Source – Captial Ag Press
By Mateusz Perkowski
Date – 14 Feb 2014
Website – www.capitalpress.com
Biotech companies are often perceived as the financial beneficiaries of transgenic crops, but it’s actually end users who gain the most, according to an economist.
“Consumers, in the form of savings, have benefited most from the technology,” said Nicholas Kalaitzandonakes, agribusiness professor at the University of Missouri.
Kalaitzandonakes spoke about the “winners and losers” from genetic engineering in world agriculture at a Feb. 13 lecture sponsored by Oregon State University’s Outreach in Biotechnology program.
Consumers have realized a net economic gain of roughly $130 billion from genetically engineered crops since their adoption began in mid-1990s, according to Kalaitzandonakes’ “meta-analysis” of other studies.
Improved yields and other efficiencies associated with biotech crops have boosted production of major food and fiber commodities, thus driving down their costs, he said.
In the aggregate, the price decrease has resulted in a net economic loss to the world’s farmers of about $30 billion, he estimated. He compared the price of non-biotech commodities and their lower yields with biotech crops that produce higher yields at a lower price.
However, the actual impact on growers in different countries is more complex because yields of biotech crops increased dramatically, Kalaitzandonakes said.
Over the long term, all innovations in agriculture result in a “treadmill effect” for the world’s farmers, he said. As the benefits of improved yields are transferred to consumers, growers must keep improving just to stay at the same economic level.
However, farmers who stay at the forefront of technological progress are able to reap the value before it ultimately shifts to consumers, Kalaitzandonakes said. “Adopters do gain as they go along.”
Farmers in the U.S., for example, have seen a net economic gain from biotech crops while those in the European Union, which has prohibitions against such technology, have experienced a loss, he said. Overall, growers in countries that have embraced biotechnology have profited, but those net gains have been surpassed by the losses felt elsewhere around the globe.
However, the principle applies to other advances — such as global positioning systems and precision agriculture — which boost the productivity of some farmers to the detriment of others, Kalaitzandonakes said.
“They are going to do the same thing,” he said.
“Biotech companies are often perceived as the financial beneficiaries of transgenic crops, but it’s actually end users who gain the most, according to an economist.”
Hmmmm…let’s look at that.
(1) According to the US Department of Agriculture’s Economic Research Service, the average per-acre cost of soybean and corn seed increased 325% and 259%, respectively, between 1995 and 2011. This is roughly the time period when acreage of GM corn and soy grew from less than 20% to more than 80-90%.
Moss says that the escalating prices for GM seeds are outstripping increases in grain prices earned by farmers, resulting in farmers being squeezed by higher costs with less returns.
(2)(See this for more: http://www.theatlantic.com/health/archive/2012/03/overhauling-the-farm-bill-the-real-beneficiaries-of-subsidies/254422/.
Big processed-food manufacturers also fared well. According to a 2011 paper by Food & Water Watch and Public Health Institute, soda companies have saved an estimated $100 million each year on their corn bill — mostly for high fructose corn syrup — since supply controls were dismantled.
So to understand the subsidy debate that is about to get underway with the 2012 Farm Bill, it helps to know who ultimately benefits from policies, rather than who directly gets the money. The real winners in the subsidy explosion since the mid-’90′s have clearly been the animal feedlot operators and the largest corporate mega-farms. Suppliers like Monsanto and big grain traders — ADM, Bunge, Cargill, and Dreyfus — benefited handsomely as well. Small and mid-sized growers depend on subsidies to stay afloat, sometimes even in big years; meanwhile, big industrial growers thrive. Isn’t there a better system?
Indeed…