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Economic Impact of GM Crops on Agriculture

Production and Indian Economy

Avinash C SPG12AGR4001

SEMINAR -II

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Introduction

Flow of Presentation

Status of GM Crops In India and World

Economic Impact on production and Indian Economy

GM crops-Pros and Cons

Some of Issue and Fact

GM crops Development Objectives

Case studies

Conclusion

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Introduction

World Health Organization

GMOs as “Organisms in which the genetic material

(DNA) has been altered in a way that does not occur

naturally”. This is usually done by inserting genes of

related or unrelated species into an organism's DNA in an

attempt to transfer, or stop expression of, a specific trait.

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Creating GM Plants Eg-IR maize

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First crop introduced was Flavr Savr tomato in USA in 1995

So far 20 crops approved for commercial cultivation in different countries

Only four crops being marketed commercially I.e., corn, cotton, soybean and canola

Commercial production initiated for papaya, squash, rice and alfalfa in USA and other countries, Others are approved but not yet being Marketed

Major countries include USA, Canada, Japan, China, India, Brazil, EU, Argentina, South Africa

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Transgenic Crops:Development Objectives

Integrated pest management (IPM)

Herbicide tolerance (HT)

Nutritional enhancements

Product quality improvement

Increase in yield

Stress tolerance (ST)

Plant based pharmaceuticals

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Status of GM Crops In India and World

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GLOBAL

Source: FAO Stat and ISAAA, 2013

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79.1

USA

40.3

Brazil Argentenia India

24.4 11.80 10.8

Canada

TOP 5 COUNTRIESBY HECTRAGEMillions of biotech crop hectares planted

1996 2013

12Source: Clive James, 2012 ISAAA

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COUNTRY AREA(MH) CROPS GROWN RankUSA* 79.1 Maize, soybean, cotton, canola,

sugarbeet,alfalfa, papaya, squash1

Brazil* 36.6 Soybean, maize, cotton 2Argentina* 23.9 Soybean, maize, cotton 3

India* 11.80 Cotton 4Canada* 11.6 Canola, maize, soybean, sugarbeet 5China* 4.0 Cotton, papaya, tomato,

sweet pepper6

Paraguay* 3.4 Soybean, maize, cotton 7South Africa* 2.9 Maize, soybean, cotton 8Pakistan* 2.8 Cotton 9Uruguay* 1.4 Soybean, maize 10Bolivia* 1.0 Soybean 11Philippines* 0.8 Maize 12

Table.1: Global Area of Biotech Crops in 2012: by Country (Million Hectares)**

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Australia* 0.7 Cotton, canola 13Burkina Faso* 0.3 Cotton 14Myanmar* 0.3 Cotton 15Mexico* 0.2 Cotton, soybean 16Spain* 0.1 Maize 17Chile* <0.1 Maize, soybean, canola 18Colombia <0.1 Cotton 19Honduras <0.1 Maize 20Sudan <0.1 Cotton 21Portugal <0.1 Maize 22Czech Republic <0.1 Maize 23Cuba <0.1 Maize 24Egypt <0.1 Maize 25Costa Rica <0.1 Cotton, soybean 26Romania <0.1 Maize 27Slovakia <0.1 Maize 28total 170.3

* 18 biotech mega-countries growing 50,000 hectares, or more, of biotech crops** Rounded off to the nearest hundred thousand Source: Clive James, 2012.ISAAA

Contd…

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Global Area of Biotech Crops,1996to 2011: By Crop(Million Ha)

Source: Clive James, 2012 ISAAA

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26 MARCH 2002 – A LANDMARK

Govt. of India approved Mahyco’s Bt-cotton

for control of bollworms

India’s first transgenic crop

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India

Only one crop approved i.e. Bt cottonThree hybrids containing Cry1Ac gene

approved in 2002 and one in 2004

Six hybrids approved for northern states in 2005

62 hybrids approved for Kharif 2006

Three new events approved I.e.

i. Cry1Ac gene (event 1) by M/s J.K. Agri Seeds Ltd.

ii. Fusion genes (cry 1Ab+cry 1Ac) 'GFM by M/s Nath Seeds

iii. Stacked genes cry1Ac and cry1Ab by M/s MAHYCO

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Adoption of single and multiple gene Bt cotton hybrid 2002 to 2010-11

Source: Compiled by ISAAA, 2010-11

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Bt-COTTON IN INDIATable . 2: Rapid adoption from 2002 To 2012 (in Million)

YearTotal

cotton area in hectares

Bt-cotton area in hectares

% of cotton area occupied by Bt-cotton

2002 8.73 0.03 0.3

2003 7.67 0.09 1.2

2004 7.63 0.55 7.3

2005 8.92 1.27 14.2

2006 9.16 3.80 41.5

2007 9.40 6.20 66.0

2008 9.27 7.60 82.0

2009 9.64 8.40 87.0

2010 10.94 9.20 92.0

2011 11.80 10.08 93.0

2012 11.80 11.00 94.75

2013 11.80 11.20 94.91

CAGR (%) 4.06 63.86

Source: www.GEAC.com

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BT Cotton yield of Major cultivating state India

Source: ECONOMY SURVEY, 2011-12

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Source: ECONOMY SURVEY, 2011-12

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Do we need Bt- Brinjal

Brinjal is the poor men vegetable

India is the centre of origin of Brinjal.

Brinjal is susceptible to fruit and shoot borer (Leucinodes orbanalis) and Helicoverpa armigera.

These insect damage leads to 50 to 70% yield loss ($ 221millons)

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BT-BRINJAL

1. No study as to safety of Bt-Brinjal for

environment was made.

2. Bt- toxin(16-17mg/kg) is unsafe and harmful for

mammalian consumption.

3. Bt Brinjal produces protein in the vegetable that

induce resistance to antibiotics.

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Economic Impact on production and Indian Economy

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Table.3: Major impact on yield

Source: Carl E. Pray ,2009

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Table.4; Increased crop productivity

crop

1996-2011 additional production

(million tonnes)

2011 additional production

(million tonnes)

Soybeans 110.2 12.74

Maize 195.0 34.54

Cotton 15.85 2.48

Canola 6.55 0.44

Sugar beet 0.45 0.13

Source:Graham Brookes and Peter Barfoot 2013

Note: GM HT sugar beet only in the US and Canada since 2008

27Source: Graham Brookes and Peter Barfoot, 2012

Average yield gains GM IR crops (cotton and maize) 1996-2011

Notes: IRCB = Insect resistance to corn boring pests, IRCRW = Insect resistance to corn rootworm

India

38.0

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Export and import of cotton in India, 2001-2010

Source:

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2002-03 2004-05 2006-07

Bt Conventional Bt Conventional Bt Conventional

Insecticides (kg/acre) 2.07*** 4.17 2.05*** 4.19 1.22* 1.55

Yield (Kg/acre) 658.82*** 490.86 742.94*** 550.52 841.65*** 589.93

Net revenue (Rs/acre)

5294.22** 3132.99 4921.83*** 2152.08 7120.82*** 4181.26

Table.5: Comparison of insecticide use, yields, and net revenues between Bt andconventional cotton plots in India

*, **, *** Mean values are different from those of conventional cotton in the same year at a 10%, 5%, and 1% significance level, respectively

Arjunan Subramanian and Matin Qaim, 2008

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Particulars Argentina China India Mexico South Africa

Yield 33 19 34 11 65

Revenue 34 23 33 9 65

Pesticide cost

-47 -67 -41 -77 -58

Seed Cost 530 95 17 165 89

Profit 31 340 69 12 299

Table.6: Performance advantage of IR over conventional cotton expressedas a percentage.

Source: Terri Raney, Science direct,2006

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GM HT soybeans

GM HT maize

GM HT cotton

GM HT canola

GM IR maize

GM IR cotton

Total

US 10,422 1,402.9 804 149.2 4,778.9 2,232.7 19,789.7Argentina 7,815 46 28.6 n/a 226.8 67.9 8,184.3Brazil 2,868 n/a n/a n/a n/a 65.5 2,933.5Paraguay 459 n/a n/a n/a n/a n/a 459Canada 103.5 42 n/a 1,289 208.5 n/a 1,643South Africa 3.8 5.2 0.2 n/a 354.9 19.3 383.4China n/a n/a n/a n/a n/a 6,740.8 6,740.8India n/a n/a n/a n/a n/a 3,220.73 3,220.73Australia n/a n/a 5.2 n/a n/a 190.6 195.8Mexico 8.8 n/a 10.3 n/a n/a 65.9 85Philippines n/a 11.4 n/a n/a 33.2 n/a 44.6Romania 92.7 n/a n/a n/a n/a n/a 92.7Uruguay 42.4 n/a n/a n/a 2.7 n/a 45.1Spain n/a n/a n/a n/a 60.0 n/a 60Other EU n/a n/a n/a n/a 8.6 n/a 8.6Colombia n/a n/a n/a n/a n/a 12.6 12.6

n/a = not applicable.

Table 7. GM crop farm income benefits in selected countries, 1996-2007 ($ million).

Source: Graham Brookes and Peter Barfoot, 2012

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YearsCost Saving

(Net after cost of technology:

$/ha)

Net Increase in Gross margin

Increase in farm Income at a national level ($

millions)

Increase in national farm income as % of

farm level value of national production

2002 -12.42 82.66 3.69 0.26

2003 -16.2 209.85 20.98 0.47

2004 -13.56 193.36 96.68 1.86

2005 -22.25 255.96 332.74 5.26

2006 3.52 221.02 839.89 14.04

2007 26.41 356.85 2093.97 22.84

2008 24.28 256.73 1.790.16 24.27

2009 22.19 211.17 1754.96 23.47

2010 23.10 265.80 2498.53 24.26

2011 23.65 299.56 3220.73 22.05

Table.8:Farm level income impact of using GM IR cotton in India 2002-2010

Source: Graham Brookes and Peter Barfoot, 2012

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Country Area of

trait ('000

ha)

Yield

assumptio

n %

change

Base yield

(tonnes/ha

)

Farm level

price

($/tonne)

Cost of

technology

($/ha)

Impact on

costs, net

of cost of

technology

($/ha)

Change

in farm

income

($/ha)

Change in

farm income

at national

level

('000 $)

Production

impact

('000

tonnes)

US 2,585.2 +10 0.93 1,202 -46.95 -5.77 +106.02 +274,078 +240.4

China 3,800 +10 1.18 807.4 -48.07 +152.48 +248.08 +942,695 +449.9

South Africa

9.9 +24 0.692 1,172.0 -49.43 -31.23 +163.42 +1,617.8 +1.6

Australia 55.3 0 1.91 1,458 -251.3 +212.0 +212.09 +11,734.3 0

Mexico 60.0 +9.28 1.18 1088.7 -70.41 +20.49 +139.71 +8,382.1 +6.6

Argentina 162.3 +30 0.418 1,455 -37.85 -21.17 +161.31 +26,180.8 +20.3

India 5,868 +50 0.43 1,536.9 -55.29 -8.86 +321.57 +1,886,986 +1,261.6

Colombia 20.0 +9.28 0.95 1,900 -70.41 +20.49 +187.99 +3,749.8 +1.8

Brazil 358 +6.23 1.32 1,316.6 -43.94 +71.21 +135.54 +48,524 +29.4

Table.9: GM IR cotton, 2011.

Source: Graham Brookes and Peter Barfoot, 2012

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Economic impacts of GM crops on farmers

Suitability of the crop for local conditions

Climate

Pest and disease prevalence

Cost of weed management

Subsidies and incentives offered by governments or

corporations

Cost of seed

Availability of markets for the crop.

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GM crops-Pros

Improved resistance to pests and diseases.

Improved resistance to Herbicide

Production of more nutritious staple crops

Contribute to food security ,sustainability

Contributing to the alleviation of poverty and hunger

Increased crop productivity

Stability of production

Economic and social benefits

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GM CROPS- CONS

Human health

Environmental hazards

Effects on Non-Target organisms andplants

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HUMAN HEALTH Allergen and toxin

Antibiotic resistance

Unknown effects on human health

GM CROPS- CONS

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ENVIRONMENTAL HAZARDS

Growing of GM crops may lead to

monoculture

The creation of pest or herbicide

resistant GM crops could result in

superbugs or super weeds

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EFFECTS ON NON-TARGET ORGANISMS

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Some of Issue and Fact that Everyone should know

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GM contamination is a very serious risk for farmers and the nation. According to a survey by ASSOCHAM, the demand for organic food in India is estimated to be growing annually at 40%.Moreover, India is also ideally placed to meet the growing global demand for organic produce. Already India is the largest producer of organic cotton.

GM contamination is unacceptable to many countries. The discovery in May 2013 of GM wheat growing in US farms, years after field trials ended, has deeply worried wheat farmers. They recall the huge losses to US rice farmers and exporters when GM contamination of US long grain rice was detected in Europe in 2006. Protracted litigation forced Bayer CropScience to pay $ 750 million compensation.

Bt contamination of Indian organic cotton has been detected in Europe. Indian farmers do not have the financial capacity to litigate against large corporations.

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Do GM crops increase yield?

Has cotton yield increased in India due to Bt cotton?

Have GM crops increased global food security?

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To Feed a growing global population that may touch 9 billion by 2050.. The

world already produces enough food for 13 billion people, so the problem is not

of food production but of access to it by the poor.

The world’s largest GM crop adopters are USA, Brazil and Argentina. They

account for 76% of all land under GM. In the US, the percentage of food insecure

has risen from 12% in 1995 to 15% of the population in 2011.

In Brazil, the rate at which hunger is reducing has decreased. In Argentina

hunger has not decreased after the introduction of GM crops. In Paraguay,

where nearly 65% of the land is under GM, hunger has increased from 12.6% in

2004-06 to 25.5% in 2010-12.

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Case Study-1

Inequality and GM Crops: A Case–Study of Bt Cotton in India

Stephen Morse, Richard Bennett, and Yousouf Ismael

AgBioForum, 2007

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Table. 10 : Production and cost statistics for Bt and non–Bt plots of adopters and non–adopters.

Bt plots of adopters Non–Bt plots of non–adopters

2002 2003 2002 2003

Mean SD Mean SD Mean SD Mean SD

Yield (quintiles/acre) 7.67 3.16 8.16 2.94 4.15 2.53 4.49 2.69

Revenue (Rp/acre) 17,259 8,094 18,900 7,503 8,576 5,756 9,592 5,973

Cost (Rs/Acre)

Seed 1,423 617 1,356 373 417 112 415 137

Total fertilizer 876 591 976 850 892 592 967 731

Bollworm insecticide 487 798 314 330 517 491 450 474

Irrigation 55 74 90 157 30 54 45 74

Total labour 2,033 1,093 2,116 1,337 1,723 1,099 1,815 1,240

Total costs 4,736 2,074 4,852 2,589 3,622 1,948 3,636 2,303Gross margin (Rp/acre) 12,523 7,749 14,048 7,672 4,954 5,662 5,956 6,172

Sample size 38 51 45 50

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Case Study-2

Socio-Economic Impact of Bt Cotton — A

Case Study of Karnataka

V.R. Kiresur and Manjunath Ichangi

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Inputs

Bt cotton Non bt cotton

Small Farmers

Medium farmers

Large famers

Overall Small Farmers

Medium farmers

Large famers

Overall

Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value

1.Seed (kg) 3.36 3710 3.44 3721 3.36 3725 3.38 3718 2.5 2050 3.0 2555 3.5 3045 3.0 2550

2.Labour

a) Human labour

100 6005 100 6100 102.7 6135 101.3 6080 122 7415 124.5 7529 129 7665 125 7534

b) Bullock labour

14.0 4400 14.7 1345 15.6 4530 14.7 4425 13.3 4240 15.0 4320 15.5 4565 14.6 4375

c) Machine labour

6.5 1950 6.5 1950 7.5 2250 6.8 2050 6.5 1950 7.0 2100 7.5 2550 7.0 2200

3.FYM (toones)

6.4 2425 6.5 2456 6.7 2470 6.5 2350 6.5 2350 6.6 2456 7.0 2700 6.7 2502

4.Fertilizer (Kg)

243 2506 246 2515 247.8 2510 245.8 2510 265 2555 275 2610 276 2650 272 2605

5.PPC (Rs) - 4350 - 4412 - 4422 - 4394 - 6340 - 6377 - 6390 - 6369

Table.Input utilization pattern, cost incurred and yield realized by farmers in Bt and non-Bt cotton

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Contd…

Inputs

Bt cotton Non bt cotton

Small Farmers

Medium farmers

Large famers Overall Small

FarmersMedium farmers

Large famers Overall

Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value

6.Yield(quintal) 23.6 24 24.5 24 17.8 18.5 19 18.4

Gross returns(Rs) 66080 67200 68600 67284 49480 51800 53200 5193`

Net Returns(Rs) 30014 3080 31035 30618 11797 11912 11854 12189

Net returns per rupee of investment 1.83 1.84 1.82 1.83 1.31 1.33 1.28 1.31

Additional cost over non-Bt(Rs) -1617 -2495 -3781 -2631

Additional returns over non-Bt (Rs) 16600 15400 15400 15791

Additional net returns from Bt (Rs) 18217 17895 19181 18429

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CONCLUSION

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