Publications: ISAAA Briefs
No. 8 - 1998
Chair, ISAAA Board of Directors
Review of Transgenic Crop Products Currently Approved for Commercialization
Benefits from Transgenic Crops
Value of Global Transgenic Crop Market, 1995 to 1998
Global Potential for the Principal Transgenic Crops
Potential Benefits for Developing Countries
Current and Future Developments that Impact on Transgenic Crops
Future Prospects and Global Food Security
This publication characterizes the adoption of commercialized transgenic crops globally in 1998, excluding China. A database was developed for transgenic crops globally. The data base is analyzed by country, crop and trait, and the economic benefits to growers was estimated for selected transgenic crops that were planted in 1996 and 1997 in the USA and Canada. Data on the current global status of commercialized transgenic crops is complemented with a discussion of several key issues, including global food security and the potential benefits for developing countries in a rapidly evolving global market.
Between 1996 and 1998, eight countries, 5 industrial and 3 developing, have contributed to more than a fifteen fold increase in the global area of transgenic crops. Adoption rates for transgenic crops are some of the highest for new technologies by agricultural industry standards. High adoption rates reflect grower satisfaction with the products that offer significant benefits ranging from more flexible crop management, higher productivity and a safer environment through decreased use of conventional pesticides, which collectively contribute to a more sustainable agriculture. In 1998, the global area of transgenic crops increased by 16.8 million hectares to 27.8 million hectares, from 11.0 million hectares in 1997. Five principal transgenic crops were grown in eight countries in 1998, three of which, Spain, France and South Africa, grew transgenic crops for the first time in 1998. Data for China has not been included in the global database because only tentative estimates were available which suggest that <100,000 hectares of transgenic crops were grown in 1998, representing <1 % of global transgenic area, with Bt cotton being the principal crop.
The countries listed in descending order of transgenic crop area on a global basis in 1998 are: USA 20.5 million hectares representing 74 % of the global area, Argentina with 4.3 million hectares equivalent to 15 % of global area; Canada 2.8 million hectares representing 10 %; Australia with approximately 0.1 million hectares equivalent to 1 % and finally Mexico, Spain, France and South Africa each with <0.1 million hectares, equivalent to less than 1 % of the global area of transgenic crops in 1998. The proportion of transgenic crops grown in industrial countries was 84 %, about the same as 1997 (86 %) with 16 % grown in the developing countries, with most of that area in Argentina, and the balance in Mexico and South Africa. As in 1997, the largest increase in transgenic crops in 1998 occurred in the USA (12.4 million hectares) where there was a 2.5 fold increase, followed by Argentina (2.9 million hectares) with a 3.0 fold increase, and Canada (1.5 million hectares) with a 2.1 fold increase. USA continued to be the principal grower of transgenic crops in 1998 and its share of global area was the same (74 %) in 1997 and 1998. Argentina's transgenic crop area increase was the largest relative change, increasing 3.0 fold from 1.4 million hectares in 1997 to 4.3 million hectares in 1998; thus Argentina's global share of transgenic crop area increased from 13 % of global area in 1997 to 15 % in 1998. Canada's share of global transgenic crop area decreased marginally from 12 % in 1997 to 10 % of global area in 1998.
The five principal transgenic crops grown in 1998 were, in descending order of area, soybean, corn/maize, cotton, canola/rapeseed, and potato. Transgenic soybean and corn continued to be ranked first and second in 1998, accounting for 52 % and 30 % of global transgenic area, respectively. Cotton and canola shared third ranking position in 1998 each occupying 9 % of global area. The relative ranking of the principal transgenic traits were the same in 1997 and 1998, with herbicide tolerance being by far the highest, increasing from 63 % in 1997 to 71 % in 1998. Insect resistant crops decreased from 36 % in 1997 to 28 % in 1998. Stacked genes for insect resistance and herbicide tolerance increased from <0.1 % in 1997 (<0.1 million hectares) to 1 % or 0.3 million hectares in 1998 with quality traits occupying less than 1 % and <0.1 million hectares in both 1997 and 1998.
In reviewing the shift in global share of transgenic crops for the respective countries, crops and traits, the major changes between 1997 and 1998 were related to the following trends: growth in area of transgenic crops between 1997 and 1998 in the industrial countries continued to be significant and almost 5 times greater than in developing countries (13.9 million hectares versus 2.9 million hectares); in terms of crops, soybean contributed the most (56 %) to global growth of transgenic crops, equivalent to 9.4 million hectares between 1997 and 1998, followed by corn at 30 % (5.1 million hectares), canola at 7 % (1.2 million hectares) and cotton at 6 % (1.1 million hectares). There were three noteworthy developments in terms of traits, herbicide tolerance contributed the most (77 % or 12.9 million hectares) to global growth, and insect resistance contributed 22 % equivalent to 3.7 million hectares; the multiple or stacked traits of insect resistance and herbicide tolerance increased by 0.2 million hectares in 1998 representing 1 % of global area with significant prospects for further growth in future. Of the 5 major transgenic crops grown in 8 countries in 1998, the two principal crops of soybean and corn, represented 82 % of the global transgenic area. In 1998 herbicide tolerant soybean was the most dominant transgenic crop (52 % of global transgenic area) followed by insect resistant corn (24 %), herbicide tolerant canola (9 %), and insect resistant/herbicide tolerant cotton at 9 % and herbicide tolerant corn at 6 %. The three major factors that influenced the change in absolute area of transgenic crops between 1997 and 1998 and the relative global share of different countries, crops and traits were: firstly, the enormous increase in herbicide tolerant soybean in the USA from 3.6 million hectares in 1997 to 10.2 million hectares in 1998 (equivalent to 36 % of the US national soybean area) coupled with a similar increase in herbicide tolerant soybean in Argentina from 1.4 million hectares in 1997 to 4.3 million hectares in 1998 and equivalent to >60 % of the Argentinean national soybean area; secondly, the significant increase of insect resistant corn in the USA from 2.8 million hectares in 1997 to 6.5 million hectares in 1998, equivalent to 22 % of the US national corn area in 1998; and thirdly, the large increase of herbicide tolerant canola in Canada from 1.2 million hectares in 1997 to 2.4 million hectares in 1998, equivalent to 50 % of the Canadian canola area. The combined effect of these three factors resulted in a global area in 1998 that was 16.8 million hectares higher and 2.5 fold greater than 1997. It is noteworthy that 1998 was the first year for a commercialized transgenic crop to be grown in the countries of the European Union. Estimates suggest that introductory quantities of insect resistant maize were grown primarily in Spain (20,000 hectares) and France (2,000 hectares); this is judged to be potentially a very significant development because it could have important implications for the further adoption of transgenics in countries of the European Union.
Estimated Benefits from Transgenic Crops
More information on the benefits associated with transgenic crops is becoming available following the substantial area of transgenic crops planted in the USA and Canada in 1997. Multiple benefits have been reported by growers for selected transgenic crops; these include more flexibility in terms of crop management (particularly important for herbicide tolerant crops), decreased dependency on conventional insecticides and herbicides, higher yields and cleaner and higher grade of grain/end product.
As expected, net economic returns to the grower vary by year, by crop product and by location, depending on factors such as level of infestation of the targeted pest, the epidemic level of a disease or the weed density. For the USA in 1996, economic benefits to growers from the following transgenic crops were estimated conservatively at $128 million for Bt cotton, $19 million for Bt corn, and $12 million for herbicide tolerant soybean, for a collective national benefit of $159 million. Similarly, in 1997, economic benefits were estimated at $119 million for Bt corn, $109 million for herbicide tolerant soybean, $133 million for Bt cotton, and $5 million for herbicide tolerant cotton and <$1 million for Bt potato, for a collective national benefit in the USA of $366 million. In Canada, benefits at a national level, due to the use of herbicide tolerant canola, were estimated at $5 million in 1996, and $48 million in 1997, plus $5 million for Bt corn for a total of $53 million. Thus, in 1996 and 1997, selected transgenic crops in the USA and Canada resulted in economic benefits to growers, conservatively estimated at $583 million.
Future Global Markets and Global Food Security
Global sales of transgenic crop products have grown rapidly during the period 1995 to 1998. Global sales from transgenic crops were estimated at $75 million in 1995; sales tripled in 1996 and again in 1997 to reach $235 million and $670 million respectively, and dnoubled in 1998 to reach an estimated value of between $1.2 to $1.5 billion. Thus, revenues for transgenic crops have increased by approximately twenty fold in the four year period 1995 to 1998. The global market for transgenic crops is projected to increase to $3 billion or more in 2000, to $8 billion in 2005, and to $25 billion in 2010.
The number of countries growing transgenic crops has increased from 1 in 1992, to 6 in 1996, to 9 in 1998, and is expected to continue to grow to the year 2000 and beyond. In 1999, countries in North and Latin America already growing transgenic crops are expected to significantly expand the area of current products and also to introduce new single and multiple trait products and Brazil will probably grow transgenic crops for the first time in 1999. Similarly, China is expected to expand its transgenic crop area aggressively, with growth and diversification continuing in Australia and South Africa. Whereas public acceptance, including labeling of foods derived from genetically modified plants, will continue to be dominant issues that will impact on adoption of transgenic crops in countries of the European Union, the initial approval of several products in 1998 was encouraging. However, more recent developments have delayed plans for early expansion. India and several countries in Eastern Europe have transgenic crops that are ready for commercialization. As expansion of transgenic crops continues, a shift will occur from the current generation of "input" agronomic traits to the next generation of "output" quality traits, which will result in improved and specialized nutritional food and feed products that will satisfy a high-value-added market; this will significantly affect the value of the global transgenic crop market and also broaden the beneficiary profile from growers and consumers to food, feed and fiber processors.
Biotechnology-driven consolidations in the form of acquisitions, mergers and alliances continue to be a dominant feature of the biotechnology industry. In the last three years alone, corporations commercializing transgenic crops and involved with seeds, agricultural chemicals, and the life sciences have been engaged in more than 25 major acquisitions and alliances valued at >$15 billion. This consolidation is expected to continue. Genomics is pivotal to the growth of the industry and is catalyzing a new generation of alliances, acquisitions and mergers.
Transgenic crops are proprietary, developed almost exclusively by the private sector in the industrial countries, with the majority of the global transgenic crop area to-date grown in countries of the North. However, it is important to note that developing countries such as China played a pioneering role by being the first country to introduce a commercialized transgenic crop in the early 1990s. Argentina is a global leader in the accelerated adoption of transgenic crops with significant expansion imminent in Mexico and South Africa. Given that the food gap of many developing countries, including China, is expected to more than double in the next 25 years and that some developing countries like Argentina can meet some of those needs through exports, the long term potential and importance of transgenic crops for developing countries is evident. There are three considerations that underpin the strategic importance of transgenic crops for developing countries.
Firstly, developing countries have potentially more to gain from transgenic crops than industrial countries because the area of almost all crops is far greater in developing countries than in the USA and Canada where adoption has been highest to date. For example, there is 145 times more rice, five times more cotton, three times more maize and wheat and as much soybean grown in the developing countries compared with the USA and Canada. This excludes important staples such as cassava and sweet potato that are grown almost exclusively in the developing countries and have the potential to benefit significantly from biotechnology.
Secondly, yields of almost all crops are significantly lower in developing than industrial countries; for example, there is almost a threefold difference in maize yields between the USA and developing countries and almost a twofold difference in rice yields. Yields are low in developing countries for many reasons but one of the principal causes is that crops in developing countries suffer much more from biotic stresses, due to pests, weeds and diseases, for which current transgenic crops already offer improved protection. Thus, the potential gain for developing countries from improved control of biotic stresses is relatively greater than for industrial countries.
Thirdly, and most importantly, it is in the developing countries, not the industrial countries, where 800 million people suffer from malnutrition today and where transgenic crops could increase crop productivity and contribute to the alleviation of hunger and poverty which are inextricably linked. During the next decade an increase in productivity of 10 to 25 percent from transgenic crops is both feasible and realistic. This will be a critical and significant contribution to global food security, more nutritious food and feed, and to a safer environment. Transgenic crops have much to offer developing countries and should be an essential component of a global food security strategy that integrates conventional and biotechnology crop improvement applications to produce more food where the need is greatest, and where the welfare value of food is the highest. Denial of the new technologies to the poor is synonymous to condemning them to continued suffering from malnutrition which eventually may deny the poorest of the poor their right to survival.
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