graham brookes pg economics ltd uk€¦ · east timor dominican republic dijbouti denmark czech...

Global Impact of Biotech Crops:

economic & environmental effects

1996-2013

Graham Brookes

PG Economics Ltd

UK

©PG Economics Ltd 2015

Background

• 10th annual review of global GM crop impacts

• Authors of 20 papers on GM crop impacts in peer review journals

• Current review in 2 open access papers in journal GM Crops. www.tandfonline.com/loi/kgmc29

• Full report available at www.pgeconomics.co.uk


http://www.landesbioscience.com/journal/gmcrops

http://www.pgeconomics.co.uk/

Coverage

• Cumulative impact: 1996-2013

• Farm income & productivity impacts: focuses on farm income, yield, production

• Environmental impact analysis covering pesticide spray changes & associated environmental impact

• Environmental impact analysis: greenhouse gas emissions


Methodology

• Review and use of considerable economic impact literature plus own analysis

• Uses current prices, exch rates and yields (for each year) & update of key costs each year: gives dynamic element to analysis

• Review of pesticide usage (volumes used) or typical GM versus conventional treatments

• Use of Environmental Impact Quotient (EIQ) indicator

• Review of literature on carbon impacts – fuel changes and soil carbon


Key Findings

change 1996 2013

Pesticide

change 1996-2013 Carbon Emissions Carbon Emissions

2013

Global Global

farm income

1996-2013

550 million kg

reduction in

pesticides & 19%

cut in associated

environmental

impact

cut of 28 billion kg

co2 release; equal

to taking 12.4

million cars off the

road

$133.5 billion

increase


Farm income gains 2013: highlights

• Total farm income benefit $ 20.5 billion

• Equal to adding value to global production of these four crops of 7.6%

• Average gain/hectare: $122

• Income share: 50% each developed and developing countries


Farm income gains 1996-2013 by country (US $)

Zimbabwe

Zambia

Yemen Vietnam

Venezuela

Vanuatu

Uzbekistan

Uruguay

United States

United Kingdom

U.A.E.

Ukraine

Uganda

Turkmenistan Turkey

Tunisia

Togo

Thailand

Tanzania

Tajikistan

Syria

Switz.

Sweden

Swaziland

Suriname Sri Lanka

Spain

South Africa

Somalia

Solomon Islands

Slovenia

Slovakia

Sierra Leone

Senegal

Saudi Arabia

Rwanda

Russia

Romania

Qatar

Portugal

Poland

Philippines

Peru

Paraguay

Papua New Guinea

Panama

Pakistan

Oman

Norway

Nigeria

Nicaragua

New Zealand

Netherlands

Nepal

Namibia Mozambique

Morocco

Mongolia Moldova

Mexico

Mauritania

Mlta

Malaysia

Malawi

Madagascar

Macedonia

Lux.

Lithuania

Liberia

Lesotho

Lebanon

Latvia

Laos

Kyrgyzstan

Kuwait

S. Korea

Taiwan

N. Korea

Kenya

Kazakhstan

Jordan

Japan

Jamaica

Italy

Israel

Ireland

Iraq Iran

Indonesia Indonesia

India

Hungary

Honduras

Haiti

Guyana

Guinea-Bissau Guinea

Guatemala

Greece

Ghana

Germany

Georgia

Gambia

Gabon

French Guiana

France

Finland

Fiji

Estonia

Eritrea

Equatorial Guinea

El Salvador

Ecuador

East Timor

Dominican Republic

Dijbouti

Denmark

Czech Rep.

Cyprus

Cuba

Cote d’Ivoire

Costa Rica

Congo

Dem. Rep. Congo

Colombia

China

Chile

Central African

Republic

Cape Verde

Canada

Cameroon

Cambodia

Burundi

Burma

Burkina Faso

Bulgaria

Brunei

Brazil

Botswana

Bolivia

Bhutan

Benin

Belize

Bel.

Belarus

Bangladesh Bahamas

Azerbaijan

Austria

Australia

Armenia

Argentina

Angola

Albania

Afghanistan

Western Sahara

Bosnia & Herz.

Serbia Montenegro

Croatia

Canada

$5.63 billion increase

United States


Mexico

$287 million increase

Bolivia —

$538 million

— Brazil


— Paraguay


— Argentina17.6 billion

increase

South Africa


Australia


Philippines

$470 million

China


India


Spain

$206 million

Uruguay —

$153 million

Colombia

$106 million

Pakistan

$1.6 bn increase

Myanmar

$138 million

increase

Burkina F $137

million


Farm income benefits:

Philippines (US $ billion)

2013 1996-2013 % of crop using

technology 2013

Insect resistant

corn 73.8 347.4 28

Herbicide

tolerant corn 18.3 123.0 31

Year first used: IR corn 2003, HT corn 2006

Average benefit/ha IR corn $96/ha, HT corn $36/ha


Other farm level benefits

GM HT crops GM IR crops

Increased management

flexibility/convenience Production risk management tool

Facilitation of no till practices Machinery & energy cost savings

Cleaner crops = lower harvest cost &

quality premia

Yield gains for non GM crops (reduced

general pest levels)

Less damage in follow on crops

Convenience benefit

Improved crop quality

Improved health & safety for

farmers/workers

In US these benefits valued at $11 billion 1996-2013


Cost of accessing the technology

($ billion) 2013

• Distribution of total trait benefit:

all (tech cost 25%) – every $1 invested

in seed = $4.04 in extra income

• Distribution of benefit:

developing countries (tech cost

24%) every $1 invested in seed = $4.22 in

extra income

Cost of tech goes to seed supply chain (sellers of seed to

farmers, seed multipliers, plant breeders, distributors & tech

providers)

Farm

income,

20.5

Cost of

tech, 6.8

Farm

income,

10.26

Cost of

tech, 3.18


Yield gains versus cost savings

• 70% ($93 billion) of total farm income gain due to yield

gains 1996-2013

• Remaining gains from cost savings

• Yield gains mainly from GM IR technology & cost savings

mainly from GM HT technology

• Yield gains greatest in developing countries & cost savings

mainly in developed countries

• HT technology also facilitated no tillage systems – allowed

second crops (soy) in the same season in S America


IR corn: average yield increase 1996-2013


Average across all countries:

+11.7%

7.0% 6.2%

18.3%

11.4% 10.7%

23.7%

21.5%

13.4%

5.5% 5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

US & Can Argentina Philippines S Africa Uruguay Honduras Colombia Brazil Paraguay US & Can

CRW

IR cotton: average yield increase 1996-2013


Average across all countries:

+17%

9.9% 10.0%

24.0%

0.0%

10.0%

30.0%

33.0%

20.0% 18.0%

-0.3%

30.6%

20.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

US China S Africa Australia Mexico Argentina India Colombia Burkina

Faso

Brazil Myanmar Pakistan

IR soybeans: average yield increase

2013

10.0% 9.1%

12.8%

8.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Brazil Argentina Paraguay Uruguay


HT traits: yield and production effects


Trait/country Yield/production effect

HT soy: Romania, Mexico,

Bolivia

+23%, +7% & +15%

respectively on yield

HT soy: 2nd generation: US &

Canada

+10.5% yield

HT soy Argentina & Paraguay Facilitation of 2nd crop soy

after wheat: equal to +20%

and +9% respectively to

production level

HT corn: Argentina, Brazil,

Philippines

+10%, +6% & +6%


HT cotton: Mexico, Colombia,

Brazil

+9%, +4% & +1%


HT canola: US, Canada &

Australia

+1.4%, +6.4% & +10.9%


Additional crop production arising from positive

yield effects of biotech traits 1996-2013

(million tonnes)


0.0

50.0

100.0

150.0

200.0

250.0

300.0

Soybeans Corn Cotton Canola

15.9

44.4

2.8 1.1

138.2

273.6

21.7 8.0

2013 1996-2013

Additional conventional area required if

biotech not used (m ha)

2013 1996-2013

Soybeans 5.8 49.9

Maize 8.3 50.9

Cotton 3.5 27.2

Canola 0.5 4.1

Total 18.1 132.1


Price impacts

• Additional production

from biotech has

contributed to

lowering world prices

of grains and oilseeds

Crop/Commodity

Biotech benefit to

world prices (2007

baseline)

Soybeans -5.8%

Corn -9.6%

Canola -3.8%

Soy oil -5%

Soymeal -9%

Canola oil & meal -4%

Source: Brookes G et al (2010) The production and price impact of biotech crops, Agbioforum 13 (1)

2010. www.agbioforum.org


http://www.agbioforum.org/

Share of global crop trade accounted for

GM production 2013/14 (million tonnes)

Soybeans Maize Cotton Canola

Global production 283.7 987.7 26.2 71.1

Global trade (exports) 112.8 129.6 8.9 15.1

Share of global trade from

GM producers 107.4 (95.2%) 90.3 (69.7%) 6.2 (70%) 12.5 (83%)

Estimated size of market

requiring certified

conventional (in countries that

have import requirements)

3.0-4.0 7.5 Negligible 0.1

Estimated share of global

trade that may contain GM

(ie, not required to be

segregated)

108.8-109.8 82.8-122.1 6.2 12.4-12.5

Share of global trade that may

be GM 96.4% to 97.3% 64%-94% 70%

82% to

83%


Impact on pesticide use

• Since 1996 use of pesticides down by 550 m kg (-8.6%) &

associated environmental impact -19% - equivalent to 2 x

total EU (28) pesticide active ingredient use on arable

crops in one year

• Largest environmental gains from GM IR cotton: savings

of 210 million kg insecticide use & 28% reduction in

associated environmental impact of insecticides


Impact on greenhouse gas emissions

Lower GHG emissions: 2 main

sources:

• Reduced fuel use (less spraying

& soil cultivation)

• GM HT crops facilitate no till

systems = less soil preparation

= additional soil carbon storage


Reduced GHG emissions: 2013

• Reduced fuel use (less

spraying & tillage) = 2.1

billion kg less carbon

dioxide

• Facilitation of no/low till

systems = 25.9 billion kg

of carbon dioxide not

released into atmosphere

=

Equivalent to removing 12.4 million

cars — 43% of cars registered in the

United Kingdom — from the road

for one year


Reduced GHG emissions: 1996-2013

• less fuel use = 18.7 billion kg co2

emission saving (8.3 m cars off the

road)

• additional soil carbon

sequestration = 229 billion kg co2

saving if land retained in

permanent no tillage. BUT only a

proportion remains in continuous

no till so real figure is lower (lack

of data means not possible to

calculate)


Concluding comments

• Technology used by 18 m farmers on 165 m ha in 2013

• Delivered important economic & environmental benefits

• + $133.5 billion to farm income since 1996

• -550 m kg pesticides & 19% reduction in env impact associated with pesticide use since 1996

• Carbon dioxide emissions down by 28 billion kg in 2013: equal to 12.4 m cars off the road for a year


Concluding comments

• GM IR technology: higher yields, less production risk, decreased

insecticide use leading to improved productivity and returns and more

environmentally farming methods

• GM HT technology: combination of direct benefits (mostly cost

reductions) & facilitation of changes in farming systems (no till & use of

broad spectrum products) plus major GHG emission gains

• Both technologies have made important contributions to increasing world

production levels of soybeans, corn, canola and cotton

• GM HT technology has seen over reliance on use of glyphosate by some

farmers in North/South America: contributed to weed resistance problems

and need to change/adapt weed control practices. Resulted in increases in

herbicide use and costs of production in last few years but environmental

impact of herbicides used are still better than conventional crop alternative

and GM HT crops still more profitable


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