Guillaume P. Gruère

Bt cotton and farmer suicides in India: an evidence-based assessment

Abstract Bt cotton is accused of being responsible for an increase of farmer suicides in India. In this article, we provide a comprehensive review of evidence on Bt cotton and farmer suicides. Available data show no evidence of a ‘resurgence’ of farmer suicides. Moreover, Bt cotton technology has been very effective overall in India. Nevertheless, in specific districts and years, Bt cotton may have indirectly contributed to farmer indebtedness, leading to suicides, but its failure was mainly the result of the context or environment in which it was planted.

Rejecting New Technology: The Case of Genetically Modified Wheat

Canada has stringent regulations covering the release of new wheat varieties, but the United States has virtually no regulations in this area. Monsanto Co. developed genetically modified (GM) spring wheat for North America, and made a commitment to the U.S. industry to release this new technology simultaneously in both Canada and the United States, or not at all. The Canadian regulatory bias against new varieties acted as a veto against GM wheat and caused Monsanto to shelve the technology in both countries in 2004. Substantial economic rents were foregone in North America due to the rejection of this new technology. Copyright 2006, Oxford University Press.

What Labelling Policy for Consumer Choice? The Case of Genetically Modified Food in Canada and Europe

Faced with divergent opinions among consumers on the use of genetically modified (GM) foods, Canada has adopted a voluntary labelling approach for non-GM foods, whereas the European Union has a mandatory labelling policy for GM foods. Interestingly, both labelling systems have resulted in very little, if any, additional consumer choice. Using an analytical model, we show that the coexistence of GM and non-GM products at the retail level depends on the labelling policy, consumer perceptions, and the type of product. Although voluntary labelling tends to favour the use of GM products, it is more likely to provide consumer choice.

International Approval and Labeling Regulations of Genetically Modified Food in Major Trading Countries

We review the approval and labeling regulations covering genetically modified (GM) foods in the United States, the European Union (EU), Japan, Canada, Australia, and New Zealand. We divide these countries into three groups according to their regulatory approach. At one extreme, the United States and Canada use pragmatic and science-based regulations, and at the other extreme the EU uses stringent and precautionary regulations. Finally, Japan and Australia/New Zealand have intermediate regulatory approaches. We argue that labeling requirements in importing nations have affected international trade, and that approval regulations are more likely than labeling regulations to be harmonized in the future.

The economic impact of transgenic crops in developing countries : a note on the methods

A vast literature has accumulated since crop varieties with transgenic resistance to insects and herbicide tolerance were released to farmers in 1996 and 1997. A comparatively minor segment of this literature consists of studies conducted by agricultural economists to measure the farm-level impact of transgenic crop varieties, the size and distribution of the economic benefits from adopting them and the implications for international trade. This paper focuses only on the applied economics literature about the impact of transgenic crop varieties in non-industrialised agricultural systems, with a focus on the methods. A number of studies have surveyed the findings for both industrialised and non-industrialised agriculture at various points in time, but surveys of methods are less common and most treat one aspect of economic impact. Clearly, the methods used in research influence the findings that are presented and what they mean. Three levels of impact analysis are considered: farm, industry and trade. We conclude that because the methods used present challenges and limitations, the few transgenic crop-trait combinations released in developing economies and the relatively brief time frame of most analyses, the results are promising but the balance sheet is mixed. Thus, the findings of current case studies should not be generalised to other locations, crops and traits.

International Trade and Welfare Effects of Biotechnology Innovations: GM Food Crops in Bangladesh, India, Indonesia, and the Philippines

Purpose – The chapter examines the international welfare effects of biotech crop adoption, based on a transversal literature review and a case study of the introduction of genetically modified (GM) food crops in Bangladesh, India, Indonesia, and the Philippines. Methodology/approach – The analysis is based on (a) a review of lessons from the applied economic literature and (b) simulations using an improved multimarket, multicountry, computable general equilibrium (CGE) model, calibrated with productivity hypotheses formulated with local scientists in the four Asian countries. Findings – Results from the analysis show that, in the absence of trade-related regulations, GM crop adoption generates economic gains for adopting countries and importing non-adopters, that domestic regulations at adopters and especially non-adopters can reduce these gains, and that import regulations in other countries can also affect gains for exporting adopters. The case study illustrates these conclusions, but it also shows that net importers will mostly benefit from adoption in their terms of trade, and that segregation of non-GM crops for export markets can be beneficial if it is not too costly. Research limitations/implications – The use of a CGE model allows for accounting for cross-sectoral effects, and for regulations affecting bilateral trade flows, but it also has a number of limitations. The model used here, like the ones used in the other papers in the literature, is static, based on an aggregated representation of the global economy (GTAP database), and assumes perfect competition. This means that the absolute results of each scenario may not perfectly represent the actual welfare effects engendered by the adoption of biotech crops. Still, what matters here is the comparison of the relative welfare effects across countries and scenarios. The simulations are also done ex-ante, so, even if the model here was calibrated with country-based data, the results do depend on hypothetical assumptions about the performance of the selected technologies. Originality/value of the paper – The chapter aims to illustrate the welfare effects generated by GM crops for adopters, non-adopters, in a segmented and regulated international market. Unlike other papers, the review section provides key transversal lessons from the literature, accounting for results from both partial equilibrium and CGE model studies. The empirical application focuses on four populous Asian countries that have been largely left out of the literature. The model used in the simulation presents a number of improvement from the CGE literature on GM crops, including partial adoption, factor-biased productivity shock in each adopting country, GM labeling regulations modeled as trade filters, and the inclusion of costly non-GM segregation as observed in the international market.

Reviewing South Africa's marketing and trade policies for genetically modified products

South Africa is unique in that it has commercialised genetically modified (GM) crops and has a functional biosafety system, which allows for trade in both GM and non-GM crops, despite being surrounded by countries banning the use of GM products. This paper analyses the past achievements and evolving changes in marketing and trade policies for GM products in South Africa. A quantitative analysis of South Africas GM imports and exports demonstrates the success of South Africas flexible regulatory system. Yet a review of recent reforms indicates a trend towards more rigid trade and marketing regulations of GM products. This paper suggests five policy recommendations to improve rather than rigidify regulations and allow South Africa to adapt to global changes, manage risks and take advantage of potentially promising new GM technologies.

National Trade Interests

The coexistence between, and segregation of, genetically modified (GM), non-GM and organic crop production in supply chains is at the heart of the debates around the use and/or importation of specific GM products in a growing number of countries (Carter and Gruere 2012; Gruere and Sengupta 2009a). In this setting, the key question for policy-makers is how to manage negative market externalities induced by the introduction or use of GM products (Golan and Kuchler 2002; Moschini and Lapan 2006). Field testing and/or producing a GM crop may generate unintentional movements of pollen or seed to non-GM crops or fields. Introducing a GM product in a market chain (whether from the farm or via imports) may result in accidental comingling affecting non-GM supply chains. In a larger setting, adopting or importing GM crops may taint the reputation of non-GM marketing chain actors. In each of these cases, non-GM marketing chain actors may suffer economic losses due to market share restrictions or price decline.

Revisiting the palm oil boom in South-East Asia: fuel versus food demand drivers.

In the past 30 years, palm oil production has increased ninefold, with almost all the growth occurring in Malaysia and Indonesia. This growth has been associated with extensive deforestation, with biofuels often named as the principal driver. However, other drivers have been less examined; in particular, restrictions on genetically modified food in Europe and on trans fats in many developed countries have led food companies to switch to using palm oil in production. This article uses a price analysis to examine the drivers of palm oil production growth during the 1980–2010 boom. Soya bean oil is used in the analysis as the leading vegetable oil, while crude oil represents the energy market; the prices of these oils, along with palm oil, are tested in vector autoregression (VAR) and vector error correction models. The two models consistently find that palm oil prices do not appear to respond to short-run fluctuations in crude oil prices. Rather, they are a function of lagged palm oil prices and current and lagged soya bean oil prices. Overall, the results indicate that while palm and soya bean oil markets have a potentially significant relationship, the crude oil market does not appear to have been an important driver of the palm oil boom.

Will They Stay or Will They Go? The Political Influence of GM-Averse Importing Companies on Biosafety Decision Makers in Africa

Presumed but unproven trade risks are considered a significant factor in the reluctance of African countries to use potentially beneficial genetically modified (GM) crops. We model a threat from an importer to a local policy maker announcing an upcoming confined field trial of a GM crop as a dynamic game of incomplete information and illustrate our analysis with a stochastic simulation. The results show that provided the cost of threatening is small, and the cost of going out of the country is significant, the importer will threaten to go out and may effectively lower the probability of commercializing a GM crop.