Genetically Modified. Crops in Africa. Economic and Policy Lessons from Countries South of the Sahara

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1 Genetically Modified Crops in Africa Economic and Policy Lessons from Countries South of the Sahara Edited by Jose Falck-Zepeda, Guillaume Gruere, and Idah Sithole-Niang A Peer-Reviewed Publication International Food Policy Research Institute Washington, DC

2 Contents Tables, Figures, and Boxes Abbreviations and Acronyms Foreword Acknowledgments Introduction and Background Jose Falck-Zepeda, Guillaume Gruere, and Idah Sithole-Niang Vll XI Xlll xv 1 Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Socioeconomic and Farm-Level Effects of Genetically Modified Crops: The Case of Bt Crops in South Africa 25 Marnus Gouse Bt Maize and Fumonisin Reduction in South Africa: Potential Health Impacts 43 Carl E. Pray, John P. Rheeder, Marnus Gouse, Yvette Volkwyn, Liana van der Westhuizen, and Gordon S. Shephard Genetically Modified Cotton in Uganda: An Ex Ante Evaluation 61 Daniela Horna, Patricia Zambrano, Jose Falck-Zepeda, Theresa Sengooba, and Miriam Kyotalimye Benefits, Costs, and Consumer Perceptions of the Potential Introduction of a Fungus-Resistant Banana in Uganda and Policy Implications 99 Enoch M. Kikulwe, Ekin Birol, Justus Wesseler, and Jose Falck-Zepeda Genetically Modified Organisms, Exports, and Regional Integration in Africa 143 David Wafula and Guillaume Gruere

3 Chapter 6 Chapter 7 Chapter 8 Estimates and Implications of the Costs of Compliance with Biosafety Regulations for African Agriculture 159 Jose Falck-Zepeda and Patricia Zambrano Policy, Investment, and Partnerships for Agricultural Biotechnology Research in Africa: Emerging Evidence 183 David J. Spielman and Patricia Zambrano Genetically Modified Foods and Crops: Africa's Choice 207 Robert Paarlberg Conclusion 219 Guillaume Gruere, Idah Sithole-Niang, and Jose Falck-Zepeda Contributors 229 Index 235

4 Tables, Figures, and Boxes Tables 1.1 Regulatory status of genetically engineered crops in the regulatory and development pipeline, Estimated area and share of total area planted to transgenic cotton in South Africa, 2000/ / Summary of findings of main published studies 1.3 Estimated area and share of total area planted to genetically modified maize in South Africa, 2000/ / Maize and beer consumption and fumonisin exposure (probable daily intake) 2.2 Fumonisin (FBJ levels in maize and maize products in South Africa 2.3 Possible government interventions and their potential impact 2.4 Percentage of smallholder farmers using purchased seed, by region, Comparison of total fumonisin levels in maize in rural KwaZulu-Natal, (mg/kg = ppb) 2.6 Fumonisin exposure in the Eastern Cape with Bt maize adoption 3.1 Organic cotton production, Assumptions for variables and distributions used for partial budget simulations 3.3 Descriptive statistics

5 3.4 Descriptive statistics of main variables, control of plot 3.5 Cotton profitability for low- and high-input systems, season 2007/ Cotton profitability for conventional and organic cotton producers, 2007/08 season 3.7 Partial budgets for scenarios using genetically modified seed 3A.1 All sample (N = 151) 3A.2 Low-input producer (N = 124) 3 A.3 High-input producer (N = 27) 3A.4 Conventional producer (N= 139) 3A.5 Organic producer (N = 12) 4.1 Hurdle rates and average annual MISTICs per hectare of genetically modified bananas, per household, and per bananagrowing farm household at different risk-free rates of return and risk-adjusted rates of return 4.2 Comparison of KAP scores with consumer characteristics 4.3 Random-parameter logit model with interactions 4.4 Segment-specific valuation of banana bunch attributes (percentage change in price per banana bunch) 4.5 Compensating surplus and 95 percent confidence intervals for four bunch options' CM (genetically modified) crops and products included in the Regional Approach to Biotechnology and Biosafety Policy in Eastern and Southern Africa project 5.2 Immediate export losses if all European importers shunned all "possibly GM" or "possibly GM-tainted" products 6.1 Social costs of biosafety regulations 6.2 Estimates of cost of applications over time (US dollars) and processing time (months) for the Insect-Resistant Maize for Africa project in Kenya 6.3 Estimates of the cost of regulation for the containment stage of the Insect-Resistant Maize for Africa (IRMA) project in Kenya, 2005 (2005 US dollars)

6 ix 6.4 Estimates of the cost of regulations of Bt cotton in Kenya, 2005 (2005 US dollars) Estimates of the cost of compliance with biosafety regulations for fungus- and nematode-resistant banana in Uganda, (2005 US dollars) Cost of compliance with biosafety regulations Estimated costs for biosafety activities for India, China, and the United States (US dollars) Estimates of cost of compliance with biosafety regulations for selected technologies in the Philippines and Indonesia Number of genetically modified products in Africa south of the Sahara, Number of genetically modified crops under development in Africa, 2003 and Distribution of public-private partnerships in the CGIAR, by center, as of Number of institutional arrangements used in public genetically modified products under development, by region and type of arrangement 194 Figures 1.1 Area cultivated with genetically engineered crops, by country Share of genetically modified crop acreage, by country Status of National Biosafety Frameworks (NBFs) in Africa Cotton-growing regions in Uganda Cotton value chain in Uganda Graphical analysis of marginal benefits, (a) low-input producer; (b) high-input producer; (c) conventional producer; (d) organic producer; (e) insect-resistant cotton producer; (f) herbicidetolerant cotton producer Location of study sites Value of welfare and maximum incremental socially tolerable irreversible costs (MISTICs) per bunch at different riskadjusted discount rates 121

7 X 6.1 Biosafety regulatory phases and regulatory decision points in a functional biosafety system (a) Increase in the cost of compliance (b) Compliance cost with increases in the time of approval 175 Boxes 6.1 Other Definitions of Biosafety 161