People in U.S. production agriculture often take for granted the benefits of biotech crops. A report titled “The First Decade of Genetically Engineered Crops in the United States” by Jorge Fernandez-Cornejo and Margriet Caswell of the Economic Research Service of USDA fills in details on factors that created those benefits.
The authors divided the industry into three segments: seed suppliers and technology providers, farmers and consumers. The industry developed in part due to strengthening of intellectual property rights in the 1970s and 1980s through plant variety production (PVP) certificates issued by the Plant Variety Protection Office of USDA and patents issued by the U.S. Patent and Trademark Office that provide exclusive rights to newly developed varieties. Of the over 4,200 agricultural biotech patents awarded from 1996-2000, 75 percent were for private companies.
From 1987 through early April 2005 USDA’s Animal and Plant Health Inspection Service (APHIS) received 11,600 applications for field release of plant biotech varieties for testing purposes and approved 10,700 (92 percent). Corn had the largest number of approved applications at 4,968 followed by soybeans at 843, potatoes at 747 and cotton at 724. Approved applications by trait were led by herbicide tolerance (HT) at 3,587, insect resistance (Bt) at 3,141, product quality at 2,314, virus resistance at 1,239 and agronomic properties at 1,043.
Once field testing is completed, an applicant can apply for nonregulated status. Deregulation petitions had been received by APHIS for 103 varieties as of April 2005. APHIS has granted deregulation of 63 varieties with 17 for corn, 11 for tomatoes, 9 for cotton, 7 for rapeseed and 5 each for soybeans and potatoes. Deregulations by trait included 28 for HT, 21 of Bt, 13 for product quality, 9 for virus resistance and 6 for agronomic properties.
Over 90 percent of U.S. corn, soybeans and cotton acres are treated with herbicides so there is little surprise that 87 percent of the soybeans, 61 percent of the cotton and 26 percent of the corn acres were HT in 2005. Insect damage is less pervasive in many years, and in 2005 52 percent of the cotton and 35 percent of the corn acres had Bt varieties. Results from USDA’s Agricultural and Resource Management Surveys for 2001-03 show 60-65 percent of farmers (79 percent for Bt corn farmers) use biotech crops to increase yields, 10-15 percent to reduce pesticide costs, and 15-25 percent to save management time.
The authors reviewed studies on net returns, household income and pesticide use and found generally positive benefits for biotech crop adopters. Bt cotton and corn were particularly profitable when insect pressures were high. In low pest years the returns to Bt corn were negative, but farmers use the technology as insurance for years with high pest pressures. Data from 2001 show that adopters of Bt corn use 8 percent less insecticide per planted acre.
HT soybeans do not increase farm incomes, but are associated with higher household incomes which may indicate farmers use the time saved and management flexibility to produce off-farm income. HT soybeans can also make harvest easier. They are twice as likely to be used in conservation tillage programs which reduce soil erosion and chemical runoff. ERS analysis of data from 1997/98 showed that overall pesticide use was 2.5 million pounds lower because of biotech crops. Also, glyphosate herbicide is less persistent in the environment and is less than one-third as toxic to humans.
Many of the studies cited by the authors used data that are over five years old. With improvements in biotech crops and increased understanding of how to effectively use them, newer studies may show greater benefits.
These research efforts and producer benefits are of no value unless U.S. consumers and export markets accept biotech foods. The report explains that food manufacturers in the U.S., the EU and Japan have taken different approaches to marketing biotech foods. In the EU and Japan foods that contain biotech ingredients must be labeled, and manufacturers have generally avoided biotech ingredients so they do not have to label foods. In the U.S. foods that contain biotech ingredients do not have to be labeled and some manufacturers appeal to concerns about biotech foods by labeling products as non GE (genetically engineered). From 2000-2004 U.S. manufacturers introduced over 3,500 products as non GE. These are separate from products labeled organic.
Estimates of distribution of benefits among stakeholders by crop and technology vary widely due to the economic benefits to farmers for using the crops, payments to technology providers and the impact of the technology on world prices. Based on data from the late 1990s consumers benefit most from HT cotton (57 percent of the total benefits), while U.S. farmers and biotech companies benefited 4 percent and 5 percent respectively. For Bt cotton, U.S. farmers and biotech firms each received 29 percent of the benefits, while consumers received 14 percent. Seed firms received 40 percent of the benefits of HT soybeans, followed by 28 percent for biotech firms, 20 percent for U.S. farmers and 5 percent for consumers.
The future of biotech crops will be determined by the same three sets of stakeholders as outlined in the report; each will weigh the benefits and costs. Updating the research outlined in the study is critical for stakeholders and for public officials who regulate the industry so that informed, timely decisions can be made as the biotech crop industry develops over the next 10 years.