Dorchester, United Kingdom
28 April 2010

Two new studies show biotech crops continue to deliver significant global economic and environmental benefits and make important contributions to global food production, food security and lower real prices for food and feed crops

“Since 1996, biotech crop adoption has contributed to reducing the release of greenhouse gas emissions from agriculture, decreased pesticide spraying, significantly boosted farmers’ incomes and resulted in lower real world prices for corn, canola, soybeans and the main derivatives of these crops,” said Graham Brookes, director of PG Economics, co-author of the reports. “The technology has also made important contributions to increasing crop yields, reducing production risks, improving productivity and raising global production of key crops. The combination of economic and environmental benefit delivery is therefore making a valuable contribution to improving the sustainability of global agriculture and affordability of food, with these benefits and improvements being greatest in developing countries”

Previewing the findings of the two studies, the key findings are:

• Biotech crops have contributed to significantly reducing the release of greenhouse gas emissions from agricultural practices. This results from less fuel use and additional soil carbon storage from reduced tillage with biotech crops. In 2008, this was equivalent to removing 15.6 billion kg of carbon dioxide from the atmosphere or equal to removing 6.9 million cars from the road for one year;
• Biotech crops have reduced pesticide spraying (1996-2008) by 352 million kg (-8.4%) and as a result decreased the environmental impact associated with herbicide and insecticide use on the area planted to biotech crops by 16.3%;
• Herbicide tolerant biotech crops have facilitated the adoption of no/reduced tillage production systems in many regions, especially South America. This has made important contributions to reducing soil erosion and improving soil moisture levels;
• There have been substantial net economic benefits at the farm level amounting to $9.4 billion in 2008 and $52 billion for the thirteen year period. The farm income gain in 2008 is equivalent to adding 3.65% to the value of global production of the four main biotech crops of soybeans, corn, canola and cotton;
• Of the total farm income benefit, 50.5% ($26.25 billion) has been due to yield gains, with the balance arising from reductions in the cost of production. Two thirds of the yield gain derive from adoption of insect resistant crops and the balance from herbicide tolerant crops;
• The share of the farm income gains, both in 2008 and cumulatively (1996-2008) has been about 50% each for farmers in developing and developed countries;
• The cost farmers paid for accessing GM technology in 2008 was equal to 27% of the total technology gains (a total of $12.8 billion inclusive of farm income gains ($9.4 billion) plus cost of the technology payable to the seed supply chain ($3.4 billion*));
• For farmers in developing countries the total cost of accessing the technology in 2008 was equal to about 15% of total technology gains, whilst for farmers in developed countries the cost was 36% of the total technology gains. Whilst circumstances vary between countries, the higher share of total technology gains accounted for by farm income gains in developing countries relative to the farm income share in developed countries reflects factors such as weaker provision and enforcement of intellectual property rights in developing countries;
• Since 1996, biotech traits have added 74 million tonnes and 79.7 million tonnes respectively to global production of soybeans and corn. The technology has also contributed an extra 8.6 million tonnes of cotton lint and 4.8 million tonnes of canola;
• If GM technology had not been available to the (13.3 million) farmers using the technology in 2008, maintaining global production levels at the 2008 levels would have required additional plantings of 4.6 million ha of soybeans, 3.5 million ha of corn, 2.2 million ha of cotton and 0.3 million ha of canola. This total area requirement is equivalent to about 6% of the arable land in the US, or 21% of the arable land in Brazil;
• World prices of corn, soybeans and canola would probably be respectively 5.8%, 9.6% and 3.8% higher than 2007 baseline levels if the technology was no longer available to farmers. Prices of key derivatives (eg, soymeal) would also probably be 5% to 9% higher and prices of related cereals and oilseeds (eg, wheat, barley, sunflower) would be 3% to 4% higher;
• The global cost of consuming cereals and oilseeds would probably increase by $20 billion (+3.6%) relative to the 2007 baseline cost of consumption if biotech traits were no longer available to farmers;
• Average global yields would probably fall 1.5%, 4.3% and 0.65% respectively for corn, soybeans and canola if biotech traits were no longer available to farmers.

For additional information, contact Graham Brookes Tel +44(0) 1531 650123. www.pgeconomics.co.uk

Papers available to download at www.pgeconomics.co.uk 

The full (annual) global economic and environmental impact report updates previous studies (using the same methodology), available on the same website and (shorter versions) in the peer review scientific journal, Agbioforum (ref 13 (1) 76-94) - www.agbioforum.org.

The 2nd paper analyses the impact on global corn, canola and soybean prices and is also available in AgBioforum (ref 13 (1) 25-52

* The cost of the technology accrues to the seed supply chain including sellers of seed to farmers, seed multipliers, plant breeders, distributors and the GM technology providers

Website: http://www.pgeconomics.co.uk

Published: April 28, 2010