Economic effects of GM crops: Reviewing farm-level evidence The case - - PowerPoint PPT Presentation
Economic effects of GM crops: Reviewing farm-level evidence The case of Bt crops in South Africa by Marnus Gouse Department of Agricultural Economics, Extension and Rural Development, University of Pretoria Delivering Agricultural
Economic effects of GM crops: Reviewing farm-level evidence The case of Bt crops in South Africa
by Marnus Gouse Department of Agricultural Economics, Extension and Rural Development, University of Pretoria Delivering Agricultural Biotechnology to African Farmers: Linking Economic Research to Decision Making 19-21 May 2009 Entebbe Uganda
History
1979 monitored and advised NDA on responsible development and use of modern biotechnology.
in 1997/98 and 1998/99.
Commercial releases to date:
SA has a dualistic agricultural sector Approximately <40 000 large-scale commercial farmers Approximately 240 000 small-scale farmers + Approximately 3 million subsistence farmers SA commercial farmers compare well with US farmers Small-scale SA farmers experience of special interest to rest of Africa Socio-economic studies – evidence to date
Bt Cotton
Adoption of GM cotton in South Africa GM cotton area – percentage of total cotton area
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Bt Cotton % RR Cotton % Stacked cotton % Total GM plantings %
Yield effect due to better bollworm control
All SA studies found yield increases with Bt cotton compared to conventional cotton Field trails by Clark Cotton: 16.8% UP - Irrigation large-scale farmers: 18.5%
UP and Reading – Small-scale Makhathini farmers 16-40% CIRAD – 23% (substantial but not statistically significant) Reading found in later study increases of up to 80% Yield advantage depends on:
Varies from season to season, between regions and between farmers and fields within regions
Bt cotton Yield effect
SA large scale farmers (14-18%) SA smallholders (23->80%) Relatively high yield effect compared to Australia (0%), US (9-11%), China (8-10%) but compares well with India (50+%) and Argentina (25-30+%) Linked to insecticide use – SA smallholder farmers use less than 50% of the
Average dryland smallholder yield over 11 years: only 553 kg seed cotton / ha Commercial dryland farmers 3-4 tons / ha and irrigation farmers > 6 tons/ha (Some countries’ Bt yield benefit more than SA smallholder total production)
Saving on insecticide chemicals to control bollworms
Smallholders:
endosulfan (organophosphate) / ha. Farmers still need to spray for sucking insects like jassids and aphids previously killed in the cross-fire aimed at bollworms Application costs:
But in most seasons, saving on insecticides were not enough to cover increased expenditure on Bt seed due to technology fee – importance of increased yield.
Cotton seed prices and technology fees in ZAR / 25 kg bag of seed
Year Seed cost DeltaOpal (conventional) Seed cost NuOpal (Bt) Bt technology fee RR technology fee Stacked technology fee 1997/98 120
150 165 786.68
150 165 600
170 190 600
185 210 600 240
215 250 600 300
295 295 700 300
350 350 700 350
370 370 785 365
390 390 785 365 1150 2007/08 410 410 785 365 1150 2008/09 430.50 430.50 785 365 1150
Distribution of additional benefit based on 1999/00 and 2000/01 data
Small-scale Dryland Farmers Large-scale Dryland Farmers Large-scale Irrigation Farmers Seed company: D&PL 3% 2% 1% Technology supplier: Monsanto 28% 52% 20% Farmer 69% 45% 79% Primary Consumer: Ginning company 0% 0% 0% Insecticide companies R-90,600 R-777,700 R-1, 086, 400
20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 1978/79 1980/81 1982/83 1984/85 1986/87 1988/89 1990/91 1992/93 1994/95 1996/97 1998/99 2000/01' 2002/03' 2004/05' 2006/07' Hectares
Makhathini Flats Technological triumph but institutional failure: Number of farmers have declined drastically mainly due to lack of credit Vunisa credit and input supplier on Flats – cotton crop is only collateral One buyer – loan recovery rate of 90% But in 2001/2002 a second gin opened on the Flats….. Farmers borrowed from one gin and delivered to other gin Collapse of credit scheme – few farmers able to finance own production
500 1000 1500 2000 2500 3000 3500 4000
1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Total number of smallholders Number of smallholders on Makhathini
0.000 1.000 2.000 3.000 4.000 5.000 6.000
1924/1925 1927/1928 1930/1931 1933/1934 1936/1937 1939/1940 1942/1943 1945/1946 1948/1949 1951/1952 1954/1956 1958/1959 1961/1962 1964/1965 1967/1968 1970/1971 1973/1974 1976/1977 1979/1980 1982/1983 1985/1986 1988/1989 1991/1992 1994/1995 1997/1998 2000/2001 2003/2004 2006/2007
Area (million ha) 0.5 1 1.5 2 2.5 3 3.5 4 4.5 Yield (ton/ha) Area Yield/ha
Bt maize
African maize stem borer (Busseola fusca) and the Chilo stem borer (Chilo partellus) are the most harmful pests to maize and grain sorghum in South Africa (Kfir, 1997) Busseola causes between 5 and 75% damage on maize in Southern Africa every year. Busseola annually reduces South African maize crop by 10% on average. In SA: 10% damage = loss of just under a million tons (white and yellow) valued at 200 million US$ Smallholders: Small-scale farmers agree that stalk borers are the main pest But insecticide application levels differ dramatically between farmers and production areas Insecticide application to control stalk borers on maize not as vital as for bollworms on cotton. Especially for smallholders. = low insecticide saving benefit = low labour saving benefit
0% 10% 20% 30% 40% 50% 60%
1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
Bt Yellow % Bt White % RR Yellow % RR White % Stacked yellow % Stacked white % Total yellow GM area % Total white GM area %
Smallholder yield effect Measure in kg grain yield / kg seed planted
50 100 150 200 250 300 350
kg yield / kg seed plan All sites Northern Highveld Southern Highveld Hlabisa Venda Mqanduli Flagstaff Ow n Conventional isoline Bt 32% 62% 21% 30% 62% 26% 34%
2002/2003 – pooled yield data for the two northern KZN areas (Sim & Hla) Rendered an average 16% yield increase (at 95% stat. sig.) A farmer who planted 10kg of Bt seed in 2002/2003 on average harvested 110kg of grain more than a conventional maize planting farmer. 2003/2004 – pooled data for two sites Rendered an average 5% yield increase (not statistically significant) Conclude that there was no yield difference Following seasons’ yield indications show small or no yield increase - linked to low rainfall and lower than usual stalk borer pressure Large-scale farmers: Yield increases of approximately 10% (depending on season and production practice)
Yield advantage can be measure in two ways:
Quantification of yield benefit for a farmer planting 10kg of seed (2002/2003) Northern KZN
Yield advantage with Bt (16%) 110 kg Value of the yield advantage @ R731/mt* R 80.41 Yield advantage in terms of maize meal quantity ** 108.57 kg Value of the yield advantage in terms of “Sifted” maize meal cost @ R168 for 80 kg R 228 Value of the yield advantage in terms of “Super” maize meal cost @ R240 for 80 kg R 326 *Maize spot price at closest silo (Safex price minus transport and handling) ** Unsifted, self-milled maize meal at a 98.7% extraction rate
If we use the rule-of-thumb of – a household of 7 people needs 14 x 80kg bags of maize meal per year: A 110 kg yield increase means 35 more days of food security. Health benefits of Bt maize: Current Rockefeller supported project with MRC on fumonisin levels
Large and small-scale farmers in South Africa can and have benefited from GM (Bt) crop adoption Important to realise - due to the nature of the technology, farmers will only benefit in seasons when the stalk borer / boll worm infestation levels are significant. Farmers can only benefit from technology if there are functioning and efficient input and output markets (techno triumph but institutional failure) Current indications in SA are that RR maize might be more popular with smallholders than Bt maize – labour saving.