CHAPTER 2

Genetically Modified Crops and GlobalFood Security

Matin Qaim

Department of Agricultural Economics and Rural Development, Georg-August-University

of Goettingen, 37073 Goettingen, Germany

E-mail address: mqaim@uni-goettingen.de

Abstract

Purpose – The role of genetically modified (GM) crops for food security isthe subject of controversial debates. Consequently, policy-makers areunsure whether this technology is suitable for developing countries. Thischapter reviews the scientific evidence.Methodology/approach – Starting from a food security definition, potentialpathways of how GM crops could contribute to hunger reduction areanalyzed conceptually. Furthermore, studies about the socioeconomicimpacts of GM crop applications are reviewed. This includes ex poststudies for present applications such as insect-resistant and herbicide-tolerant crops, as well as ex ante studies for future GM technologies suchas Golden Rice and drought-tolerant varieties.Findings – GM crops can raise agricultural productivity and thuscontribute to better food availability. Especially when tailored to smallfarm conditions, GM crops can also cause income increases for the ruralpoor, entailing better access to food. Nutritionally enhanced, biofortifiedGM crops could reduce problems of micronutrient malnutrition in a cost-effective way.Research limitations – The examples observable so far are still limited.Impacts also depend on the wider institutional setting. Like anytechnology, GM crops are not a substitute but a complement to muchneeded institutional and infrastructure improvement in developingcountries.Social implications – The fact that available GM crops already contributeto poverty reduction and improved food security has not been widelyrecognized up until now.

Frontiers of Economics and Globalization r 2011 by Emerald Group Publishing Limited.Volume 10 ISSN: 1574-8715 All rights reservedDOI: 10.1108/S1574-8715(2011)0000010007

Matin Qaim30

Value of paper – Results presented in this chapter can contribute to a moreconstructive public debate, in which GM crop risks are not discussed outof the context of actual and potential benefits.

Keywords: Food security, poverty, smallholder farmers, developingcountries, biotechnology

JEL Classifications: O13, O33, Q12, Q16, Q18

1. Introduction

Globally, around 1 billion people are currently undernourished, that is,they suffer from insufficient calorie supplies. Almost all these people live indeveloping countries, especially in Asia and Sub-Saharan Africa (FAO,2009). The first millennium development goal (MDG) of the UnitedNations foresees halving hunger by 2015. Unfortunately, this goal will notbe achieved. The trend is even moving into the wrong direction: recently,not only the absolute number but also the proportion of undernourishedpeople has risen, which is partly due to rising food prices combined withthe global financial and economic crisis (von Braun, 2008).1

What are the appropriate instruments to reduce hunger and improveglobal food security? In this regard, the role of agricultural technology, ingeneral, and of genetically modified (GM) crops, in particular, is the subjectof controversial debates. Some consider hunger as only a distributionproblem (Sharma, 2004; Holt-Gimenez et al., 2006). In their view,promoting technological progress is not an important policy approach;rather, social policies – such as improved education, health, and incomeredistribution – are seen as the key elements of a hunger reduction strategy.However, while the importance of social policies is undisputed, focusing ondistribution alone is too shortsighted, as it neglects the fact that global fooddemand is increasing rapidly due to population and income growth.Over thepast 10 years, growth in global demand for cereals (including for feed andbiofuels) has outpaced supply; growth rates in yields of major cereals haveeven been declining since the 1990s (FAO, 2010; also see Figure 1). Recentinternational food price spikes, which were caused by various factors, havecontributed to a wider public recognition of the need for more robustagricultural production increases (Godfray et al., 2010). Nonetheless, there

1 The statistics on the number of undernourished published regularly by the Food and

Agriculture Organization (FAO) are officially used as one indicator to track progress toward

the first MDG. It should be noted that these FAO statistics have been criticized not only for

being imprecise but also for systematically overestimating the number of undernourished

(e.g., Svedberg, 2002). However, different studies with detailed household level data have also

shown that food price increases contribute to rising rates of hunger and poverty, at least in the

short and medium run (e.g., Ivanic and Martin, 2008; Ecker and Qaim, 2011).

Rice

Wheat

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1960s 1970s 1980s 1990s 2000s

Ann

ual g

row

th in

%

Fig. 1. Worldwide yield growth (1960–2008). Source: Own presentationbased on data from FAO (2010). Note: Growth rates in global mean yieldswere calculated on an annual basis and then averaged over the respective

time periods.

Genetically Modified Crops and Global Food Security 31

is no consensus on how this should be achieved and what role modernbiotechnology could play (IAASTD, 2009; Gurian-Sherman, 2009). Whilesome see GM crop technologies as a necessary tool for achieving long-termfood security (Borlaug, 2007), others are concerned about negativeeconomic and social consequences that these technologies could have forthe poor (Sharma, 2004; FOE, 2008; Shiva, 2009).

This chapter contributes to the debate by reviewing the academicliterature on socioeconomic impacts of GM crops. Empirical evidenceshows that this technology offers great potential to contribute to thereduction of hunger and malnutrition. Yet, concrete examples are stilllimited; realizing the potential on a larger scale will require more publicand policy support. The rest of this chapter is structured as follows: in thenext section, different potential pathways of how GM crops can improveglobal food security are analyzed conceptually. Then, observable impactsof GM crops that have already been commercialized are reviewed, beforeex ante studies related to future GM crop applications are summarized.Subsequently, institutional and policy issues are discussed, and someconclusions are drawn.

2. GM crops and food security: potential pathways

According to the FAO, food security exists when all people, at all times, havephysical and economic access to sufficient, safe, and nutritious food that

Matin Qaim32

meets their dietary needs and food preferences for an active and healthy life(FAO, 2009). This involves at least three dimensions, namely (1) physicalaccess to sufficient food, which is a question of global and local foodavailability, (2) economic access to food, which is related to householdincome, and (3) food safety andnutritional value. In principle,GMcrops canpositively contribute to all three dimensions, as is explained below.

2.1. GM crops and food availability

On the basis of FAO food balance sheet data, currently there is enoughfood available at the global level to feed the world population, at least interms of calories. Nevertheless, there are around 1 billion peopleundernourished, which underlines that hunger is a serious distributionproblem: whereas some people consume and waste too much food, othershave too little. This phenomenon is detailed below in connection with theeconomic accessibility of food. However, only looking at the situationtoday is too static, as it neglects past developments as well as future trends.From a dynamic perspective, beyond distribution hunger is also aproduction problem. The fact that currently enough food is available isattributable to tremendous historical production increases. Successes incrop breeding, coupled with more irrigation and use of agrochemicals,tripled cereal yields over the past 50 years in many parts of the world,including in Asia and Latin America (FAO, 2010). These productivitygains became known as the green revolution; they outpaced populationgrowth and helped to prevent widespread famines that had been predictedin the early 1960s (Evenson and Gollin, 2003).

But food demand will further rise in the future. Through population andincome growth, global demand will increase by at least 70% until 2050(Godfray et al., 2010). Moreover, the use of biofuels soars, competing withfood production for scarce natural resources, such as arable land and water(Dewbre et al., 2008). While arable land is still being expanded in someregions, soil degradation and urbanization contribute to agricultural arealosses elsewhere. Total arable land can hardly be increased without causingserious environmental problems.Hence, food production increases will haveto come from higher yields on the given land. Against this background, it isparticularly worrisome that yield growth in major cereals has been decliningover the past 20 years. While yield growth in rice and wheat was still around3%per year in the 1980s, it has now dropped to below 1% (Figure 1). This istoo little to keep pace with growth in global food demand. To sustainsufficient food availability until 2050, a minimum yield growth of 1.5% peryear is required. This will only be possible through higher investments inagricultural research, including the use of new technologies.

Raising agricultural productivity in a sustainable way will require a mixof different technologies, adjusted to the specific conditions in a particular

Genetically Modified Crops and Global Food Security 33

setting. Tapping genetic knowledge will have a major role to play, becausethis can help reduce the strong correlation between yields and agrochem-ical use observed in the past, which has often led to negative environmentalexternalities (Huang et al., 2002; World Bank, 2007). One potential avenueis improving the effectiveness of pest control. A significant proportion ofthe potential world harvest is lost to weeds, animal pests, and diseases.Figure 2 shows that potential losses in some crops can reach 80% andmore. A sizeable portion of these potential losses is avoided throughchemical pesticides and other pest-control strategies, but 30%–40% occursas actual damage. Actual losses are higher in developing countries than indeveloped countries, because pest pressure in tropical and subtropicalclimates is often stronger than in temperate zones (Oerke, 2006).Moreover, given more severe technical and financial constraints, pestcontrol is often less effective in developing countries.

In addition to reducing chemical pesticide use, crops with inbuilt geneticpest resistance have the potential to further reduce crop losses and thusincrease effective yields. Positive yield effects of pest-resistant crops areexpected to be higher in developing countries (Qaim and Zilberman, 2003).While conventional breeders also try to develop plants with pest resistancetraits, GM techniques offer new opportunities because a much wider genepool can be used. Insect and virus resistance were among the first GMtraits to be commercialized in some crops, but fungal- and bacterial-resistant GM crops are also approaching the end of the research pipeline(Kempken and Jung, 2010).

0 10 20 30 40 50 60 70 80 90

potential

actual

potential

actual

potential

actual

potential

actual

potential

actual

Cot

ton

Pot

atoe

sM

aize

Ric

eW

heat

Crop losses in %

Weeds

Animal pests

Diseases

Fig. 2. Global pest-related crop losses inmajor crops. Source:Oerke (2006).

Matin Qaim34

Other GM traits that researchers are working on are higher planttolerance to various abiotic stresses such as heat, drought, flood, coldness,or soil salinity (Qaim, 2009; Kempken and Jung, 2010). Such technologiescould also contribute to higher and more stable yields, especially in regionsaffected by erratic weather conditions. Again, developing countries couldbenefit more than developed countries, because of higher weathervariability. Moreover, especially in Africa farmers often have limitedaccess to irrigation and other risk-reducing technologies. Abiotic stresstolerance is particularly relevant against the background of climatechange. Climate change is not only associated with an increase in meantemperatures, but also with more frequent weather extremes. The firstdrought- and heat-tolerant GM crops are expected to be commercializedwithin the next five years (Kempken and Jung, 2010). In the longer run,GM techniques could also help improve nutrient efficiencies and yieldpotentials in crop plants. Hence, combined with conventional breedingand other innovations, GM crops could significantly raise agriculturalproductivity, which is important to ensure sufficient food availability for agrowing world population.

2.2. GM crops and economic access to food

Global and local food availability is a necessary but not a sufficientcondition for food security, as the above discussion about unequal fooddistribution showed. Many people are too poor to have adequateeconomic access to food, so raising their income needs to be a centralcomponent of any food security strategy. Figure 3 shows that around 80%of the hungry people in developing countries live in rural areas, where theydirectly or indirectly depend on agriculture as farmers or wage laborers.There are different ways of increasing agricultural incomes and reducingrural poverty, including education, infrastructure investments, andinstitutional change. Yet, agricultural technology has an important roleto play as well. Comprehensive analyses show that promoting thedevelopment and spread of appropriate new technologies is not only aneffective but also a highly efficient way of reducing poverty, especially inAfrica and Asia (Thirtle et al., 2003; Fan et al., 2005). Through the incomepathway, technological progress improves economic access to food amongrural households, even when the new technologies themselves maysometimes relate to non-food cash crops.

In principle, GM technologies can be suitable to raise incomes in thesmall farm sector. Inbuilt in the seed, they are scale-neutral and relativelyeasy to use. Moreover, smallholders are often particularly affected by croplosses due to biotic and abiotic stress factors, because of unfavorableagroecological, financial, and technical conditions. Yield-increasingtechnologies can also be employment generating: in traditional production

Smallholderfarmers 50%

Rural landless 20%

Pastoralists, fishers,forest dependent 10%

Urban poor 20%

Fig. 3. Who are the hungry people? Source: World Bank (2007).

Genetically Modified Crops and Global Food Security 35

systems, where most of the farming operations are performed manually,higher yields imply that more labor is hired for harvesting and relatedactivities. Hence, the rural landless could benefit as well.

Yet, whether these potentials will actually materialize also depends on anumber of institutional and policy factors. For instance, even if technicallypossible, how can it be ensured that GM crops targeted to small farmerconditions will actually become available and accessible in developingcountries? These are questions that will be addressed further belowthrough reviewing the empirical evidence. Since a few concrete GM cropapplications can already be observed in the small farm sector of developingcountries, an analysis of the social effects will be instructive.

2.3. GM crops and nutritional value

The third dimension of food security – as outlined in the definition above –refers to nutritional value. That is, dietary needs are broader than just foodenergy. While hunger and undernourishment are the results of insufficientcalorie intake, the human body also needs a number of micronutrients thatare contained in bigger amounts in high-value foods such as fruits,vegetables, and animal products. Since such higher-value foods are oftenmore expensive than calorie-dense staple foods, the poor do not consumethem in sufficient amounts, so that micronutrient deficiencies arewidespread. Around 3 billion people are at risk of zinc deficiency, 2billion people are anemic, many due to iron deficiency, 2 billion are iodinedeficient, and 200 million are deficient in vitamin A (Stein and Qaim, 2007;WHO, 2009). Micronutrient deficiencies are responsible for severe health

Matin Qaim36

problems, including impaired physical and cognitive development,susceptibility to infectious diseases, and higher child mortality. Reducingmicronutrient malnutrition has recently been recognized as a keyopportunity to promote economic development in a cost-effective way(Lomborg, 2009).

Traditional interventions to address micronutrient deficiencies includefood supplementation, industrial fortification, and dietary diversificationprograms.While all these programs have been successful in some situations,a common problem is that they are relatively expensive to implement andoften do not reach poor households in remote rural areas. A newcomplementary strategy is biofortification, that is, the breeding of staplefood crops for higher micronutrient contents (Qaim et al., 2007). While thispartly builds on conventional breeding, GM approaches are particularlypromising when certain micronutrients are completely absent from a cropplant or not available in sufficient amounts. A case in point is rice, where theendosperm of conventional grain does not contain any beta-carotene, whichis a precursor of vitamin A. Hence, GM techniques were used to developGolden Rice, which contains significant levels of beta-carotene (see belowfor further details about Golden Rice and its potential impact). Whilebiofortified crops should not be seen as a substitute for dietary diversifica-tion and other micronutrient interventions, they could nonethelesscontribute to reducing nutritional deficiencies and related health problems.This is especially true among the poor, for whom many of the otheralternatives are often out of reach in the short to medium run.

3. Socioeconomic impacts of commercialized GM crops

While the previous section looked at different potential pathways of howGM crops could contribute to global food security, this section focuses onthe actual effects already observable in different countries. The first GMcrops were commercialized in the mid-1990s in the USA and a few othercountries. Since then, adoption rates have been rising rapidly. In 2009,GM crops were grown on 134 million hectares by 14 million farmers in 25countries, including 16 developing countries (James, 2009). Yet, theportfolio of different GM crops and modified traits is still limited. Most ofthe commercial applications involve herbicide tolerance and insectresistance in crops such as soybean, maize, cotton, and canola.

3.1. Impacts of herbicide-tolerant crops

Herbicide-tolerant (HT) crops are tolerant to certain broad-spectrumherbicides like glyphosate or glufosinate, which are more effective, lesstoxic, and usually cheaper than selective herbicides. HT technology is sofar mostly used in soybean, maize, cotton, and canola. The dominant crop

Genetically Modified Crops and Global Food Security 37

is HT soybean, which was grown on 69 million ha in 2009, mostly in theUSA, Argentina, and Brazil, but also in a number of other countries.Likewise, HT maize is cultivated primarily in North and South America,with smaller areas in South Africa and the Philippines. HT cotton ismostly cultivated in the USA, whereas HT canola is predominantly grownin Canada (James, 2009).

HT adopting farmers benefit in terms of lower herbicide expenditures.Total herbicide quantities applied were reduced in some situations, but notin others. In Argentina, herbicide quantities were even increasedsignificantly (Qaim and Traxler, 2005). This is largely because herbicidesprays were substituted for tillage. In Argentina, the share of soybeanfarmers using no-till almost doubled to 80% since the introduction of HTtechnology. Also in the USA and Canada, no-till practices expandedthrough HT adoption (Fernandez-Cornejo and Caswell, 2006). In terms ofyields, there is no significant difference between HT and conventionalcrops in most cases, implying that crop losses due to weeds were effectivelycontrolled even before the introduction of HT technology. This, however,is location-specific: where certain weeds are difficult to control withselective herbicides, the adoption of HT and the switch to broad spectrumherbicides resulted in better weed control and higher crop yields. Examplesare HT soybeans in Romania and Mexico, and HT maize in Argentina(Brookes and Barfoot, 2008).

Available studies show that HT technology reduces the cost ofproduction through lower expenditures for herbicides, labor, machinery,and fuel. Yet, the innovating companies charge a technology fee on seeds,which varies between crops and countries. Several studies for HT soybeanand canola in the USA and Canada showed that the fee was in a similarmagnitude or sometimes higher than the average cost reduction, so thatfarmer profit effects were small or sometimes negative (Naseem and Pray,2004).2 This is different in South America. While the agronomicadvantages are similar, the fee charged on seeds is lower, as HTtechnology is not patented there. Many soybean farmers in South Americaeven use farm-saved GM seeds. Qaim and Traxler (2005) showed forArgentina that the average profit gain through HT soybean adoption is ina magnitude of US$23 per hectare. The technology is so attractive forfarmers that HT is now being used on almost 100% of the Argentinesoybean area. In Brazil, adoption rates are also over 70% with a furtherrising trend (James, 2009).

While farmers in developing countries benefit significantly from HTsoybeans, most soybeans are grown on relatively large and fullymechanized farms. So far, HT crops have not been widely adopted in

2 It remains to be seen how seed prices and technology fees develop when relevant patents

expire in the USA and Canada within the next few years.

Matin Qaim38

the small farm sector. Smallholders often weed manually, so that HT cropsare inappropriate, unless labor shortages or weeds that are difficult tocontrol justify conversion to chemical practices. A case in point could bestriga, a weed that can hardly be controlled manually and leads tosignificant yield losses in subsistence production systems of maize,sorghum, millet, and a few other crops in Sub-Saharan Africa.

Overall, HT crops are attractive for many farmers from an economicperspective. There are also environmental benefits through reduced tillageoperations, entailing a decrease in soil erosion, fuel use, and greenhousegas emissions (Qaim and Traxler, 2005; Brookes and Barfoot, 2008).Nevertheless, the potentials of HT crops to contribute to global foodsecurity seem relatively limited, because yield-increasing and poverty-reducing effects can only be expected in quite specific situations.

3.2. Impacts of insect-resistant crops

Insect-resistant GM crops commercially grown so far involve different genesfrom the soil bacterium Bacillus thuringiensis (Bt) that make the plantsresistant to certain lepidopteran and coleopteran pest species. The mostwidely used examples are Bt maize and Bt cotton. In 2009, Bt maize wasgrown on 35million ha in more than 15 countries. The biggest Bt maize areasare found in the USA, Argentina, South Africa, Canada, and the Philippines.Bt cotton was grown on almost 15 million ha in 2009, mostly in India, China,and the USA, but also in a number of other countries (James, 2009).

3.2.1. Agronomic and economic effects

If insect pests are effectively controlled through chemical pesticides, themain effect of switching to Bt crops will be a reduction in insecticideapplications, as the genetic resistance mechanism substitutes for chemicalcontrol agents. However, as shown above (see Figure 2), there are alsosituations where insect pests are not effectively controlled, due to theunavailability of suitable insecticides or other technical, financial, orinstitutional constraints. In those situations, Bt technology adoption canhelp reduce crop damage and thus increase effective yields. Table 1confirms that both insecticide-reducing and yield-increasing effects of Btcrops can be observed internationally.

In conventional cotton, high amounts of chemical insecticides arenormally used to control the bollworm complex, which is the main Bttarget pest. Accordingly, Bt cotton adoption allows significant insecticidereductions, ranging from 30% to 80% on average. This brings aboutsubstantial environmental advantages and health benefits for farmers,farm workers, and consumers. Yield effects are also quite pronounced,especially in developing countries. In Argentina, for instance, conventionalcotton farmers under-use chemical insecticides, so that insect pests are not

Table 1. Average farm level effects of Bt crops

Country Insecticide

reduction (%)

Increase in effective

yield (%)

Increase in profit

(US$/ha)

Bt cotton

Argentina 47 33 23

Australia 48 0 66

China 65 24 470

India 41 37 135

Mexico 77 9 295

South Africa 33 22 91

USA 36 10 58

Bt maize

Argentina 0 9 20

Philippines 5 34 53

South Africa 10 11 42

Spain 63 6 70

USA 8 5 12

Source: Qaim (2009).

Notes: The results are based on data from farm surveys carried out by various research teams

in the different countries between 1996 and 2009. All results are based on data from two or

more growing seasons. The profit effects shown are net profits gains after payment of any

technology fee or seed price premium.

Genetically Modified Crops and Global Food Security 39

effectively controlled (Qaim and de Janvry, 2005). In India and China,chemical input use is much higher, but the insecticides are not always veryeffective, due to low quality, resistance in pest populations, and sometimesincorrect timing of sprays (Huang et al., 2003; Qaim et al., 2006). Ascotton is not a food crop, yield increases do not directly contribute toimprovements in food availability. The example is interesting nonetheless,because Bt cotton is the only GM crop that is already widely used insmallholder production systems in different developing countries. Similareffects can also be expected for Bt food crops, when there is highinfestation of Bt target pests.

The evidence available for Bt maize confirms this prediction (Table 1).Except for Spain, where the percentage reduction in insecticide use is large,the more important result of Bt maize is an increase in effective yields. Inthe USA, Bt maize is mainly used against the European corn borer, whichis often not controlled by chemical means (more recently commercializedBt hybrids in the USA also provide resistance to the corn rootwormcomplex). In Argentina and South Africa, mean yield effects are higher,because there is more severe pest pressure. The average yield gain of 11%in South Africa shown in Table 1 refers to large commercial farms. Thesefarms have been growing yellow Bt maize hybrids for several years. Gouse

Matin Qaim40

et al. (2006) also analyzed data from smallholder farmers growing white Btmaize hybrids in South Africa; they found average yield gains of 32% onBt plots. In the Philippines, average yield advantages of Bt maize are even34%. These patterns suggest that resource-poor smallholder farmers facebigger constraints in controlling insect damage in their conventional crops.

The profit effects of Bt technologies are also shown in Table 1. Bt seedsare more expensive than conventional seeds, because they are mostly soldby private companies that charge a technology fee. The fee is positivelycorrelated with the strengths of intellectual property right (IPR) protectionin a country. In all countries, Bt adopting farmers benefit financially, thatis, the economic advantages associated with insecticide savings and highereffective yields more than outweigh the technology fee charged on GMseeds. Yet, the absolute gains differ remarkably between countries andcrops. On average, the extra profits are higher in developing than indeveloped countries. Apart from agroecological and socioeconomicdifferences, GM seed costs are often lower in developing countries, dueto weaker IPRs, seed reproduction by farmers, subsidies, or other types ofgovernment price interventions (Basu and Qaim, 2007). Moreover, profitgains are higher for Bt cotton than for Bt maize, which is partly due tolower technology fees charged by the companies in smallholder cottonenvironments. In addition, the pests targeted by Bt cotton are of highereconomic importance than those targeted by Bt maize, although newer Btmaize events now cover a broader spectrum of target pests, which maypotentially change the picture in the future.

The mean values shown in Table 1 mask impact variability observedwithin countries. Especially during the early years of Bt cotton adoption inChina and India, there were farmers that did not benefit economically,mainly because of insufficient knowledge about appropriate pesticideadjustments or the use of varieties not suitable for certain agroecologicalconditions (Qaim et al., 2006; Pemsl and Waibel, 2007; Gruere et al., 2008).These initial problems were overcome, so that most cotton farmers are nowhighly satisfied with Bt technology. This is reflected in the rapid adoptionrates. In India, around 90% of the cotton farmers have adopted Bttechnology, whereas in some provinces of China all cotton is nowGM.Mostcotton farmers in India and China are small-scale producers, who often livenear or below the poverty line. For them, financial gains of several hundreddollars per hectare through Bt adoption can improve living standardssubstantially, entailing better economic access to food and other basicneeds. Poverty and distribution effects are analyzed more explicitly below.

3.2.2. Poverty and distribution effects

Especially in China, India, and South Africa, Bt cotton is often grown infarms with less than three hectares of land. In South Africa, manysmallholders grow Bt white maize as their staple food. Several studies

Genetically Modified Crops and Global Food Security 41

show that Bt technology advantages for small-scale farmers are of asimilar magnitude as those of large-scale producers. In some cases, theadvantages can even be bigger (Pray et al., 2001; Morse et al., 2004).

However, there are only very few recent studies that have gone beyondfarm profits, to analyze wider socioeconomic outcomes of GM crops,such as impacts on household income, income distribution, poverty, andrural employment. Ali and Abdulai (2010) have analyzed the effects of Btcotton in Pakistan. Using a propensity-score matching approach, theyshowed that the adoption of this new technology exerts a positive andsignificant effect on household income and poverty reduction amongcotton growers. Subramanian and Qaim (2009, 2010) developed a villagesocial accounting matrix (SAM) and multiplier model to examine directand indirect effects of Bt cotton adoption in India. Their results showthat total household income effects of Bt cotton are US$246 per hectarehigher than those of conventional cotton (Figure 4). Of these totalbenefits, US$135 are direct profits for cotton farmers, and US$111 arespillovers through backward and forward linkages to other local marketsand sectors. That is, each dollar of direct Bt cotton benefits is associated

0

100

200

300

400

500

600

All households Extremely poor Moderately poor Non-poor

US

$ pe

r ha

Bt

Conventional

Fig. 4. Household income effects of Bt and conventional cotton in India.Source: Qaim et al. (2009). Notes: The results show combine direct andindirect effects calculated with an SAM multiplier model. Data for thisanalysis come from a village census survey carried out in 2004 in Kanzara,Maharashtra, and three waves of a panel survey carried out in 2003, 2005,and 2007 in the states of Maharashtra, Karnataka, Andhra Pradesh, andTamil Nadu. For further details of the model and data also see Subramanianand Qaim (2010). The columns for ‘‘all households’’ are the sums of the

columns for the three income categories.

Matin Qaim42

with over 80 cents of additional indirect benefits in the village economy(Qaim et al., 2009).

In terms of income distribution, all types of households benefit,including those below the poverty line (Figure 4). Sixty percent of the gainsaccrue to the extremely and moderately poor. Hence, Bt cotton in India ispoverty reducing. The technology is also net employment generating, sothat landless rural households benefit as well. The employment effects haveinteresting gender implications: Bt cotton increases aggregate returns tolabor by 42%, while the returns for hired female agricultural workersincrease by 55%. This is largely due to additional labor employed forpicking cotton, which is primarily a female activity in India (Subramanianet al., 2010). As is known, women’s income has a particularly positiveeffect for child nutrition and welfare (Quisumbing et al., 1995).

These findings on social benefits in India are in stark contrast to somereports by biotech critics, who claim that Bt cotton would ruin smallholderfarmers and drive them into suicide (e.g., Sharma, 2004; Shiva, 2009).However, such reports are not substantiated by reliable data. Gruere et al.(2008) have analyzed the issue of farmer suicides in India and found nocorrelation with Bt cotton adoption; suicides among Indian farmers werealready reported long before Bt cotton was commercialized, and thenumber of cases has not increased since Bt technology was released.

The results summarized here on positive income and poverty reductioneffects of Bt cotton in the small farm sector of Pakistan and India cannotbe simply extrapolated to other countries and other GM crops, becauseimpacts always depend on the conditions in a particular setting. None-theless, the fact that a first-generation GM crop like Bt cotton alreadycontributes to poverty reduction and improved food security has not beenwidely recognized up till now.

4. Potential impacts of future GM crops

4.1. Crops with improved agronomic traits

While Bt technology so far has mainly been used in maize and cotton, thereare also other Bt crops that are likely to be commercialized soon (Romeiset al., 2008). For instance, China has recently announced the commer-cialization of Bt rice, while in IndiaBt eggplant is ready to go. Both technologieshave been tested extensively in experimental stations and on farms. Theavailable data are in line with results for Bt cotton and Bt maize: insecticide-reducing and yield-increasing effects can lead to significant economic andsocial benefits (Huang et al., 2005; Romeis et al., 2008; Qaim, 2009).

In an ex ante study for Bt eggplant in India, Krishna and Qaim (2008a)projected that the technology, which controls the eggplant fruit and shootborer, will reduce chemical insecticide use by up to 50% and increase

Genetically Modified Crops and Global Food Security 43

yields by 40% on average. This will not only improve farmers’ profits butalso lower market prices and thus improve consumer access to vegetables,with expected positive nutrition effects among the poor. Moreover, Bteggplant will be less contaminated with pesticide residues; such residues invegetables have become a real problem in some parts of India (Krishnaand Qaim, 2008b). Despite the expected positive economic, environmental,and health effects, Bt eggplant – as the first GM food crop to becommercialized in India – has recently aroused controversial publicdebates. After a careful review of the biosafety and food safety data, theGenetic Engineering Approval Committee, which is the responsibleauthority in India, declared Bt eggplant to be safe and approved thistechnology in October 2009 (Kumar, 2009). However, after a series ofpublic hearings, which were heavily influenced by anti-biotech campaignsand biased media reports, the Minister of Environment and Forestssuspended the commercialization of Bt eggplant for an indefinite period oftime. This example demonstrates how much the regulatory procedures,which should be science based, are influenced by subjective views of certainlobbying groups.

Also for other pest-resistant GM traits that are being developed indifferent crops – such as fungal, virus, nematode, or bacterial resistance –pesticide-reducing and yield-increasing effects can be expected. As arguedabove and as already observed for Bt technologies, positive yield effectswill generally be more pronounced in developing countries, where pestpressure is often higher and farmers face more severe constraints incontrolling pest damage (Table 2). Especially in the non-commercial and

Table 2. Expected yield effects of pest-resistant GM cropsin different regions

Region Pest pressure Availability of

chemical

alternatives

Adoption of

chemical

alternatives

Expected yield

effect of GM

crops

Developed

countries

Low to medium High High Low

Latin America

(commercial)

Medium Medium High Low to medium

China Medium Medium High Low to medium

Latin America

(non-

commercial)

Medium Low to medium Low Medium to high

South and

Southeast Asia

High Low to medium Low to medium High

Sub-Saharan

Africa

High Low Low High

Source: Qaim and Zilberman (2003).

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semi-commercial crop sectors, where technical and economic constraintsimpede a more widespread use of chemicals, pest-related crop losses areoften 50% and higher (Oerke, 2006). On the basis of the conditions of pestpressure and current crop protection, the biggest yield gains are expectedin South and Southeast Asia and Sub-Saharan Africa.

The effects of GM crops with tolerance to abiotic stresses will also besituation specific. A drought-tolerant transgenic variety can lead tosubstantially higher yields than conventional varieties under water stress,whereas the effect may be small when sufficient water is available.Especially in the semi-arid tropics, many small-scale farmers are operatingunder drought-prone conditions, so that the benefits of drought tolerancecould be sizeable. In a study referring to eight low-income countries inAsia and Sub-Saharan Africa, Kostandini et al. (2009) reckon that theaverage yield gains of GM drought tolerance traits may be 18% in maize,25% in wheat, and 10% in rice. This is expected to lead to annual welfaregains of US$850 million in the eight countries under study. Additionalbenefits of higher yield stability (variance reduction) are calculated to beUS$570 million.

While the development of drought-tolerant varieties is a major priorityboth in public and private sector crop improvement programs (Kempkenand Jung, 2010), biotech researchers are also working on tolerance toother abiotic stress factors such as heat, salinity, flood, and coldness.Climate change is associated with more frequent weather extremes, so thatmore tolerant GM crops can help reduce the risks of crop failures and foodcrises. Furthermore, research is underway to develop crops with highernutrient efficiency, especially with respect to nitrogen. Nutrient-efficientcrops will reduce chemical fertilizer use and associated environmentalexternalities in intensive agricultural production systems, while they willcontribute to yield gains in regions where fertilizers are currentlyunderused, as is the case in large parts of Sub-Saharan Africa. Some ofthese traits are genetically complex, so that commercialization may not beexpected in the short run. But in the medium and long run, thecontribution to food security could be sizeable.

4.2. Crops with improved nutritional traits

Nutritionally enhanced GM crops that researchers are working on includeoilseeds with improved fatty acid profiles, crops with higher amounts ofcertain essential amino acids, and biofortified staples with enhancedcontents of minerals and vitamins (Moschini, 2008). A well-known exampleof a GM biofortified crop is Golden Rice, which contains significantamounts of beta-carotene to control vitamin A deficiency (VAD). GoldenRice could become commercially available in some Asian countries startingin 2012 (Potrykus, 2008). As this technology is particularly promising from a

Genetically Modified Crops and Global Food Security 45

food security perspective, some further details about likely nutrition andhealth benefits are discussed in the following.

VAD is a considerable public health problem in many developingcountries: it affects 190 million pre-school children and 19 millionpregnant women world-wide (WHO, 2009). Apart from increasing childmortality, VAD can lead to visual problems, including blindness, and italso increases the incidence of infectious diseases (UN SCN, 2004). Thedeficiency is most widespread in poverty households, where diets aredominated by staple foods with relatively low nutritional value. Wide-spread consumption of Golden Rice promises to improve the situation inrice-eating populations. Stein et al. (2008) developed a methodology forcomprehensive ex ante evaluation, which they used for empirical analysisin India. India is one of the target countries for Golden Rice, becausemean levels of rice consumption are relatively high, and VAD iswidespread.

Using a disability-adjusted life years (DALYs) approach, Stein et al.(2008) calculated the social burden associated with VAD in India.3 Thecombined annual mortality and morbidity burden is expressed in terms ofthe number of DALYs lost. The present burden of VAD, calculated basedon available health statistics, is the situation without Golden Rice. In anext step, present beta-carotene intakes from nationally representativefood consumption data were derived, and the likely shift in the intakedistribution through future consumption of Golden Rice was established.Necessary assumptions were based on experimental data and expertestimates about the technology’s efficacy and future coverage. Higherbeta-carotene intakes will improve the vitamin A status of individuals,thus reducing the incidence of adverse health outcomes. These reducedincidence rates were projected and used to re-calculate the expectedremaining burden with Golden Rice. The difference in the VAD burdenwith and without Golden Rice is the expected impact of the technologyexpressed in terms of the number of DALYs saved.

According to these calculations, the current annual burden of VAD inIndia amounts to a loss of 2.3 million DALYs, of which 2.0 million are lostdue to child mortality alone. In terms of incidence numbers, more than70,000 Indian children under the age of six die each year due to VAD. Inthis context, widespread consumption of Golden Rice could reduce theburden by 59%, which includes the saving of almost 40,000 lives every year(Table 3). Because the severity of VAD is negatively correlated with

3 The DALYs approach was initially developed by Murray and Lopez (1996) to quantify the

burden of different diseases by combining problems of mortality and morbidity in a single

index. The method was further developed by different authors to make it useful for a wide

array of health and nutrition problems, including micronutrient deficiencies. It can also be

used for impact evaluations and cost-effectiveness analyses of biofortified crops and other

micronutrient interventions (Stein et al., 2005).

Table 3. Burden of vitamin A deficiency in India and potentialimpact of Golden Rice

Current burden of vitamin A deficiency

Number of DALYs lost each year (thousands) 2,328

Number of lives lost each year (thousands) 71.6

Potential impact of Golden Rice

Number of DALYs saved each year (thousands) 1,382

Reduction of the DALYs burden (%) 59.4

Number of lives saved each year (thousands) 39.7

Cost-effectiveness of Golden Rice and other vitamin A interventions

Cost per DALY saved through Golden Rice (US$) 3.1

World Bank cost-effectiveness standard for DALYs saved (US$) 200

Cost per DALY saved through supplementation (US$) 134

Cost per DALY saved through industrial fortification (US$) 84

Source: Stein et al. (2008).

Notes: The impact estimates build on the ‘‘high impact scenario’’ in Stein et al. (2008). Given

recent evidence about the high efficacy of Golden Rice (Tang et al., 2009), the assumptions in

that scenario appear realistic when the technology receives public support for social

marketing efforts.

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income, the positive effects are most pronounced in the poorest incomegroups (Stein et al., 2008).

While these results suggest that Golden Rice alone is unlikely toeliminate the problems of VAD, the projected improvements in publichealth and nutrition are huge. However, unlike available GM crops thatwere mostly commercialized by private companies and sold at a premiumcharged on seeds, Golden Rice is a humanitarian project where seeds willbe distributed without a technology fee (Potrykus, 2008). Therefore, ananalysis of its potential cost-effectiveness is also important. The majorcosts of Golden Rice are the investments in research as well as indeveloping, testing, and disseminating the GM technology. Dividing thesecosts by the number of DALYs saved, and taking into account the timewhen costs and benefits occur through discounting, results in the averagecost per DALY saved, which is a common measure for the cost-effectiveness of health interventions. According to the projections byStein et al. (2008), the cost per DALY saved through Golden Rice is in amagnitude of US$3 (Table 3). A sensitivity analysis shows that even withmuch more pessimistic assumptions the cost would not rise to more thanUS$20 per DALY saved.

These results should be compared with suitable benchmarks. The WorldBank classifies health interventions as very cost-effective when their costper DALY saved is less than US$200. This underlines that Golden Ricecould be extremely cost-effective. But how does Golden Rice compare with

Genetically Modified Crops and Global Food Security 47

conventional vitamin A interventions? Scaling up food supplementation orindustrial fortification programs for vitamin A in India would costbetween US$84 and US$134 per DALY saved (Table 3). The major cost ofthese conventional interventions is not to produce the vitamin pills or foodfortificants but to reach the target population in remote rural areas, whichrequires large investments and monitoring on a regular basis. This isdifferent for Golden Rice: even though the initial investment for researchand development is high, recurrent costs will be low, because Golden Riceseeds will spread through existing formal and informal distributionchannels and can be reproduced by farmers themselves. Nonetheless,social marketing efforts will be required to explain the yellow color of therice that is associated with beta-carotene. Furthermore, suitable strategiesto convince farmers to adopt Golden Rice varieties have to be developed.A combination of beta-carotene with interesting agronomic traits in ricemight be a practicable avenue.

Similar effects can also be expected for other biofortified crops,containing higher amounts of iron, zinc, vitamin A, and other micro-nutrients (Qaim et al., 2007; Meenakshi et al., 2010). However, while thisbodes well for reducing nutritional deficiencies in developing countries,biofortified crops should not be seen as a substitute for existingmicronutrient interventions but as a complementary strategy. No singleapproach will eliminate micronutrient deficiency problems, and allinterventions have their strengths and weaknesses in particular situations.While supplementation and industrial fortification might be more suitablefor urban areas and feeding programs for well defined target groups,biofortified crops are likely to achieve a wider coverage, especially in ruralareas. It is only in the long run that poverty reduction and economic growthmay be expected to contribute to dietary diversification, which might thenreduce the urgency for more specific micronutrient interventions.

5. Institutional and policy issues

Most GM crops available so far were developed and commercialized byprivate firms. Monsanto is involved in many cases, mostly in cooperationwith local seed companies. The empirical evidence reported here provides aconsistent picture: developing-country farmers and consumers can benefitsubstantially from proprietary GM crops. The fear by many critics thatGM technologies only add to the profits of multinational companies istherefore exaggerated. IPR protection influences the distribution ofbenefits: through strong IPRs on GM technologies, as observed in somedeveloped countries, companies can capture a significant fraction of theoverall benefits. But in most developing countries IPRs are weak, so thatGM seed prices are lower and farmers capture a larger benefit share(Qaim, 2009). Strengthening IPRs could invigorate the local private seed

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industry and accelerate innovation rates in some emerging economies, butin the least-developed countries potential advantages would probably beoutweighed by disadvantages in terms of lower technology accessibilitythrough higher seed prices. Therefore, the appropriate strength of IPRprotection is country-specific.

Beyond the issue of seed prices and benefit distribution, the dominance ofprivate multinationals also has implications for the type of GM crops thatemerge. The private sector develops technologies primarily for big lucrativemarkets. Hitherto applications concentrate on commercial crops andrelatively large and economically more advanced countries. Whiletechnically feasible, it is unlikely that multinationals will commercializeGM innovations for niche markets in the least-developed world, wheremarket failures are commonplace. Such research gaps will have to beaddressed by the public sector, if biotechnology developments are not tobypass the poor. This requires an expansion of public research investments.Some of the bigger countries – like China, India, or Brazil – have publicbiotechnology programs and the critical mass to come up with owntechnologies that can complement proprietary innovations. Smallerdeveloping countries will need more targeted external support, for instancethrough closer cooperation with international agricultural research centers.

Also, more public–private partnerships should be sought to harness thecomparative strengths of both sectors. There are numerous examples ofpublic–private research cooperation in agricultural biotechnology, butnone of these projects has yet led to a commercialized GM crop. Ex antestudies show that well-designed partnerships can be advantageous for allparties involved (Krishna and Qaim, 2007, 2008a). Still, more research isneeded, in order to identify best practices for the joint development andcommercialization of GM crops and issues related to IPR transfer.

Against this background, the constantly rising regulatory hurdles andcosts are a major stumbling block (Moschini, 2008). Kalaitzandonakeset al. (2007) have estimated the private compliance costs for regulatoryapproval of a new Bt or HT maize technology in one country at US$6million to US$15 million, which is often more than the cost of actuallydeveloping the technology. Commercializing the same technology in othercountries will entail additional costs. Such high regulatory costs slow downinnovation rates. They also impede the commercialization of GMtechnologies in minor crops and small countries, as markets in suchsituations are not large enough to justify the fixed cost investments. And,expensive regulations are difficult to handle by small firms and publicsector organizations, so that they contribute to further concentration ofthe agricultural biotech industry. If such lengthy and complex procedureswere really necessary to regulate high-risk products, then the costsinvolved would be justified. But this does not seem to be the case. Since theuse of genetic engineering does not entail unique risks, it is actuallyillogical to subject GM crops to a much higher degree of scrutiny than

Genetically Modified Crops and Global Food Security 49

conventionally bred crops (Bradford et al., 2005). The regulatorycomplexity observed today is rather the outcome of the politicized publicdebate and the lobbying success of anti-biotech interest groups (Miller andConko, 2004). Especially with a view to the large potentials of GM cropsfor developing countries, some reform of the regulatory framework will benecessary, and economists have an important role in this respect in termsof quantifying costs and benefits.

But also when suitable GM crop technologies are commercialized indeveloping countries, benefits for poor farmers and consumers will notoccur automatically. A conducive institutional environment is importantto promote wide and equitable access to new seed technologies. In general,well-functioning input and output markets, including efficient micro-creditschemes, will spur the process of innovation adoption. Unfortunately,such conditions first need to be established in the poorest countries ofAfrica and Asia, so that the GM crop impacts observed so far in China,India, and other more advanced developing countries cannot simply beextrapolated. Like any agricultural technology, GM crops are not asubstitute but a complement to much needed institutional change in ruralareas of developing countries.

6. Conclusion

Global food security requires (1) sufficient food availability, (2) economicaccess to food by all, and (3) an adequate nutritional value of the diets thatpeople consume. While GM crops are not a panacea, they can contributeto improving food security in terms of all three dimensions. Crops that areresistant to biotic or tolerant to abiotic stress factors can substantiallyincrease effective yields and thus enhance global and local foodavailability. Moreover, since most of the world’s hungry people dependon agriculture as a source of income and employment, GM crops that aresuitable for the small farm sector can raise the incomes of the poor andthus improve their economic access to food. And finally, biofortified cropscan add nutritional value to staple food crops and thus reduce specificnutritional deficiencies in a highly cost-effective way.

So far, mostly HT and Bt crops have been employed. Available impactstudies show that these crops are beneficial, but they also suggest thatdifferentiation is important. While the potentials of HT crops to contributeto food security seem to be confined to very specific situations, the positiveimpacts of Bt crops can bemuch larger. Bt cotton in particular does not onlycontribute to higher yields and lower insecticide use but also contribute tosignificant household income gains, including for farmers and rural laborersliving below the poverty line. Similar effects are observed for Bt maize, andpreliminary studies suggests that other pest-resistant GM food crops mayalso result in comparable impacts. Strikingly, farmers in developing

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countries often benefit more than their colleagues in developed countries,which is partly due to weaker IPR protection and thus lower seed prices. Butincome distribution also depends on the wider institutional setting,including farmers’ access to suitable seed varieties, credit, information, andother input and output markets. Like any agricultural technology, GMcrops are not a substitute but a complement to much needed institutionaland infrastructure improvement.

GM technologies in the research pipeline include crops that are moretolerant to temperature and water stress, more efficient in terms of soilnutrient use, or crops that contain higher amounts of vitamins and traceminerals. The benefits of such applications could be much bigger thanthose already observed. Against the background of a dwindling naturalresource base, rapidly growing demand for food and biofuels, andwidespread rural poverty, GM crops could contribute significantly tosustainable development.

Despite these potentials, the public debate about GM crops remainscontroversial. Concerns about new risks and lobbying efforts of anti-biotech groups have led to complex, costly, and unpredictable biosafety,food safety, and labeling regulations, which slow down innovation ratesand lead to a bias against small countries, minor crops, small firms, andpublic research organizations. Overregulation has become a real threat forthe further development and use of GM crops. The costs of regulation interms of foregone benefits might be large, especially for developingcountries. This is not to say that zero regulation would be desirable, butthe trade-offs associated with regulation need to be considered. In thegeneral public, the risks of GM crops seem to be overrated, while thebenefits are underrated. Wider recognition of the technology’s potentialscould help redirect public policy efforts towards ensuring that pro-pooroutcomes can be achieved on a larger scale.

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