SIKAP/STRIVE, INC. The Socio-economic and Environmental Impacts of LMOs: The Case of Bt Corn in the Philippines* Leonardo A. Gonzales, PhD** *Paper presented during the Tuesday Forum of the MAP ABCD Foundation, Formation House, Estrada St. Corner Amapola St. Guadalupe Viejo, Makati City, Metro Manila ** Founding President and Chairman, SIKAP/STRIVE, Inc. Email: lag@strivefoundation.com
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. Outline of the Presentation • Global Trends in the Commercial Adoption of GM Crops • Empirical Findings of the SIKAP/STRIVE, Inc. Impact Assessment Study • Conclusions • Recommendations
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Global Area (Million Hectares) of Biotech Crops, 2014: by Country I S A A A Biotech Mega Countries 50,000 hectares (125,000 acres), or more Million Hectares 1. USA 73.1 2. Brazil* 42.2 3. Argentina* 24.3 2% Africa 4. India* 11.6 5. Canada 11.6 6. China* 3.9 87% 11% Asia 7. Paraguay* 3.9 8. Pakistan* 2.9 Americas 9. South Africa* 2.7 10. Uruguay* 1.6 11. Bolivia* 1.0 12. Philippines* 0.8 13. Australia 0.5 14. Burkina Faso* 0.5 15. Myanmar* 0.3 16. Mexico* 0.2 28 countries which have adopted 17. Spain 0.1 Increase over 2013 biotech crops 18. Colombia* 0.1 19. Sudan* 0.1 In 2014, global area of biotech Less than 50,000 hectares crops was 181.5 million hectares, 3 to 4% representing an increase of 3 to Honduras* Romania 4% over 2013, equivalent to 6.3 Chile* Slovakia million hectares. Portugal Costa Rica* Cuba* Bangladesh* Czech Republic Source: Clive James, 2014. * Developing countries
Global Area of Biotech Crops, 1996 to 2014: By Trait (Million Hectares, Million Acres) I S A A A M Acres 297 120 Herbicide Tolerance 247 100 Stacked Traits Insect Resistance (Bt) 198 80 148 60 99 40 49 20 0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Clive James, 2014
Global Adoption Rates (%) for Principal Biotech Crops (Million Hectares, Million Acres), 2014 I S A A A M Acres 494 200 184 Conventional 445 180 395 160 Biotech 346 140 111 296 120 247 100 198 80 140 60 37 36 99 40 49 20 0 0 82% 68% 30% 25% Soybean Cotton Maize Canola Source: Clive James, 2014 Hectarage based on FAO Preliminary Data for 2012.
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. LMO ADOPTION IN THE PHILIPPINES • The GM corn technology is now more ten years old in the Philippines In 2002: Bt or corn borer resistant corn In 2005: HT or herbicide tolerant corn; and Bt/HT or Stacked corn In 2007: Bt corn first renewal of propagation permit In 2014: Around 830,000 hectares were planted to GM Corn. 7
SIKAP/STRIVE, INC. Area Planted to Yellow Corn by Seed Technology, 1995-2013. 1400 1200 Area Planted ('000 ha) 1000 800 600 2005/2010 : Bt NK603, Bt11, 2002/2007 : Stacked MON810 400 HT Stacked (Bt/HT) 200 Pyramided Stacked Yellow Corn 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year 8 Note: 1995-2013 data series came from BPI; 2012 and 2013 are own estimates of SIKAP/STRIVE, Inc.
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. IMPACT ASSESSMENT STUDY • Covered nine major corn producing provinces • Eight cropping seasons (2003-2004 2011-2012) • Sample corn households of 3,505
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. IMPACT ASSESSMENT STUDY The basic research hypothesis was: Technological innovations like GM Products are sustainable if they provide positive socio-economic impacts to society and are compliant with the basic requirements of the natural resource systems. 10
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A. Impacts of Bt Corn 2003-2011 Microeconomic farm level impacts 11
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.1 Farm level impact – Yield • The average yield advantage of Bt corn over ordinary hybrid (OH) corn was 19% from 2003 to 2011. • The corn borer resistance agronomic trait of Bt corn largely contributed to the yield difference. 12
SIKAP/STRIVE, INC. Trends in Yellow Corn Yield by Seed Technology. 7.0 Yellow Corn (National) Bt 6.0 19% GM (Bt, HT and Bt/HT) Average Bt vs Ordinary Hybrid OH 5.0 Yield (mt/ha) 22% OH vs Natio- 4.0 nal 3.0 2002/2007 : 2005/2010 : MON810 NK603, Bt11 2.0 2007 : El 2004-05 : Niño El Niño 1.0 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 13
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.1 Farm level impact – Cost • On the average, Bt corn has a cost advantage of 10% relative to OH corn from 2003 to 2011. 14
SIKAP/STRIVE, INC. Trends in Yellow Corn Farm Production Cost. Farm Level Production Cost (P/kg, 2003 Constant Prices) 5.0 4.5 10% Bt vs 4.0 OH 3.5 3.0 2.5 Bt 2.0 2005/2010 : 2002/2007 : GM (Bt, HT and Bt/HT) Average NK603, Bt11 MON810 1.5 Ordinary Hybrid 1.0 0.5 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 15
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.1 Farm level impact – Income • The average real peso per kilogram income advantage of Bt corn over OH corn was 8% per annum from 2003 to 2011. 16
SIKAP/STRIVE, INC. Trends in Yellow Corn Farm Income. 5.5 Farm Level Income (P/kg, 2003 Constant Prices) 5.0 4.5 8% Bt vs 4.0 OH 3.5 3.0 2.5 Bt 2002/2007 : 2005/2010 : 2.0 MON810 NK603, Bt11 GM (Bt, HT and Bt/HT) Average 1.5 Ordinary Hybrid 1.0 0.5 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 17
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.1 Farm level impact – Economic carrying capacity • Bt corn consistently outperformed OH corn by 29%, in meeting the food and poverty thresholds, from 2003 to 2011. 18
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. Carrying Capacity Ratio. NFI i x L i CC i = -------------- SE x 1.15 Where: CC i is the carrying capacity ratio of activity i; Ni i = net income of activity i; L i = is the landholding from activity i; and SE = subsistence level expenditures or poverty thresholds for a family of five and the 0.15 in 1.15 represents 15 percent savings of households. 19
SIKAP/STRIVE, INC. Trends in Yellow Corn Food Carrying Capacity. 1.5 Food Carrying Capacity Ratio (using 2003 Constant 29% 1.0 Bt vs OH Prices) 0.5 Bt 2002/2007 : 2005/2010 : GM (Bt, HT and Bt/HT) Average MON810 NK603, Bt11 Ordinary Hybrid 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 20
SIKAP/STRIVE, INC. Trends in Yellow Corn Poverty Carrying Capacity. 1.0 Poverty Carrying Capacity Ratio (using 2003 Constant 29% Bt vs OH Prices) 0.5 Bt 2002/2007 : 2005/2010 : GM (Bt, HT and Bt/HT) Average MON810 NK603, Bt11 Ordinary Hybrid 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 21
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.1 Farm level Impact – Return on investment • Bt corn users had 42% higher return on investment than OH corn users from 2003 to 2011. • In order to recover the investments at the farm level, corn yield must be at least 4.0 mt/ha. 22
SIKAP/STRIVE, INC. Trends in Yellow Corn Farm Level Return on Investment. Return on Investment (%, using 2003 Constant Prices) 90 Bt 80 GM (Bt, HT and Bt/HT) Average 42% 70 Ordinary Hybrid Bt vs OH 60 50 40 30 2002/2007 : 2005/2010 : 20 MON810 NK603, Bt11 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 23
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A. Impacts of Bt Corn 2003-2011 Environmental impacts 24
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.2 Environmental impact indicators • Resource use efficiency is the amount of resource needed to produce one mt of corn grain • In terms of ratio: INPUT RESOURCE USE ------------ OR ------------------------------- OUTPUT GRAIN PRODUCTION 25
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.2 Environmental impact – Land use efficiency • Bt corn seed users required 15% less land than OH corn seed users in generating one metric ton of corn grain from 2003 to 2011. • The land use efficiencies of the analyzed seed technologies (OH, Bt and GM) increased dramatically during this period . 26
SIKAP/STRIVE, INC. Land Use Efficiency of Yellow Corn by Seed Technology. 0.4 Land Use Efficiency (ha/mt grain) 0.3 15% 0.2 Bt vs OH National: 27% ↑ EFF in 11 Years Yellow Corn (National) 0.1 Bt: 35% ↑ EFF in 8 Years Bt GM (Bt, HT and Bt/HT) Average Ordinary Hybrid: 39% ↑ EFF in 8 Years Ordinary Hybrid 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 27
SIKAP/STRIVE, INC. SIKAP/STRIVE, INC. EMPIRICAL FINDINGS A.2 Environmental impact – Fertilizer use efficiency • Bt corn adopters, on the average, were 9% more efficient in the use of fertilizer than OH corn seed users from 2003 to 2011. • Fertilizer use efficiency across the analyzed seed technologies improved during this period. 28
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