falck zepeda overview of policy issues ssa for the afdb april 2011
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Overview of Key Policy Issues Impacting theAdoption of Bio-technology in Africa
Jos Falck ZepedaResearch Fellow
Co-Leader Genetic Resources Policies Project andLeader Policy Team Program for Biosafety Systems (PBS)
IFPRI
Presentation made at the African Development Bank, Tunis, Tunisia April 14, 2011
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Outline
Policy Issues Investments in R&D
capacity
Legal issues: Liability and
redress Markets and trade:
Labeling
Socio-economic issuesassessment
Experience withassessments
Tool supporting decisionmaking
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1. Investments in R&D capacity
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Investments in priority setting
Sub-regional priority setting exercises completed,mostly based on expert opinion
Approaches used to date may have not lead to
the identification of best portfolio of activities Priority setting require a robust quantitative and
qualitative foundation
Proposal: Collect more and better regional and national data
More systematic analysis
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An example for biotechnologyprioritization from ASARECA
Commodity InterventionConstraints*
I F V W P D S B N Q G
Maize GM MM s m l
Beans GM MM m l l
Sorghum GM MM m m l
Banana TC GM MM s m s m
Wheat GM MM s,l s,l
Potatoes GM, TC m s s s
Coffee MM F GM, TC m s l s
Cotton GM, MM m,s s m s
Rice GM MM s s s m s
Cassava GM MM D s s,m s,l
Groundnut MM GM l m l
Sweet potato GM MM m s,m m,l s
Crop plants D, F s,l
Key to interventions:GM = genetic modificationF = fingerprintingD = diagnosticsTC = tissue cultureMM = molecular marker
Key to priorities: red = first , blue = second , yellow = third , green = fourth
Key to time-frame: s = short term (technology transfer) , m = medium term (genes known)l = long term (genes to be cloned)
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IFPRIs prototype economic evaluation and priority setting
approach for informing biotechnology strategy and investmentdecision making processes
Production, Trade, Prices
(levels, trends, projections)
Agroecological ZonesCrop diversity
Current & Future
RegionalImportance?
Commodity
Prioritisation
Compile available data on
the location, magnitude andeconomic consequences of
major production constraints
Type and impactof major production
constraints?
ConstraintPrioritisation
Economic
payoffs to constraintmitigation?
Design scenarios
for assessing effects ofmitigating constraints
Existing, emerging orpotential biotechnology
options
Policy and Investment
Implications forBiotechnology
R&D and Regulation
Payoff matrices
by crop and country
Payoff matrices
by crop and country
Payoff matrices
by crop and country
Technology-Specific
Payoff matrices(Crop/Country/Region)
Payoff matrices
by crop and country
Payoff matrices
by crop and country
Payoff matrices
by crop and country
Payoff matricesby crop and country
1. CommodityScreening
2. ConstraintScreening
3. Potential Payoffs:Commodity/Constraint-Scale
4. Potential Payoffs:Technology-Scale
Likely regulatory regimes
governing R&D, technology
use, marketing & time lag,and adoption implications
StakeholderDialogue
5. Strategy/PolicyProcesses.
Investment DecisionMaking
Source: Wood, Zambrano,You, Falck Zepeda, Sichra,2008
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Investments in R&D capacity 1990s under investment in R&D activities
2008 improving but still lagging
Concentration in a few countries
Many countries, especially Francophone Africa, face
fundamental capacity and investment challenges
Without appropriate funding the innovation system cannotaddress effectively SSA productivity constraints
Ourexperience is that biotech R&D also under invested
Proposal:
Systematic and focused capacity assessments
Alleviate the constraint political will
Source: partially based Beintema and Stads, 2011, IFPRI / ASTI
Food Policy Report 24
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Plant breeding investments by crop in Kenya(As a percentage of total breeding budget)
FAO study onplant breedingandbiotechnology
Compare /contrast withnationalpriorities
Identifyoutputs fromresearch - ROI
Contrast toother sectorinvestments
0
5
10
15
20
25
30
35
40
wheat
rice
maize
so
rghum
millet
othersmallgrain
oilseed
fibercrop
root&
tubers
Forages
o
therlegumes
veg&
fruits
misc.
1985 1990 1995 2001
Source: Falck Zepeda et al. 2007
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IFPRI matrix of policy status andpolicy objective based investments
Policy Status PolicyObjectives
Tools
plantgenetic
resources
conservation
and
enhancement
Tools
PlantBreeding
Tools
BiotechnologyTool
Cross
Cutting
(1) Setting the stage
for using biotech
products
Development
of conventional
capacitiesEstablishment
of a regulatory
system to
facilitate access
to
biotechnology
products
Improvement
of the
technology
delivery system
Invest in
germplasm
bankCharacterizati
on of plant
genetic
material
Support for
NARS applied
and adaptiveresearch in
agronomy and
conventional
plant breeding
(infrastructure and
human resource
development)
Development of
operational IPR
regulatory
frameworks
Design of seed
legislation
Development of
operational
biosafetyframeworks
Support for NARS
applied and
adaptive research in
molecular biology
and associated
sciences within
innovative cluster
(infrastructure and
human resource
development)
Promotion of
agricultural technical
services industrySupport entry of
private sector into
seed and R&D
systems
(2) Improving the efficiency and products of
agricultural research through increased used of
biotechnological tools
(3) Building capacities to develop
biotechnology based innovations
Source: Falck Zepeda et al. 2007
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2. Legal issues: Liability and redress
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What is liability and redress? Liability: refers to the obligation of a person or
institution to provide compensation for damage itis deemed to be responsible for. (Boadie 2007)
Redress: risk mitigation procedures Possibility of transboundary movements of GMOs
opened the possibility of international liabilitymanagement regimes
Consider concepts such as significant damage,likelihood, comparison to baseline, attribution tooperator, compensation, restoration,environmental biodiversity (human health)
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Strict liability and innovation Countries may implement civil liability systems with
strict liability clauses
Strict liability refers to those systems where
Imposition of liability on a party without a finding offault
Neither good faith nor the fact that the defendant tookall possible precautions are valid defenses
Strict liability often applies to those engaged inhazardous or inherently dangerous ventures
Innovators and product developers may not investin those countries with strict liability clauses
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Nagoya Supplementary Protocol onLiability and Redress Supplement to the Cartagena Protocol on Biosafety Guides parties to implement administrative procedure
where competent authorities require operators to takeresponse measures in the event of damage
Allows parties develop in their national laws civilliability procedures
Requires building/strengthening capacity to
Define and assess damage
Enforce response to damage
Establish financials security mechanisms
Establish risk management systems and instruments
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3. Market and trade issues: Labeling
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Labeling of GM crops Labeling viewed as way of addressing some
consumer concerns including safety, religious,ethical and the right to know about foods
Decision points for designing labeling systems
Mandatory vs. Voluntary
Product vs. Process
Coverage Thresholds
Decision options have a cost/benefit andenforcement implications especially in developingcountries
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Mandatory vs. Voluntary labeling ofGE food
Voluntary systems preferred as only those trulyinterested and willing to pay are targeted forimplementation
Mandatory systems increase cost to societywithout any consumer group discrimination
Some studies show an increase of 10% of foodprices
Complication: analytical methods to test for thepresence of GM products are not completelyreliable, lack sensitivity and are expensive
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Developing countries issues Many foods are sold unpackaged labelling is
impractical
With high illiteracy levels labels are ineffective
Where communications are poor and people areuneducated raising public awareness about GMOsis more difficult question value of label
Many countries often do not have the infrastructure
or financial capability to implement adequaterecord keeping - controls
Major issue: enforcement
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4. Socio-economic issues
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Motivations for the assessment ofsocio-economic considerations
For biosafety regulatory purposes one needs tounderstand:
the impact of the inclusion of socio-economic issues indecision making
The relationship /interaction with the risk assessment process
Consider technology flows, opportunities lost due to
additional regulatory hurdles and who is impacted more
Technologyassessments
Technology approvalwithin biosafety
regulatory processes
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Important distinction
What are the goal and objectives for socio-economicassessments as related to biosafety or technology decisionmaking?
Democratic societies right to know vs. Freedom to operate
vs. Freedom to choose
An impact assessmentduring the biosafetyregulatory stage needsto be ex ante
For monitoring orstandard technologyevaluation purposes this
is a conventional ex-post assessment
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What do we know from the economic impactassessment literature to date?
A review of 187 peerreviewed studies
Different impact domains
Farmers, household andcommunity
Industry and markets
Consumers
Trade
Citation: Smale, Melinda; Zambrano, Patricia; Grure, Guillaume; Falck-Zepeda, Jos; Matuschke, Ira; Horna, Daniela; Nagarajan, Latha;Yerramareddy, Indira; Jones, Hannah. 2009. Measuring the economic impacts of transgenic crops in developing agriculture during the first
decade: Approaches, findings, and future directions. (Food policy review 10) Washington, D.C.: International Food Policy Research Institute(IFPRI) 107 pages
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IFPRI Food Policy Reviewconclusions
On average, profitablebut averages maskvariability by agro-climate, host cultivar, trait,farmer
Too few traits, too few cases/authors
generalizations should not be drawn yet...needmore time to describe adoption
Next decade Cross cutting issues for further study including
impacts of poverty, gender, public health,generational
Need for improved methods
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Bt cotton in the U.S. First estimates
-22 -12 -14
58 37 37
141
8097
63
8593
-50
0
50
100
150
200
250
300
1996
Industry
US Farmers
Consumers
Foreign Farmers
1997 1998
Industry
36%
Consumers19%
US Farmers
45%
Total benefit estimates(Millions US $)
Falck-Zepeda, Traxler & Nelson 1999, 2000
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Black Sigatoka Resistant Bananas inUganda
If approval delayed,forego potential annual(social) benefits of +/-US$200 million
GM crops (food) withtangible benefits,increases consumersacceptance of GMbanana for 58% of thepopulation
Higher negativeperceptions amongst theurban elite as comparedto rural producers
Photos copyright: Kikulwe 2009
Kikulwe, E.M., E. Birol, J. Wesseler, J. Falck-Zepeda. A
latent class approach to investigating demand for geneticallymodified banana in Uganda Agricultural Economics.Publication Forthcoming 2011.
http://www.gmo-compass.org/features/zoomimage.php?image=/data/imagescontent/grocery_shopping/017_banana-blacksigatoka_zoom.jpg&width=500&height=332 -
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Bt cotton in Uganda
Positive yield impacts onnet benefits
Smaller IRR probablyexplained due to lowinitial yields need to
improve overall cottonproductivity
Probability of a negativereturn can be as high as
38% with a technologyfee as charged in othercountries
Photos credit: Horna 2009
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Ex ante studies at a regional level
Country Crop/Trait Representative findings
West Africa Bt cotton Countries are worse off by not adopting Smaller net benefits and returns than other
studies Negotiating downward the technology fee is key
India, China,Philippinesand otherAsian
Bt rice Adoption gains are up to 10 times the level oflosses due to potential closing of export market totrade sensitive countries
Falck Zepeda, J.B., D. Horna, P. Zambrano and M. Smale. Policy and Institutional Factors and the Distribution of Economic Benefits and Risk fromthe Adoption of Insect Resistant (Bt) Cotton in West Africa. 2008. Asian Biotechnology Development Review 11(1):1-32.
Falck Zepeda, J., D. Horna and M. Smale. Distribution of economic benefits and risk from the adoption of insect resistant co tton in West Africa2008. African Journal of Agricultural and Resource Economics.
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Bt maize in the Philippines
Growing Bt maizesignificantly increasesprofits and yields
Significant insecticide
use reductions Adopters tend to be
larger, use hired laborare more educated,
have more positiveperceptions of currentand future status
Change in economic surplus
(mill pesos)
Producer Surplus 7906
Seed Innovator 703
Total Surplus 8609
Producer Share (%) 92
Innovator Share (%) 8
Bt maize studies in Philippines led by Dr. Jose Yorobe Jr. with 466 farmers in16 villages Isabela Province, Luzon, So. Cotabato Province, Mindanao
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Bt cotton in Colombia
Evidence of yieldenhancement rather thanpesticide reductions
Bt farmers benefited
where the target pest iseconomically important
Sampling biasimportant: adopters were
better off farmers Institutional context
crucial
Photos credit: Zambrano 2009
Source: Zambrano, P., L. A. Fonseca, I. Cardona, and E. Magalhaes. 2009. Thesocio-economic impact of transgenic cotton in Colombia. In Biotechnology andagricultural development: Transgenic cotton, rural institutions and resource-poor
farmers, ed. R. Tripp. Routledge Explorations in Environmental Economics 19.London: Routledge. Chapter 8. Pp. 168-199
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Bt maize in Honduras
Excellent insect control Bt yield advantage was
24-33%
Bt maize yields preferred
even by risk averseproducers
100% higher seed costthan conventional hybrid
Institutional issuesimportant
Photos credit: Sanders and Trabanino 2008
Small Resource-Poor Countries Taking Advantage of the New Bioeconomyand Innovation: The Case of Insect Protected/Herbicide Tolerant Maize inHonduras. Jose Falck Zepeda, Arie Sanders, Rogelio Trabanino, Oswaldo
Medina and Rolando Batallas-Huacon. Paper presented at the 13th ICABRConference The Emerging Bio-Economy, Ravello, Italy June 17-20, 2009.
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Institutional and productive issues thatcan define adoption and its impact
Information about the technology Information about marketing and other consumer
issues
Extension services
Credit Productive inputs (fertilizer, pesticides,
herbicides..)
Technology fees and seed prices
Intellectual property issues Seed systems and competition
IFPRI/PBS socio economic research
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IFPRI/PBS socio-economic researchand policy making
Uganda oBt cotton studyo
Presentation of synthesis of cotton impactstudies globally
Philippines o Bt maize studieso Cost of compliance and discussions on thesystems efficiency
Kenya and Malawi o Ongoing/planned Bt cotton studies
o Planned synthesis presentations/seminars
ECOWAS/WAEMU oPlanned study on impact of harmonizationefforts in COMESAo Potential impact of Bt cotton introduction inWest Africa (WB discussions)
APEC/ASEAN Trade studies rice
India o Labeling and trade worko Farmer suicides discussion paper
Protocol level o Mexico expert meeting to discuss socio-economics in 2008..o Supported survey
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Socio-economic considerations and theCartagena Protocol on Biosafety (Article 26.1)
especially with regard to the valueof biological diversity toindigenous and local communities.
socio-economic considerationsarising from the impact of livingmodified organisms on theconservation and sustainableuse of biological diversity,
Voluntary it is
notmandatory
Strictly anarrow scope
may take into account,
consistent with their internationalobligations,
1. The Parties, in reaching adecision on import under thisProtocol or under its domesticmeasures implementing theProtocol,
SOCIOECONOMIC CONSIDERATIONS
Especially WTO
Impactparameter??Focus??
Relate to importdecisions Domestic lawsand regulations
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Another important distinction
Article 26.1 of theCartagenaProtocol and
(future) derivedagreements
National laws,regulations, policiesand implementing
regulations
Relatively fewlimitation except
bindinginternationalagreements (WTO)and existing laws,regulations, policies
Limitation is the textof Article 26.1, other
international bindinginternationalagreements (WTO)
P i l l d d i i f
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Practical structural and governance decision forsocio-economic inclusion in the decision makingprocesses
Issues OptionsType of inclusion No inclusion vs. Mandatory vs. Voluntary
Scope Narrow interpretation article 26.1 Narrow set of socio-economic issues Broader set of assessments (SIA or SL)
Approach Concurrent but separate vs. Sequential vs. Embedded Implementation entity
Assessment trigger Each submission vs. Event-by-event
When Laboratory/greenhouse vs. CFTs vs. Commercialization For post release monitoring At all stages?
How? Choice of methods for ex anteassessments is much more limited than forex post
Decision making rules and standards Method integration, standards, tolerance to errors
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Potential implications from the inclusion ofsocio-economic considerations into decisionmaking
Regulatory costs will increase
Potential regulatory delays can reduce Number of technologies
Number of technologies released by the public sector -> cropsand traits of a public good nature
Potentially introduce more uncertainty to the process
May lead to an unworkable system if rules andstandards are not clear
Society gains information on technology impacts
What will society do with this information?
Wh t d i i k d ith
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What can a decision maker do withthe results a socio-economic
assessment?
What is the decision making rule and the standard by which toguide such decision?
Who is the best person to make this decision? Is it a regulator,decision makers, or the persons who will endure the risk and the
benefits of the technologyfarmers?
Negative SocioEconomic
Assessment+
Biosafetyassessmentrenders product
as safe
Not approval
Require moreinformation
SEA
BA
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What can a decision maker do with the resultsa socio-economic assessment?...continued
Considering that.
Socio-economic assessment include quite a bit of art in a process thatuses science and scientific tools
Lots of uncertainties and subjectivities
Negative SocioEconomic
Assessment dueto institutional
issues
+Biosafetyassessment
renders productas safe
Not approve
Require moreinformation
SEA
Approve afterresolving
institutional issues
BA
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Key Messages
Robust evidence based priority setting and R&Dcapacity analysis are critical for decision making
Adoption of GE biotechnologies has been overallpositive, but results are variableno different than anyother past technology release
Benefit variability significantly influenced by market,management and institutional issues
Systematic understanding of all potential implications ofissues impacting GM crop adoption and diffusion inSSA is critical
Prudent to judge technology by its own merits
Think about crops and traits of interest to developingcountries
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Key messages Article 26.1 of the Cartagena Protocol
is not mandatory
has a very specific scope, target and objectives focused onbiodiversity
National laws and regulations may incorporate socio-economics
If decision is inclusion then need to focus on Implementing regulations and consequences from inclusion of
socio-economic
Addressing transparency, feasibility, decision makingstandards
Ensure capacity to conduct feasible socio-economicstudies in a cost efficient and timely manner
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