Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at...

Program for Biosafety Systems – http://pbs.ifpri.info/

“Experiences with Genetically Modified Crops, Socioeconomic Assessments,

Biosafety and Decision Making”

José Falck ZepedaSenior Research Fellow

International Food Policy Research Institute

Leader Policy Team for the Program for Biosafety Systems (IFPRI - PBS)

Photos: Bt/RR maize Isabela province, Northern Luzon, Philippines, 2012

Presentation made at USDA-FAS, Washington DC, February 25, 2014.


Content

• Background

• What we know

• Approaches –Brazil & Argentina

• Potential implications from SEC inclusion


Socioeconomic Considerations (SEC) Definition

• Slight paraphrase of International Association of Impact Assessment (IAIA)“All the issues of interest to humans that may be affected by an intervention or natural phenomena following a line of causality, that is, from cause to effect. The characterization of socioeconomics considerations may include all the potential ways by which people and communities interact with their socio-cultural, economic and biophysical surroundings and the impact that such intervention or causal agent may have on them.”

• Simplified version (author to be revealed someday…)"Socioeconomic assessment can include examination of a variety of social and economic factors with the objective to better understand the potential impacts of relevant interventions on people and communities."


The Netherlands Commission on Genetic Modification (COGEM 2009) proposal on SECs

Benefits to society – e.g. yield increase or food quality improvement

Economics and prosperity – such as increased employment and productivity

Health and welfare – for workers, the local population and consumers

Local and general food supply – these should remain at the same level or improve

Cultural heritage – if desired, specific elements of cultural heritage or local customs should be preserved

Freedom of choice – both consumers and producers should be able to choose between GMO and GMO-free products

Safety – in terms of bother personal and the environment

Biodiversity

Environmental quality


What drives SEC inclusion in decision making

• International agreements

• Regional considerations

• National laws and regulations

– National Biosafety Frameworks

– Implementing regulations, directives, administrative acts

• Stakeholder interests


Article 26.1 of the Cartagena Protocol on Biosafety1 . The Parties, in reaching a decision on import under

this Protocol or under its domestic measures implementing the Protocol,

may take into account,

consistent with their international obligations,

socio-economic considerations arising from the impact of living modified organisms on the conservation and

sustainable use of biological diversity,

especially with regard to the value of biological diversity to indigenous and local communities

• Applies to decision on import only, or

• National measures

• Voluntary – NOTmandatory

• Especially –not limited to - WTO

• Strictly a specific focus and line of causality

• Explicit impact indicator and emphasis on one target group


Assessments as tools/inputs for decision making

Biosafety assessments

Socio-Economic

Assessments

Decision Making

Biosafety regulatory processes are:

• Time and budget constrained

• Mandated to render a decision as an outcome

• Decisions and options tradeoffs


Socio-economics and biosafety & biotechnology decision making

BEFORE RELEASE

An impact assessment during the biosafety regulatory stage to decide on the approval of a technology needs to be ex ante

AFTER RELEASE

For monitoring purposes or for standard technology evaluation purposes this is a conventional ex-post assessment


What can a decision maker do with the results a socio-economic assessment?

ASSESSMENT OUTCOME

Negative Socio – Economic Assessment

due to institutional

issues

Biosafety renders

product to be “safe”

Not approve?

Require more information?

SEC

assessment

Approve after resolving

institutional issues?

DECISION MAKING

Biosafety

assessment


SEC and regulatory design and implementation issues

Issues Options

Type of inclusion? • No inclusion vs. Mandatory vs. Voluntary

Who? • Developer vs. dedicated government unit vs. third party experts

Scope? • Narrow interpretation article 26.1 • Narrow set of socio-economic issues • Broader set of assessments (SIA or SL)

Approach? • Concurrent but separate vs. Sequential vs. Embedded• Implementation entity

Assessment trigger? • Each submission vs. Event-by-event vs. class of events

When? • Laboratory/greenhouse vs. CFTs vs. Commercialization• For post release monitoring

How? • Will the assessment require a de novo study? • Choice of methods limited• Decision making rules and standards• Method integration, standards, tolerance to errors


2. What do we know about the socio-economic impact of GE technologies?


What do we know from the economic impact assessment literature to date?

• A review of 187 peer reviewed studies

• Examined studies with a focus on:

– Farmers, household and community

– Industry and markets

– Consumers

– TradeCitation: Smale, Melinda; Zambrano, Patricia; Gruère, Guillaume; Falck-Zepeda, José; Matuschke, Ira; Horna, Daniela; Nagarajan, Latha;

Yerramareddy, Indira; Jones, Hannah. 2009. Measuring the economic impacts of transgenic crops in developing agriculture during the first

decade: Approaches, findings, and future directions. (Food policy review 10) Washington, D.C.: International Food Policy Research Institute

(IFPRI) 107 pages


Food Policy Review 10 conclusions

• On average GM crops have a higher economic performance — averages do not reflect agro-climate, host cultivar, trait, and farmer variability

• Too few traits, too few cases/authors—generalizations should not be drawn yet...need more time to describe adoption

These conclusions are no different than those for most technologies released to date…


Food Policy Review 10 conclusions

• Address cross cutting issues for further study including impacts of poverty, gender, public health, generational, cross links with environmental and health issues

• Develop improved methods and multi-disciplinary collaborations to examine broader issues


Black Sigatoka Resistant Bananas in Uganda

Consider irreversible and reversible cost and benefits

With one year delay, forego potential annual (social) benefits of +/- US$200 million

A GM banana with tangible benefits to consumers increases their acceptance for 58% of the population

Photos credits: Kikulwe 2009 and Edmeades 2008

Kikulwe, E.M., E. Birol, J. Wesseler, J. Falck-Zepeda. A

latent class approach to investigating demand for genetically

modified banana in Uganda Agricultural Economics 2011.

http://www.gmo-compass.org/features/zoomimage.php?image=/data/imagescontent/grocery_shopping/017_banana-blacksigatoka_zoom.jpg&width=500&height=332

http://www.gmo-compass.org/features/zoomimage.php?image=/data/imagescontent/grocery_shopping/017_banana-blacksigatoka_zoom.jpg&width=500&height=332


Bt cotton in Uganda Positive yield impacts and

net benefits

Smaller rate of return probably explained due to low base yields Need to improve overall

cotton productivity

Probability of a negative return can be as high as 38% with a technology fee as charged elsewhere

Photos credit: © Horna 2009

Horna, et al. (2013) . “Economic Considerations in the Approval

Process of GM Cotton in Uganda: Designing an Ex-ante

Assessment to Support Decision-making. “IFPRI Monoograph


Bt maize in the Philippines

• Growing Bt maize significantly increases profits and yields

• Significant insecticide use reductions

• Adopters tend to be– Cultivate larger areas

– Use hired labor

– More educated

– have more positive perceptions of current and future status

Change in economic surplus

(mill pesos)

Producer Surplus 7906

Seed Innovator 703

Total Surplus 8609

Producer Share (%) 92

Innovator Share (%) 8

Bt maize studies in Philippines led by Dr. Jose Yorobe Jr. with 466 farmers in

16 villages Isabela Province, Luzon, South Cotabato Province, Mindanao


Bt/RR maize in Honduras

Excellent target pest control

Bt yield advantage 893-1136 Kg ha-1 yield (24-33%)

Bt maize yields preferred even by risk averse producers

100% higher seed cost than conventional hybrid

Institutional issues important

Photos credit: © Sanders and Trabanino 2008

Source: Falck-Zepeda, J., A. Sanders, C. Rogelio Trabanino, & R. Batallas-

Huacon. Caught Between Scylla and Charybdis: Impact Estimation Issues from

the Early Adoption of GM Maize in Honduras. AgBioForum, 15(2), 138-151.

Available on the World Wide Web: http://www.agbioforum.org.


A meta-analysis paper by Areal, Riesgo and Rodriguez-Cerezo (2012)

“GM crops perform better than their conventional counterparts in agronomic and economic (gross margin) terms”

“GM crops tend to perform better in developing countries than in developed countries, with Bt cotton being the most profitable crop grown”


3. How are socioeconomics included in decision making ….or not…


In Brazil, Law 11.105, of 2005, an several normative resolutions from CTNBio –

National Technical Commision on Biosafety regulate the processes for the evaluation,

import authorization, transport, research and deliberate release (limited or

commerical) of LMOs

CNBS

CTNBio

ANVISA (Health)IBAMA (Environment)

Proponent(legal entity)

CIBio

Ministries of Health, Agriculture,

and EnvironmentSociety

Source: Paulo Paes de Andrade, 2012

The case of Brazil


Comercialization

Risk Assessment

Biological Aspects

Risk

management

CTNBioMultidisciplinary

body with 54 members

Publicconsultation

Federal monitoring entities –Ministries Agriculture and Health

CIBiosResearch institutions,

universities, private and public companies

CNBS11 Ministries

ResearchProponent

Risk

communication

Source: Paulo

Paes de Andrade,

2012


Issue Brazil

Type of inclusion Only if an SEC identified during the scientific biosafety assessment

Scope / What Not clear / open

Who • Three separate bodies Institutional Biosafety Committee, CTNBio = biosafety assessments, CNBS (National Biosafety Council): decision making body.

• CNBS commissions a third party

When Commercialization

Comments • Rationale for dual bodies was to separate technical assessment from the “political” decision making

• Mexico has a similar approach

Source: based on Falck Zepeda, Wesseler and Smyth, 2010 and Pray, 2010


Permits for GM crops in Brazil (cultivation,

importation, export)

Source: Paulo Paes de Andrade, 2012

Num

ber

of app

roved e

vents

Year of approval

Old regulatory framework New regulatory framework

Beans

Cotton

Maize

Soybeans

Simple majority voting


Argentina – Key regulatory steps

• CONABIA: Evaluates agricultural and environmental impacts through trials

• SENASA: Food safety evaluation

• DNMA: Evaluates potential commercial impact focusing on export markets

• CONABIA makes final report


Regulatory activity

• Number of evaluated applications 1991-2011

– Soybeans: 703

– Cotton: 123

• Basic biosafety measures

– Isolation distances• Soybeans: 3-30 meters

• Cotton: 800 meters

– Year post release monitoring• Soybean: 1

• Cotton: 3


Issue Argentina

Type of inclusion Mandatory

Scope / What? Economic impacts on trade and/orcompetitiveness. Other impacts being considered.

Who? Minister of Finance and Trade – special unit

When? Commercialization

Comments For a while..policy of only approving those already approved in trade sensitive markets

Source: based on Falck Zepeda, Wesseler and Smyth, 2010 and Pray, 2010


3. Potential implications

Photos: KARI –Kenya glasshouse, KARI-Thika confined field trial of Bt cotton, IRRI conventional rice trials Los Baños, Philippines


Potential implications from SEC inclusion into decision making

• Gain more and/or better information about technology impacts for decision making - may support valuable technologies

• Balance gains in information, additional costs & effort, and impacts on innovation

• Potential for introducing uncertainty that can lead to an unworkable system if rules and standards are not clear


Potential implications from SEC inclusion into decision making

• Cost of compliance costs will increase

• Potential regulatory delays

– Reduction in the number of technologies especially those released by the public sector and crops/traits of a public good nature

– Some public sector institutions may not be able to deploy technologies due to fixed costs necessary to enter market


Contrasting baseline net benefit levels from GE crop adoption with higher costs in the Philippines

Notes: 1) Source: Bayer, Norton and Falck Zepeda (2008), 2) Baseline values for each technology expressed in millions US$ using a discount rate for

the estimation of Net Present Value = 5%, 3) Change in Net benefits defined as the total benefits estimated using the economic surplus minus total

regulatory costs.


Contrasting benefit levels from GE crop adoption with larger regulatory lags in the Philippines

Notes: 1) Source: Bayer, Norton and Falck Zepeda (2008), 2) Baseline values for each technology expressed in millions US$ using a discount rate for

the estimation of Net Present Value = 5%, 3) Change in Net benefits defined as the total benefits estimated using the economic surplus minus total

regulatory costs.


Risk impacts and the stream of benefits

-120

-100

-80

-60

-40

-20

0

20

40

1 2 3 4 5 6 7 8

Valu

es

in M

illio

ns

Years after the onset of benefits5% - 95% +/- 1 Std. Dev. Mean

• Regulatory delays have a negative

impact on returns to investments

• With a 20% rate of return, expect

year 6 of regulatory delay to be the

trigger point for suspending

investment in new R&D

• Investment risk increases over time

• Likelihood that investments will not

be made increases with no

information about probability of

success

Source: Smyth, McDonald and Falck-Zepeda, 2013


Summarizing

• Socioeconomic consideration inclusion in decision making is not mandatory

• Inclusion of socioeconomics in decision making

– Can have positive and negative impacts linked significantly to implementation

– Increase the cost of compliance

– Time delays are significant

– Investment risk can increase

• GM crop adoption impacts have been mostly positive with some caveats

• There are feasible approaches for implementation but need to focus on options and processes

• Prudent for countries to consider carefully whether the gains in information and assurance are actually outweighed by the cost and other implications from the inclusion of socioeconomics


José Benjamin Falck-Zepeda, Ph.D.Senior Research Fellow / Leader Policy Team Program for

Biosafety SystemsIFPRI

2033 K Street NWWashington, DC 20006-1002

[email protected]

Brief bio/pubs: http://www.ifpri.org/staffprofile/jose-falck-zepedaBlog: http://socioeconomicbiosafety.wordpress.com/

Follow me on Twitter: @josefalck

mailto:[email protected]

http://www.ifpri.org/staffprofile/jose-falck-zepeda

http://socioeconomicbiosafety.wordpress.com/

Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at...

Technology

Transcript of Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at...