Organisms recently ruled on an emergency petition by France on the safety of Mon 810, a variety of biotech corn, authorized for cultivation in the EU since 1998.  They found that France had not submitted any specific scientific evidence for human and animal health or the environment that would invalidate EFSA’s previous risk assessment of Mon 810 corn as safe.

Biotech crops are now in their 17th year of commercial cultivation and use with over 3 billion acres planted globally, with crops used in almost every country around the globe.  They have been studied repeatedly by regulatory agencies and found to be safe when managed under various regulatory programs.  The benefits clearly out weight any risks that have been studied.  It is up to the EU negotiators to decide how to engage the U.S. in the interest of their own citizens.

Ross Korves is an Economic Policy Analyst with Truth About Trade and Technology

 

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Ross Korves

Ross Korves joined Truth About Trade and Technology in 2004 as the Economic and Trade Policy Analyst. Researching and analyzing economic issues important to agricultural producers, Ross provides an intimate understanding regarding the interface of economic policy analysis and the political process. Mr. Korves served the American Farm Bureau Federation as an Economist from 1980 – 2004. He served as Chief Economist from April 2001 through September 2003 and held the title of Senior Economist from September 2003 through August 2004. Born and raised on a southern Illinois hog farm and educated at Southern Illinois University, Ross holds a Masters Degree in Agribusiness Economics. His studies and research have expanded internationally through his work in Germany as a 1984 McCloy Agricultural Fellow and study travel to Japan in 1982, Zambia and Kenya in 1986 and Germany in 1987.

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