The Economic Effects of Genetically Modified OrphanCommodities: Projections for Sweetpotato in Kenya

Matin Qaim

Agricultural EconomistCenter for Development Research (ZEF)

No. 13-1999

Published in collaboration with

Zentrum fur EntwicklungsforschungCenter for Development ResearchUniversitat BonnZEF Bonn

The Economic Effects of Genetically Modified OrphanCommodities: Projections for Sweetpotato in Kenya

Matin Qaim

Agricultural EconomistCenter for Development Research (ZEF)

No. 13-1999

Published by: The International Service for the Acquisition of Agri-biotech Applications (ISAAA). Ithaca, New Yorkand Center for Development Research (ZEF), Bonn.

Copyright: (1999) International Service for the Acquisition of Agri-biotechApplications (ISAAA) and Center for Development Research (ZEF).

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Citation: Qaim, M. 1999. The Economic Effects of Genetically Modified Orphan Commodities: Projections forSweetpotato in Kenya. ISAAA Briefs No. 13. ISAAA: Ithaca, NY and ZEF: Bonn.

Author‘s address: Center for Development Research, Universität Bonn, Walter-Flex-Str. 3, D-53113 Bonn, Germany, Tel.: +49-228-731 841, Fax: +49-228-731 869,E-mail: mqaim@uni-bonn.de Web: http://www.zef.de

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Contents

i

Foreword.........................................................iiiExecutive Summary...........................................v

List of Tables...................................................viiList of Figures..................................................vii

List of Abbreviations and Acronyms.................ix

1 . Introduction.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.1 Conceptual Framework.......................................................................................................21.2 Study Overview..................................................................................................................2

2 . The Kenyan Sweetpotato Sector...................................................................................22.1 Regional Production Aspects................................................................................................42.2 Sweetpotato Farming Systems..............................................................................................52.3 Cost and Income Calculations.............................................................................................72.4 Sweetpotato Marketing and Consumption.............................................................................92.5 Phytosanitary Problems......................................................................................................10

3 . The Transgenic Resistance Technologies.....................................................................113.1 The Biotechnology Research Projects..................................................................................11

3.1.1 Virus Resistance....................................................................................................113.1.2 Weevil Resistance.................................................................................................13

3.2 Agronomic Technology Potentials......................................................................................133.3 Technology-Inherent Risks.................................................................................................14

4 . Potential Technology Benefits and Costs....................................................................164.1 Methodology................................................................................................................. ...16

4.1.1 The Model............................................................................................................164.1.2 The Data..............................................................................................................17

4.2 Cost and Income Effects at the Farm Level.........................................................................184.3 Technology Adoption........................................................................................................194.4 Projected Welfare Effects..................................................................................................204.5 Benefit-Cost Analysis........................................................................................................214.6 Sensitivity Analysis...........................................................................................................23

5 . Conclusions and Policy Implications..........................................................................25

Acknowledgments............................................................................................................27

References......................................................................................................................27

Appendices.....................................................................................................................31

i i i

Foreword

Despite the ongoing controversial debates aboutgenetically engineered crops, there is little doubtthat biotechnology will substantially impact onglobal agricultural production. But how can devel-oping countries, where the need for agriculturalinnovation is greatest, become the main beneficia-ries? Biotechnology research is capital- and knowl-edge-intensive, and without targeted support thereis the risk that the technology will bypass the smallfarm sector and poor consumers in the South. If weare to tackle the problems of the poor we mustdevelop innovative research projects.

This report by Matin Qaim analyzes internationalresearch projects jointly launched by the KenyaAgricultural Research Institute (KARI), Monsanto,and other organizations to develop geneticallyengineered sweetpotatoes with resistance to majorpests and diseases. The expected economic ramifi-cations are analyzed for small-scale farmingsystems in Kenya, where the transgenic varietieswill first be deployed in the near future. The reportshows that both sweetpotato producers and consum-ers will profit from the technology. In addition tothese direct, positive impacts on the income andfood security situation of households, the initiativesadvance significant biotechnology capacity-formation in the Kenyan agricultural researchsystem. Indeed, the examples in the study clearlydemonstrate the viability of public-private sector

research partnerships for the benefit of developingcountries. Working with typical semisubsistencecrops—such as sweetpotato—is particularly attrac-tive because it targets the poor and avoids conflictswith the private sector′s business interests.

Having analyzed transgenic potato technology inMexico and tissue culture banana technology inKenya, the present study is the third fieldwork-based socioeconomic biotechnology assessmentcarried out independently by the Center for Devel-opment Research (ZEF) and published in collabora-tion with the International Service for the Acquisi-tion of Agri-biotech Applications (ISAAA). Thecombined results of these studies underline evenmore firmly that modern agricultural biotechnologycan provide great benefits to low- and middle-income countries, including the smallholder sector.Yet these benefits will not materialize withoutpublic support. The international community musttranslate the promise of biotechnology for the Southinto actual benefits through appropriate policies.Apart from higher financial commitments for publicbiotechnology research targeting smallholders andpoor consumers, profound institutional changes innational and international agricultural innovationsystems are necessary to respond efficiently to therapidly changing framework conditions.

Joachim von BraunDirector, ZEF

Executive Summary

Biotechnology has the potential to boost globalagricultural productivity in a sustainable way. Theprospects are particularly bright for the developingworld, where the need for new farm technologies ismost pronounced. Biotechnology advances, how-ever, are predominantly taking place in the industri-alized world. The research capacity in manydeveloping countries is limited, and so thesecountries will have to import biotechnology in orderto be able to use it. But technological requirementsdiffer across countries, and some fear that the needsof the South will be bypassed by biotechnologicalresearch programs that are dominated by theprivate sector in the North. For the so-called“orphan commodities,” those food crops that haveminor international appeal but that are of greatimportance to semisubsistent farmers in developingcountries, this could especially prove true. In thisstudy, however, we examine innovative undertak-ings that have been jointly launched by the publicand private sector to develop recombinantsweetpotato technologies for use in Africa. Theeconomic impacts of the resulting transgenicsweetpotato varieties for Kenya are scrutinizedusing an ex ante analytical framework. The studyseeks to improve the empirical evidence about therepercussions of biotechnology in the small-farmsector of developing countries. It also seeks toenrich the knowledge base needed for formulatingpolicies that include the poor in the biotechnologyrevolution.

In Kenya, as in other countries of sub-SaharanAfrica, sweetpotato is mainly grown by resource-poor women farmers. Sweetpotato provides animportant security function for the producinghouseholds because—under adverse climaticconditions and low-input regimes—it yields higheramounts of food energy and micronutrients per unitarea than any other crop. The amount of land usedfor sweetpotato production in Kenya has grownsubstantially in recent decades due to populationpressure. Today, Kenyan farmers cultivate the cropon about 75,000 hectares that are spread overvarious agroecological zones. In the farmingsystems of Kenya, sweetpotato is usually part of adiversified cropping pattern. A farm′s averagesweetpotato holding is 0.45 acres (0.18 hectares),and some 40 percent of the harvest is kept forhousehold consumption. In spite of the crop′s

robustness, farmers suffer significant yield lossescaused by pests and diseases, notably sweetpotatoviruses and weevils. Efficient methods to controlthese pathogens are not available, and compared toother sweetpotato-producing regions in the world,the yield levels obtained in Kenya are low. Thisproblem is exacerbated by the neglect of nationaland international agricultural research onsweetpotato.

A research project to advance nonconventionalvirus resistance in sweetpotato, however, waslaunched in 1991/92 by the private companyMonsanto and the Kenya Agricultural ResearchInstitute (KARI). Apart from funds Monsanto pro-vided, the first phase of the initiative was cospon-sored by the US Agency for International Develop-ment (USAID). The University of Missouri alsoassisted with coordination efforts. Basic researchcomponents of the project—such as the develop-ment of suitable biotransformation and plantregeneration protocols—have been carried out inMonsanto′s US laboratories in collaboration withKARI scientists. The transfer of the recombinantsweetpotato technology from the USA to Kenya isscheduled for 1999. A royalty-free licensing agree-ment has been signed, which allows KARI to usethe technology and to share it with other Africancountries in the future. Monsanto′s contribution,therefore, can be looked upon as development aid.The next project phase, beginning in 1999, issponsored by the Agricultural Research Fund (ARF),which is being administered by the World Bank.This new phase is institutionally supported byMonsanto, the International Service for the Acquisi-tion of Agri-biotech Applications (ISAAA), and theInternational Potato Center (CIP). During this phase,virus-resistant sweetpotatoes will be field-tested inKenya and transgenic varieties will subsequently bereleased. This technology is Kenya′s first experi-ence with bioengineered crops, and so capacitybuilding for biosafety is an integral part of theproject′s activities. Kenya′s farmers could receivethe new transgenic varieties as early as 2002. In themeantime, KARI will transform additional varietiesfor virus resistance in its newly refurbished biotech-nology laboratory. Given the heterogeneous varietalpreferences among sweetpotato producers, this isimportant for promoting widespread technologyadoption.

v

Other research undertakings have recently begunwith the objective of developing transgenic weevilresistance in sweetpotato for use in Africa. Theseundertakings involve different public organizations,although the work is also partly based on propri-etary technology patented by the private sector.Given the experience of the Monsanto/KARIproject, Kenya will probably be one of the firstcountries to deploy the weevil resistance technol-ogy in sweetpotato, possibly as early as 2004.

This study investigates the potential impacts of bothvirus and weevil resistance in the Kenyansweetpotato sector. Interview surveys conducted in1998 of researchers, extension workers, and farm-ers, constitute the data basis for the quantitativeanalysis. First, the likely effects are analyzed at thelevel of the individual farm. It is expected that byusing transgenic virus-resistant varieties farmers willbe able to increase their sweetpotato yields by 18percent. Due to spatially divergent virus pressures,productivity increases will be somewhat higher inthe moist, western part of Kenya than in the driercentral and eastern regions. The potential yieldgains for weevil-resistant varieties are even higher:25 percent, with no significant regional differences.Farmers will easily be able to integrate bothresistance technologies into their traditionalcropping systems without additional costs. Theprojected sweetpotato income gains at the farmlevel are sizable. Under the simplified assumptionof constant output prices, the relative incomeincrease would be 28 and 39 percent for virus andweevil resistance technology, respectively. Risingcash revenues as well as the greater availability ofsweetpotato for subsistence consumption willcontribute significantly to improved food securityfor rural households.

The potential effects of transgenic technologies arealso analyzed for the Kenyan sweetpotato marketas a whole. For this purpose, an economic surplusmodel with technological progress is employed. Inaddition to the agronomic technology potentials,innovation adoption rates are important modelparameters. Given the widespread informal ex-change of sweetpotato planting material amongfarmers, a fairly quick dissemination is anticipatedif the resistance mechanisms are incorporated intovarieties acceptable to farmers. The model simula-tions show that the virus-resistant varieties wouldproduce an aggregate annual benefit of 324 million

Kenyan Shillings (KSh) (5.4 million US$), whereasthe weevil resistance technology could createwelfare gains of 593 million KSh (9.9 million US$)per year. For both technologies, about 26 percent ofthe overall surplus will be captured by food con-sumers, since the growth in productivity will causethe sweetpotato market price to decline.

Juxtaposing the benefits to the costs of research anddevelopment (R&D), the virus resistance technologyproduces an internal rate of return (IRR) of 26percent. The research on sweetpotato weevilresistance is at a much earlier stage, so no reliableR&D cost figures could be assembled for thistechnology. But assuming the same investments asfor the virus research project, the weevil resistancetechnology creates an IRR of 33 percent. It shouldbe noted, however, that a direct comparison of theIRR figures could be misleading because it neglectsthe positive dynamic effects of capacity-building,which are difficult to quantify. The implementationof the weevil resistance technology in Kenya willprofit from the knowledge and experience acquiredfrom the virus resistance project. In the longer run,it is likely that varieties with both resistancemechanisms incorporated will also become avail-able. Furthermore, it needs to be stressed that thestated benefit-cost ratios grossly underestimate theactual social returns on research investments.Eventually, the innovations will also be used inother African countries, so it is inappropriate toimpose the whole cost of basic research in ananalysis confined to Kenya. Taking into accountonly the more applied research components and thecost of local capacity building, the IRR for the virusresistance technology is 60 percent, and for theweevil resistance technology it is 77 percent.

The examples clearly show that modern biotechnol-ogy can offer promising solutions to the problems ofresource-poor farmers in developing countries iftheir specific needs are explicitly taken intoaccount in biotechnology research. Moreover, theinternational collaborative R&D projects demon-strate the viability of successful partnershipsbetween the public and the private sectors. As mostof the basic biotechnology tools available to dateare patented by private companies, which often donot have enough market incentives to develop end-technologies designed to serve resource-poorfarmers in the South, more interactions of this kindare needed. Firms are particularly inclined to

vi

vi i

donate proprietary technology (e.g., certain genes)for use in public sector research on orphan com-modities, such as sweetpotato. The reason for this isthat these crops do not conflict with the privatesector′s commercial interests. Donor organizations

should make more funds available for innovativepublic-private partnerships and biotechnologytransfers so that developing countries can gainaccess to the benefits of biotechnology.

vi i i

List of Tables

List of Figures

Figure 1: Development of sweetpotato production in Kenya (1962-1998)........................................................3

Figure 2: Average food energy yields of different food crops in Africa............................................................4

Figure 3: Map of Kenyan provinces.............................................................................................................5

Figure 4: Estimated adoption profiles of sweetpotato virus andweevil resistance technologies, by region....................................................................................20

Figure 5: Development of IRRs under the assumption of extended research lags............................................24

i x

Table 1: Sweetpotato production statistics for the Kenyan provinces (1996-1998 averages). .........................5

Table 2: Characteristics of sweetpotato farms, by region............................................................................6

Table 3: Average sweetpotato production cost, by region (per acre and season)................................................7

Table 4: Average sweetpotato enterprise budgets, by region (per acre and season)......................................9

Table 5: Potential yield gains of sweetpotato virus and weevil resistance technologies,by region (percent)..................................................................................................................14

Table 6: Potential cost and income effects of sweetpotato virus and weevil resistance technologiesat the farm level, by region (per acre). .....................................................................................18

Table 7: Projected welfare effects of virus and weevil resistance technologies. ........................................21

Table 8: IRRs of virus and weevil resistance projects under different assumptions forR&D costs and benefits (percent).............................................................................................22

Table A1: Technology shift factor K for virus and weevil resistance technologies. .......................................31

Table A2: Technology-induced changes in producer and consumer surplus (in thousand 1998 KSh) ...............31

Table A3: Financial cost of the virus resistance research project by involved organizations(in thousand 1998 KSh). ..........................................................................................................32

List of Abbreviations and Acronyms

x

ABSP Agricultural Biotechnology Support ProjectARF Agricultural Research FundBt Bacillus thuringiensisCGIAR Consultative Group on International Agricultural ResearchCIP International Potato CenterFAO Food and Agriculture Organization of the United NationsFDA Food and Drug AdministrationIITA International Institute of Tropical AgricultureIPR Intellectual Property RightsIRR Internal Rate of ReturnISAAA International Service for the Acquisition of Agri-biotech ApplicationsKARI Kenya Agricultural Research Institutekcal KilocalorieMALDM Ministry of Agriculture, Livestock Development and MarketingNARL National Agricultural Research LaboratoryNARS National Agricultural Research SystemR&D Research and DevelopmentSPCSV Sweetpotato Chlorotic Stunt VirusSPFMV Sweetpotato Feathery Mottle VirusSPVD Sweetpotato Virus DiseaseUSAID United States Agency for International DevelopmentZEF Zentrum für Entwicklungsforschung (Center for Development Research)

x i

US$ 25.00 ISBN: 1-892456-17-6

1

1. Introduction

making and stimulate future cooperative researchprograms targeted to benefit developing countries,the present study attempts to improve the informa-tion base by projecting the effects of transgenicsweetpotato technology in Kenya. Sweetpotatoproducers in sub-Saharan Africa are mostly small-scale and resource-poor farmers (Scott and Ewell,1992).

A collaborative effort between the US life-sciencescompany Monsanto and the Kenya AgriculturalResearch Institute (KARI) to advance non-conven-tional virus resistance in sweetpotato began in1991/92. The initial phase of the project has beencosponsored by the US Agency for InternationalDevelopment (USAID). A coat protein gene encod-ing resistance to the most important virus type hadbeen previously available from the public sector, sothe research activities of the project focused ondeveloping effective gene constructs and planttransformation and regeneration systems forsweetpotato (cf. Wambugu, 1996). To perform thesetasks and for training purposes, different KARIresearchers have worked at Monsanto′s St. Louis-based facilities. Reliable laboratory protocols havebeen obtained, and since 1997 scientists have beenscreening the transgenic sweetpotatoes for virusresistance. In 1998, Monsanto and KARI signed alicensing agreement for a royalty-free transfer of thetechnology to Africa. Kenyan field trials for the firsttransgenic sweetpotato are scheduled to start in1999. The next phase of the project is sponsoredthrough the Agricultural Research Fund (ARF), withinstitutional support from Monsanto, the Interna-tional Service for the Acquisition of Agri-biotechApplications (ISAAA), and the International PotatoCenter (CIP). The ARF foresees field-testing and thesubsequent release of Kenya′s first virus-resistantsweetpotato variety. Since no transgenic crops haveyet been commercialized in Kenya, this will alsoinvolve the development and consolidation ofefficient biosafety procedures. Kenyan farmers areexpected to have access to the new varietiesbeginning in the year 2002. Furthermore, KARI hasestablished a plant biotransformation laboratory inNairobi, and there are plans to transform a numberof additional sweetpotato clones for virus resis-tance. Monsanto will provide technical assistanceand will continue to work on the development ofnew gene constructs.

There is widespread agreement today that biotech-nology will have significant repercussions onworldwide agricultural development (e.g., Kendallet al., 1997; ODI, 1999). In particular, plants thatare genetically engineered to resist biotic andabiotic stress factors could increase food productionand farm incomes in a sustainable way. Developingcountries stand to benefit most, because in thesecountries food insecurity continues to be a seriousproblem and agriculture is the main source ofincome and employment for most of the population.

Biotechnology applications, however, remainconcentrated in the industrialized world, and theprivate sector usually decides the direction ofrelated research (cf. James, 1998). These effortsfocus on areas with large market potentials so thatresearch investments can be recovered and profitsmade. Many developing country crops—notablytypical semisubsistence crops—do not providesufficient incentives for private sector research anddevelopment (R&D). Such crops have been termed“orphan commodities” (Persley, 1990). From adevelopment policy perspective, public action isneeded to help overcome these shortcomings inbiotechnology R&D. Pure public research—forexample by the international agricultural researchcenters—would be one option. But since the privatebiotechnology industry has a substantial lead overmany public institutes in terms of facilities andexperience, joint public-private sector researchcould be speedier and much more efficient thanpublic research alone. Moreover, basic biotechnol-ogy tools often apply to a diverse range of cropsand problems. Because commercial enterprises holdthe lion′s share of these important patents, it wouldbe difficult or impossible for public institutes toaccess the elementary tools needed for biotech-nology research without interacting with the privatesector. Viable models of public-private sectorpartnerships, therefore, are needed to effectivelyprovide the poor in developing countries withpromising biotechnology products (James, 1997).Although a number of public research initiativeswith private sector links have been launched inrecent years, not a single bioengineered orphancommodity has yet been developed into a commer-cial application. This means that there is very littleevidence about its related economic impacts.Because such information could assist decision-

2

Apart from the virus resistance technology, thereare different public research institutes in the USAthat are developing transgenic weevil resistance insweetpotato for use in sub-Saharan Africa. This isalso a very desirable crop trait for Kenya, and basedon the Monsanto/KARI project experience, theweevil resistance technology could be adapted anddelivered to the national producers as soon as itbecomes available. The present study analyzes thepotential economic impacts of both transgenicsweetpotato virus and weevil resistance.

1.1 Conceptual Framework

Although the Monsanto/KARI biotechnologyresearch project began in 1991/92, the virusresistance technology has not yet been released forcommercial application in Kenya. The same holdstrue for the weevil resistance technology, which isat an even earlier stage. This means that theeconomic impacts of the innovations can only beanticipated by employing an ex ante analyticalframework. For a detailed description of conceptualissues in ex ante biotechnology evaluation, refer-ence is made to Qaim and von Braun (1998) andQaim (1998). The technologies′ ability to increasethe yields (or avoid current yield losses) at the farmlevel is assessed based on interviews with 20different sweetpotato experts. These expertsincluded representatives from KARI, CIP, ISAAA,Monsanto, the Kenyan Ministry of Agriculture, andnational universities. To increase the objectivity ofthe information obtained, five out of the 20 expertswere not part of the virus resistance biotechnologyproject. The expert interviews also covered ques-tions about the likely time-horizon for technologydevelopment and application as well as R&D costestimates. Primary data about the currentsweetpotato farming systems and input-output

relations were collected from a survey of 47 farmsin the five most important producing provinces ofKenya (Nyanza, Western, Central, Eastern andCoast, see Figure 3). The farm interviews weresupplemented by discussions with agricultural fieldextension officers. The author undertook all of thesesurveys in late 1998. The potential effects oftransgenic virus and weevil resistance onsweetpotato incomes and productivities are scruti-nized by comparing crop enterprise budgetswithout, and hypothetically with, the use of thetechnologies. As geographical differences areexpected, the sweetpotato farms are disaggregatedinto two groups—those located in the western partof Kenya and those in the Central and East. Bio-technology research impacts at the national levelare projected using an economic surplus model ofthe Kenyan sweetpotato market with technologicalprogress.

1.2 Study Overview

Chapter 2 describes the current situation ofsweetpotato production and consumption in Kenya.The description partly builds on the CIP and KARIbody of literature. Yet there is scarcely any pub-lished material available, especially with respect tothe cost of sweetpotato production, so the enterprisebudgets presented are based on the primary datacollection outlined above. Chapter 3 gives a moredetailed overview of the biotechnology R&Dprojects and the technologies′ potential yieldeffects. The economic impact analysis is conductedin chapter 4, first at the level of the individual farmand then at the national market level. Measures forresearch investment returns under different projectcost and benefit assumptions are also calculated.Chapter 5 concludes with some generalized policyimplications.

2. The Kenyan Sweetpotato Sector

accounts for more than 80 percent of the globaloutput. Africa makes up 5 percent of the totalproduction. Notwithstanding this comparativelysmall share, some sub-Saharan Africa countries—notably Burundi, Rwanda, and Uganda—are amongthose with the highest sweetpotato per capitaconsumption figures (CIP, 1996).

Developing countries produced almost 99 percentof the worldwide sweetpotato production of 130million tons in 1998. The crop is predominantly aprimary or secondary staple food for the world′spoor, especially in rural areas. The internationaltrade in sweetpotato is almost nil. Asia is by far thelargest producing continent, and China alone

3

Kenya is the fourth largest sweetpotato producer inAfrica. In 1998, the crop covered 75,000 hectares,or about 1.9 percent of Kenya′s total arable land. Asin other African countries, sweetpotato productionin Kenya rose significantly during the last decades.Figure 1 shows that the production almost multi-plied by a factor of 5 from 1962 to 1998.

Per unit productivity increases were relevant duringthe 1960s and 1970s, but since the early 1980s, theyield levels obtained in Kenya have stagnated.Compared to other food crops, national and interna-tional agricultural research institutes have givenlittle attention to sweetpotato (Horton and Ewell,1991). Most of the production growth is due toincreases in the area under sweetpotato cultiva-tion.1 The main reason for the crop′s rising impor-

tance is the growing population pressure on landsuitable for cultivation and concomitantly decliningfarm sizes. In some areas the crop is now grown onmore arid lands with low soil fertility. Sweetpotatois highly adaptable to marginal climatic and soilconditions.2 On the other hand, it has also beensubstituted for other food crops because it yieldsconsiderably higher amounts of food energy per unitarea under prevailing low-input production condi-tions (see Figure 2). The same holds true for anumber of vitamins and micronutrients, especiallythe orange- and yellow-fleshed varieties (Woolfe,1992; Low et al., 1997). Sweetpotato is well suitedas a food security crop, and it would be even moreso if appropriate technologies could contribute tohigher yields in farmers′ fields.

0

10

20

30

40

50

60

70

80

1962 1966 1970 1974 1978 1982 1986 1990 1994 1998

Are

a, P

rodu

ctio

n

0

2

4

6

8

10

12

14

Yield

Area ('000 ha)

Production (0'000 t)

Yield (t/ha)

Figure 1: Development of sweetpotato production in Kenya (1962-1998)

1 In contrast, the area planted with sweetpotato in Asia and Latin America declined during the last decades.

2 Given the high population growth rates and the fact that 80 percent of Kenya′s land is classified as arid and semiarid (Republic of Kenya,1997), it can be expected that the importance of sweetpotato will further rise in the future.

Source: Based on data from FAO (1999).

4

2.1 Regional Production Aspects

In Kenya, sweetpotato is grown under variousagroecological conditions, from the coastal low-lands to altitudes of about 2000 meters in theCentral Highlands and Lake Victoria Basin. Note-worthy amounts are produced in six provinces(Nyanza, Western, Rift Valley, Eastern, Central andCoast, see Figure 3). Strikingly, according toMinistry of Agriculture statistics (MALDM, variousissues), the national sweetpotato area is only halfthe size of the sweetpotato area stated for Kenya bythe FAO (1999). Because official statistics tend tounderestimate the true area under semisubsistencecrops, the higher figures appear to be the morerealistic ones. But since the FAO only providesstatistics for the country as a whole, we multipliedthe aggregate area figures by MALDM′s area ratiosfor the individual provinces in order to derive theregional information shown in Table 1. This proce-dure implicitly assumes that the national statisticsunderestimate the sweetpotato area in all growing-provinces more or less to the same relative degree.

Sweetpotato production conditions differ by loca-tion due to distinct agroclimatic and socioeco-nomic factors. For the purpose of this study, Kenyais subdivided into two major sweetpotato-producingregions: the West (Nyanza and Western Prov-inces) and the Central/East (Rift Valley, Central,Eastern and Coast Provinces).3 Almost 75 percentof the total sweetpotato production is concentratedin the densely populated Lake Victoria Basin in theWest. This region is mostly humid or semihumid(Rees et al., 1997). Although some of the producingareas in the Central and Coast Provinces showhumid conditions as well, the majority of them areclassified as semiarid (Ngunjiri et al., 1993).

Because the official yield levels for the individualprovinces are partly inconsistent, we decided to usethe average yield figures elicited in the farminterview survey. Weighting these figures with theregions′ production shares, we derive a nationalaverage of 9.8 tons per hectare. This is similar to

Figure 2: Average food energy yields of different food crops in Africa

0 10 20 30 40 50

Sweetpotato

Rice

Maize

Cassava

Banana

Sorghum

Yam

Millet

thousand kcal/ha/day

Note: The daily kcal figures are based on average yield levels and lengths of crop cycles under African conditions.Source: Adapted from Woolfe (1992).

3 As will be shown later, this regional approach is instructive because virus problems – and thus the potentials of the virus resistancetechnology – differ according to agroecological conditions.

5

Figure 3: Map of Kenyan provinces

the aggregate 1996-1998 figures stated by MALDM(10.4 t/ha) and FAO (9.7 t/ha). Although Kenya′ssweetpotato yields exceed the African average,they are significantly below the yield levelsobtained in Asia (15 t/ha).

2.2 Sweetpotato Farming Systems

In Kenya, sweetpotato is predominantly grown onsmall and resource-poor farms, usually withoutpurchased inputs. The cropping patterns ofsweetpotato-producing farms typically embrace alarge number of activities, including the cultivation

Table 1: Sweetpotato production statistics for the Kenyan provinces (1996-1998 averages)

Province Area (ha) Production (t) Production share(percent)

Nyanza 35,950 362,373 49.9Western 17,953 180,971 24.9Total West 53,903 543,344 74.8Rift Valley 3,675 32,485 4.5Central 3,558 31,449 4.3Eastern 12,414 109,744 15.1Coast 1,117 9,871 1.3Total Central and East 20,764 183,549 25.2Total Kenya 74,667 726,893 100.0Notes: The total area corresponds to FAO statistics, whereby the area shares of the individual provinces are taken from MALDM. Theregional average per hectare yields (West: 10.08 t/ha, Central and East: 8.84 t/ha) have been obtained from the author′s farm survey.Sources: FAO (1999), MALDM (1996, 1997), and the author′s interview survey (1998).

6

of other staple food crops (e.g., maize, cassava,banana, etc.), fruits, vegetables, and export com-modities such as tea and coffee. In addition, themajority of the farms is engaged in some form oflivestock keeping. The average size of asweetpotato-producing farm in the sample of 47respondents is 5.7 acres.4 The mean sweetpotatoholding has a size of about 0.4 acres, with a rangebetween 0.1 and 2.5 acres. We chose not todifferentiate further between farm sizes because theproduction conditions on smaller and largersweetpotato farms were found to be very similar(also see Ngunjiri and Ewell, 1992). Most of thefarmers grow two sweetpotato cycles per year, thefirst one in the long rainy season and the secondone during the short rains. Sweetpotato is com-monly cultivated as a pure crop. Sometimesintercropping or relay cropping with maize andother plants is practiced.

Sweetpotato often takes the role of an insurancecrop in these farming systems. As mentioned above,if offers comparatively better yields under adverseclimatic conditions and low-input regimes. Asignificant share of the harvest is consumed directlyon a subsistence basis; sweetpotato is not primarilyconsidered a main cash earner. Still, the interviewsrevealed that on average around 60 percent of thefarm production is sold to raise small amounts ofmoney. The sweetpotato income is usually spent onbasic items that the farm family urgently needs.Unfortunately, no previous comparable data onsweetpotato sales at the farm level are available forKenya. Based on a review of studies that have been

carried out in various sub-Saharan countries duringthe 1980s, Scott and Ewell (1992) estimate that thehome-consumption share was probably more than90 percent. Although it should be kept in mind thatour sample size is quite small, it appears thatsweetpotato commercialization increased substan-tially during the last decade. The main reason for atrend towards closer market integration is probablyKenya′s increasing urbanization. Rising sweetpotatodemand in the cities is leading to better marketingpotentials for farmers. A swelling population in thecities also restricts the space available for urbanagriculture in kitchen gardens, which could in-crease sweetpotato purchases.5 Home-consumedshares are slightly higher in the western parts of thecountry as compared to the Central and East. Suchregional differences are shown in Table 2.

The average size of sweetpotato-producing farms inthe West is much smaller than in the Central andEast. This reflects the higher population density inthe Lake Victoria Basin. Although no comprehen-sive information on overall household incomes wascollected in the farm survey, own observations andexperts′ statements suggest that farms in thewestern region are somewhat resource-poorer onaverage than those in the rest of the country. Thesuperiority of sweetpotato over other crops in termsof food energy production per unit area has alreadybeen discussed. Population pressure might alsopartly explain the relatively higher importance ofsweetpotato for farms in the West. Factors of cultureand tradition, however, are probably more relevant.

4 Although official area statistics are usually given in hectares, we use acres for the description of farming systems. This is the morecommon reference among farmers themselves (1 acre = 0.405 ha).

5 This linkage has been shown, for instance, by Tardif-Douglin (1991) in Rwanda.

Table 2: Characteristics of sweetpotato farms, by region

Average Average Sweetpotato Input use a Female Homefarm sweetpotato cycles (percent) managed b consumption

size (acres) area (acres) per year (percent) (percent)

West 5.02 0.42 2.10 5 86 41Central and East 7.81 0.47 1.85 8 73 37a This is the percentage of farmers in the sample using irrigation, farmyard manure, chemical fertilizers, or any kind of pesticide forsweetpotato production.b This is the percentage of farmers who stated that sweetpotato is predominantly managed by women.Source: Author′s interview survey (1998).

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Table 2 also reveals that sweetpotato is considereda women′s crop by the majority of farm families.The female household members are responsible formost of the operations. Men usually assist only withland preparation. Even the monetary income fromsweetpotato is often controlled by women, becausesmaller units of sweetpotatoes are sold continu-ously, whenever cash is needed to meet the basichousehold requirements—unlike typical cash crops,which are usually marketed in comparatively largeamounts during the harvesting season. Some highlycommercialized sweetpotato growers in Nyanzaand Central Province, where higher levels of inputsare used and where men control the production andmarketing of the crop, are exceptions to thispattern. But for Kenya as a whole, these commer-cial sweetpotato growers play a subordinate role.

2.3 Cost and Income Calculations

Kenyan farmers usually grow sweetpotato withoutany purchased inputs. But the crop is comparativelylabor intensive, and under labor-scarce conditions itwould be misleading to neglect this important costcomponent. Allocating family labor to sweetpotatoreduces this household resource for other activitiesand imposes an opportunity cost. Hiring externallabor is also not uncommon for certain operations,especially for land preparation and harvesting insome cases. Sixty-six percent of the interviewedfarmers stated that they hire laborers forsweetpotato on an occasional basis. For the costcalculations, we value each labor-day at theprevailing regional rate for casual workers, regard-less of whether it is family or outside labor. Thisprocedure has also been used by Ngunjiri and Ewell

(1992), which is the only previous source on thecost of sweetpotato production in Kenya. Theaverage cost accounts are shown in Table 3 for thewestern and central/eastern regions. The calcula-tions refer to one crop cycle (about 6 months) on aper acre basis. Although sweetpotatoes are culti-vated on plots that are usually smaller than oneacre, we chose this benchmark for comparativepurposes. Farmers′ statements have been linearlyextrapolated, which is justified given the absenceof operations with significant scale effects. Theindividual operations are explained in greater detailin the following paragraphs.

Land for sweetpotato cultivation is rarely hired.Nevertheless, the average regional rent is imposedin the cost budgets to approximate the foregonebenefit from cultivating other crops. Given thehigher population pressure in the West, it is notsurprising that the price for land is higher there thanit is in the Central and East. On the other hand,relative labor scarcity is more salient in the Centraland East, which the higher wage rate in this regionreflects. Plowing is done either by hand or byanimal traction. In some cases the soil is plowedmore than once before planting. Rarely, no plowingat all is carried out, especially on light and sandysoils. Eighty-three percent of the intervieweesreported that they cultivate sweetpotatoes onmounds or ridges. The preparation and maintenanceof mounds and ridges is labor-intensive, but itprovides better growing conditions for the roots, andfarmers know that the additional labor cost isusually rewarded by higher average yields. Thoserespondents who grow the crop on flat ground stated

Table 3: Average sweetpotato production cost, by region (per acre and season)

West Central and EastCost items Labor-days Cost (KSh) Labor-days Cost (KSh)Cost for land a - 810 - 590Plowing 5.21 438 5.86 551Mounding/ridging 16.05 1,348 11.13 1,047Vine preparation 4.90 412 4.88 459Planting 4.64 390 5.50 517Weeding 35.22 2,960 24.88 2,339Harvesting 22.42 1,884 19.67 1,849Other b - 176 - 429Total 88.44 8,418 71.92 7,781Note: The average daily labor rate is 84 KSh in the West and 94 KSh in the Central and East (1 US$ = 59.7 KSh).a This is the prevailing average per acre rent for a period of 6 months.b Other cost items include expenditures for inputs, such as fertilizers and irrigation.Source: Author′s interview survey (1998).

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that the main reason they do so was labor shortage.The prevalence of farmers cultivating sweetpotatoon flat land is somewhat higher in the Central andEast.

Farmers predominantly plant sweetpotato at thebeginning of the rainy season, usually cultivatingmore than one sweetpotato variety. Sometimes theyuse a number of different varieties even on a singleplot. Important variety characteristics are yieldperformance, high dry matter content (closelyrelated to the taste of the roots), the time periodneeded for the crop to mature, and the amount offoliage production. Farmers′ preferences and thelocal suitability of certain cultivars are fairlydiverse. Even for a single farmer the preferences areoften not easily defined. Various respondents, forinstance, said that they like early maturing varietiesbecause they can earn some cash before othercrops are harvested, while they choose late-maturing varieties for subsistence consumption.Kenyan farmers are growing a wide range ofsweetpotato varieties, many of which have not yetbeen unambiguously characterized by researchers(CIP, 1991).

Vine cuttings are used as planting material. Theyare usually obtained from farmers′ own stocks andpreserved over the dry spell in moist and shadedareas. Before planting, cuttings that show visiblesigns of pest or disease infection are often sortedout. When farmers want to test new varieties, orwhen their own supplies are scarce, neighborssupply planting material free of charge. In droughtyears, when many growers run out of their ownmaterial, cuttings sometimes have to be bought onlocal markets, where supplies from other regionsare marketed. Whenever outside sources ofsweetpotato vines are used, the exchanged amountsare small (e.g., a handful). They need to be multi-plied first to obtain enough material for establishinga whole plot. This crop delay affects the magnitudeand timing of income flows. Additionally, pest anddisease problems can become more severe in theseinstances, because proper vine selection is disre-garded due to the lack of time to obtain enoughhealthy material. The scarcity of planting materialin dry years is considered a serious constraint inKenya and in other countries of sub-Saharan Africa(e.g., Bashaasha et al., 1995; Kapinga et al., 1995).Once enough cuttings have been obtained, plantingis carried out manually. The average labor require-

ments for vine preparation and for planting areshown in Table 3.

Weeding is predominantly done once per cropseason with a hand hoe. This is a time-consumingtask because special care has to be taken not tohurt the emerging sweetpotato storage roots. Tocontrol pest problems, it is also important that theroots remain covered with soil. If labor availabilitypermits, a second weeding procedure is carried outlater during the season, when weeds are uprootedmanually. This operation often includes the mainte-nance of mounds or ridges for optimal plant devel-opment. Significantly more labor is allocated toweeding in the West than in the Central and East.

Except for very few farmers who apply fertilizers orirrigation to sweetpotatoes, no other productioncosts arise before the roots are harvested. Almost 90percent of the sampled farms perform harvesting ina piecemeal fashion. Only the amounts neededimmediately for their own consumption or for salesare harvested. Thus, harvesting can continue for aperiod of several months, starting when the firstroots are mature (about three months after planting)up until the plot is needed for the next crop. Themain reason for this practice is the in-groundstorage function. Sweetpotato is a perishablecommodity, and in the absence of appropriatealternative storage techniques postharvest lossescan be high (Smit, 1997). Because sweetpotato israrely processed in Kenya, piecemeal harvesting isthe only way to conserve the commodity until it isconsumed. Casual laborers are often hired whenlarger amounts of sweetpotatoes are harvested foroutside transactions.

The total average amount of labor allocated togrowing sweetpotato is 23 percent higher in theWest than in the Central and East. It is hypoth-esized that the more intensive production practicesin the Lake Victoria Basin are mainly due to thehigher population pressure in this region. Becauseof the lower wage rate, however, the per acreproduction cost in the West is only slightly abovethe cost in other parts of the country. Given thehigher yield levels, the western producers areeconomically somewhat more efficient than theircounterparts in the Central and East, as is demon-strated by the per unit cost of production (see Table4). Interestingly, the situation would be vice versaunder the assumption of an equal wage rate for both

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regions. The gross revenues from sweetpotatoproduction have been obtained by multiplying theroot yields by the average farm-gate price.6 Mostfarmers use sweetpotato vines and foliage asanimal feed, but the amounts are difficult toestimate since this occurs over an extended periodof time during piecemeal harvesting. The value ofthis crop by-product is disregarded in the calcula-tions. The per acre net incomes are also shown inTable 4. Compared with the Central and East,average sweetpotato incomes are 17 percent higherfor farms in the West.

2.4 Sweetpotato Marketing and Consumption

Although Kenyan farmers market substantialamounts of sweetpotatoes, for most of them com-mercialization is not the main reason for growingthe crop. Selling sweetpotatoes is often a spontane-ous decision made by households whenever cash isneeded, and the marketing channels are ratherinformal. Sixty-four percent of the farmers statedthat they sell sweetpotatoes directly at the farm-gate, when traders come to pick up the produce.But these traders come in irregular intervals, andwhen they are not available farmers have totransport their sweetpotatoes to the local market. Inremote locations, where farmers commercializeonly small amounts of sweetpotatoes, transportingthe crop as a head-load to the nearest village isusually the only marketing option. This is eitherdone by female household members or by laborershired for this purpose.7 In the villages, farmersthemselves often retail the sweetpotatoes, but

roadside dealings with middlemen, who transportthe commodity to urban markets, are also common.The bulky, perishable nature of sweetpotato and theirregularity of sales increase the transportation andtransaction costs for middlemen. This often makesthe urban retail price for fresh roots a multiple ofthe price observed in rural areas. Unfortunately, nodata were found on domestic sweetpotato tradebetween deficient and surplus areas in Kenya. It isstriking that the mean adjusted farm-gate pricesderived from the survey were almost identical forthe western and the central and eastern regions.This indicates that there are efficient arbitragetransactions, and that it is appropriate to considerthe Kenyan sweetpotato market as a fairly inte-grated one. International trade with sweetpotatoesis not reported for Kenya (FAO, 1999).

In terms of annual per capita consumption ofsweetpotatoes, Kenya—with 21 kilograms—ranksfifth among the African countries after Burundi,Rwanda, Uganda, and Madagascar (CIP, 1996). It isconsidered a secondary food crop in Kenya, wherethe primary staple foods are grains, particularlymaize and wheat. Due to the semisubsistentproduction patterns of sweetpotato, consumptionfigures are expected to be significantly higher inrural than in urban areas. Still, Omosa (1997) foundthat over 90 percent of households in major citiesalso consume fresh sweetpotatoes at least once perweek. Moreover, a stratification of consumersaccording to income levels did not reveal a cleartrend. Whereas in Nairobi richer householdsconsume sweetpotatoes more often than poorerones, in Kisumu it is the other way around.Bashaasha and Mwanga (1992) reported that inUganda sweetpotato has a low but positive incomeelasticity. In Kenya, demand elasticity estimatesare not available. Aggregating over rural and urbandemand, it is presumed that sweetpotato in Kenyais slightly inferior or has an income elasticity closeto zero. The parameter could increase if new waysof processing the storage roots (e.g., to flour) wereintroduced. With respect to sweetpotato prices,Omosa′s study (1997) revealed that the retail pricelevel is inversely correlated with consumption for

6 The farm survey rendered an average farm-gate price of 5898 KSh/t in the West, and 5848 KSh/t in the Central and East. This is not astatistically significant variance so that a weighted national mean of 5885 KSh/t has been used in the calculations.

7 For the analysis, all prices stated by the interview respondents for the point of first sale were adjusted to the farm-gate.

Table 4: Average sweetpotato enterprise budgets,by region (per acre and season)

West Central and EastProduction cost (KSh) 8,418 7,781Yield (t) 4.08 3.58Farm-gate price (KSh/t) 5,885 5,885Gross revenue (KSh) 24,016 21,073Net income (KSh) 15,599 13,292Per unit cost (KSh/t) 2,063 2,173Note: 1 US$ = 59.7 KSh.Source: Author′s interview survey (1998).

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the majority of households. This suggests that theaggregate price elasticity of demand is negativeand significantly different from zero. Taking theseconsiderations into account, we assume a pricecoefficient of –0.4 for sweetpotato demand inKenya.

2.5 Phytosanitary Problems

Although sweetpotato can withstand adversegrowing conditions much better than most otherplant species cultivated for human consumption,there are certain pests and diseases that seriouslyaffect the crop and its yield performance. World-wide, the most important phytosanitary problemsare sweetpotato weevils (Cylas spp.) and, particu-larly in sub-Saharan Africa, different types ofviruses (Ames et al., 1997; CIP, 1995).

In Kenya, the weevil is the single most importantbiotic production constraint (Smit, 1997; Ngunjiri etal., 1993). Weevil-induced crop losses on individualfields can reach over 80 percent. Interviewedexperts estimate that the national average yieldreduction caused by the pest in Kenya is 20 per-cent. The ant-like adults feed on the sweetpotatofoliage and on the storage roots. The insect isparticularly active under drier conditions. BecauseKenyan farmers practice piecemeal harvesting, thestorage roots remain in the ground for some timeduring the dry spell, and so they are especiallyvulnerable to weevil damage. On the other hand,harvesting the whole plot at maturity would lead tohigher postharvest storage losses. More detailedstudies have not been carried out so far. Althoughone might expect higher crop losses in the driercentral and eastern region, the researchers andextensionists consistently stated that the weevilproblem is at least as important in the West. Itcould be that the initial weevil population is higherin the Lake Victoria Basin because of more wide-spread sweetpotato cultivation. Furthermore,farmers in the drier zones might use better adaptedmanagement practices (e.g., harvesting dates)because they are aware of the greater potentialseverity of the pest (E. Carey, personal communica-tion). For our analysis, it is assumed that the currentweevil-caused yield loss is on average 20 percentin both regions. There is no effective method tocombat this pest. However, in addition to appropri-

ately timing dates for planting and harvesting, croprotation and the use of varieties with deep storageroots can reduce the problem. The level of naturalresistance found in the sweetpotato germplasm isfairly low, limiting the success of conventionalresistance breeding (Zhang et al., 1998; Collins andMendoza, 1991).

The most widespread sweetpotato virus in Kenya isthe sweetpotato feathery mottle virus (SPFMV)(Wambugu, 1991). A member of the Potyviridaefamily, it is transmitted by a range of differentaphid species. The virus often only manifests itselfin mild leaf symptoms. Although economic losseshave been noted in certain varieties, SPFMV aloneis not considered a severe production constraint. Ininteraction, however, with the whitefly-transmittedsweetpotato chlorotic stunt virus (SPCSV, familyClosteroviridae), it forms the sweetpotato virusdisease (SPVD) complex, the most importantsweetpotato disease in Kenya and other countries ofsub-Saharan Africa (Geddes, 1990).8 Many farmersdo not explicitly recognize viruses as a problem.Although SPVD shows obvious symptoms, thesesymptoms are often misinterpreted as direct insectdamage. The significance of SPVD varies accordingto agroecological zone. A moist and warm environ-ment promotes the incidence of insect vectors, sothe virus pressure is more severe in the LakeVictoria Basin than it is in the drier areas of theCentral and East. Apart from insect transmission,the virus is also dispersed through infectedsweetpotato vines. Transmission through insects iscalled primary infection; dispersal through un-healthy planting material is called secondaryinfection. Both types occur in the small-scale andsemisubsistent growing conditions of sweetpotato inKenya.

Virus control is impossible once the plant has beeninfected, and the use of chemical measures againstthe insect vectors is not economically feasible.Yield reductions caused by SPVD can be devastat-ing. The disease can lead to complete crop destruc-tion on severely infected plots grown with suscep-tible varieties (Karyeija et al., 1998). The actualaverage yield losses in farmers′ fields are muchlower, which is probably attributable to two factors(cf. Gibson et al., 1997): First, farmers commonly

8 SPCSV in the absence of SPFMV is also not considered a severe constraint.

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select healthy looking vines for planting, and solikely sort out SPVD infected material due to theclearly visible symptoms. Second, a fairly highdegree of natural resistance to virus diseases occursin some sweetpotato landraces. Although farmers′knowledge about viruses is generally low, it isexpected that virus resistance is implicitly one ofthe main variety selection criteria in affected areas.Virus degeneration presumably also contributes tothe comparatively rapid replacement of certainsweetpotato varieties in Africa. For Kenya, exactinformation about actual virus-induced yield lossesis not available. The interviewed experts estimateregional average yield reductions of 12-15 percentin the West and of 7-10 percent in the Central andEast. In addition to the direct yield reductions, thereis another point that needs to be considered when

assessing the economic importance of sweetpotatoviruses. The agronomic trait of natural virus resis-tance is often negatively correlated with thegenetic yield potential of a sweetpotato clone(Aritua et al., 1998b), and so in high virus pressureareas an indirect loss occurs when farmers obtainreduced output growing lower-yielding resistantvarieties instead of higher-yielding susceptiblevarieties.

Except for sweetpotato weevils and viruses, otherbiotic stress factors are of minor aggregate impor-tance in Kenya. Locally, however, vertebrate pests– such as monkeys, moles, rats, and porcupines –can also be serious obstacles to sweetpotatoproduction.

3. The Transgenic Resistance Technologies

This study seeks to analyze the potential impacts oftwo different sweetpotato biotechnologies:transgenic virus resistance and transgenic weevilresistance. Although the Kenyan government hasidentified biotechnology as a priority for combatingnational food deficit problems, the country is still inthe first stages of development in terms of biotech-nological research (Wafula and Falconi, 1998).Hardly any work related to crop genetic engineer-ing has been carried out so far. The initialsweetpotato virus resistance project, therefore, hasa strong capacity-building component, in additionto the merits of the resulting technology productitself. We first describe the collaborative researchprojects on virus and weevil resistance (see section3.1) and then discuss the technologies′ potentialsand risks.

3.1 The Biotechnology Research Projects

3.1.1 Virus Resistance

Monsanto and KARI launched the sweetpotato virusresistance project in 1991/92. In the initial phase,some financial support was provided by USAID,which also contributed to the project through itsextensive experience in Africa. The initiative alsobenefited from the coordinating efforts of theUniversity of Missouri. The project′s main objec-tives are twofold. First, it aims to develop effectivesweetpotato virus resistance technology. Second, itseeks to transfer this technology to Kenya—and

eventually to other African countries—to benefitsweetpotato producers and consumers, as well asbiotechnology capacity-building in the NationalAgricultural Research System (NARS).

The viral coat protein gene conferring resistance toSPFMV was available from the public sector. It hadbeen previously isolated by scientists at NorthCarolina State University and cloned in collabora-tion with CIP and the Scripps Institute in the USA(Wambugu, 1996). It is expected that the SPVDcomplex can be controlled by expressing SPFMVresistance in sweetpotato, (see also discussion insections 2.5 and 3.2). The project still needed atransferable gene construct containing the coatprotein gene, and effective sweetpotato transforma-tion and regeneration systems. As part of thecollaborative strategy, a postdoctoral scientist fromKARI worked with the project from 1992 to 1994 inMonsanto′s St. Louis-based laboratories. The geneconstruct was developed incorporating marker andpromoter genes patented by Monsanto. After 1994,several other KARI scientists—partly funded by theISAAA Biotechnology Fellowship Program—werealso sent to Monsanto for training and to consoli-date the sweetpotato technology. One USAID-sponsored Kenyan scholar doing project-relatedresearch is also absolving a Ph.D. program at theUniversity of Missouri. An American postdoctoralfellow was sent through USAID′s Agricultural

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Biotechnology Support Project (ABSP) to work withthe project team at Monsanto. Crop transformationwas conducted using Agrobacterium tumefaciens,and successful expression of the viral coat proteinhas so far been achieved in two differentsweetpotato lines (CPT-560 and Jewel). Virus testswith American SPFM strains showed a statisticallysignificant resistance in both lines (Hinchee, 1998).In 1998/99 protection studies have also beencarried out with African virus strains, revealingsimilar resistance levels.

To date, all research has been carried out in theUSA, but preparatory activities for the technologytransfer have also been started in Kenya. Tissueculture capability for sweetpotato, which is impor-tant for the regeneration and rapid multiplication oftransgenic plants, is already available at KARI. Thefacilities at KARI′s National Agricultural ResearchLaboratory (NARL) have been completely refur-bished with support from the World Bank, and theyare now fitted for plant transformation and otherbiotechnology activities. Scheduled for 1999, CPT-560 will be the first transgenic virus-resistantsweetpotato clone transferred to Kenya.9 Geneti-cally engineered livestock vaccines are alreadybeing tested in Kenya, but the sweetpotatoes willbe the first transgenic crops to be field released inthe country. Developing efficient biosafety regula-tions, therefore, is an integral part of the project.ISAAA assisted with this effort by making itsexperience available through extensive consulta-tions and the organization of a workshop on riskassessment (Wambugu et al., 1995).

In 1998, mock trials were carried out with conven-tional CPT-560 and a number of locally usedsweetpotato varieties at five different on-stationsites in Kenya. The main objectives of these trialswere to familiarize KARI staff members withgeneral trial procedures and to evaluate theperformance and economic importance of CPT-560.Preliminary results indicate that the nontransformedclone is susceptible to viruses but has an outstand-ing yield performance in low virus-pressure areas.Its consumer acceptance is moderate (KARI, 1999).Transgenic trials will begin in 1999 at the same fivesites. At least three cycles of on-station trials willbe carried out, so that—if successful—the first on-

farm tests could take place in the year 2001.Assuming simultaneous bulking of planting mate-rial, KARI could officially release transgenic CPT-560 for commercial application in 2002, followedby more widespread technology dissemination tofarmers in subsequent years.

A new project phase was launched in 1999, spon-sored through the Agricultural Research Fund (ARF),which is administered by the World Bank. It is adirect continuation of the Monsanto/KARI initiative,and apart from these organizations it explicitlyinvolves CIP for institutional and research collabo-ration and ISAAA for project facilitation. The mainobjective of this new phase is to establish andstrengthen Kenya′s sweetpotato biotechnologycapacity, which includes research, biosafetyinstitution-building, and effective dissemination toresource-poor farmers. Crop transformation ofpopular Kenyan varieties for virus resistance will beperformed at NARL in close interaction withMonsanto researchers. It is important to extend thelist of transformed clones in order to satisfy thediverse varietal preferences of sweetpotato produc-ers and consumers. Monsanto will continue its in-house sweetpotato research by developing newtransferable gene constructs for virus resistance tosteadily improve the quality of the technologyproduct. To commercialize the additionalbioengineered varieties, the same biosafety proce-dure as mentioned above for transgenic CPT-560will be applied.

Concerning intellectual property rights (IPRs),Monsanto and KARI signed a nonexclusive, royalty-free licensing agreement in 1998. The agreementallows KARI to use and further develop thetransgenic virus resistance technology insweetpotato. KARI is also permitted to protect theresulting transgenic varieties under the plantbreeders′ rights convention or similar regulationseffective in Kenya. Additionally, the technologymay be transferred to any other country in Africa.Given these contractual arrangements, Monsanto′sown interests in the project are not apparent at firstsight, but it is expected that the company′s incen-tives include the following:• Recognizing biotechnology′s promising poten-

tials for the developing world, Monsanto

9 Jewel is an American clone that is not well adapted to African conditions.

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wanted to share its research progress withAfrica as humanitarian aid. The public is stillstrongly skeptical about biotechnology, so theproject could improve the image of biotechnol-ogy in general and of the company in particu-lar.

• Taking sweetpotato as a model species offeredthe advantage of directly targeting R&D effortsto the poor, who dominate the crop′s productionand consumption. Because Monsanto is notcommercially interested in sweetpotato, thecollaborative project does not contradict itsown business activities.

• The demand for seed technology in Africa isexpected to increase tremendously in thefuture. The project′s partnership with KARI andother organizations active in the region offersMonsanto a unique opportunity to gain valuableexperiences for prospective business venturesand contribute to establishing an institutionalnetwork.

3.1.2 Weevil Resistance

The research on sweetpotato weevil resistance isnot a single project, and there are different effortsunderway. The University of Missouri, for instance,recently started a research project in collaborationwith KARI, CIP, and Monsanto. Tuskegee Universityhas launched another initiative. A number ofdifferent Bacillus thuringiensis (Bt) genes areavailable, mostly patented by the private sector,and Bt-based insect resistance is already usedcommercially in a number of crops and countries(cf. Krattiger, 1997). The available Bt strains ofdifferent companies are screened to identify thosethat produce toxins against the African weevilspecies. Once the appropriate genes for weevilresistance have been found, they are introduced tosuperior African sweetpotato varieties. In this study,we consider the two technologies—virus resistanceand weevil resistance—independently of each otherbecause the virus resistance project has advancedmuch further than the research on weevil resis-tance. Forecasts of when the first transgenic weevil-resistant variety will be released in Kenya oranother African country cannot yet be reliablymade. It is expected that the development timecould be comparatively short (possibly only 5years), thanks to the sweetpotato biotechnologycapacity gained within the virus resistance projectand the already extensive experience with Bt-technology.

3.2 Agronomic Technology Potentials

Increasing the yield levels currently obtained byKenya′s sweetpotato growers will be the mainagronomic effect of the virus and weevil resistancetechnologies. It is expected that the damagecaused by the SPVD complex can be controlledthrough transgenic resistance to SPFMV alone (alsosee section 2.5), but this can only be determinedthrough field tests. The probability of success isfairly high because SPVD has never been identifiedin the absence of SPFMV, and the typical, potyvirusdisease symptoms even suggest that SPFMVdominates within the complex (Karyeija et al.,1998). On the other hand, coat protein technologydoes not confer absolute virus immunity, so somesmall level of infection will persist. The remainingSPFMV titer is too low to cause direct damage, butit is unclear whether it could interact with SPCSVto form the virus complex. Aritua et al. (1998a)even presume that infection with SPCSV mightcause a loss of resistance to SPFMV. But thishypothesis is based on the surveillance of clonesthat are naturally resistant to SPFMV. Because thenatural resistance mechanism is different from thecoat protein-mediated one, this observation cannotsimply be transferred to the transgenic technology.In ex ante analyses used as guidelines for decidingwhether or not to start with a certain researchproject, such uncertainty about the research successis usually accounted for with the help of probabilityfunctions (e.g. Mills, 1997). In our case, however,the research project is already underway. Shouldthe resistance performance prove unsatisfactory inthe first run, investigations would continue toamend the technology′s effectiveness. Besides newgene constructs based on the SPFMV coat protein,this could also include work on the identification ofgenes responsible for resistance to SPCSV. Ratherthan being a question of success or failure, theuncertainty is a matter of possible extendedresearch costs and time lags. This should be kept inmind in regards to the sensitivity analysis of theresults.

It was argued in section 2.5 that viruses cause anindirect loss because some higher yieldingsweetpotato clones cannot be used in high viruspressure locations due to their susceptibility todisease. In fact, nearly all introduced exoticvarieties that outyielded local varieties under lowvirus pressure conditions succumbed to the diseasein locations where virus pressure was more severe

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(Carey et al., 1997). In addition to the currentlyobserved direct yield reductions, therefore, theoption of endowing some promising exotic cloneswith transgenic virus resistance in the future has tobe accounted for in assessing agronomic technol-ogy potentials. The estimated yield gains attribut-able to the virus resistance technology at the farmlevel are shown in Table 5. The percentage figuresreflect that virus pressure is higher in the westernparts of the country and low to moderate in theCentral and East of Kenya.10

In the recent past, conventional breeding programsin sub-Saharan Africa have also created high-yielding sweetpotato varieties with a satisfactorydegree of genetic virus resistance. Although itmight be easier with recombinant techniques toendow acceptable clones with the additional traitof virus resistance, a transgenic breeding approachshould not be seen as a substitute for the conven-tional one. Eventually, measures of cost-effective-ness will determine the appropriate toolbox forachieving certain breeding objectives. An alterna-tive to genetic virus resistance would be establish-ing a more sophisticated system to distributecertified and pathogen-free sweetpotato plantingmaterial. Although primary virus infection viainsect transmission could still occur, a morewidespread use of healthy vine cuttings wouldcertainly reduce secondary virus infection. Yetbuilding up and maintaining a system in which allsmall-scale farmers regularly purchase cleansweetpotato planting material would be much moredemanding than introducing durable geneticresistance that farmers could reproduce themselves.

The potential yield gains of the weevil resistancetechnology are also shown in Table 5. The percent-age figures are translations from the aforementionedeconomic losses induced by weevils. Weevilproblems are severe in all sweetpotato-producingregions of Kenya, so it is expected that the weevilresistance technology would offer the same agro-nomic potential in both the West and Central/Eastregions. As argued before, using recombinanttechniques for the weevil resistance trait is particu-larly appealing because there are no knownresistance genes in sweetpotato or its wild relativesfor conventional breeding programs.

3.3 Technology-Inherent Risks

Arguments about the risks associated withbioengineered organisms are dominating theinternational biotechnology debate. Although thisstudy focuses on the benefits of transgenicsweetpotatoes, a comprehensive economic evalua-tion must also take into account possible negativeexternalities for the environment and for humanhealth.

Crop transformation in sweetpotato is conducteddirectly with desired varieties so that further cropimprovement through conventional breeding isunnecessary. Any unexpected plant characteristicsor phenotypic aberrations resulting from geneticinteractions within the plant genome would berecognized at the primary transformant stage, andno such abnormalities have been reported in thetransformation process for virus resistance. But thepossible interactions with the environment ofbioengineered plants or introduced transgenes canoften only be assessed through direct observationsin field tests. To date, no field trials of geneticallyengineered virus or weevil-resistantsweetpotatoes have been carried out. The givenstatements are based on expert interviews and onprevious experience with other transgenic plants.Risk elements of the sweetpotato virus and weevilresistance technologies include the following:• The first obvious risk of transgenic plants is the

possible outcrossing of the transgenes into theenvironment (vertical gene transfer). Suchoutcrossing can occur through the transmissionof pollen from a bioengineered domestic plant

10 More distinct yield gains could be expected in parts of Uganda, Rwanda, and Burundi, where virus pressure is still higher than inwestern Kenya.

Table 5: Potential yield gains of sweetpotato virusand weevil resistance technologies, byregion (percent)

Region West Central and EastVirus resistance 20 12Weevil resistance 25 25Note: The figures are farm level estimates for plots wheretechnology application is assumed. They take into account theaverage regional pathogen pressure, and the percentagegains refer to the current yields obtained without the use ofthe technology.Source: Author′s calculations based on interviews with 20sweetpotato experts (cf. section 1.1) supplemented byliterature sources indicated in the text.

15

always be sufficient nontransgenic refuge areasnearby to reduce the selection pressure forresistance development in pathogen popula-tions. In respect to the weevil resistancetechnology, other insecticidal proteins, such asprotease inhibitors (cf. Zhang et al., 1998),have already been identified and could be usedin combination with Bt to broaden the spectrumof protection for the long run.

• Bt toxins are generally considered innocuousfor predator insects and other nontarget organ-isms but they are very specific to their targetpests. Still, little experience has yet beengained with transgenic Bt technology in thetropics, where insect-toxin linkages might bedifferent than in other agroclimatic regions.Furthermore, the long-term effects of insect-resistant plants on natural food chains are notyet well understood (e.g., Losey et al., 1999;Sianesi and Ulph, 1998). Although negativeenvironmental consequences due to weevil-resistant sweetpotatoes are not expected,appropriate risk studies of the transgenicvarieties need to be carried out within pre- andpost-approval trials. Sweetpotato weevilscannot effectively be controlled by chemicalinsecticides, but, in general, the environmentalimpacts of transgenic insect resistance shouldbe compared with conventional methods forpest control that are often associated withmuch more severe negative externalities (cf.Schuler et al., 1999).

• A particular risk of the virus resistance technol-ogy is that novel viruses could be createdthrough transgenic recombination. Theoreti-cally, when using viral coat proteins forresistance, there is the possibility that thetransgenes could interact with other virus typescontaminating the plant. Known asheteroencapsidation, this can lead to theemergence of new virus strains that are moreaggressive than the existing ones (cf. Tepfer,1993). But heteroencapsidation is not confinedto transgenic crops. The recombination ofdifferent viruses infecting a conventional plantcould occur in just the same way, and there isno evidence that transgenic recombinationwould occur with increased frequency. More-over, while heteroencapsidation has beendemonstrated in highly unnatural in vitroconditions, it has rarely been observed innature (Kendall et al., 1997).

to a related wild species. Sweetpotato isthought to have originated from Central andSouth America (CIP, 1996), so East Africa is nota center of genetic diversity for the crop.Nonetheless, there are some wild flowers (e.g.,morning glory) in Kenya that are naturallycrossable with sweetpotato. The interviewedresearchers stated that such crossings couldoccur but would not result in fertile progeny. Afurther spread of the transgenes into the envi-ronment would thus be prevented.

• Possible human health risks also need to beexamined. Although little specific informationon transgenic sweetpotato is yet available, thelikelihood that the considered technologiesmight cause adverse health implications is verylow. The SPFMV coat protein genes used fortransformation are part of the viral genomeitself. Humans consume them whenever theyeat virus-infected sweetpotatoes. Regarding theother genes used in the gene constructs (e.g.,promoter and marker genes) considerablefoodsafety information has been obtainedthrough other technology products that havealready been released for commercial use inNorth America. The Food and Drug Administra-tion (FDA), which is the responsible authorityfor foodsafety issues in the USA, has deregu-lated all constituent parts of the gene constructsused for virus resistance. The gene constructsfor the Bt technology have not yet beendeveloped, but they will build upon proven andtested gene sequences as well.

• Another risk applicable to all biotic resistancetechnologies is that pathogen populations couldovercome transgenic resistance mechanisms.Although this would not have detrimentaleffects for the environment or for human health,it would diminish the effectiveness of theinnovations. Both technologies are based onsingle gene resistances, a strategy that usuallylowers the likelihood of long durability. Littlerelated evidence is available regarding coatprotein-mediated virus resistance, but thepossibility of Bt technology breaking down hasbeen extensively discussed in the literature(e.g., Krattiger, 1997). It is hypothesized thatthe African sweetpotato production systemswould enable comparatively long effective-ness. Small-scale farmers usually grow differentvarieties on adjacent fields, or sometimes evenon a single plot. Consequently, there will

16

In summarizing, it can be presumed that the risksassociated with the two sweetpotato biotechnolo-gies are rather low. Conclusive statements, how-ever, cannot be made prior to the transgenic fieldtrials. In any case, the safe use of biotechnologyrequires a sound biosafety regulatory framework. InKenya, this still needs to be consolidated. Efforts to

establish and adjust efficient guidelines at theinstitutional and national levels are already under-way (Thitai et al., 1998), and the sweetpotatobiotechnology developments—particularly theinitial KARI/Monsanto virus resistance project—willfurther contribute to relevant capacity building.

4. Potential Technology Benefits and Costs

4.1 Methodology

This chapter attempts to analyze the benefits andcosts of the sweetpotato biotechnologies in quanti-tative terms. Potential benefits of the technologiesare assessed by means of a partial equilibriummodel of the Kenyan sweetpotato market. This isthe standard procedure for modeling technologicalprogress associated with specific commodities(Alston et al., 1995). Nevertheless, it should bementioned that economic surplus measures in apartial equilibrium setting only capture the directand immediate benefits of a technology for produc-ers and consumers. Indirect effects and spillovers toother markets are disregarded. For the biotechnol-ogy projects analyzed such indirect effects couldinclude:• Long-term benefits associated with project-

related capacity- and institution-building. Thetransgenic virus-resistant sweetpotatoes will bethe first recombinant crop technology devel-oped by Kenyan scientists. The knowledge andexperience gained by working with Monsantoand other project partners are expected to besizable. In addition, a national regulatoryframework for the safe use of biotechnology isbeing established. These positive developmentslay the ground for future technological progressin sweetpotato and other crops.

• Technology-related productivity gains lead toincreasing purchasing power and thus to risingconsumer demand for food and nonfoodcommodities alike. Such a demand stimuluscreates income gains in various sectors andgenerates employment and overall economicgrowth. Delgado et al. (1998) recently demon-strated the significance of such linkages togrowth from innovations in agriculture forvarious sub-Saharan African countries.

These indirect benefit potentials are hard to mea-sure for individual technologies, so we confine the

quantitative analysis to the direct technologicaleffects in the Kenyan sweetpotato sector. It shouldbe kept in mind, however, that the welfare gainsidentified through the modeling approach willundervalue the true long-term benefits of thebiotechnology projects.

4.1.1 The Model

Qaim (1999) applied an economic surplus model toinvestigate the impact of banana biotechnology inKenya. This model is based on linear functions ofsupply and demand in an economy without interna-tional trade. It is assumed that innovation causesthe supply curve to shift downwards in a parallelfashion. In order to analyze the technology′s likelydistribution effects, the national supply curve hasbeen disaggregated into the supply curves ofproducer groups with different farm sizes. Further-more, the downward sloping market demand curvehas been supplemented by a vertical demand curvefor home consumption. Neglecting home-consumedshares would underestimate benefits to producersand overestimate benefits to market consumers fortechnologies related to a semisubsistence crop (cf.Hayami and Herdt, 1977; Norton et al., 1987). Weapply the same model to the Kenyan sweetpotatomarket. But instead of analyzing distribution effectsbetween different farm sizes, the supply disaggrega-tion is used in a geographical sense: it is differenti-ated between the sweetpotato producers in theWest and those in the Central and East of Kenya.All producers are facing the same market demandcurve, so there is only a single equilibrium price.As seen in section 2.4, spatial market integration isfairly close.

The changes in consumer surplus (CS) and producersurplus (PS) for farmers in region i are defined asfollows (Qaim, 1999):

17

where p is the equilibrium price, qd is the total

quantity demanded (market plus home-consumed)and q

s,i is the total quantity produced by farmers in

region i. ssi is region i’s production share and h

i is

the average proportion of home consumption. εd

and εs are the price elasticities of demand and

supply, respectively. The technology downwardshift factor K for producers in region i in a givenyear t is defined as:

with Cpot

the region-specific potential per unit costreduction through the transgenic sweetpotatovarieties, and A the region- and time-specifictechnology adoption rate.

This model is applied independently for the twodifferent technologies considered. It is run for a 16-year period, beginning with the release of therespective technology. It could be argued that thebiotechnology applications might produce benefitsfor a period longer than 16 years, especially whenthe list of transformed varieties is gradually ex-tended. But technological obsolescence mightoccur through possible resistance breaking (seesection 3.3) or because other and superior innova-tions will be developed. And even if the technolo-gies would still be used after that period, theprocedure of discounting prevents benefit flows thatoccur far in the future from changing the modelresults significantly. The possibility that pathogenscould overcome the resistance mechanisms beforethe end of the 16-year period is taken into accountin the sensitivity analysis.

4.1.2 The Data

The data needed to run the described economicsurplus model with biotechnological progress canbe subdivided into two categories. First, thetechnology-related data, i.e., the per unit costreduction, and the technology adoption rate. Thesetwo parameters are discussed in sections 4.2 and4.3, respectively. Second, the sweetpotato market-related data, particularly the equilibrium quantities,prices, and price elasticity coefficients. Thequantity and price figures have already beendiscussed above. They refer to 1998. Yet, due topopulation growth, it is expected that the overallsweetpotato demand curve (market purchases plushome-consumed shares) will shift rightward overtime (cf. Norton et al., 1987). The annual exog-enous shift in demand is assumed to be 2.6 percent,which corresponds to the contemporary populationgrowth rates in Kenya (World Bank, 1999). Signifi-cant per capita income growth is not expected forthe period under consideration. Given that theincome elasticity of sweetpotato consumption isassumed to be near zero, rising purchasing powerwould hardly influence the demand side anyway.Price elasticities of demand and supply in Kenyacould not be found for sweetpotatoes or other rootand tuber crops. It was argued in section 2.4 that aprice demand parameter of –0.4 would be areasonable appraisal. On the supply side,Bashaasha and Mwanga (1992) estimated a priceresponsiveness of 0.3 for sweetpotatoes inUganda. We assume the same value for thegrowers in Kenya. Production systems are similarin the West and the Central and East, so there is noreason to expect that the price elasticity of supplywould differ significantly between the regions. Theregion-specific production shares and home-consumed sweetpotato proportions were pre-sented earlier.

( )

⋅⋅⋅−−

⋅⋅+⋅⋅⋅−=∆ ∑

=

n

iiiddd sshqdp

p

dp

p

dpqpCS

1

5.01 ε

( )iisiisiisi hqdpKp

dpK

p

dpqpPS ⋅⋅−+

+⋅⋅+⋅

+⋅⋅=∆ ,., 5.01 ε

(1)

(2)

(3)tipotiti ACK ,,, ⋅=

18

4.2 Cost and Income Effects at the Farm Level

In this section, the potential benefits of thetransgenic sweetpotato technologies are analyzedat the individual farm level. For this purpose, theenterprise budgets currently observed in the Westand the Central and East of Kenya are comparedwith hypothetical ones, for which the use of thevirus and the weevil resistance technology isassumed, respectively. Among other significantindicators, we are particularly interested in thetechnologies′ impacts on the per unit cost ofsweetpotato production. The per unit cost reductionis the standard measure for describing technologicalprogress at the farm level, and the algebraicformulations above showed that the figure isneeded to determine the shift of the sweetpotatosupply curve in the economic surplus model. Thecomparison of the regional enterprise budgets isshown in Table 6.

The without-technology reference reflects thesweetpotato cost and income figures alreadydiscussed in chapter 2. For both with-technologyscenarios, no change in the per acre cost of produc-tion is projected.11 This is realistic because noadditional inputs are needed to realize the tech-nologies′ yield gain potentials. For the transgenicplanting material itself, it can be assumed thatfarmers will obtain it through the same informalchannels that they obtain conventional sweetpotato

vines: exchange between neighbors. AlthoughMonsanto also invested a sizable sum to developthe virus resistance technology, this contributionhas to be seen as humanitarian aid to Africa. Notechnology premium will be charged to the Kenyansweetpotato farmers.

Given constant per acre production costs and risingyields, both technologies will bring about signifi-cant per unit cost reductions, and remarkableincreases in sweetpotato incomes can be ex-pected.12 Due to the higher virus pressure in theWest, the potential positive impact of the virusresistance technology is higher in this region thanin the Central and East. The weevil resistancetechnology, however, shows almost the sameeffects in both regions, as expected. Potential perunit cost reductions and income gains for weevilresistance are more pronounced than for virusresistance in both regions, though with only acomparatively small difference in the West.

Technology-induced agricultural productivity gainsin developing countries are often associated withchanges in tasks and responsibilities between menand women (e.g. Quisumbing et al., 1995). In-creased commercialization, for instance, can leadto male household members taking control of cropincome previously controlled by female householdmembers. Although this could happen with the

11 The labor requirements will slightly increase because of the higher per acre yields to be handled. However, on account of piece-meal harvesting the additional amount of labor is difficult to estimate. Hence, we refrained from including this minor cost increase.

12 Note that the income comparisons assume a constant sweetpotato farm-gate price. This might be realistic for some early technologyadopters. Given a more widespread distribution, however, productivity increases will cause the producer price to fall. This is ac-counted for later in the economic surplus model.

Table 6: Potential cost and income effects of sweetpotato virus and weevil resistance technologies at the farmlevel, by region (per acre)

West Central and EastWithout Virus Weevil Without Virus Weevil

technology resistance resistance technology resistance resistanceProduction cost (KSh) 8,418 8,418 8,418 7,781 7,781 7,781Yield (t) 4.08 4.90 5.10 3.58 4.01 4.48Gross revenue (KSh) 24,016 28,837 30,014 21,073 23,599 26,365Net income (KSh) 15,599 20,419 21,596 13,292 15,818 18,584Per unit cost (KSh/t) 2,063 1,718 1,651 2,173 1,940 1,737Income increase (percent) - 30.9 38.4 - 19.0 39.8Unit cost reduction (percent) - 16.7 20.0 - 10.7 20.1Notes: The sweetpotato farm-gate price is assumed to be 5885 KSh per ton in all scenarios (1 US$ = 59.7 KSh).Source: Author′s calculations based on potential yield gains derived in section 3.2.

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technologies considered, it is likely that thetendency for women to lose their decision-makingpower will be less pronounced in sweetpotato thanin other crops. This is because the widespreadcustom of piecemeal harvesting provides a continu-ous flow of income that is used for immediatehousehold needs. Hence, the increased sweetpotatoincome created by transgenic technologies mightactually increase female household members′economic independence. There is widespreadevidence that women′s income has a greaterpositive impact on household food security thanmen′s income (e.g. von Braun and Kennedy, 1994).

4.3 Technology Adoption

We define technology adoption as the proportion ofKenyan sweetpotato production under the newtransgenic varieties. Generally, adopting newvarieties is a successive process over time. First,some progressive farmers start to use a new seedtechnology, and then the number of users increasesin subsequent growing periods. But varietal replace-ment is also a gradual process at the level of theindividual farm. Farmers test a new variety on partof their land, and then extend this area whensatisfied with the results. Varietal replacement isalways associated with a certain degree of risk.Early adopters, for instance, do not know in ad-vance how the consumer market will react to thenew variety. Furthermore, a new variety mightrequire adjusting traditional cropping practices.Partly due to such risk aspects, the adoption overtime of new high-yielding varieties has beenobserved to follow a logistic function in many expost empirical studies [see Feder et al. (1985) for areview]. In the case of bioengineered crops withresistance to biotic stress factors, the risk of adop-tion for farmers is reduced substantially. Adjust-ments to the traditional input mix are not necessary.And, especially for the weevil resistance technol-ogy, it is likely that some of the varieties already inuse will be genetically transformed, which furtherreduces the risk of technology adoption (also seeQaim (1998) for transgenic technology adoptionaspects).13 We therefore assume a linear adoptionprofile instead of a logistic curve.

New conventional sweetpotato germplasm isdisseminated in the following manner. WheneverKARI identifies a promising clone in on-stationtests, on-farm demonstration trials are carried outwith contact farmers. At the end of the season, ameeting is organized for sweetpotato growers toobserve the yield and quality performance of thenew variety. Farmers may then take a handful ofvine cuttings for their own propagation and forfurther dissemination. In western Kenya, KARIsometimes also cooperates with women′s groupsthat multiply sweetpotato planting material andthen sell it to interested farmers at a comparativelylow rate. The targeted introduction of newsweetpotato varieties from abroad or from regionalbreeding programs is a rather new activity inKenya, and no exact information is available aboutthe possible speed of variety adoption. Farmers arechoosy, especially in regards to taste characteristicsof sweetpotato cultivars. But preliminary experi-ences from Kenya and other countries with similarconditions suggest that acceptable and superiorgermplasm can quickly spread through informalexchanges of vine cuttings from farmer to farmer(cf. Carey et al., 1997; Minde et al., 1997). It isexpected that transgenic varieties will diffuse inexactly the same way as conventional material.

The estimated linear adoption profiles for thetransgenic resistance technologies are graphicallydepicted in Figure 4. If successful, the first trans-formed virus-resistant clone (CPT-560) could bereleased in 2002, with additional varieties follow-ing in subsequent years. The time path for theweevil resistance technology is less clear. Thegraphs build on the assumption that it will bereleased simultaneously with the virus-resistantvarieties, but this is just for comparative purposes.As explained above, the weevil project is at anearlier stage; technology release cannot be ex-pected before 2004 or 2005.

Given farmers′ diverse varietal preferences, thespeed of adoption and the maximum adoption rateswill closely correlate to the number of availabletransgenic varieties. The adoption patterns assumethat, in due time, five or more varieties would be

13 For virus resistance it is less feasible that the technology be incorporated in already popular varieties, especially in high-virus pressureareas. Since farmers in these areas are generally using landraces with natural resistance, it is rather desirable to endow higher-yielding butnaturally susceptible varieties with the trait of transgenic virus resistance (also see section 2.5).

20

transformed for virus and weevil resistance, respec-tively. Due to the more severe virus pressure in themoist Lake Victoria Basin, adoption of the virusresistance technology will be faster and will besomewhat more widespread in the West than in theCentral and East. For the weevil resistance technol-ogy, adoption behavior is presumed to be identicalin both regions. It is expected that farmers willadopt weevil-resistant varieties more rapidlybecause most of them are aware of the weevilproblems. By contrast, farmers are much less awareof virus problems. Finally, if more varieties aretransformed in the future, then maximum adoptionrates could be higher for both resistance mecha-nisms. The technologies′ shift factors (K) of theregional supply curves—resulting from multiplyingthe per unit cost reductions by the technologyadoption rates—are given in the Appendix, TableA1.

National and international biotechnology opponentshave recently initiated a media campaign in Kenyaagainst the introduction of transgenic crops (e.g.,Muli, 1998; Redfern, 1998). Because the averageeducational standard in Kenya is comparativelylow, the population can easily be influenced by thisbiased information. As a result, some food consum-ers and producers may not want to accepttransgenic crops, which would depress technologyadoption rates. It is important to support the flow ofobjective information about biotechnology so that

the public can make an educated, informed choiceabout these new technologies. Risks and fears mustnot be played down, but they should always bebalanced with potential benefits. This holds true fordeveloping and developed countries alike.

4.4 Projected Welfare Effects

After all the variables have been specified, theexpected welfare effects of the biotechnologyprojects can be simulated with the describedsweetpotato market model. Changes in producerand consumer surplus are calculated annually forthe considered 16-year period of technologyapplication. Because it is assumed that bothtechnologies will be released in 2002, the analysiscovers the period 2002-2017. The technologyrelease date is realistic for the first transgenic virus-resistant variety, and as elaborated before, the sameassumption for the weevil resistance technologyused only for comparative purposes. The completemodel results are shown in the Appendix, TableA2. They are summarized in Table 7.

Both technologies will create substantial welfaregains for Kenyan sweetpotato producers andconsumers.14 For the virus resistance technology,the annual gain is projected at 324 million KSh. Forthe weevil resistance technology it is 593 millionKSh. The difference in the values occurs mainlybecause weevils depress current sweetpotato yieldsmore than viruses. Moreover, farmers will adopt

Figure 4: Estimated adoption profiles of sweetpotato virus and weevil resistance technologies, by region

West

0

20

40

60

0 2 4 6 8 10 12 14Number of years after technology release

Per

cent

Weevil resistance

Virus resistance

Central and East

0

20

40

60

0 2 4 6 8 10 12 14

Number of years after technology release

Per

cent

Weevil resistance

Virus resistance

14 Once their success has been proven in Kenya, the sweetpotato biotechnologies are planned to be transferred to other sub-SaharanAfrican countries in the future. The benefit projections given in this report constitute only a small fraction of the total potential technologygains. Kenya′s production share in African sweetpotato production is about 9 percent.

21

weevil-resistant varieties more quickly and morewidely. For both technologies, the relative benefitdistribution between sweetpotato producers andconsumers is identical. Consumers capture around26 percent of the overall welfare gains due to pricedecreases. Remember that the technology benefitsassociated with home consumption in the farmhouseholds are included on the producer side. For afully commercialized commodity, the benefit shareof market consumers would rise to 43 percent.Among producers, welfare distribution of the virusresistance technology is biased towards westernsweetpotato farm households. Given lower viruspressure in the Central and East, this is not asurprise. Sweetpotato farms in the West are com-paratively resource-poorer on average, so that thisbias does not have undesired equity implications.Weevil problems, on the other hand, were oppres-sive in all of Kenya′s sweetpotato-producingregions, so the regional distribution of the producersurplus created by weevil resistance almost exactlycorresponds to the initial regional productionshares.

This comparison of the welfare effects of virus andweevil resistance should not be misunderstood as acompetition between two mutually exclusivetechnologies. On the contrary, both resistancemechanisms will be available for Kenyansweetpotato growers in the future, possibly in thesame varieties. We refrain from evaluating bothtechnologies together because little is known aboutpossible synergies in the crop losses caused byviruses and weevils. Assumptions about the yieldeffects of combined resistance mechanisms wouldbe pure speculation.

4.5 Benefit-Cost Analysis

R&D cost data for the sweetpotato virus resistancetechnology have been assembled in the interviewswith representatives of the different involvedorganizations. The data up until 1999 refer to actualexpenditures related to the project. For years after1999, the interviewees were asked to give realisticestimates on the expected future project costs. Thecosts carried by the individual organizationsinvolved in the virus resistance project are dis-cussed in the following paragraphs. An overview isgiven in the Appendix, Table A3.• USAID: USAID provided financial assistance

for the first project phase, from the end of 1991until 1998. The funds cover scholarship pro-grams and research support for Kenyan andother external scientists who worked with theproject at Monsanto. Some of these contribu-tions were administered through ABSP and theUniversity of Missouri. Moreover, USAIDsponsored capacity-building activities inKenya, such as updating KARI′s laboratoriesand training local staff in biosafety and similarissues.

• Monsanto: The company carried the bulk ofthe St. Louis-based research activities andoverhead costs. This includes the salaries andtravel costs of its own researchers and supportstaff associated with the project, short-termstipends for external researchers, the provisionof laboratory facilities, such as transformationequipment and growth chambers for thetransgenic material, as well as operationalexpenditures. Major research costs are esti-mated to continue until 2001 and graduallydiminish in subsequent years.

Table 7: Projected welfare effects of virus and weevil resistance technologies

ProducersWest Central and East Consumers

Virus resistance technologyAnnuity of surplus change a 219.3 21.0 83.5Share of total producer surplus (percent) 91.2 8.8 25.8 b

Regional production share (percent) 74.8 25.2 -

Weevil resistance technologyAnnuity of surplus change a 330.1 109.4 153.3Share of producer surplus (percent) 75.1 24.9 25.9 b

Regional production share (percent) 74.8 25.2 -a The annuity figures are given in million 1998 KSh (1 US$ = 59.7 KSh). They have been calculated using a discount rate of 10percent.b The share given for consumers refers to the proportion of the overall economic surplus attributable to sweetpotato consumers.Source: Author′s calculations.

22

• KARI: Before 1997, KARI administered grantsfrom USAID, so significant costs related to theproject did not accrue to the institute. In 1997/98 KARI refurbished its research facilities atNARL, partly supported by the World Bank. In1998 the institute financed mock trials withCPT-560 and other national sweetpotato clones.KARI will also carry the salary of its ownresearchers working under the project once thetechnology enters Kenya. After the donorsupport fades out in 2002, it is expected thatKARI′s cost will increase somewhat beforeshrinking again. After 2008, it is assumed thatthere is only a minor annual cost for maintain-ing the transgenic germplasm.

• World Bank: The World Bank partiallysupported the laboratory refurbishment at NARLin 1997/98. Moreover, the Agricultural ResearchFund (ARF), out of which the three-year projectperiod starting from 1999 is sponsored, isadministered by the World Bank. The ARFprovides for operational expenditures andresearch equipment needed for KARI to carryout sweetpotato transformation. Trainingactivities, the support of biosafety develop-ments, and project overhead are also covered.A small part of the fund is also designated forthe facilitation work of CIP and ISAAA.

• ISAAA: ISAAA granted several short-termscholarships for KARI researchers to travel tothe USA. ISAAA has also assisted the projectwith biosafety issues, IPR regulations, andwriting funding proposals on a rather informalbasis. More formal involvement of ISAAAbegins in 1999 onwards, when the sweetpotatotechnology is transferred to Kenya. ISAAA willthen take responsibility for institutional facilita-tion and for monitoring the different projectactivities (technology transfer, field trials,technology dissemination, maintaining the

network with the different involved organiza-tions, etc.).

• CIP: CIP has the international mandate forresearch in root and tuber crops and hasextensive experience in many parts of theworld. CIP′s regional office in Nairobi is animportant partner for KARI′s sweetpotatoprogram, and in regards to developing the virusresistance technology, CIP will collaborate withKARI in field trial evaluations as well as in thebulking and distribution of transgenic materialto farmers that will occur later. Although theseactivities are actually financed by the ARF, it isexpected that some additional costs mightaccrue and that these will be covered by CIP.

For the weevil resistance technology, no R&D costdata have been collected. Related research hasonly just begun, so cost estimates must remainspeculative at this point. The projects carried out atdifferent universities will profit greatly from thebasic knowledge (e.g., transformation and regenera-tion protocols) already generated through researchon sweetpotato virus resistance, so it is likely thatthe cost of developing sweetpotato weevil resis-tance will be much lower than the one shown inTable A3. Nevertheless, for comparative purposesit is instructive to assume equal costs for bothprojects when calculating benefit-cost measures.Table 8 shows the internal rates of return (IRRs)under different assumptions for the virus and theweevil resistance technology, respectively.

The first row in the Table takes into account thecomplete R&D expenditure borne by the differentorganizations. The IRRs are significantly above 10percent, the standard discount rate used for invest-ments in low and middle-income economies. Yet inan international comparison of annual rates ofreturn on agricultural research investments, the

Table 8: IRRs of virus and weevil resistance projects under different assumptions for R&D costs and benefits(percent)

Virus resistance Weevil resistanceFull R&D cost, Kenyan sweetpotato area 26.1 33.3Full R&D cost, Kenyan sweetpotato area doubled 33.7 41.7Full R&D cost, Kenyan sweetpotato area quadrupled 41.9 50.7Only applied R&D cost a, Kenyan sweetpotato area 59.5 77.3a The cost borne by Monsanto has been subtracted and the research lag has been shortened from 11 to 5 years.Source: Author′s calculations.

23

figures obtained range at the lower end of thespectrum (cf. Ruttan, 1982). Because the analysis oftechnology benefits is confined to Kenya this is notsurprising. Although spillover effects to othercountries of Africa will be part of the transgenicsweetpotato projects, they are not included in thecalculations due to the lack of reasonable ex antedata. For illustrative purposes, the second and thirdrow of Table 8 demonstrate the impact that anincrease in the sweetpotato area (e.g., throughextending the technology to neighboring countries)would have on the aggregate benefit-cost measures.Of course, varietal adjustments and nationalbiosafety procedures would be necessary beforefarmers in other countries could use the technology.But to gain a sense of perspective, it should be keptin mind that Tanzania′s sweetpotato area is almostthree times larger than Kenya′s, and Uganda′s areais larger than Kenya′s by a factor of 7.

On the cost side, it is necessary to consider whetherit is appropriate to include the total cost of R&D inthe calculations. Apart from the anticipatedtechnology spillovers to other countries, the basicresearch component and related knowledge gainsof the virus resistance project will also facilitate thedevelopment of other transgenic sweetpotatotechnologies in the future. Concentrating on thebiotechnology transfer from the USA to Kenya, it isinformative to calculate supplementary IRRs, whereonly the cost of applied R&D is considered. Eventhough a clear-cut separation between basic andapplied research is difficult, assessing the appliedresearch components can be attained by subtractingthe project expenditure directly borne by Monsanto.The remaining cost items include the establishmentof the bioengineering laboratory in Kenya, in-country transformation, regeneration, testing ofdifferent sweetpotato varieties, and nationalcapacity-formation in biosafety and related regula-tory procedures. Moreover, the research lag wouldbe shortened substantially when excluding basicresearch. Given the availability of elementarytechniques, it is expected that a transgenicsweetpotato variety could be developed andreleased within a time frame of about 5 years. Onthe basis of these assumptions, additional IRRs havebeen calculated, which are also shown in Table 8.It becomes apparent that the transfer of bothsweetpotato technologies is a highly profitableundertaking. The efficiency effects from a Kenyanpoint of view are even more positive, because

foreign organizations carry the lion′s share of theproject costs. The figures could also representimportant economic information for other countriesplanning to import recombinant sweetpotatotechnologies. Needless to say, benefit-cost ratioswould still be higher in countries with largersweetpotato areas or with more biotechnologyexperience already at hand.

4.6 Sensitivity Analysis

It is the nature of ex ante studies for their data to beassociated with uncertainty. In order to strengthenthe credibility of the numerical results and thederived statements, a sensitivity analysis is carriedout with respect to pivotal parameters. Key vari-ables that determine the technology shift of thesweetpotato supply curves are the per unit costreduction (C) and the technology adoption rate (A).As expected, the gains in total economic surpluschange proportional to variations of these twoparameters. The benefit partition between producersand consumers remains unaffected. Although theinfluence on the IRRs is significant, the overallprofitability of both technologies (virus and weevilresistance) is not jeopardized even with an 80percent reduction of either C or A. The IRRs wouldstill be higher than the opportunity cost of financialresources, assumed at 10 percent.

Because no reliable estimates are available for thesweetpotato price elasticities of supply and de-mand, the robustness of the results is also testedwith respect to changes in these parameters.Changes in the values of the supply and demandprice coefficients in reasonable dimensions have acomparatively small impact on the aggregateeconomic surplus gains and thus on the IRRs. Yetthe surplus distribution between producers andconsumers is influenced. Not surprisingly, theconsumer share increases to some extent with arising price elasticity of supply, whereas a strongerprice responsiveness of consumers would lead tohigher benefit shares attributable to producers.These changes in the partition between producerand consumer surplus are lessened, however,because a significant proportion of Kenya′ssweetpotato output is directly consumed by produc-ing households.

Another important factor subject to uncertainty isthe time lag between the start of the project andthe first technology release. In the previous section,

24

it became apparent that shortening the research lagleads to a substantial rise in projects′ profitability.However, given that basic research components arealso contemplated, the possibility of prolongedresearch lags needs to be taken into account aswell. In section 3.2, it was noted that little isknown yet about how effectively the SPFMV coatprotein gene confers resistance to the whole SPVDcomplex. Although the probability of success ishigh, we cannot rule out with absolute certaintythat further refinements of the gene construct willbe necessary. This would expand the research lag(originally assumed to be 11 years) and the cost ofR&D. For the sweetpotato weevil resistancetechnology, however, extending the research lag isnot expected. As previously elaborated, it is likelythat technology release can be accomplished muchfaster than in the case of virus resistance. Neverthe-less, the sensitivity of the IRRs with respect toextended research lags is examined for bothtechnologies. The results are graphically depictedin Figure 5. It can be seen that the overall profit-ability of the technology projects shrinks. Yet evenfor an extension of the research lag by 10 years, theIRRs would stay above 10 percent.

Finally, it could be argued that the period of 16years, for which benefit flows have been consid-ered, is too long because the resistance mecha-nisms may break down earlier. Although it isexpected that selection pressure in pathogenpopulations is reduced because of the small-scalesweetpotato cultivation practices (see section 3.3),the option of shortened benefit flows was also takeninto account. The impacts on the projects′ eco-nomic returns are rather low: assuming a five-yearshortening of benefit flows, the IRR is still 24percent for the virus resistance and 32 percent forthe weevil resistance technology.

Again, it should be clearly stated that the givenIRRs underestimate the potential economic impactof the research projects, because technologyspillovers from Kenya to other countries are disre-garded in the analysis. In summary, the sensitivityanalysis underlines the validity of the statementsabout welfare and profitability outcomes for thetransgenic virus and weevil resistance technologies,even under extreme parameter variations.

Figure 5: Development of IRRs under the assumption of extended research lags

Note: The original research lag is 11 years. The IRRs take into account the full R&D cost, including basic research components, andthey are based on the Kenyan sweetpotato area (cf. section 4.5). For each extended year, the average annual R&D expenditure thataccrues during the first 11 years of the project has been added on the cost side.

10.0

15.0

20.0

25.0

30.0

35.0

0 1 2 3 4 5 6 7 8 9 10

Extension of research lag (years)

IRR

(pe

rcen

t)

Virus resistanceWeevil resistance

25

5. Conclusions and Policy Implications

own in-country crop transformation. This bridges thedistance between researchers and farmers and is agood starting point for participatory variety selec-tion among the various stakeholders. Of course,biotechnology and conventional approaches to cropimprovement should not be considered as substi-tutes. The most efficient combination of tools mustbe determined for each breeding objective. Further-more, biotechnology can only be successful ifappropriately integrated into the existing breedingand variety dissemination networks of a country.

Growing sweetpotato virus-and weevil-resistantvarieties will improve the food situation of farmfamilies. On the one hand, the higher yield levelsobtained add to the sweetpotato availability fordirect subsistence consumption. On the other hand,rising cash incomes increase households′ ability topurchase other food items. Because women oftencontrol the revenues from sweetpotato sales, thereis a high probability that a significant proportion ofthe additional income would be spent on food,especially in food-insecure households. Due totechnology-induced market price decreases, urbansweetpotato consumers will also profit. About 26percent of the overall welfare gains are captured bysweetpotato consuming, nonproducing households.Against the backdrop of the perpetual trend towardsurbanization, such food price decreases throughagricultural technological progress are becomingmore and more important for the nutritional well-being of poor population segments.

Virus pressure varies in different parts of Kenya. Thehighest virus-induced crop losses are found in thedensely populated Lake Victoria Basin, so it is inthis western part of the country that the virusresistance technology will bring about the greatestbenefits. But farms in the West are on averageresource-poorer than those in the Central and East,so the distribution of benefits tends to equalize theexisting regional income disparities. By contrast,weevil infestation shows more or less the sameseverity across all sweetpotato producing provincesof Kenya. Significantly, the expected aggregateproductivity gains of transgenic weevil resistanceare even higher than those of virus-resistant variet-ies. This comparison, however, should not bemisunderstood as a priority setting exercise inwhich one technology is preferred over another.

Viruses and weevils are the most pressing bioticproduction constraints for the predominantly small-scale and semisubsistent sweetpotato farms inKenya. There are no economically viable methodsto combat these pathogens once they haveinfected the plant. Recently, conventional efforts atvirus resistance breeding produced first successes insub-Saharan Africa. But the genetic trait ofsweetpotato weevil resistance has not yet provenamenable to a conventional plant breeding ap-proach. Biotechnology, on the other hand, extendsthe portfolio of tools available for disease and pestcontrol. The bioengineered resistance mechanismsanalyzed in this study will substantially reduce thesweetpotato losses caused by viruses and weevils,and they will enhance farmers′ yields and incomesconsiderably. The project examples demonstratethat modern biotechnology can offer promisingsolutions to the problems of resource-poor farmers,provided that the specific needs of these farmersare explicitly taken into account in internationalbiotechnology research.

Transgenic varieties with enhanced attributes ofstress resistance fit well into the traditionalsweetpotato production systems of Africa forsupplementary inputs are not required. Becausetransgenic planting material is easy to handle andreproduce, and given the comparatively low risk ofadoption for farmers, it can be expected that boththe virus and weevil resistance technologies will berapidly disseminated to Kenya′s sweetpotatogrowers. Yet there are two factors to considerregarding technology acceptance. First, scientistsand policymakers need to foster the flow of objec-tive information about biotechnology in Kenya.Otherwise the technology could be met withdisapproval due to the ongoing biased mediacampaign against genetically engineered crops.Second, given the distinct varietal preferencesamong consumers and producers, the number ofdifferent sweetpotato clones transformed will be achief determinant of the speed and degree oftechnology adoption. In this respect, transgenictechniques offer another advantage over the tools ofconventional crossbreeding. Once the basicrecombinant sweetpotato technology becomesavailable, it is comparatively easy to incorporatethe desired resistance mechanisms into additionalvarieties. KARI has established the capacity for its

26

Such a narrow viewpoint neglects the dynamicbenefit potentials. The development ofsweetpotato virus resistance is in a much moreadvanced stage than the weevil resistancetechnology, and the virus-resistant varieties will bethe first transgenic crops to be released in Kenya. Ithas to be kept in mind, therefore, that this initialproject has a strong component of knowledge-creation and capacity building—in addition to thedirect welfare gains it produces in the Kenyansweetpotato sector. The acquired researchexperience will support the emergence of otherrecombinant sweetpotato innovations, and theestablishment of facilities and regulatory proce-dures in Kenya will facilitate future biotechnologicalprogress in the country. It is anticipated, for in-stance, that the research lag for the sweetpotatoweevil resistance project will be reduced by morethan 50 percent compared to the virus resistancetechnology. In the longer run, it is likely that bothvirus and weevil resistance mechanisms will beincorporated into the same sweetpotato varieties.

Given the scarcity of financial resources availablefor international agricultural research, the benefit ofa technology always needs to be contrasted to thecost of R&D. In the case of the technologiesconsidered, especially the sweetpotato virusresistance, the cost of R&D is fairly high because italso includes components of basic research. Buteven if the resistance technologies were only usedin Kenya, the research investments would generatesignificantly positive benefit-cost ratios. In reality,technology spillovers from Kenya to other countriesin sub-Saharan Africa are intended, although suchspillovers have not explicitly been analyzed.Clearly, however, they would multiply the socialreturns on basic research investments. The interna-tional collaborative R&D projects on sweetpotatovirus and weevil resistance also demonstrate theviability of successful partnerships between thepublic and the private sector. Most of the basicbiotechnology tools available to date are patentedby private companies, and these companies oftendo not have enough market incentives to developend-technologies explicitly designed to serveresource-poor farmers in the South. So from adevelopment policy perspective more interactionsof this kind are needed.

There are numerous examples showing thatprivate companies are usually willing to donate

proprietary technology components for use indeveloping countries, so long as the firms′ owncommercial interests are not conflicted. Technologydonation therefore requires careful contractualarrangements for each specific case, statingwhere, under what conditions, and for what purposethe technology might or might not be used by thelicense-taker. If such contractual arrangementscannot be ensured, private companies are under-standably hesitant to license patented innovations.Bilateral agreements between a company and asingle developing country are much easier tonegotiate than multilateral ones. Because of itsglobal mandate and prevailing public good policy,for instance, the centers of the Consultative Groupon International Agricultural Research (CGIAR) findit difficult to get access to proprietary researchtools and technologies for further adjustment andfinal release. Given the international exchange ofgermplasm, it could not be ruled out that theresulting public sector technologies with propri-etary components would also be used in countrieswhere the conditions for commercial technologyreleases by the donating firms are favorable. Itremains a challenging task to identify and formu-late IPR regulations acceptable to all involvedparties in order to foster more related researchcooperation.

Working with orphan commodities, such assweetpotato, makes things somewhat easier. Privatecompanies have no immediate commercial interestin these poor people′s crops. Biotechnology canprovide the means for the transfer of geneticmaterial across species, so that certain genes usedby private firms in commercial crops could also bevaluable for public R&D on orphan commodities.Apart from promoter or marker genes with a broadspectrum of possible applications, this holds trueeven for specific resistance genes when the rel-evant crop species are attacked by similar pests ordiseases. The Bt genes that will be used forsweetpotato weevil resistance are a case in point. Ifprivate companies can watch over their safeemployment, there is no reason why they shouldnot agree to donate proprietary technologies for usein orphan commodities. Of course, in the develop-ment of sweetpotato virus resistance Monsanto ismuch more than just the donator of availabletechnology. The main part of the research for theproject has been carried out in Monsanto laborato-ries. In spite of the grants from other organizations,

27

the company carries around 70 percent of the totalcost of R&D. It is unlikely that this example of costsharing can be taken as a model for further public-private research partnerships. The cost for thedevelopment of bioengineered orphan commodi-ties with desired traits will decrease over time,once more basic biotechnology tools and transfor-mation protocols become available. Nonetheless,

it is essential to increase the public sector contribu-tions in terms of funds and expertise in order toencourage collaborative R&D initiatives in thefuture. Harnessing the comparative advantages ofthe public and the private sector is a prerequisitefor the efficient provision of highly beneficialbiotechnology innovations for the poor.

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Acknowledgments

This study could not have been undertaken withoutthe substantial support of various organizations andindividuals. First, the financial assistance providedby the German Research Society (DeutscheForschungsgemeinschaft – DFG), the GermanAgency for Technical Cooperation (DeutscheGesellschaft für Technische Zusammenarbeit –GTZ), and the German Ministry for EconomicCooperation and Development (Bundesministeriumfür wirtschaftliche Zusammenarbeit undEntwicklung – BMZ) is gratefully acknowledged.

For the fieldwork in Kenya, logistic support wasprovided by the International Service for theAcquisition of Agri-biotech Applications (ISAAA),the Kenya Agricultural Research Institute (KARI),the International Potato Center (CIP), and theInternational Livestock Research Institute (ILRI).Special thanks go to Florence Wambugu andMichael Njuguna of ISAAA′s regional office inNairobi, who treated me very kindly and provided

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Appendices

Table A1: Technology shift factor K for virus and weevil resistance technologies

Virus resistance Weevil resistanceYear a West Central and East Year a West Central and East0 0.000 0.000 0 0.000 0.0001 0.011 0.005 1 0.020 0.0202 0.022 0.009 2 0.040 0.0403 0.033 0.014 3 0.060 0.0604 0.045 0.018 4 0.080 0.0805 0.056 0.023 5 0.100 0.1016 0.067 0.028 6 0.100 0.1017 0.067 0.032 7 0.100 0.1018 0.067 0.032 8 0.100 0.1019 0.067 0.032 9 0.100 0.10110 0.067 0.032 10 0.100 0.10111 0.067 0.032 11 0.100 0.10112 0.067 0.032 12 0.100 0.10113 0.067 0.032 13 0.100 0.10114 0.067 0.032 14 0.100 0.10115 0.067 0.032 15 0.100 0.101a This is the number of years after the first technology release.Source: Author′s calculations.

Table A2: Technology-induced changes in producer and consumer surplus (in thousand 1998 KSh)

Virus resistance Weevil resistanceProducers Producers

Year a West Central/East Consumers Year a West Central/East Consumers0 0 0 0 0 0 0 01 35,484 2,769 13,251 1 60,700 20,118 28,0232 74,487 5,808 27,831 2 127,479 42,252 58,9443 117,273 9,137 43,838 3 200,793 66,554 92,9864 164,119 12,776 61,380 4 281,128 93,186 130,3875 215,323 16,748 80,570 5 369,003 122,319 171,4056 271,203 21,077 101,529 6 386,974 128,276 179,7527 282,799 29,887 108,653 7 405,819 134,523 188,5068 296,571 31,343 113,944 8 425,583 141,074 197,6869 311,014 32,869 119,493 9 446,308 147,945 207,31410 326,160 34,470 125,313 10 468,043 155,149 217,41011 342,044 36,149 131,415 11 490,837 162,705 227,99712 358,702 37,909 137,815 12 514,740 170,629 239,10113 376,170 39,755 144,527 13 539,808 178,938 250,74514 394,490 41,691 151,565 14 566,096 187,653 262,95615 413,701 43,722 158,946 15 593,665 196,791 275,762a This is the number of years after the first technology release.Source: Author′s calculations.

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Table A3: Financial cost of the virus resistance research project by involved organizations (in thousand 1998 KSh)

Year USAID a Monsanto KARI Univ. of Wor ld ISAAA CIP TotalMissouri Bank b

1992 4,541 2,418 0 0 0 0 0 6,9591993 4,541 2,418 0 0 0 0 0 6,9591994 5,634 11,970 0 0 0 0 0 17,6041995 3,555 16,447 0 0 0 896 0 20,8981996 3,555 19,462 0 0 0 0 0 23,0181997 1,013 29,895 1,293 516 1,425 1,506 0 35,6471998 1,013 29,417 1,621 516 1,425 2,402 0 36,3941999 0 28,835 1,800 0 9,552 2,388 597 43,1722000 0 28,835 1,800 0 9,552 1,194 597 41,9782001 0 28,835 1,800 0 9,552 1,194 597 41,9782002 0 11,940 2,985 0 0 597 0 15,5222003 0 8,955 2,985 0 0 0 0 11,9402004 0 5,970 2,985 0 0 0 0 8,9552005 0 4478 1,493 0 0 0 0 5,9702006 0 2,985 1,493 0 0 0 0 4,4782007 0 1,493 1,493 0 0 0 0 2,9852008 0 0 1,493 0 0 0 0 1,4932009 0 0 299 0 0 0 0 2 9 92010 0 0 299 0 0 0 0 2 9 92011 0 0 299 0 0 0 0 2 9 92012 0 0 299 0 0 0 0 2 9 92013 0 0 299 0 0 0 0 2 9 92014 0 0 299 0 0 0 0 2 9 92015 0 0 299 0 0 0 0 2 9 92016 0 0 299 0 0 0 0 2 9 92017 0 0 299 0 0 0 0 2 9 9Total 23,854 234,352 25,925 1032 31,505 10,177 1,791 32,8636a The USAID funds include the ABSP scholarship.b Although the World Bank only administers the ARF, the funds are included in this column.Source: Author′s interview survey.