Biotech Crops and Economic Development


The recent announcement that Mexican regulatory officials are again refusing to go forward with field trials of biotech corn points out the continued confusion over economic development. Developing countries often complain about the U.S. not doing enough to open trade through the WTO negotiations process and yet refuse to adopt regulatory policies that encourage productivity increases within their own agricultures.

The link between increasing productivity, economic growth and trade makes the situation in Mexico particularly puzzling. The North American Free Trade Agreement (NAFTA) among Mexico, Canada and the U.S. will be fully implemented on January 1, 2008 with corn being one of the last products to be fully traded. Mexico already grows about 300,000 acres of biotech cotton, including some of the newest Bt/herbicide tolerant stacked cotton, and 60,000 acres of herbicide tolerant soybeans. It also imports biotech cotton, corn and soybeans and products from the U.S. The field trials of biotech corn were to be in wheat growing areas of three northern states far from the “cradle of maize.” Mexico cannot continue to have one foot firmly planted in international trade with NAFTA while having the other one caught in the anti-development mode of rejecting biotech corn needed to have competitive corn producers and improve incomes for its limited resource corn producers.

Economic empowerment of limited resource farmers has been given renewed attention recently with Muhammad Yunus and the Grameen Bank receiving the 2006 Nobel Peace Prize for making micro loans to poor people in developing countries. These loans, many of which are given to women, include agricultural production like egg production from chickens and modern technology like satellite phone services in rural villages.

Developing countries are considered developing because they have not increased productivity over the past 50 years to the same extent as developed countries. They include countries like Korea that have made incredible progress in productivity and are now essentially developed countries. At the other extreme are the 32 countries identified as least developed where the majority of the population has made little or no productivity improvements over the past 50 years. Countries like Mexico, China and India are in a middle category that has made substantial progress over the past 25 years, but still have significant numbers of poor people.

The broad outline of the situation has been stated before. Of the world’s 6.5 billion people, half live on less than $2 per day. Of that half, 1.25 million people live on less than $1 per day. According to Dr. Robert Thompson, Professor of Agricultural Economics at the University of Illinois and former World Bank official in rural development, 70 percent of the people who live on less than one dollar per day are farm families. This is not a case of having enough food in the world, but not in the right place. Farmers themselves do not have access to productivity increasing technology to produce food for their families needs and sell significant amounts in the market. They are still using unimproved, local seeds, not using fertilizer, and not controlling crop pests with pesticides and biotechnology. The question now is how to close the productivity gap in just a few years time to reduce the potential for widespread famine and begin the process of productivity improvements that will move those farmers from $1 per day in income to $1.25 per day, then $1.50 per day and then still higher.

Institutions like the Bill and Melinda Gates Foundation are committing hundreds of millions of dollars to practical applications of known technology in Africa and supporting research where needed to close knowledge gaps. Government leaders are speaking out. The Prime Minister of India Manmohan Singh said recently at the Second International Rice Congress in New Delhi, “We need to strike a balance between using the potential of biotechnology to meet the requirements of hungry people, while addressing ethical concerns about interfering with nature.” His greatest concern is the lack of productivity improvements in rice in recent years.

Rapid gains in productivity will require the introduction of new technology into current food production systems with as few changes as possible and limited needs for producer education. Biotech seeds for existing crops fit those needs. Biotech seeds adapted to local climatic conditions can be grown and consumed the same way as traditional crops.

Biotech seeds already have a proven track record among limited resource farmers. Huang Jikun, an economist at the Center for Agricultural Policy at the Chinese Academy of Sciences in Beijing, had research published in the journal Science that showed farmers growing Bt Cotton earned $225 per hectare more than farmers growing traditional cotton. He has also found that biotech rice increased incomes by $85 per hectare. For farmers who earn only $350 per year that is a huge step up the economic ladder. South African peer-reviewed studies on insect-resistant corn reported that small corn farmers had higher yields and that providing seed at affordable prices is critical to increased biotech production among small producers. Monsanto reported recently that small South Africa farmers have reported a 40 percent increase in production with biotech corn compared to conventional corn.

As the Nobel Committee said in awarding the Peace Prize, “Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development.” Biotech seeds are one piece of the development puzzle for the almost 15 percent of the worlds people who live on less than a dollar day and make their living as farmers.

Ross Korves

Ross Korves

Ross Korves served Truth about Trade & Technology, before it became Global Farmer Network, from 2004 – 2015 as the Economic and Trade Policy Analyst.

Researching and analyzing economic issues important to agricultural producers, Ross provided an intimate understanding regarding the interface of economic policy analysis and the political process.

Mr. Korves served the American Farm Bureau Federation as an Economist from 1980-2004. He served as Chief Economist from April 2001 through September 2003 and held the title of Senior Economist from September 2003 through August 2004.

Born and raised on a southern Illinois hog farm and educated at Southern Illinois University, Ross holds a Masters Degree in Agribusiness Economics. His studies and research expanded internationally through his work in Germany as a 1984 McCloy Agricultural Fellow and study travel to Japan in 1982, Zambia and Kenya in 1985 and Germany in 1987.

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