EEP 101-CONTAINMENT OF EEP 101-CONTAINMENT OF RISKS RISKS

&THE EVOLUTION OF &THE EVOLUTION OF BIOTECHNOLOGYBIOTECHNOLOGY

David ZilbermanDavid Zilberman

State of ag biotechnologyState of ag biotechnology

The cup is half full=High adoption rates The cup is half full=High adoption rates in major crops in U.s. Argentina,Chinain major crops in U.s. Argentina,China

Half empty-Half empty- practical ban in Europe &Japanpractical ban in Europe &Japan Restrictions slowed adoption and product Restrictions slowed adoption and product

developmentdevelopment Under-development of technology in minor Under-development of technology in minor

crops& developing countriescrops& developing countries Concern about risk major reason for Concern about risk major reason for

resistanceresistance

Presumed Points of FailurePresumed Points of Failure

1.1. ProductivityProductivity: Biotechnology aims to solve problems of : Biotechnology aims to solve problems of the North; will not make a difference in the South.the North; will not make a difference in the South.

2.2. AccessAccess: Biotechnology is controlled by corporations; : Biotechnology is controlled by corporations; will not be accessible on feasible terms to poor will not be accessible on feasible terms to poor peasants.peasants.

3.3. RisksRisks: Damage to environment and human health, : Damage to environment and human health, contamination of native genetic materials, and loss of contamination of native genetic materials, and loss of crop biodiversitycrop biodiversity

Impacts of ag bio tech on Impacts of ag bio tech on productivityproductivity

Ag biotech and Ag biotech and developmentdevelopment

Ag biotech was developed in the north, with Ag biotech was developed in the north, with application to crop and varieties of application to crop and varieties of developed countriesdeveloped countries

It mostly served to reduce pesticides use It mostly served to reduce pesticides use and improve profitability.and improve profitability.

Is the first generation of biotech appropriate Is the first generation of biotech appropriate to developing countriesto developing countries -will it increase yields?-will it increase yields? How will it affect crop biodiversity?How will it affect crop biodiversity?

We will address these issues hereWe will address these issues here

Theory: Impacts of ag Theory: Impacts of ag biotechnology varybiotechnology vary

The impacts of ag biotechnology on yield depends on The impacts of ag biotechnology on yield depends on where it is appliedwhere it is applied How it is appliedHow it is applied What was used beforeWhat was used before

The management of the crop before and with biotech The management of the crop before and with biotech depend ondepend on socio economic situations andsocio economic situations and institutional arrangement associate with biotechnologyinstitutional arrangement associate with biotechnology

Two important factorTwo important factor The extent of use of chemicalsThe extent of use of chemicals The varieties that are being modifiedThe varieties that are being modified

Productivity: Yield-Increasing PotentialProductivity: Yield-Increasing Potential

Yield = potential output Yield = potential output xx (1 - damage) (1 - damage) damage = damage = f f (pest, pest control)(pest, pest control) Combination of high pest pressure and minimal Combination of high pest pressure and minimal

existing use of pest control existing use of pest control potential for yield- potential for yield-increasing effectincreasing effect

Attractive features of pest-control agricultural Attractive features of pest-control agricultural biotechnologiesbiotechnologies Simplicity of useSimplicity of use Reduction in use of chemicals or laborReduction in use of chemicals or labor Expansion of weather conditions where crop growExpansion of weather conditions where crop grow

Technology, variety changes and Technology, variety changes and yield effectyield effect

Adoption of GMO may entail a switch from local Adoption of GMO may entail a switch from local variety to generic varietyvariety to generic variety

This switch may reduce yieldsThis switch may reduce yields

Yield gain =Reduction of pest damage of Yield gain =Reduction of pest damage of generic varietygeneric variety

- Difference in net yield between traditional and - Difference in net yield between traditional and genericgeneric

ΔY = YGenericpotential (1− DamgBiotech ) −

YLocal vaarietypotential (1− Damgnobiotecg )

Example 1Example 1

Potential yield local variety =4 ton/ hectarePotential yield local variety =4 ton/ hectare Potential Yield generic variety 3 tons/ hectarePotential Yield generic variety 3 tons/ hectare Damage 50%Damage 50% Bt reduce damage by 100%Bt reduce damage by 100% Yield effect of modified local varietyYield effect of modified local variety

4 - 4*(1 - .5) = 2 4 - 4*(1 - .5) = 2 Yield effect of generic varietyYield effect of generic variety

3 - 2 = 13 - 2 = 1

Productivity: Evidence for Bt Cotton GainsProductivity: Evidence for Bt Cotton Gains

Bt cotton in:Bt cotton in: United States: yield effect 0 – 15%United States: yield effect 0 – 15% China: yield effect 10% China: yield effect 10% South Africa: yield effect 20%-40%South Africa: yield effect 20%-40% India: yield effect 60 – 80 %India: yield effect 60 – 80 %

In every country have reduction in chemical usageIn every country have reduction in chemical usage

Some Indian StoriesSome Indian Stories Field trials in 2001-2 has yield effect of 80% Field trials in 2001-2 has yield effect of 80%

with generic variety and 87% with local GMVwith generic variety and 87% with local GMV Pesticides use decline by 70%Pesticides use decline by 70% No wonder yield loss can be 60%No wonder yield loss can be 60% In 2002-3 when actual cotton was planted yield In 2002-3 when actual cotton was planted yield

effect was between -10%-30%effect was between -10%-30% Law pest pressure Law pest pressure In some locations a wrong variety was introducedIn some locations a wrong variety was introduced

The yield gain in 2003-4 was higher-higher pet The yield gain in 2003-4 was higher-higher pet damagedamage

Robin hood and GMVRobin hood and GMV In Gujjarat a local breeder introduced illegally Bt In Gujjarat a local breeder introduced illegally Bt

cotton with spectacular resultcotton with spectacular result A unholy alliance of environmentalists and A unholy alliance of environmentalists and

companies wanted the cotton to be burnedcompanies wanted the cotton to be burned Farmer demonstrated and the cotton saved and Farmer demonstrated and the cotton saved and

Bt legalizedBt legalized

Bt as insuranceBt as insurance It is meaningless tp speak about yield effect It is meaningless tp speak about yield effect

since pest damage is a random variable and since pest damage is a random variable and yield effect variesyield effect varies

A switch to generic GMV may reduce yield in A switch to generic GMV may reduce yield in a good year but increase it substantially in a a good year but increase it substantially in a bad onebad one

Bt increases mean yield but reduces variance Bt increases mean yield but reduces variance and especially down side risk-where and especially down side risk-where pesticides are costly and yield losses still may pesticides are costly and yield losses still may result in bankruptcyresult in bankruptcy

Example 2Example 2Potential yield: 6 local variety

4 generic variety

Damage 25% with 50% probability50% with 50% probability

Bt eliminates pest damage Adoption of generic Bt Reduces yield from 4.5 to 4 with 50% probabilityIncreases yield from 3.0 to 4 with 50% probability Adoption of local Bt Increases yield from 4.5 to 6 with 50% probabilityIncreases yield from 3.0 to 6 with 50% probability

Biotech risk and farm sizeBiotech risk and farm size The gain in terms of risk bearing cost is main The gain in terms of risk bearing cost is main

reason for adoption even in USreason for adoption even in US Small farmers that have little access to Small farmers that have little access to

insurance and formal credit market may be insurance and formal credit market may be beneficial of lower riskbeneficial of lower risk

Seed technology has minimal economics of Seed technology has minimal economics of scale, reduce need to invest in pest control scale, reduce need to invest in pest control equipment and reduce monitoring time- thus equipment and reduce monitoring time- thus may be appealing to small farmer if affordable may be appealing to small farmer if affordable and and Modification is done with a good varietyModification is done with a good variety

Region Pest

pressure

Availabili

ty of

chemical

alternativ

es

Adoption

of

chemicals

Yield

effect of

GM

crops

Developed countries Low-

med

high high low

L.Am (commercial) medium medium high low -med

China medium medium high low-

med\

L.Am(non-

commercial)

medium low -med low med -

high

South & S o. east

Asia

high low -med low -med high

Africa high low low high

Predicted yield effects of pest controlling Biotech

Environment: Relative to Modern Breeding Environment: Relative to Modern Breeding Biotech Can Enhance Crop BiodiversityBiotech Can Enhance Crop Biodiversity

Main premise: Main premise: Agbiotech allows minor modification of Agbiotech allows minor modification of existing varieties and under appropriate institutional setup existing varieties and under appropriate institutional setup can be adopted while preserving crop biodiversitycan be adopted while preserving crop biodiversity

Conventional breeding involves often massive genetic changes, Conventional breeding involves often massive genetic changes, and adjustments to accommodate biodiversity are costly and and adjustments to accommodate biodiversity are costly and

Well functioning IPR system can lead to crop biodiversity Well functioning IPR system can lead to crop biodiversity preservationpreservation

Field data support this claimField data support this claim

Ag biotech and crop bio Ag biotech and crop bio diversity diversity

Table 1. Number of available varieties for different Table 1. Number of available varieties for different GM GM

technologies in selected countries (2001/2002)technologies in selected countries (2001/2002)

Country TechnologyArea under

technology (ha)

Number oflocal

varieties/hybrids a

Number ofimported

varieties/hybrids

USA RR soybean 22 million >1,100 0

Bt corn 7 million >700 0

Bt cotton 2 million 19 0

Argentina RR soybean 10 million 45 11

Bt corn 0.7 million 15 6

Bt cotton 22,000 0 2

China Bt cotton 1.5 million 22 5

India Bt cotton 40,000 3 0

Mexico Bt cotton 28,000 0 2

South Africa Bt cotton 20,000 1 2

Environment: Environment: BiodiversityBiodiversity scenarios in the field scenarios in the field

Strong IPRs, strong breeding sector, and low Strong IPRs, strong breeding sector, and low transaction coststransaction costs. . (US)(US) Private technology owner Private technology owner will license the innovation to different seed will license the innovation to different seed companies, who incorporate it into many or all companies, who incorporate it into many or all crop varieties, so that crop biodiversity is crop varieties, so that crop biodiversity is preserved. preserved.

Strong IPRs, strong breeding sector, but high Strong IPRs, strong breeding sector, but high transaction coststransaction costs. (EU) If an agreement cannot . (EU) If an agreement cannot be reached, companies will bypass breeding be reached, companies will bypass breeding sector, directly introduce GM crop varieties that sector, directly introduce GM crop varieties that are not locally adapted. are not locally adapted.

Environment: Environment: BiodiversityBiodiversity scenarios in the field scenarios in the field

Weak IPRs and a strong breeding sectorWeak IPRs and a strong breeding sector. (China). (China) Many different GM varieties are available Many different GM varieties are available Farmers and consumers are beneficiaries. SR Farmers and consumers are beneficiaries. SR social optimum.social optimum.

Weak IPRs and a weak breeding sector. Weak IPRs and a weak breeding sector. (Africa(Africa)) IfIf foreign GM crop varieties are even introduced, foreign GM crop varieties are even introduced, are done directly without adaptation. A loss of are done directly without adaptation. A loss of local crop biodiversity.local crop biodiversity.

Biotech Could Biotech Could EnhanceEnhance Crop Biodiversity Crop Biodiversity

Conventional breeding led to wholesale replacement of Conventional breeding led to wholesale replacement of land races with elite line monoculturesland races with elite line monocultures

Biotechnology could provide precise improvements to Biotechnology could provide precise improvements to traditional land racestraditional land races

Could lead to reintroduction of new “technologically Could lead to reintroduction of new “technologically competitive” land races - ”Jurasic garden”competitive” land races - ”Jurasic garden”

Access and Access and developmentdevelopment

Intellectual Property Rights (IPR)Intellectual Property Rights (IPR)RegistrationsRegistrations

Access: Biotechnologies in the SouthAccess: Biotechnologies in the South

Most IP is generated by research in the Most IP is generated by research in the NorthNorth

Transfer of public sector’s rights to the Transfer of public sector’s rights to the private sector provides incentives for private sector provides incentives for development and commercializationdevelopment and commercialization

Companies have little incentive to invest in Companies have little incentive to invest in applications specific to the Southapplications specific to the South

Access: Biotechnologies in the SouthAccess: Biotechnologies in the South

Companies are willing to give technologies for use Companies are willing to give technologies for use in South; good PRin South; good PR

Companies worry about liability, transaction costsCompanies worry about liability, transaction costs

Universities with rights to technology will also be Universities with rights to technology will also be open to transferring to South applicationsopen to transferring to South applications

Needed institutional mediation: IP clearinghouseNeeded institutional mediation: IP clearinghouse

Access: Objectives of clearinghouse for Access: Objectives of clearinghouse for IPRIPR

Reduce search costs to identifying set of Reduce search costs to identifying set of technologies accessibletechnologies accessible

Reduce transaction cost for the Reduce transaction cost for the commercialization of innovationscommercialization of innovations Increase transparency about ownership of IPRIncrease transparency about ownership of IPR Provide mechanisms to manage negotiation of Provide mechanisms to manage negotiation of

access to IPRaccess to IPR

Improve technology transfer mechanisms and Improve technology transfer mechanisms and practices (mostly in public sector institution)practices (mostly in public sector institution)

Non-member organizations

Member organizations

Non-member IP users

Pooled sub-licensing

Assignment, license, or option for full or limited fields of use

Single patent sub-licensing

“Re-packaging”

IP providers:

IP users:

Member organization IP users

Non-member IP users

Direct licensing transactions

Access: Model of a clearinghouse for IPR

Why Under investment in ag Why Under investment in ag biotechbiotech Regulatory constraints, IPR concerns reduce Regulatory constraints, IPR concerns reduce

investmentinvestment Size of markets lead to under investment in Size of markets lead to under investment in

minor cropsminor crops Lack of investment is because of prices of ag Lack of investment is because of prices of ag

products products Development of ag technology is cyclical Development of ag technology is cyclical

depend on market conditiondepend on market condition Crisis leads to change Crisis leads to change

Developing countries & minor Developing countries & minor cropcrop

Most ag biotech is developed for major crops in Most ag biotech is developed for major crops in the norththe north

Private companies in developed countries hold Private companies in developed countries hold IPR for many GMO innovations IPR for many GMO innovations

There is a risk that Africa will miss the gene There is a risk that Africa will miss the gene revolution as it missed the green revolution.revolution as it missed the green revolution.

Specialty crops may not attract investment in Specialty crops may not attract investment in agricultural biotech & under-utilize itagricultural biotech & under-utilize it

Continued investment in public Continued investment in public research research

Risk of under investing in public research and Risk of under investing in public research and developmentdevelopment

Public sector research complement private Public sector research complement private sector . Through technology transfer there is sector . Through technology transfer there is continuity.continuity.

Public sector research contributes to Public sector research contributes to competitivenesscompetitiveness

Public sector R&D is essential in developing Public sector R&D is essential in developing countries and minor cropscountries and minor crops

Private & Public researchPrivate & Public research

Public sector research emphasize Public sector research emphasize generalized basic innovationsgeneralized basic innovations

Private sector research is product focusPrivate sector research is product focus There is complementarily between sectorsThere is complementarily between sectors Technology transfer is crucial linkTechnology transfer is crucial link Private sector under R&D and that affects Private sector under R&D and that affects

minor crops minor crops

Diversification of research Diversification of research paradigmparadigm

There is a risk of overemphasizing biotechThere is a risk of overemphasizing biotech Need public research in alternative Need public research in alternative

solutions that is not embodied in productssolutions that is not embodied in products Need regulatory research- with Need regulatory research- with

international cooperation and exchange of international cooperation and exchange of knowledge. knowledge.

Access: Reducing Regulatory ConstraintsAccess: Reducing Regulatory Constraints

Registration should be efficient. Excessive requirements Registration should be efficient. Excessive requirements may be used as a source of political economic rent may be used as a source of political economic rent seeking.seeking.

Borders are arbitrary. Countries can take advantage of Borders are arbitrary. Countries can take advantage of regulatory clearances granted elsewhere and concentrate regulatory clearances granted elsewhere and concentrate on addressing unique local problems and risks.on addressing unique local problems and risks.

Countries should develop regional alliances for regulation Countries should develop regional alliances for regulation and establish mechanisms for easy transfer of regulatory and establish mechanisms for easy transfer of regulatory information.information.

Regulatory design-tougher Regulatory design-tougher is not betteris not better

Regulation has a role risk control and screeningRegulation has a role risk control and screening Post regulation monitoring can correct Post regulation monitoring can correct

mistakes-irreversibility happens -but not alwaysmistakes-irreversibility happens -but not always Tough regulation may lead toTough regulation may lead to

ConcentrationConcentration Delay of introduction of technologiesDelay of introduction of technologies Reduced research and investment and retardation Reduced research and investment and retardation

of technology of technology

Need to optimize regulation Need to optimize regulation

Impacts of regulation strategiesImpacts of regulation strategies

For plant that reproduce sexually- once a GMV For plant that reproduce sexually- once a GMV variety is developed(an event) the gene is variety is developed(an event) the gene is inserted to others through back crossinginserted to others through back crossing

Tough regulation of each variety lead to reduce Tough regulation of each variety lead to reduce choice and switching away from local varieties-choice and switching away from local varieties-a small number of varieties will be used and a small number of varieties will be used and much of the potential of innovation lostmuch of the potential of innovation lost

Regulations of events increase choice -cost of Regulations of events increase choice -cost of modifying specific varieties smallermodifying specific varieties smaller

Regulation and pace of Regulation and pace of changechange

Varieties may change rather fast with Varieties may change rather fast with conventional breedingconventional breeding

Slow regulatory process may result in Slow regulatory process may result in insertion of GMVs in older varieties and loss insertion of GMVs in older varieties and loss of benefits obtained through conventional of benefits obtained through conventional breeding-breeding-

Slow regulatory process slow innovation as Slow regulatory process slow innovation as it is reducing returns to and thus it is reducing returns to and thus investment in innovationinvestment in innovation

AcceptanceAcceptance

Europeans attitude to GmoEuropeans attitude to Gmo

Lack of trust in government-Bse F &mouthLack of trust in government-Bse F &mouth Insufficient food safety regulation Insufficient food safety regulation Strength of environmental movementStrength of environmental movement Biotech is American technologyBiotech is American technology Barrier to tradeBarrier to trade Scientists and society do not want to fall Scientists and society do not want to fall

behind behind

AcceptanceAcceptance Progress of ag biotech depends on broad Progress of ag biotech depends on broad

acceptanceacceptance Consumers have right to discriminate Consumers have right to discriminate

according to the way products are produced.according to the way products are produced. This discrimination should not be used to This discrimination should not be used to

form trade barriersform trade barriers A global Academy of science needed for A global Academy of science needed for

dispute resolution dispute resolution Regulatory constrained needed for Regulatory constrained needed for

acceptance. Concerns may be valid. acceptance. Concerns may be valid.

LabelingLabeling

ReasonableReasonable labeling is a reasonable regulatory labeling is a reasonable regulatory requirementrequirement

Product tracing will reduce cost of safety Product tracing will reduce cost of safety maintenance.maintenance.

Labeling will benefit industry in the long Labeling will benefit industry in the long run.Enable product differntiationrun.Enable product differntiation

Should be done privately subject to government Should be done privately subject to government monitoringmonitoring

RisksRisks

Risk Containment Approach for Risk Containment Approach for PolicymakingPolicymaking

Risk = Probability of a bad event Risk = Probability of a bad event occurring during a period of time.occurring during a period of time.

risk management to design risk management to design policies to 1)maximize risk policies to 1)maximize risk reduction within a given reduction within a given constraint on social costs. Or constraint on social costs. Or 2)maximize social welfare subject 2)maximize social welfare subject to risk constraintsto risk constraints

Risk containment can be Risk containment can be practiced locally&globallypracticed locally&globally

Precaution in technology Precaution in technology development development

Precaution Precaution is notis not avoiding risks. It avoiding risks. It means containing risks in an adaptive means containing risks in an adaptive process of continuous learning..process of continuous learning..

There are gaping holes in scientific There are gaping holes in scientific knowledge, but it is the best we have.knowledge, but it is the best we have.

Progress requires gradual expansion of Progress requires gradual expansion of capacity containing risks as we venture capacity containing risks as we venture to new territories. to new territories.

Even risk averse individuals Even risk averse individuals take risktake risk

There are many risk management There are many risk management strategies including:strategies including: DiversificationDiversification InsuranceInsurance experimentationexperimentation

Not taking risks id riskyNot taking risks id risky

Multiplicity Of RisksMultiplicity Of Risks

Individual risks can not evaluated in isolation. Individual risks can not evaluated in isolation. There are trade-offs in risk takingThere are trade-offs in risk taking

Some of the risks associated with food Some of the risks associated with food policies include:policies include: Food shortagesFood shortages Environmental degradationEnvironmental degradation Market concentrationMarket concentration PovertyPoverty Political instabilityPolitical instability

The Relations between risks The Relations between risks and timeand time

Risks may be correlated. High likelihood Risks may be correlated. High likelihood of Food shortages is linked with high of Food shortages is linked with high poverty probability.poverty probability.

Governance design should have a long Governance design should have a long term perspective term perspective

. Dynamic processes contribute to . Dynamic processes contribute to generation or reduction of risks. generation or reduction of risks. Population growth may increase food Population growth may increase food

shortage risk shortage risk

Malthusian Malthusian scenario&agricultural scenario&agricultural

technology technology Food grew faster than population throughout Food grew faster than population throughout most of the 20th centurymost of the 20th century

Food productivity growth is sluggish-but Food productivity growth is sluggish-but population is expected increase and food population is expected increase and food demand to double.demand to double.

Food availability can meet the challenge by:Food availability can meet the challenge by: Increased productivityIncreased productivity increase intensificationincrease intensification Expansion of agricultural land and resource baseExpansion of agricultural land and resource base

Intensification and the Intensification and the environmentenvironment

Alternative practices were introduced to Alternative practices were introduced to reduce damages (IPM, Low Tillage, precision reduce damages (IPM, Low Tillage, precision farming) with varying results farming) with varying results

Intensive use of chemicals(pesticides and Intensive use of chemicals(pesticides and fertilizers), multiple cropping and intensive fertilizers), multiple cropping and intensive plowing leads toplowing leads to risks to human and animal healthrisks to human and animal health Contamination of bodies of water,Contamination of bodies of water, Soil erosionSoil erosion

Current ag biotech practices Current ag biotech practices were invented to replace were invented to replace

chemicalschemicals Expectation of strict pesticides Expectation of strict pesticides

regulations motivated introduction of regulations motivated introduction of pest control ag-biotech pest control ag-biotech

Its adoption is fast because of Its adoption is fast because of convenience as well as profitability. convenience as well as profitability. UUnderreporting of GMO use in nderreporting of GMO use in India Brazil, and China. India Brazil, and China.

Environment: Sound Basis for Risk AnalysisEnvironment: Sound Basis for Risk Analysis

Is the Precautionary Principle a sound basis for risk Is the Precautionary Principle a sound basis for risk analysis?analysis?

There are always trade-offs between risks and benefits, There are always trade-offs between risks and benefits, and between risks and risks.and between risks and risks. In Africa, does risk of “genetic contamination” exceed risk of In Africa, does risk of “genetic contamination” exceed risk of

starvation?starvation?

Agricultural biotechnology should be evaluated in Agricultural biotechnology should be evaluated in comparison to pesticides and other real alternatives.comparison to pesticides and other real alternatives. In tropics, increased productivity would reduce pressure for In tropics, increased productivity would reduce pressure for

deforestation.deforestation.

Gmo’s are not perfect- Gmo’s are not perfect- Gmo’s have problems-resistance buildup, Gmo’s have problems-resistance buildup,

damage to secondary pests, genetic damage to secondary pests, genetic contamination.contamination.

Refugia, monitoring of impacts, restriction of Refugia, monitoring of impacts, restriction of use in some locations can address these use in some locations can address these problems partially-but alternatives have problems partially-but alternatives have problems and risks that have to be considered.problems and risks that have to be considered.

Agricultural biotech is in its infancy- built up of Agricultural biotech is in its infancy- built up of human capital and accumulation of -will lead to human capital and accumulation of -will lead to eliminations of many bug and lead to better eliminations of many bug and lead to better technologiestechnologies

Current ag biotech & risksCurrent ag biotech & risks Realized risks of agricultural biotechnology Realized risks of agricultural biotechnology

thus far is small(in spite Monarch Butterfly) thus far is small(in spite Monarch Butterfly) Experimentation with agricultural biotech is Experimentation with agricultural biotech is

vast(100million acres + annually), vast(100million acres + annually), Each Each year without a major incidence adds year without a major incidence adds confidence to the use of the confidence to the use of the technology. technology.

yet monitoring is needed to continue.yet monitoring is needed to continue. Loss of ag bio-diversity is reduced when a Loss of ag bio-diversity is reduced when a

diversity of GMO varieties is introduced.diversity of GMO varieties is introduced.

New ag bio-technologiesNew ag bio-technologies

Development of current GMO provided Development of current GMO provided tools for more attractive future GMO- tools for more attractive future GMO- improving nutritional contents and health.improving nutritional contents and health.

It may use plants as labs for It may use plants as labs for chemicals and medicines.That may chemicals and medicines.That may necessitate growing genetically necessitate growing genetically modified plants that modified plants that are not edibleare not edible in in order to protect our sources of foodorder to protect our sources of food

Bio tech and environmentBio tech and environment GMO leads to gains in terms of pesticides GMO leads to gains in terms of pesticides

use reduction and reduce acreage as yields use reduction and reduce acreage as yields increaseincrease

Gene flow is a potential problem- need to Gene flow is a potential problem- need to be monitoredbe monitored

The risk depends on the gene inserted-Bt The risk depends on the gene inserted-Bt and vitamin C producing genes may be and vitamin C producing genes may be rather benign - but genes can produce rather benign - but genes can produce toxins-regulations should varytoxins-regulations should vary

The Price of Excessive Regulatory The Price of Excessive Regulatory CautionCaution

The regulatory process of ag chemicals The regulatory process of ag chemicals and biotechnology designed to respond and biotechnology designed to respond to concerns of environmentalists, but to concerns of environmentalists, but also benefited agribusiness also benefited agribusiness Led to concentrationLed to concentration Reduced solutions available for small crops Reduced solutions available for small crops

& reduce diversity &specialization of & reduce diversity &specialization of farming.farming.

Reducing environmental risks increases Reducing environmental risks increases concentration risksconcentration risks

Farm land expansion& the Farm land expansion& the environmentenvironment

Without increase in yield per acre population Without increase in yield per acre population and demand growth will lead to expansion of and demand growth will lead to expansion of agricultural resource utilization-deforestation, agricultural resource utilization-deforestation, depletion of water resources,air and water depletion of water resources,air and water pollutionpollution

Productivity increasing innovations crucial for Productivity increasing innovations crucial for protection of natural resourcesprotection of natural resources

U.S agricultural acreage has decreased U.S agricultural acreage has decreased throughout the century due to innovation& throughout the century due to innovation& intensification.intensification.

ConclusionsConclusionsAgbiotechnology has significant potential for developing Agbiotechnology has significant potential for developing

countries; the challenge is to realize that potentialcountries; the challenge is to realize that potential::

ProductivityProductivity: yield effect of biotechnology tends to be larger in : yield effect of biotechnology tends to be larger in developing countriesdeveloping countries

AccessAccess: institutions can reduce IP and regulatory costs for : institutions can reduce IP and regulatory costs for developing countriesdeveloping countries

RisksRisks: crop biodiversity can be preserved and could even be : crop biodiversity can be preserved and could even be restored with biotechnology restored with biotechnology

Ag bio tech is only part of the Ag bio tech is only part of the solutionsolution

Ag biotech is more than Gmo’s. Ag biotech is more than Gmo’s. It will evolve- alternative molecular approaches It will evolve- alternative molecular approaches

will be developed-butwill be developed-but knowledge will not be accumulated without knowledge will not be accumulated without

experienceexperience Development may be dependent on public and Development may be dependent on public and

private sector fundingprivate sector funding Ag biotech must be pursued as part of a Ag biotech must be pursued as part of a

portfolio of technology and knowledge tools portfolio of technology and knowledge tools aiming to enhance productivity and aiming to enhance productivity and environmental sustainability of agriculture. environmental sustainability of agriculture.

Europeans attitude to GmoEuropeans attitude to Gmo

Lack of trust in government-Bse F &mouthLack of trust in government-Bse F &mouth Insufficient food safety regulation Insufficient food safety regulation Strength of environmental movementStrength of environmental movement Biotech is American technologyBiotech is American technology Barrier to tradeBarrier to trade Scientists and society do not want to fall Scientists and society do not want to fall

behind behind

AcceptanceAcceptance Progress of ag biotech depends on broad Progress of ag biotech depends on broad

acceptanceacceptance Consumers have right to discriminate Consumers have right to discriminate

according to the way products are produced.according to the way products are produced. This discrimination should not be used to This discrimination should not be used to

form trade barriersform trade barriers A global Academy of science needed for A global Academy of science needed for

dispute resolution dispute resolution Regulatory constrained needed for Regulatory constrained needed for

acceptance. Concerns may be valid. acceptance. Concerns may be valid.

LabelingLabeling

ReasonableReasonable labeling is a reasonable regulatory labeling is a reasonable regulatory requirementrequirement

Product tracing will reduce cost of safety Product tracing will reduce cost of safety maintenance.maintenance.

Labeling will benefit industry in the long Labeling will benefit industry in the long run.Enable product differntiationrun.Enable product differntiation

Should be done privately subject to government Should be done privately subject to government monitoringmonitoring

ConsiderConsider

250 million Americans are the “guinea pigs” for 250 million Americans are the “guinea pigs” for agricultural biotechnology. Northern countries also agricultural biotechnology. Northern countries also took the risk with cars and with modern chemicals. took the risk with cars and with modern chemicals.

Africa missed the Green Revolution; will it also miss Africa missed the Green Revolution; will it also miss the Gene Revolution?the Gene Revolution?

Epilog Differences in attitudes Epilog Differences in attitudes US vs EU- is it consumers US vs EU- is it consumers

attitudes?attitudes? U.S. relative advantage in Biotech threatens U.S. relative advantage in Biotech threatens European dominance in chemical pest control European dominance in chemical pest control marketsmarkets

Innovative capacity: Innovative capacity: Forward citations to US agbiotech patentsForward citations to US agbiotech patents

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

0

200

400

600

800

1000

1200

1400

1600

1800

By nationality of lead inventor and grant date of cited patent

North American

European

Japanese

Innovative capacity: Innovative capacity: Forward citations to US agrochemical patentsForward citations to US agrochemical patents

By nationality of lead inventor and grant date of cited patent

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

0

200

400

600

800

1000

1200

1400

1600

1800

North American

European

Japanese

Market incentives: Market incentives: Global crop protection market, sales US $ Global crop protection market, sales US $

millionsmillions

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

1991 2001

European corporations

US corporations

Japanese corporations

Others

agchem

agchem

agchem

agbio/seed

agbio/seed

-10.2 %

-1.2 %

-1.0 %

+12.9 %

1 yr. % change

2000 to 2001

Data Sources: Wood Mackenzie Agrochemicals, in Chemistry & Industry, November 1993 and Phillips McDougall, AgriFutura Newsletter, March 2002

Innovative capacity: Innovative capacity: comparingcomparing citation based indices of citation based indices of

patent qualitypatent quality

Behavioral evidence:Behavioral evidence:Double standards for the Double standards for the

“precautionary principle”?“precautionary principle”? Double standards applied to intra-EU trade Double standards applied to intra-EU trade relations and external EU trade relations relations and external EU trade relations (Majone, 2003)(Majone, 2003)

As applied to chemicals vs. biotechnologies? As applied to chemicals vs. biotechnologies? Possible metrics?Possible metrics? Sources?Sources?

Behavioral evidence:Behavioral evidence:Conspicuous industry absence from Conspicuous industry absence from

policy process?policy process?

““When GM products came to the market in When GM products came to the market in Europe, we were faced with contradictory Europe, we were faced with contradictory statements or even silence both from regulators statements or even silence both from regulators and from industry. This contributed substantially and from industry. This contributed substantially to the lack of confidence now present.”to the lack of confidence now present.”

- Dirk-Arie ToetNestec Ltd., 2001

Conclusions Conclusions Regulate not ban technologiesRegulate not ban technologies Effective &trusted regulation essential Effective &trusted regulation essential

for innovationfor innovation Reform IPR introduce clearing house.Reform IPR introduce clearing house. Compensate for biogiversityCompensate for biogiversity Continue support for public researchContinue support for public research