More specifically the use of transgenic crops results in:

• more sustainable and resource-efficient crop management practices that require less energy and fuel and conserve natural resources.  

• more effective control of insect pests and weeds.

• a reduction in the overall amount of pesticides used in crop production, which impacts positively on biodiversity, protects predators and non target organisms, and the environment.

• less dependency on conventional pesticides that can be a health hazard to producers and consumers; the potential health benefits associated with fewer pesticide poisonings from Bt cotton in China is an important finding, with significant implications for other developing countries where small farmers in particular may be at similar risk from heavy and over-use of conventional pesticides.

• Bt maize which has reduced levels of the fumonisin mycotoxin in maize grain which provides safer and healthier food and feed products.

• greater operational flexibility in timing of herbicide and insecticide applications.

• conservation of soil moisture, structure, nutrients and control of soil erosion through no or low-tillage practices as well as improved quality of ground and surface water with less pesticide residues.

• improved pest control, lower cost of production  and improved yields all contribute to a greater economic advantage to farmers who utilize the technology to develop more sustainable farming systems.

Economic Advantages of GM Crops

There is an increasing body of compelling evidence that transgenic crops are delivering significant economic benefits and case studies are documented in this overview. The “global” economic advantage to farmers deploying herbicide tolerant (HT) soybean, Bt cotton, HT canola and Bt corn is estimated to be of the order of  $ 700 million in 1999, equally shared between developing and industrial countries; of the $710 million, approximately 60 % is derived from HT soybean, 30 % from Bt cotton, and 10 % from HT canola. The estimate of $ 710 million is intended to provide an order of magnitude assessment of the direct economic advantage to 2 million small and large farmers who planted 39.9 million hectares of transgenic crops in 1999; in addition to these direct economic advantages that farmers derive from transgenic crops, several studies have confirmed that there are also significant additional indirect benefits to others in society. For crops such as herbicide tolerant soybean, these indirect benefits to consumers globally can be of the same order of magnitude as the direct economic advantage of $ 700 million to farmers in 1999. Thus, the “global” direct and indirect economic advantage associated with the 39.9 million hectares of transgenic crops in 1999 is likely to be of the order of $ 1 billion or more. There is no evidence to support the perception of the critics of biotechnology that the transnational developers of transgenic crops are the sole or major beneficiaries from transgenic crops. On the contrary, studies to-date confirm that not only are farmers significant beneficiaries, but they are usually the major beneficiaries, taking on average from one-third to one-half of the total economic surplus generated by transgenic crops.

Finally, an important finding of the China Bt cotton study was that the smallest farmers, those farming less than 1 hectare, gained more than twice as much income per unit of land ($ 400 per hectare) from Bt cotton, as the larger farmers ($ 185 per hectare). This finding is important from an equity/distribution viewpoint and is deserving of further investigation for Bt cotton and other transgenic crops that offer promise to small resource poor farmers. It also has important implications in relation to the claim often made by critics of transgenic crops that they are inappropriate for small farmers. Indeed, by far the largest benefits reported to-date from the studies reviewed here have been for small farmers who can least afford the loss in yield due to pests, and stand to gain the most from increases in income and suffer less health hazards resulting from fewer applications of conventional insecticide.

The Future

An estimated 3.5 million farmers grew transgenic crops in 2000 and derived multiple benefits that included significant agronomic, environmental, health and economic advantages. In 2001 the number of farmers planting GM crops is expected to grow substantially to 5 million or more. Global area planted to transgenic crops is expected to continue to grow by 10% or more in 2001 despite the unprecedented high percentage of the principal crops already planted to transgenics in the USA, Argentina, Canada and China. In 2001, these top four countries are expected to report a further significant increase in the area of transgenic crops. The other ten countries growing transgenic crops in 2000 are expected to report modest growth in GM crop area, except France and Germany, which will probably continue to grow a small token area of Bt maize. South Africa is expected to continue to diversify and expand its portfolio of transgenic crops, with Australia approving and commercializing more traits in cotton. Indonesia will commercialize Bt cotton for the first time. India is progressing towards approval of Bt cotton which could occur in early 2002. The commercialization of herbicide tolerant soybean in Brazil will be dependent on resolving the outstanding issues between the Ministries of Agriculture, Environment and Justice. The commercialization of GM crops in India and Brazil will represent a watershed for developing countries in that the three most populous countries in Asia – China, India, and Indonesia with 2.5 billion people, as well as the three major economies of Latin America – Argentina, Mexico and Brazil, plus South Africa will then all be commercializing and benefiting from transgenic crops.

The issue that will modulate adoption of specific products in some countries in 2001 will be public acceptance, which drives market demand, regulation and commodity prices. These issues will be the factors that will impact on commercial planting of transgenic crops and consumption of genetically modified derived foods in countries of the European Union. However, progress is expected in the near- to mid-term in the countries of Eastern Europe which have advanced field tests in progress. Several countries in the developing world are expected to proceed with field trials of Bt cotton, which has already delivered substantial benefits to both small and large farmers in several countries, notably China where approximately 3 million small farmers derived significant benefits in 2000.

The shift from the current generation of “input” agronomic traits to the next generation of “output” quality traits, is expected to proceed slowly and will be modulated by national regulations and possibly the next round of negotiations at the World Trade Organization (WTO). With the acceptance of the first “quality” products, which will improve the nutritional value of food and feed products, significant value will be added to the GM crop market and it should provide a stimulus to de-commoditize grain and oil seed markets. This shift will not only serve to significantly increase  the value of the global transgenic crop market but will also broaden the beneficiary profile from growers to processors and consumers. Food products derived from transgenic crops that are healthier and more nutritious could impact on public acceptance, particularly in Europe.

Significant progress has been made in the first five-year period 1996 to 2000 with an accumulated area of 125 million hectares of transgenic crops planted in 15 industrial and developing countries. As new and novel products with input and output traits will become available for commercialization in the next five years, it is critical that these products be deployed in an integrated strategy in which both conventional and biotechnology applications are applied to attain the challenging goal of global food security. Adoption of such a strategy will allow society to continue to benefit from the vital contributions that both conventional and modern plant breeding offer. Biotechnology can play a critical role in achieving food security in the developing world in countries such as China, which has assigned high priority and a strategic value to biotechnology, and was the first country in the world to commercialize transgenic crops in the early 1990s. The experience of China, where 3.0 million small farmers benefited from planting Bt cotton in 2000, Argentina and South Africa should be shared with other countries in the developing world which face the same challenges.

Governments, supported by the global scientific and international development community, must ensure continued safe and effective testing and introduction of transgenic crops and implement regulatory programs that inspire public confidence. Leadership at the international level must be exerted by the international scientific community and development institutions to stimulate discussion and to share knowledge on transgenic crops with society. The public should be well informed and engaged in a dialog about the impact of the technology on the environment, food safety, sustainability and global food security. Societies in food surplus countries must ensure that access to biotechnology is not denied or delayed to developing countries seeking to access the new technologies in their quest for food security. After all, the most compelling case for biotechnology, more specifically transgenic crops, is their potential vital contribution to global food security and the alleviation of hunger in the Third World. In summary, we must ensure that society will continue to benefit from the vital contribution that plant breeding offers, using both conventional and biotechnology tools, because improved crop varieties are, and will continue to be the most cost-effective, environmentally safe, and sustainable way to ensure global food security in the future.

Shortly before this review went to press, two major events of global significance impacted on our continuing ability as a society to alleviate poverty and malnutrition. Following the terrorist attacks in the US on 11 September 2001, the World Bank predicted that poverty would increase with millions more people condemned to poverty in 2002. More specifically, the Bank predicts that global poverty will increase by 10 million more people in 2002. Developing country growth rates could be as low as 2.9% in 2001 compared with 5.5% in 2000. For 2002, lowered growth rates for developing countries in the range of 3.5 - 3.8 percent are projected, compared with the 4.3 percent prediction made before 11 September. Africa is expected to suffer most of the economic damage from the continued economic slowdown of industrial countries with an additional 2 million Africans surviving on less than $1 a day. Africa is judged to be particularly vulnerable because many African nations do not have the means to stabilize their economies when agricultural commodity prices, on which they are dependent, fall. Consequently “farmers, rural laborers, and others tied to agriculture will bear a major portion of the burden.” The Bank recommended that donor countries increase aid, reduce trade barriers for developing countries, and urged the donor community to coordinate its economic reform policies.

The Potential Role of the World Trade Organization (WTO)

The other major global event that will impact more directly on the contribution of transgenic crops to the alleviation of poverty and hunger in the developing countries is the World Trade Organization Meeting held in Doha, Qatar, 9 to 13 November 2001, with 142 members in attendance. It is noteworthy that China, a world leader in transgenic crops, was admitted as a member of WTO on 10 November 2001. China’s membership of WTO has many significant implications for its own future strategy on GM crops, but could also be pivotal for other developing and industrial countries committed to utilizing GM crops to achieve global food, feed and fiber security. Unlike the last WTO meeting in Seattle, this time the world’s major trading partners including the US and Europe have had pre-meeting exchanges to discuss a draft of a new trade agreement that addresses trade liberalization in agriculture and textiles which comprise 70% of exports from developing countries; the TRIPS agreement (Trade Related aspects of Intellectual Property rights) is also being reviewed, albeit in the context of public health and pharmaceuticals, but there may be some important implications for agriculture. This represents significant progress which brings hope to many developing countries which have suffered under the terms of the Uruguay round concluded in 1994.

WTO is a key international organization that can ensure that GM crops are accessible to those developing countries that seek to use them to alleviate poverty and hunger and achieve food security. In the new round of trade talks WTO should address the key issues that would facilitate the implementation of the principal recommendation of the well-received 2001 UNDP Human Development Report  -  to utilize biotechnology and information technology to alleviate poverty in developing countries. More specifically WTO can address several critical issues that impact on developing countries seeking to utilize biotechnology to achieve food security. The most urgent and important issues for WTO to address and remedy are:

• Liberalization of agricultural trade. Abolishing all trade barriers could increase global income by $ 2.8 trillion over the next decade, with well over half of the benefits going to the poor. The World Bank has predicted that global trade liberalization could reduce the 1.3 billion people suffering from poverty today by 300 million to 1.0 billion by 2015. The removal or reduction of trade barriers in agriculture is assigned high priority by the US and developing countries. However, the European and Japanese continue to oppose freer trade in agriculture, particularly export subsidies, and are concerned that environmental issues are not receiving the attention they deserve.  Some observers interpret the European position on the environment as an indirect way of re-introducing protection policies for agriculture.

• The establishment of an exemplary advisory body to provide direction and leadership in the implementation of WTO’s policy of basing all its decisions, re the use and transfer of transgenic material, on scientific fact and objective evidence – this is in stark contrast to the subjective decision-making of the Biosafety Protocol which requires no scientific justification for invoking the precautionary principle. Applying the precautionary principle to delay or deny access to transgenic crops to developing countries that seek to use them for food security clearly will increase rather than decrease the food security risk to the poor, hungry and malnourished in developing countries. The establishment of an advisory body by the WTO would seem appropriate at this time, particularly to align and rationalize decisions vis-à-vis the contradictions in the Biosafety Protocol re the use and transfer of transgenic material.

• Overseeing implementation of a TRIPS agreement that is equitable to all parties. The current WTO agreement on intellectual property rights (TRIPS) negotiated during the Uruguay round is a key issue and impacts directly on the deployment of transgenic crops in developing countries. The context of the current discussions on TRIPS will be in relation to pharmaceuticals and public health, however, there could be some important implications for agriculture. The US is reluctant to soften the TRIPS requirements but a group of developing countries, including South Africa, Brazil, and India are seeking an exemption to TRIPS for public health initiatives such as the control of AIDS. The renegotiated agreement on TRIPS could  have implications for the ease of access, deployment and trading of transgenic crops for developing countries, and the views of China as a new member and a lead country in GM crops could be pivotal.

As this review went to press, the latest and encouraging news from WTO, was that members had reached consensus on the Doha Development Agenda, with Africa in particular welcoming the agreement because of the potential for more open markets for exports. The most difficult issue to resolve was the EU farm subsidies which the EU agreed to phase out, provided that it does not “prejudice the outcome” of the negotiations. However, some developing countries voiced concern that the EU may use environmental restrictions to preclude the importation of GM products. Reaching a consensus on freer trade was very important because it will provide WTO with the necessary solidarity amongst members prior to addressing the outstanding and important issues that need to be resolved in relation to biotechnology, that offers the developing countries a unique opportunity for alleviating poverty and achieving food security.

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