May 12, 2013
TABLE OF CONTENTS
1. Biofuel Policies and Food Grain Commodity Prices 2006-2012: All Boom and No Bust?
Harry de Gorter, Dusan Drabik, and David R. Just (Cornell University)
Biofuels policies have a large impact on food-grain commodity prices, first and foremost by linking biofuel prices to feedstock prices. The multiplier effect of higher biofuel prices on feedstock prices is shown to be very large (about 4) and the biofuel price premiums due to biofuel policies are also very high (above the tax credits) compared to what the biofuel price would have been otherwise. This has important implications for future energy, environmental, and agricultural policies, and for food-grain commodity prices.
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2. Estimating the Potential Economic Benefits of Adopting Bt Cotton in Selected COMESA Countries
Richard Mulwa (Centre for Advanced Studies in Environmental Law and Policy (CASELAP), University of Nairobi)
David Wafula and Margaret Karembu (ISAAA AfriCenter)
Michael Waithaka (ASARECA)
Cotton farmers in the Common Market for Eastern and Southern Africa
(COMESA) face pest challenges, the most destructive of which is the African bollworm (Helicoverpa armigera). Reduction in these pest infestations can increase yields and improve welfare of cotton producers, consumers, and innovators. Currently, the control of bollworms in this region is done through application pesticides, which is a costly exercise in terms of cost of pesticides, spray equipment, and labor. A more effective and less costly way to control damage from bollworms and other insects that frequently damage cotton in the region is by adopting Bt cotton. Governments in COMESA region are debating whether to approve Bt cotton for commercial production. This decision requires empirical evidence showing the likely magnitude of anticipated gains for producers, consumers, and innovators of the technology. Using an economic surplus framework, this study shows that there are welfare gains from adopting Bt cotton in the region, and countries that are not adopting Bt cotton are losing. Overall, most gains accrue to Egypt while Kenya gains the least. However, gains per hectare are similar in all countries except Egypt, which gains about four times the other countries.
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3. To Trust or Not to Trust: A Model for Effectively Governing Public-Private Partnerships
Obidimma C. Ezezika (Sandra Rotman Centre, University Health Network and University of Toronto, African Centre for Innovation and Leadership Development, and Dalla Lana School of Public Health, University of Toronto)
Jennifer Deadman, Jillian Murray, and Justin Mabeya (Sandra Rotman Centre, University Health Network and University of Toronto)
Abdallah S. Daar (Sandra Rotman Centre, University Health Network and University of Toronto, Dalla Lana School of Public Health and Department of Surgery, University of Toronto)
In this article, we explain the critical role of trust in the effective management of public-private partnerships (P3s). Through a literature review of P3 management and a case study of developing and applying a social audit model to an agricultural biotechnology project in sub-Saharan Africa, we demonstrate how distrust undermines the effectiveness of P3s and the added value of building trust in such projects. The principles of the model and outcomes of improved transparency, management, and accountability in the project are described. We explain how the model and lessons learned from its application to the agricultural biotechnology project are transferable to effective management practices and trust-building in other P3s.
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4. Developing a Policy for Low-Level Presence (LLP): A Canadian Case Study
Janice Tranberg (CropLife Canada)
Agricultural biotechnology research and adoption is increasing. It is estimated that by 2015 there will be a three- to four-fold increase in the number of commercialized biotech products. Also increasing are the complications with international trade given the wide range of acceptance and regulatory capabilities currently in practice globally, specifically, the increasing low-level presence (LLP) of biotech products that have received full regulatory approval in one or more countries but not in the country of import. Canada, recognizing the impact of LLP on international trade, is taking a leadership role.
Using a government-industry collaborative model, the Canadian government is developing a domestic regulatory policy to manage LLP from imports and building international collaborations to raise awareness of the impacts of LLP on trade globally. This article details the collaborative government-industry process and the current status of the draft domestic LLP policy and international engagement.
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5. Consumers' Willingness to Purchase Genetically Modified Products with Superior Benefit when the Conventional Alternative is Risky, and Its Relationship to GM Food
Amir Heiman (The Hebrew University of Jerusalem, Israel)
Scholars believe that in order to increase the acceptance rate of GM food products that offer higher value relative to non-GM alternatives, marketers need to sell them at an introductory price, and only after consumers get used to consuming them can their price be raised. This recommendation is consistent with consumers’ demand for discounts on GM food products. This study analyzes whether the opposite strategy--which begins at building a starting point of high risk, and then at a second stage choices between GM and conventional food products are made--is an efficient tactic in introducing biotechnology. Starting high and ending at a lower point is termed the reverse foot-in-the-door tactic. We test the effectiveness of reverse foot-in-the-door when applied to GM products by using an experimental survey design wherein consumers are asked first to choose between purchasing two hypothetical biotechnology products--moisturizer and a pill that supports weight loss--and then GM and conventional vegetables, and comparing the results to previous findings taken from the literature. We also identify the variables of the consumers who are willing to purchase both GM beauty-enhancing products and show that these can be used to profile consumers with high willingness to purchase GM food products.
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6. Adoption and Productivity of Breeding Technologies: Evidence from US Dairy Farms
Aditya R. Khanal and Jeffrey Gillespie (Louisiana State University Agricultural Center)
Adoption and associated profitability of advanced breeding technologies are analyzed for US dairy farms. We account for correlation and selection associated with breeding technology adoption decisions. The bivariate probit model with selection is used to model adoption decisions and least squares with extended correction terms is used for profit, productivity, and cost equations. Results show that more specialized farms with younger, more educated operators having longer planning horizons are more likely to adopt advanced breeding technologies. Artificial insemination positively impacted farm profit and negatively impacted cost of milk production, while advanced breeding technologies positively impacted milk produced per cow.
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7. The Role of Biofuel Policy and Biotechnology in the Development of the Ethanol Industry in the United States
Seth Meyer (Agricultural Development Economics Division, Food and Agriculture Organization of the United Nations, Rome)
Julian Binfield and Wyatt Thompson (Food and Agricultural Policy Research Institute, University of Missouri, Columbia)
The US Renewable Fuel Standard sets a lower bound on the amount of biofuels used, with consequences for behavior of agricultural commodity markets that currently supply the vast majority of feedstocks for biofuel production. In this article, maize biotechnology is considered taking into account the impacts of US biofuel mandates. The impact of a hypothetical technology that reduces the severity of negative maize yield shocks is estimated using a structural economic model simulated stochastically. The importance of mandated levels of use of biofuels depends on whether they are binding. If biofuel use exceeds mandated levels, then mandates have little impact. If mandates are binding, then the markets' ability to respond to price movements can be reduced. In either case, aggregate maize demand is inelastic in these projections, so yield technology improvements can reduce total revenue to maize production.
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8. Long-term Biofuel Projections under Different Oil Price Scenarios
John Miranowski (Iowa State University)
Alicia Rosburg (University of Northern Iowa)
With rapid expansion of biofuel production, major concerns have arisen over higher food costs and competition between food, feed, and biofuel for energy-rich commodities. Most projections are based on short- and intermediate-term commodity price shocks. We estimate long-term biofuel demand and cost-minimizing supply functions for feedstock and biofuel in developed and developing countries. We assume input and output coefficients and substitution elasticities adjust over time in response to changing prices in a dynamic market environment with productivity growth. Three alternative oil price scenarios are considered for biofuel feedstock production and conversion. The price of oil puts both a floor and ceiling on feedstock price. We conclude that global biofuel expansion will be limited in the absence of government incentives and mandates, unless high real oil prices prevail. Countries and regions need large, excess feedstock supplies (price-elastic response) if biofuel expansion is to be competitive with oil or other liquid fuels.
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