Disparities among countries employing genetically modified crops

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1 DepartmentofEconomicsandBusiness Studentnumber: MiaKatrineLethFWahl Nameofacademicsupervisor:ChristianBjørnskov May2014 Disparities among countries employing genetically modified crops Number of characters, excluding spaces: 106,758

2 Abstract( This% thesis% attempts% to% find% reasoning% for% the% apparent% differences% that% exist% between% countries% employing% the% technology% of% genetically% modified% crops.% Genetically%modified%crops%involve%the%introduction%of%a%new%gene,%either%from%a% related% or% unrelated% organism% that% is% then% introduced% to% the% applicable% crop% introducing%a%new%property.%the%adoption%of%genetically%modified%crops%has%been% expansive% following% commercialization% but% has% caused% diverse% reactions% worldwide.%there%has%been%public%outcry%in%some%nations%and%uncertainty%due%to% safety%concerns%restricting%any%form%of%cultivation,%while%some%nations%have%seen% genetically%modified%crops%as%a%window%of%opportunity.%% Genetically% modified% crops% have% been% proposed% as% a% tool% in% the% creation% of% additional,% and% better% food% in% response% to% growing% population% pressure,% with% a% focus% on% the% current% possibilities% for% developing% countries 1.% Industrial% considerations% are% almost% entirely% US% based% however% for% this% comparison% various%developing%countries%are%also%addressed.%the%use%of%genetically%modified% crops% has% seen% rapid% expansion% however% the% trend% has% seen% the% implementing% nations%increase%their%usage%while%many%countries%seem%reluctant%to%take%part%in% this% highly% debated% practice.% % The% reasoning% for% these% apparent% differences% is% addressed%with%the%use%of%a%quite%philosophical,%theoretical%framework%given%the% nature%of%the%technology.%this%gives%way%to%a%progression%of%key%considerations% explored% within% the% paper% including% economic,% environmental,% political% and% finally%longcterm%considerations%of%the%technology.%% The% findings% for% the% paper% are% in% line% with% the% nature% of% the% technology,% quite% uncertain.% Whilst% this% extremely% expansive% technology% is% explored,% a% weight% is% constantly%ensured%on%the%nature%of%said%technology%in%order%to%demonstrate%the% difficulty%in%reaching%a%conclusion%for%relevant%considerations.%data%suggests%the% benefits% obtained% by% the% explored% developing% countries% are% greater% to% those% of% industrial%countries%with%reasoning%for%this.%relevant%theory%is%used%to%highlight% and%explore%the%resounding%expansive%considerations%and%possibilities%that%this% technology%gives%light%to.%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% 1 % Low and middle income countries using GNI per capita for 2012 of less than US$12,615 are referred to as developing countries (World Bank, 2014)%

3 Table&of&Contents 1.# Introduction#and#problem#statement#...#1# 2.# Methodology#and#delimitations#...#2# 3.# Theoretical#framework#...#3# 3.1.# Knightian#risk#and#uncertainty#...#3# 3.2.# The#Black#Swan#theory#...#4# 3.3.# Bucket#and#Searchlight#theories#...#4# 3.4.# The#environmental#Kuznets#Curve#...#5# 3.5.# Tunneling#through#the#environmental#Kuznets#curve#...#6# 3.6.# Leapfrogging#and#the#environmental#Kuznets#curve#...#7# 4.# Economic#considerations#relating#to#genetically#modified#crops#...#9# 4.1.# Yield#comparisons#...#10# 4.2.# Seed#price#comparison#...#14# 4.3.# Pesticide#comparison#...#18# 4.4.# Economic#considerations#of#leapfrogging#and#genetically#modified#crops#...#20# 4.5.# Additional#economic#considerations#...#21# 5.# Environmental#considerations#...#22# 5.1.# Herbicide#application:#environmental#perspective#...#22# 5.2.# Glyphosate#...#24# 5.3.# Greenhouse#gas#emissions#...#28# 5.4.# Assessing#the#environmental#risk#of#the#unknown#...#29# 5.5.# Natural#resource#considerations#...#31# 5.6.# Invasiveness#and#biodiversity#...#31# 6.# Political#and#social#considerations#...#32# 6.1.# Political#considerations#...#33# 6.2.# Consumer#awareness,#communication#and#considerations#...#34# 6.3.# Genetically#modified#crops#and#inequality#...#37# 7.# Future#outlook#...#39# 7.1.# Environmental#Kuznets#curve#and#genetically#modified#crops#in#a#future#perspective#...#40# 7.2.# Exploration#of#risk#assessment#...#41# 8.# Source#critique#...#45# 9.# Conclusion#...#47# 10.# Bibliography#...#48# #

4 Table&of&figures&& Figure'1:'Conventional*environmental*Kuznets*curve.*...*5* Figure'2:'Tunneling*through*the*environmental*Kuznets*curve.*...*7* Figure'3:'Leapfrogging*and*the*environmental*Kuznets*curve.*...*8* Figure'4:'Yield*returns*on*varying*crops*in*the*United*States.*...*11* Figure'5:'Global*genetically*modified*crop*cultivation*contrary*to*the*number*of* weeds*with*glyphosate*resistance.***...*25* Figure'6:'Considerations*of*the*environmental*Kuznets*curve*and*genetically* modified*crops.*...*29* &

5 1. Introduction&and&problem&statement&& Theprogressionofgeneticallymodifiedcropshasfurthereddiscrepanciesamong the countries of implementation, both industrialized and developing. This paper sets out to explore the reasons for this. In 2013, the 18 th year of commercial cultivation, million hectares of genetically modified crops were grown globally,asubstantialincreasefromthe1.7millionhectaresgrowninthefirstyear of commercialization. Of the 27 nations implementing genetically modified crops in 2013, 19 were developing while the remaining 8 were industrial. Taking industrialusersintoaccount,aclearoutlieremerges.whilsttheusaccountedfor approximately 40% of global cultivation, the remaining 7 industrial cultivators accounted for less than 7%. The remaining 53% can be accounted for by developing countries (James, 2013). Although the utilization of genetically modified crops has intensified throughout the 18 years of commercial implementation,theushasbeenadominantuser.whilstitseemsthemajorityof users have been cautious in their implementation of genetically modified crops, the US has maintained an exceptionally fast pace of adoption seemingly without much restraint. At the same time, developing countries account for over half the usage of genetically modified crops, yet mixed signals are drawn. The argument thatgeneticallymodifiedcropsareseenasapotentiallifelineforsomedeveloping nations may be relevant however not much has been done to further this. The majorityofgeneticallymodifiedcropsaredevelopedbylargefirmsanddesigned to meet the needs of largeqscale farmers in developed countries whereas few genetically modified crops are suited for the conditions of developing countries (Hepple et al, 2003). As such the issue is raised: why is it that such considerable disparities exist among the countries implementing genetically modified crops? This is explored with a focus on the US with major developing implementers addressedwheredatamaygivewaytoanexploration.thisisinordertoensurea greater coverage of reasoning in determining the differences whilst considerable outliers within this issue are addressed. The relationship between developing countries and genetically modified crops will be examined in terms of both the costs and benefits in a broader sense but also with a perspective of specific relevant cases. At times data restrictions dictate the path followed by the paper. 1

6 Usingdeductivereasoning,thispaperwillattempttoexplainthereasonsforthese apparent discrepancies among countries employing genetically modified crops progressingthroughrelevantconsiderations.firstlycoveringanexplorationofthe economic considerations of genetically modified crops in implementing nations; exploring relevant considerations such as efficiency explored in terms of yield as well as factors such as changes in the use of pesticides and seed costs in comparison to conventional agricultural practices. Secondly the paper will progress to cover environmental considerations linked to genetically modified crops exploring data surrounding this phenomenon, approaching both the direct environmentaleffectsaswellaspossibleleadoneffectstonontargetorganisms, enforced by evidence or lack thereof in this regard. The nature of genetically modifiedcropsgiveswaytotheuseofrelevanttheorytoenhancetheemphasison said nature. Another relevant perspective to be approached is the exploration of possible longqterm effects of crops of genetically modified nature. The third progression considers political effects and the differences evident between the discrepantnations.considerationswillbemadeastotherelationshipbetweenthe utilization of genetically modified crops in conjunction with political considerations, whilst considering the consumers and general public. Finally the paper will address the future outlook and predictions regarding the use of geneticallymodifiedcropsfromthestandpointofimplementingcountriesaswell asatagloballevel. 2. Methodology&and&delimitations&& Whenassessingthedifferencesthatexistforimplementersofgeneticallymodified cropsavailabledataisusedtoexaminereasoningforthesedisparitiesaddressed by deductive logic, whilst the selected theory acts to emphasize the nature of geneticallymodifiedcrops.datasurroundingindustrialcountriesisalmostlimited purelytotheus.thiscanbeseenasfavorablegiventheexcessiveimplementation of genetically modified crops within the US and given the in comparison quite limited utilization in other industrial countries. This focus allows the demonstration of the particular proposed outlier, that of the US, to be compared with a range of developing countries as the other major implementers, thereby 2

7 allowingapossibleextractionofreasoningforthesemajorutilizers.givenspatial limitationsanddatarestrictionsafocusistakenuponmajorimplementersofthe technology whilst an exploration of major considerations such as; economic, environmental and political considerations are addressed with these key implementers in focus. Additionally the future outlook is addressed.given the nature of the technology this was deemed relevant and is thought to give an additional level of understanding to the approach and selection of theory. The theory deemed most relevant is used to tie in all considerations as the paper progressesthroughdeduction,reasoningforthetopicinabackwardsmanner. 3. Theoretical&framework& & The primary theory included within this paper accounts firstly to determine the natureofthetechnologyasanoverallconsideration.thesubsequenttheoryhas been included in order to illustrate relevant possible outcomes of hypothetical situations that are explored taking into account considerations including economic, environmental, political and future outlook. The theory selected is believed to emphasize the underlying nature of the technology, allowing a thoroughexplorationbythereaderofrelevantconsiderations Knightian&risk&and&uncertainty& Riskiscategorizedasasituation in which the outcome is unknown and yet the oddsofthisoccurrencecanbemeasured.alternativelyexpressed,theoutcomecan beinsured.aknownriskcanbeconvertedintoanactualcertainty,bethisthrough mathematical probability of an outcome or through the grouping of variables wheretheprobabilityoftheoutcomeforthegroupcanbeobtainedwithcertainty. Uncertaintyoccurswheninformationismissingandhencetheoddsofanoutcome cannot be predicted in the first place, in other words the outcome cannot be insured.trueuncertaintycannotbemeasured;toomanyunknownfactorsmakeit incalculable(knight,1921). 3

8 3.2. The&Black&Swan&theory& The Black Swan theory suggests humans are focused only on learning and maintaining specifics whilst the focus instead should be on generalities. Humans areunabletoentirelyestimatepossibleoutcomesasouronlyfocusisonwhatis known,ratherthancontemplatingtheunknown.additionallythetheoryquestions astowhymankindtakesafocusonminisculedetailsratherthansignificantevents whenthereisinadmissibleevidenceoftheirexcessiveeffect.thetheorycallsinto question why the wonder of the Black Swan is first acknowledged once it has occurred.the logic of the theory suggests that what one does know is far less relevanttothatoftheunknown.thetheoryofablackswaneventismadeupof three attributes. Firstly it is an outlier; that is nothing of prior knowledge could suggest its actuality. Secondly the event carries a significant impact and finally, followingtheevent,mankindfabricatesanexplanationinanattempttomakethe eventseemlessrandomandinanattempttoprovidereasoning.thegreatmystery surrounding a Black Swan is attributed to the combination of low predictability andtheeventhavingasignificantimpact(tabel,2007) Bucket&and&Searchlight&theories& The Bucket theory accounts for a manner in which knowledge is collected from observations without any presumptions. In this theory induction is practiced, observations are collected first and a hypothesis is then generated later. Observationsarecollectedintoametaphorical bucket andeventually,ifthereare enough observations that support a particular hypothesis, thiswillresultina statement regarded as universal truth. The Searchlight theory uses general hypotheses in a manner to assume specifics relating to a topic. When the observations collected do not correspond, anewhypothesisis formed, removing the flaws that resulted in this initial error. However if the predictions and observations match, the hypothesis continues on for further testing (Popper, 1979). 4

9 3.4. The&environmental&Kuznets&Curve& TheenvironmentalKuznetscurverelatesthestateoftheenvironmenttothestage ofdevelopmentforaparticularnation.thehypothesisissuchthatthedistribution ofincomemaybeunequalatfirst,butwillimproveaspercapitaincomeincreases in conjunction with economic development. As countries develop, certain life qualities may deteriorate before improving. The environmental Kuznets curve concernstheenvironmentintermsofpollutionemitted. Figure&1:&ConventionalenvironmentalKuznetscurve.& & Source:adaptedfromDasguptaetal.,2002 At low levels of growth, environmental conditions are seemingly pristine as demonstrated in figure 1. As growth increases an increase in both the use of naturalresources,pollutantsandlessefficient,perhapsenvironmentallydegrading technologies may be seen all amounting to additional environmental harm. Yet interest in jobs and income is placed above considerations of the environment. This environmental damage may continue to accumulate as demonstrated by the curve. Nonetheless other factors are given a higher weight to that of the environment.howeverasprogressionmotionstosubsequentdevelopmentknown asthepostindustrialstageasdemonstratedbythecurve,thereisapointatwhich 5

10 incomerequirementsarereachedandvaluesshifttoapostqmodernrate,whereby the environment is givenahighervalue. Technologies adopted are seen to be cleaner.newtechnologyleadstoeconomicgrowth,whichgiveswaytoadditional researchincleanertechnologyandatapointtechnologicaldevelopmentwillresult incleanerproduction.willingnesstopayforimprovedenvironmentalconditions grows. The higher surpluses finance a proactive approach to environmental considerations and steps in regards to this environmental protection. Regulatory institutes come into play, as institutional development is given a higher weight thanfinancialdevelopment(dasguptaetal.,2002).& 3.5. Tunneling&through&the&environmental&Kuznets&curve& ThenotionoftunnelinginregardstotheenvironmentalKuznetscurveissuchthat developingcountrieshavetheopportunitytolearnfromindustrializedcountries, inthissensetheyarenotrequiredtoprogressthroughthesamestagesofgrowth and in turn can potentially avoid levels of environmental damage. By addressing potentially irreversible environmental risks at an early stage by reflecting on the experiences of industrial nations, tunneling allows developing countries to progress in terms of growth while avoiding the notion of environmental quality havingtodeterioratesubstantiallyasinthepastbeforeimproving. 6

11 Figure&2:&TunnelingthroughtheenvironmentalKuznetscurve. Source:adaptedfromMunasighe,1999& Asdemonstratedbyfigure2,tunnelingthroughtheenvironmentalKuznetscurve meansanavoidanceofenvironmentaldamage.demonstratedbytheavoidanceof thehypotheticalareabcd,tunnelingfollowsadirectmovementfrombonwardsto D.Whilstthedegreeofareaavertedvaries,figure2isforillustrativepurposesto demonstrate the potential gains in terms of environmental effects. This act of tunnelingispossibleinthecaseofbothavailabilityandutilityofbettertechnology inconjunctionwitharelevanteconomicstructure,reflectedinanimprovementin theenvironmentaldamagefortheapplicablenation Leapfrogging&and&the&environmental&Kuznets&curve& Technological leapfrogging is the application of an advanced or cutting edge technologyappliedinanareawherebytheprevious technology, which may be inferior,moreexpensiveorlessefficient,wasnotadopted.avoidinganinvestment inaspecificindustryortechnologycanbebeneficialinthecaseofaparadigmshift giventhenationisnotfacedwiththeissuesofsunkcosts.thereforetheabilityto 7

12 adapt to the applicable technology means a gain both in terms of economic and socialterms(gerschekron,1962). Figure&3:&LeapfroggingandtheenvironmentalKuznetscurve.&& Source:adaptedfromMunasighe,1999& Depending on the level of progression for the applicable nation, the effect of leapfrogging can vary. Firstly leapfrogging may give way to progression to tunneling through the environmental Kuznets curve as demonstrated by the hypotheticalpathinfigure3followingpathabdeasopposedtotheconventional curve.theeffectofleapfroggingoccurswhenacountryhasfollowedasimilarpath tothatoftheconventionalcurvethatisthepreviouspathofadevelopednation, wherebytechnologicalpossibilitiesgive way to leapfrogging at a certain point throughout the economic growth of the applicable nation. An entire shift in the curveasdemonstratedbythehypotheticalrevisedcurveinfigure3isapplicableif technologicalleapfroggingissetintonotionearlyenough(jumaetal.,2014). 8

13 4. Economic&considerations&relating&to&genetically&modified&crops& Whilstthefirstgeneticallymodifiedcroptobeapprovedcommercially,the Flavr Savr tomato was aimed at the consumer via a longer shelf life attention rapidly shifted to supply side cultivation considerations, in particular those of yields. Currently the commercially marketed genetically modified crops feature a gene fromthesoilbacteriumbacillusthuringiensis(bt)thatproducesdeltaendotoxins, an insecticide. Thereby the genetically modified crops possessing this gene are seemingly more resistant to pests. Another common commercial genetically modified crop branch are herbicide tolerant (HT) crops, possessing a gene that enables the plant to be more resistant to herbicides, of which the most common resistance trait is glyphosate. Stacked trait crops, becoming more evident within the market of genetically modified crops, refers to a crop possessing more than just a single gene in an attempt to make the crop more resistant (James, 2013). Underlying considerations in terms of economic effects can be seen throughthe exploration of available data, first examined in terms of yield differences, seed costs and pesticide use for crop types and subsequently the additional considerationsthatmustbeaddressed.benefitsfromthecultivationofgenetically modifiedcropsaretypicallyattributedtoanincreaseinyields,particularlyevident inthecaseofsmallfarmersindevelopingcountriesasofyetgiventhespilloverof technologyoriginallyaimedatfarmersinindustrialcountries,meaningtheability toleapfrogwithinthistechnology(carpenter,2010).the1996q2012periodsaw farm level gains of approximately US$116.9 billion globally, with 58% being attributed to a fall in production costs and 42% to higher yields with this amountingto377milliontons(barfootetal.,2014forthcoming).totaleconomic gainsgloballyforgeneticallymodifiedcropcultivatorsamountedtoapproximately US$18.7billionin2012,with83%beingattributedtoincreasedyields,and17%to lowercostsofproduction.18millionfarmerscultivatedgeneticallymodifiedcrops in2013.ofthesemorethan16.5millionindividuals,thatismorethan90%,were poorfarmersindevelopingcountries(james,2013). 9

14 4.1. Yield&comparisons& Agricultural production in developing economies will need to almost double in order to feed the projected population in These increases must primarily come from increases in yields or cropping intensity given for most nations the expansionthroughlandwillnotbepossiblenorseenasoptimal(bruinsma,2009). Inthiscontext,theyieldreferstothereturnonseedrelevanttoaparticularcrop. Thiswillbeexaminedasacomparisonofthegeneticallymodifiedcropaswellas theconventionalcrop.thisisoneofthefirstconsiderationstobeaddressedwhen assessing the disparities among the countries that employ genetically modified crops. It is relevant to see if any outliers exist in terms of excessive or low yield returns Industrial&perspective& In the US in 2013 genetically modified soybeans accounted for 93% of total planted soybean area, genetically modified corn for 85% of total corn cultivation and genetically modified cotton accounted for 82% of total planted cotton area (FernandezQCornejo, 2014). In the observation of figure 4, firstly addressing the movementsinyieldsforbothcottonandcorn,bothcultivatedgeneticallymodified crops; an upward trend is apparent, however no extensive difference in yields is evidentfollowingtheintroductionofgeneticallymodifiedcrops. 10

15 Figure&4:&YieldreturnsonvaryingcropsintheUnitedStates.& Source:DatacompliedviatheUSDANASS(2014). Figure 4 demonstrates the yields of the highly implemented genetically modified cropsthatarecorn,cottonandsoybeanshavehadasteadyincrease.thisinference isreachedwithoutsurveyingtheindividualmovementsinfigure4forthedifferent cropsgiventhisisnotentirelyrelevantfortheprogressionofthispaperbutrather considering theunderlyingtrends. However note the yields for oats, which has been included for illustrative purposes. As of yet no genetically modified oat variationsexist,andyetthefiguredemonstratesaverysimilartrendmovementin yields to that of soybeans. Given the timely considerations of the introduction of genetically modified crops, clearly most yield increases are attributed to conventional methods(gurianqsherman, 2009). Approximately half the increases of major crop yields have been attributed to plant breeding, that is the manipulation of traits of a plant in order to achieve preferable characteristics, whilst the other half has been attributed to an improvement in irrigational practices,modernizationandimprovementsintheuseoffertilizer(duvik,2005). TheoverallyieldforcornintheUShasslowedtoanincreaseofapproximately1% 11

16 per year. The excessive downfall in yield for corn occurring around 2012 is attributed to extremely dry conditions for the season, again demonstrating the vulnerability still existent of crops. Figure 4 demonstrates soundly the lack of excessive growth in yield for the applicable crops, bringing about considerations surroundingthemaximumyieldpotentialsforthesecrops,aswellasthequestion ofwhatcharacteristicsofthecroporenvironmentarenecessaryinordertoalter this. An increase in yields may in turn bring unfavorable and unintentional impactsontheenvironmentorhumanhealth;previousincreasesinyieldswithin theushavebeenattributedtoanincreaseinairpollutionandafallinbiodiversity giventheincreaseinchemicals.gurianqsherman(2009)stressestheimportanceof distinguishing between the intrinsic yield that is total potential yield, and operationalyield,thatistherealisticyieldobtainedwithsomebarrierswithinthe fieldsuchaspests.theargumentissuchthatinordertokeepupwithcumulative food pressures, the intrinsic yield must be increased which genetically modified cropshavenotbeenabletoensureasofyet(gurianqsherman,2009) Developing&countries&perspective& Fordevelopingcountries,averageyieldincreasesrangebetween16%forBtcotton and30%forbtcornasopposedtodevelopedcountrieswherethereonaverageis no change in yield for Bt cotton, and an average of 7% increase in herbicide tolerant soybeans and Bt corn (Carpenter, 2010). In 2013, approximately 7.3 million Indian farmers cultivated genetically modified cotton amounting to 11 million hectares. From 1996Q2012 the farmers in India are estimated to have accumulatedus$14.6billionthroughthecultivationofgeneticallymodifiedcotton (James,2013).In2013,approximately7.5millionfarmersinChinacultivated4.2 millionhectaresofgeneticallymodifiedcotton.from1996q2012farmersinchina are estimated to have accumulated US$15.3 billion through the cultivation of genetically modified cotton (James, 2013). In China, results from a 1999 study found that yields for genetically modified cotton were between 7 to 10% higher thanconventionalcotton,andofthistheyieldeffectswerefelttothelargestextent onsmallfarms(gómezqbarberoetal.,2006).astudyinindia,thesecondlargest cottonproducerglobally,wheremorethan97%ofcottonisgeneticallymodified 12

17 Bt,concludedanincreaseinyieldby24%between2002and2008,attributedto reductions in pest attacks. Previously cotton pests, in particular the bollworm infestation, could cut cotton yields in half (Vaidyanathan, 2012). On average the profits of these farmers rose by 50% accredited to yield gains (Kathage et al., 2012).Theliteratureavailablesurroundingthishoweveristypicallyofshorttime periods, and in particular availablearound the start of the commercialization of genetically modified crops. This however gives way to proposed biases and considerations arise such as that the farmers who implemented genetically modified crops were typically wealthier and better educated. Furthermore these farmers typically already produced yields higher than the average conventional cottonfarminindia.thedebatesurroundingthesuccessinindiahasconsidered that the increased yields may in fact be solely attributed to a bettered farming practice.farmerswhoinvestinsuchexpensivegeneticallymodifiedseedschange theirfarmingpracticesandincludeirrigationandfertilizer,inordertoguarantee the success of this investment (Vaidyanathan, 2012). Data surrounding South Africa firstly for the season of 1998Q1999 demonstrates no change in yield. The following season farmers implementing genetically modified cotton experienced yieldincreasesofapproximately40%,teamedwithatypicalseedpriceincreaseof 68% per hectare as opposed to conventional seeds. The season of 1999Q2000 in South Africa demonstrated that despite higher seed prices the higher yields and the decrease of pesticide utilization meant an economic advantage of 58% for implementersofgeneticallymodifiedcotton(gómezqbarberoetal.,2006).whilst glyphosate resistant soybean cultivators in Argentina experienced a welfare loss initially at the beginning of commercialization in 1996, they received a surplus greater than US$300 million by 2001 and produced tonnes of soybean. Between 1999 and 2001 adopters of genetically modified cotton in Argentina benefited from yields between 32Q34% higher than those of conventional cultivators.howevergivenaseedpriceaveragingfourtimesthatofconventional cotton per hectare, and despite the decrease in applications of insecticide by between2.3and2.4applications, the benefits felt by farmers was limited (de Janvryetal.,2003).For2001,glyphosateresistantsoybeancultivatorsintheUS produced78668tonnesandreceivedsurplusesamountingtous$145million,the surplusreceivedbycultivatorsreached21%in2001afallfrom45%in1996.this 13

18 differencewasattributedtothenetwelfarelossexperiencedbytheusgiventhe 9.6millionhectaresstillcultivatingconventionalsoybeanasopposedtoArgentina, cultivatingconventionalsoybeanonamaximumareaof1millionhectaresin2001, resulting in welfare losses for the US Soybean producers (Traxler et al., 2005). Small scale Argentinian soybean producers were better able to exploit the time saving advantages brought about by the use of this genetically modified crop as opposedtolargerscalecultivators(branford,2002) Yield&comparison&summary&considerations& If data for 2012 is considered, the top five producers of soybean globally are all implementersofgeneticallymodifiedsoybeans,yetnotoneisplacedinthetopfive in the rank of countries obtaining the highest yields from soybean production (FAO, 2013). Reasoning for the lack of increase in yield in the case of genetically modified soybean has been attributed to cost cutting and the simplification of weedmanagement,thusthecrophasnotbeendesignedtoresultinahigheryield. This however is also the case for the data surrounding the production of corn worldwidedemonstratingasabovethatthetopfiveglobalproducersofcornare all implementing genetically modified corn, yet none lay within the top five countriesobtainingthehighestyields(fao,2013).whilsttheeffectofpatchydata must not be undermined, thedataputforwardfortheuswhenobservingthe industrial perspective, does not entirely support the claim of improved yields throughtheutilizationofgeneticallymodifiedcrops.thedataandresultsinterms ofyieldvary,andcannotbeseenasentirelycredibleconcerningthisissue Seed&price&comparison&& A comparison of seed prices is relevant to see how these figures differ with reasoning for this, such as an indication of either technological fees or perhaps a lack of competitiveness as well as additional considerations such as government interventions.furthermore,onecancomparetheseseedpricestoothersectionsof thepaper,questioningifthesedifferencesinpricesbetweengeneticallymodified 14

19 seeds and conventional seeds is reasoned for. The value of genetically modified seedsgloballyamountedtoapproximatelyus$15.6billionin2013,amountingto 35%ofthecommercialseedmarket.Theendvaluesofoutputsinthisregardare estimatedtobemorethantentimeshigherthantheseedalone(james,2013) Industrial&perspective&& Fourfirmshaveaccountedfor70%oftheglobalsoybeanseedindustryand80% oftheglobalcornseedindustryforsomeyears(schafer,2013).thisofcoursecalls into question the competitiveness of the industry. One would expect that with rapid and expansive adoption, as was the case of genetically modified crops the technologywouldexperienceadecreaseinprice.theapparentoutputenhancing technologyshouldseeminglycausethesupplycurvetoshiftrightinatraditional market consideration. Plausibly the result of new technology should result in a pricefallandhigherequilibriumquantity.thishoweverhasnotbeenthecasein theus.thenumberofnonqgeneticallymodifiedcornseedsavailableintheusfell 67% from 2005Q2010, from 3,226 to 1,062 seeds, whilst the genetically modified variety increased by 6.7% from 5,695 to 6,079 seeds from 2005 to 2010, reinforcingthestrengthofthegeneticallymodifiedseedmarket,anditsdominant contributors(binimelisetal.,2012).from1975to2000thepriceofsoybeansin theusroseby63%.thenexttenyearssawthepriceofsoybeansgrowby230%. Between1975and1997soybeanseedsaccountedfor4Q8%ofasoybeanfarmers cropincomeperacre.in2009thisfigureamountedto16.4%asopposedto11.2% for conventional soybeans.in 1975, soybean farmers spent around 5.9% of their crop income per acre on seeds, amounting to US$8.32 per acre on seeds, with a returnonaverageofus$141.70peracreontheirsoybeancultivation.by1998,the average seed expenditures averaged 10.7% of income per acre, explained by the increase in seed expenditures to US$20.46 per acre, and average return of US$ per acre. In 2001, the first year seed expenditures for the genetically modified and conventional variety were recorded separately for the US, the seed costs per acre equaled 11.3% for conventional and 15% of income per acre for geneticallymodifiedvariations,orus$19.53andus$26.08ofincomeperacre.asa totalpercentofoperatingcosts,soybeanseedpricesaccountedforbetween13 15

20 23% prior to the introduction of genetically modified seeds, rising to 35Q36% between2002and2008finallyamountingto46q52%ofoperatingcostsbetween 2009and2010.In2009thepremiumforgeneticallymodifiedcornseedswas69% as opposed to conventional corn seeds. Between 1975 and 1996, 4Q11% of crop income per acre was spent on corn seeds for corn farmers. By 2009 this figure amounted to 19%. Corn seed costs amounted to 11Q 17% of operating costs per acrefrom1975to1996,withthecostsofconventionalseedsgrowingto14q20% between 1997 and 2010, whilst genetically modified corn seeds rose to between 23Q34%. In the US, the averagepriceof cotton seeds has grown from US$33.6 to US$589/cwt.(~45kgs)overthelast35years.Between1975and1996,thepriceof cotton seeds approximately doubled.1996 to 2010 saw the priceof cotton seeds growfromus$73tous$589percwt.(~45kgs)(benbrook,2009). Anadditionalconsiderationplacedbysomeofthemajorgeneticallymodifiedseed producers is the restrictions put upon farmers in countries including the US, whereby genetically modified seeds from the year before may not be reused and mustbedestroyed,assumedlyprovidinghealthystreamofprofitformajorplayers eachyear.(crouch,2013;orton,2013).theincreaseinthesaturationintheuseof genetically modified crops in the future in the US cannot be avoided as the non geneticallymodifiedseedavailabilityissopoorthatcultivatorswillbepurchasing geneticallymodifiedseedsforthenextseveralyearswithoutasayinthematter. Major players such as the largest seed developer Monsanto have attributed the need for farmers to repurchase seeds every annum as a reqinvestment in their innovation,researchanddevelopment(monsanto,2014).theexplosionoftheuse of international property rights relating to the implementation of genetically modified seeds jeopardize the tradition practiced in many countries of saving or trading seeds. Such restrictions could be detrimental if implemented in certain countriesasupto1.4billionpeoplerelyonseedsfrompreviousseasons,including 90%offarmersinAfrica(Orton,2013) Developing&countries&perspective&& Bt cotton was first approved in India in Prior to this however illegal Bt cotton was cultivated, accounting for 10,000 acres in Btseed prices were 16

21 originally more than three times higher than thepriceof conventional seeds. In 2002Q2003 half of Bt cotton cultivators abandoned the technology, as they were notsatisfiedwiththeresults.by 2004Q2005 illegal cultivation accounted for 2 million acres (Pray et al., 2005). Government interventions began in 2005, increasing competition and causing seed prices to decline between 2006Q2008 (Sadashivappaetal.,2009).DatasurroundingArgentina sseedpricesforthefirst two years of cultivation 1996 and 1997 illustrate a similar trend to that of the UnitedStatesintermsofBtcorn.Thepriceofgeneticallymodifiedsoybeanseeds in Argentina however was significantly lower to that of the United States, attributedtoagreatercontrolofpatentedseedtechnologywithintheus,aswell astheexcessiveblackmarketsalesinargentina,estimatedtoaccountforbetween 25 and 50% of soybeans sold in Argentina throughout this time period (Ewing, 1998). Data for 2002 concluded seed price for genetically modified corn in Argentina was 93% of that in the US, whilst genetically modified soybean seeds weresoldat51%ofthepriceintheus.datafortheyear2000concludethatblack market sales in Argentina remained at 25Q50% as opposed to 0Q2% in the US, whilstfarmersavedcultivationaccountedfor25q35%inargentinaand15q20%in theus.commercialsalesofseedsin2000accountedfor80q85%oftotalseedsales in the US and between 28Q50% in Argentina (Gallo et al., 2005). In 2001 Argentinianglyphosateresistantsoybeancultivatorsreceived90%ofbenefits,as opposedtothe13%receivedbyglyphosateresistantsoybeanproducersglobally. This was attributed to weak intellectual property protection. Argentina additionallyin2001receivedus$300millioninwelfaregainsfromtheusthrough thetechnologicalspillover,anotherexampleoftheeffectsoftechnologyspillover andgainsfromfittingforeigntechnologiestodevelopingcountries.(traxleretal., 2005).SurveysinChinafortheseasonsof1999,2000and2001foundthepricefor genetically modified cotton seeds was 100Q250% higher thanconventionalseeds (Huang et al., 2003). In South Africa data collected surrounding the seasons of 1998Q1999 and 1999Q2000 concluded a doubling of seed prices per hectare for boththeseasons(bennettetal.,2002). 17

22 Seed&price&summary&considerations& Patchydatasurroundingthepriceofseedsincountriesimplementinggenetically modifiedcropshasbeenexamined,whilstthedatasurroundingtheushasgiven an underlying trend illustration of higher seed costs involved in the practise of genetically modified crops. At the same time the effects surrounding these price premiums in regards to developing countries is called into question, given the regulationsandinthecaseofnotablepricepremiumstheyappearinmostcasesto leadtohesitantimplementers,whoassumedlyimplementthetechnologythrough other manners. Unfortunately a sound comparison of seed prices cannot be completed for major implementers of genetically modified crops given lacking data, as such only few comparisons could take place on a year to year level comparison.assumedlythesepricepremiumsarejustinthecaseequivalentgains fortheproducerareexposed.thiswillbeexaminedfurtherinthecontinuationof thispaper Pesticide&comparison&& & The global market for crop protection, that is seed and chemical companies, has tripled from US$26 billion in 2001 to US$64 billion in Of these figures, herbicides account for approximately half. At the same time, the genetically modified seed market has expanded from US$115 million in its first year of commercialization to US$15 billion recorded in 2012 (Food and Water Watch, 2013). The years 2008 to 2009 saw an expansive increase in the global price of glyphosate relative to comparable herbicides, which meant a substantial cost increase in conjunction with the cultivation of glyphosate tolerant crops. Prices grewbyupto80%,tous$16,200perton,withpricesfallingtous$3,100perton followingthebubbleburst(barfootetal.,2013). 18

23 Industrial&countries&perspective&& Since1996,herbicidetolerantsoybeanshavebeenaccountableforUS$32.2billion in additional farm income within the US. Of this 33%,US$10.6 billion has been accountabletoyieldgainsorthroughthepotentialtocultivateanadditionalcrop, whilst 67% can be contributed to cost savings. Assumedly however, the benefits feltfromtheuseofglyphosateresistantcropsisdiminishinggivenareductionin effectiveness is strongly suggested. A US study of genetically modified crop cultivatorsindelawarefoundthe48%reportingglyphosateresistantweedsalso accountedforanincreaseincostsforthemanagementoftheseweedsbyus$5to US$17 per hectare (Scott et al., 2007). A further study of 17 states concluded producers expected the additional costs involved in the control of glyphosate resistant weeds would cost US$34.35 to US$40.3 per hectare (Foresman et al., 2008) Developing&countries&perspective& In developing countries pesticides, when available, can be costly for typically resourceqpoor farmers furthering the enticement to implement genetically modifiedcropswhichproposebothlimitationstothelossesexperiencedthrough pests as well as other implied benefits (Huang et al., 2003). A 2001 study concludedthatoncottonfarmsinargentinabtcottonledtoanaveragereduction ofinsecticidesby50%asopposedtoconventionalcottonfarming(dejanvryetal., 2005). InBrazil,theaverageherbicideuseforsoybeans grew from 2.8 kg per hectare in 2003 to 4.2 kg in 2008 (Meyer et al., 2010). Unfortunately data restrictions cannot give way to a concise consideration of pesticide usage for developingnationsutilizinggeneticallymodifiedcrops. 19

24 4.4. &Economic& considerations& of& leapfrogging& and& genetically& modified&crops& A particular relevance of leapfrogging within the technology of genetically modified crops is that of developing countries, given the possibility of rapid economic growth without the obstacles of previously employed technology. The theory of leapfrogging has been documented within other fields, yet given the nature of genetically modified crops the issue is raised as to whether the progression of genetically modified crops can adopt to this theory. Concerns includethepossibilitytheremayexistgreaterconsiderationsforthetechnologyto thatofthosepreviouslysuccessfulinleapfrogging.onemustconsiderthattheoneq approachqfitsqall may not be valid for developing countries in the case of genetically modified crops. Relevant considerations for the specific areas such as poor soil quality, lack of access to water and other resources such as pesticides must be addressed, some of which may not have been considerations for the industrialcountriesimplementingthetechnology,whichtherebymayundermine the relevance of leapfrogging said technology. And yet development could potentially be dramatically accelerated in developing countries by incorporating the new technology of genetically modified crops and leapfrogging to new productionmethodsofagriculture(jumaetal.,2014;assefa,2007).leapfrogging canalsogivewaytoincreasedcompetitivenessanddecreasedcostsbycreatinga shortcuttoclean,safetechnologies(assefa,2007).jumaetal.(2014)attributethe main obstacles of the possible leapfrogging of genetically modified crops to the existenceofregulatorysystemsandpublicuncertaintysurroundingtheuseofthis technologyasopposedtoresourceobstaclesasmentionedearlier.onemightsay therefore that whilst some developing countries have in fact implemented the technology of genetically modified crops, a possible potential exists in the future for developing countries that have not yet adopted this technology. Given the nature of genetically modified crops, this will become clearer as a posteriori knowledgegrows. 20

25 4.5. Additional&economic&considerations&& The lack of data can be misleading. Datahasnotyetbeencollectedforall areas; such as weather conditions and pest burdens and therefore the margin of error surroundingthismustbeconsidered.forexamplethroughthesametimeperiods, 2005Q2006and2007Q2008,twodifferentregions800kmapartinIndiaobtained notably varying yields, underlying this issue. One region obtained yields %higher,whilsttheotherobtainedyields24 40%higher(Carpenter,2010). A study in South Africa conducted over the three seasons between 1998Q2001 foundtheseasonof1999q2000hadalargeramountofrainasopposedtotheother twoseasonsandthisleadtogreaterproblemsrelatingtopests,reflectedinamuch higherpesticideuse(bennettetal.,2004).additionalconsiderationssuchasfuel pricesandlaborcostswillnotbeexaminedduetodatarestrictions. The technology of genetically modified crops has been attributed to potential incomeincreasegivenlesstimeisneededfortaskssuchaspruningandtherefore otherworkmaybecompletedwithinthistimeframe.inindia,forthe7.3million farmers adopting genetically modified crop technology, Bt cotton caused a 50% increaseinprofitsbetween2006and2008(james,2013;sadashivappaandqaim, 2009). Farmers who had adopted Bt cotton spent 18% more money than those employing conventional cotton cultivation, suggesting an improvement in living standards (Sadashivappa et al., 2009). Throughout the period of 1996Q2012 developing countries are estimated to have benefited by US$57.9 billion from genetically modified crops, as opposed tous$59 billion in industrial countries (James, 2013). In 2012, developing countries are estimated to have obtained 45.9% gains from genetically modified crops, amounting to US$8.6 billion of the total US$18.7 billion (Barfoot et al., 2014 forthcoming). The costs involved in developing a genetically modified crop can be US$300 million whilst the actual process of development can take up to 12 years (Orton, 2003). A successful exploitation of the technology involved in genetically modified crops via leapfrogging may ensure the economic gap between the applicable country and industrialcountries,ifpurelyeconomicconsiderationsareconsidered(jumaetal., 2014). 21

26 5. Environmental&considerations&& Theeffectsontheenvironmentfromgeneticallymodifiedcropsareasubstantial consideration.giventhenatureofgeneticallymodifiedcropsonemustaddressthe present considerations in terms of data put forward surrounding relevant environmentaleffects,whilstaddressingconsiderationsthatrelatetosaidnature of genetically modified crops. Firstly, it is relevant to look at environmental considerations in relation to herbicides and lead on considerations of the implementation of genetically modified crops, progressing to look at herbicide resistantweeds,invasiveness,biodiversityandtheeffectsonnaturalresources.a properassessmentoftherisksinvolvedinthecultivationofgeneticallymodified cropsbothshorttermandlongtermcannotbeassessedinatraditionalmanner; ratheronemustexplorerelevantleadonconsiderationsrelatingtothenatureof genetically modified crops with an emphasis on the unknown. This is explored addressingrelevanttheoryincludingtheenvironmentalkuznetscurveinorderto thoroughly explore and emphasize this unknown. Given the somewhat philosophicalapproachtothisassessment,detailcannotbebroughtuponspecific cropsornationsbutratheranunderlyingapproachistakenasthephenomenonis consideredataglobalenvironmentalscale Herbicide&application:&environmental&perspective& The measures in the changes of insecticide use and herbicide use as previously addresseddonottakeintoaccountthetoxicityofthechemicalsinquestion,andas suchtheconsiderationsoftheenvironmentandhumanhealtharenotconsidered. This highly considerable factor must be taken into account. This application is particularly relevant for large implementers where data, when available, can illustrate relevant effects on the environment. Lead on environmental effects stemmingfromherbicideuseinrelationtogeneticallymodifiedcropsmustalsobe considered.globally,james(2013)estimatedareductioninpesticideuseequalto 497 million kilos of active ingredient between 1996 and 2012, amounting to a reductionof8.7%duetogeneticallymodifiedcrops. 22

27 Industrial&perspective&& Despite original suggestions genetically modified crops would lower use of herbicides, data put forward by the Unites States Department of Agriculture illustratesanincreaseinherbicideuseintheusof173.7millionkilosoverthefirst 13 years of commercialized genetically modified crops(benbrook, 2009). Of this total, herbicide tolerant crops including corn, cotton and soybean accounted for 173.5millionkilos.Herbicidetolerantsoybeancropsaccountedforanincreasein herbicide consumption of million kilos, amounting to 92% of this total. In 2012, herbicide tolerant soybean accounted for 47% of total global cultivation, with glyphosate being the most common herbicide (James, 2012). At the same time, conventional soybeans experienced a fall in herbicide application, from 0.54kgsofactiveingredientperacrein1996to0.22kgsin2008.Herbicidetolerant soybean herbicide application meanwhile grew from 0.4kgs of active ingredient peracrein1996to0.75kgsin2008.thefirstthreeyearsofgeneticallymodified cropcommercializationsawanoverallfallinpesticideuseof1.2%,2.3%and2.3% respectively.notablytheexpansionintheuseofherbicideswasbetween2007and 2008, accounting for 47% of the increase in herbicide use for the 13 years considered. Between these two years, herbicide usedon herbicide tolerant crops grew31.4%.thebuildupofresistance,inparticulartoglyphosatehasmeantan increaseby26%or36.8millionkilosfrom2001to2010.(foodandwaterwatch, 2013).Meanwhilepesticideresistant(Bt)geneticallymodifiedcropshaveensured consistentfallsintheuseofinsecticide,toatotalof29.1millionkilosinthefirst13 years of commercialization (Benbrook, 2009). However intheuspesticideuse stemming directly from the use of genetically modified crops is expected to increasefromapproximately1.5kilosperhectarein2013to3.5kiloperhectarein 2025(Mortensenetal.,2012) Developing&perspective&& Asaddressedabove,a2001studyconcludedthatoncottonfarmsinArgentinaBt cotton led to an average reduction of insecticides by 50% as opposed to conventional cotton farming. Notably the reduction was within highly toxic 23

28 chemicals,assumedlyaccountingforapositiveeffectontheenvironment.ofthese reductionsbetween83%and100%forchemicalsinthetoxicclassesofiiandiii occurred,withanincreaseof248%ofherbicidesinthetoxicclassofiv,thelowest toxicity class (de Janvry et al., 2005). In Brazil, the average herbicide use for soybeansgrewfrom2.8kgperhectarein2003to4.2kgin2008correspondingto approximately1kgherbicidetoproduceonetonofsoybeansin2003,asopposed to1.5kgin2008 (Meyer et al., 2010). Despite Brazil s high output of genetically modifiedcrops,datasurroundingherbicideconsumptionisparticularlylimited.a study of South African insecticide use found that over the three seasons studied from1998q2001thetoxicloadontheenvironmenthadincreased(bennettetal., 2004). Unfortunately the restrictive data for developing countries in terms of herbicide use gives way to difficulties in the assessment of environmental considerations,givingwaytonoconcisedeductions Glyphosate&& An increase in the application of herbicides does not necessarily entail negative effects on the environment or human health. What must be considered is the toxicityandresidualpresenceoftheherbicide.glyphosatehasaverylowtoxicity reading, class IV, the lowest class and practically nonqtoxic.theissuehowever ariseswhentheemploymentofglyphosateincreasestoalevelwhereitisdeemed insufficient therefore the employment of more toxic chemicals becomes greater, causing concerns for the environment. Previously mentioned decreases in the potential benefits of genetically modified crop usage may be undermined by the useofglyphosate.theoriginaladoptionofglyphosateresistantcropscameabout with few reservations from cultivators givenweedcontrol was made simple and cheap, marketed as the effective and safer choice with the ability to reduce aggregatepesticideutilization,furtheredbyaproposeddecreaseinthenumberof applicationsofpesticide,aswellasthephysicaltimespentmanagingweedsonthe farm.theemploymentoftheseglyphosateresistantcropswasextensiveby2008, accounting for 80% of total genetically modified crops grown worldwide per annum(duke et al., 2009). Usually glyphosate is the sole herbicide employed by farmerscultivatingsuchglyphosateresistantcrops.thishoweverencouragesthe 24

29 evolution of weeds that are specifically glyphosate resistant. This issue arises when a lack of diversity in use of herbicides and weed management is practiced (Powles,2008).Withtimethiswillmakeglyphosateineffective(NRC,2010). Figure&5:&Globalgeneticallymodifiedcropcultivationcontrarytothenumberof weedswithglyphosateresistance. Source: Data complied via International Survey of Herbicide Resistant Weeds (2013)andtheISAAA(2014). A mere three years after the introduction of glyphosate resistant crops, the first caseofglyphosateresistantweedsonageneticallymodifiedcropqcultivatingfarm wasreported.asdemonstratedinfigure5,thenumberofweedswithglyphosate resistance followed a similar growth pattern of the utilization of genetically modifiedcropsworldwide.intheus,theadoptionofglyphosatewasexpansive.a 2004studyofDelawarefarmersfound38%ofrespondentsemployinggenetically modified crops reported findings of the glyphosateresistanthorseweed.95%of these respondents had made changes to their pesticide approach, of these 66% 25