THE ICAC RECORDER. International Cotton Advisory Committee. Technical Information Section. VOL. XXXIII No. 3 SEPTEMBER 2015

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1 THE ICAC RECORDER International Cotton Advisory Committee Discover Natural Fibres Initiative Technical Information Section VOL. XXXIII No. 3 SEPTEMBER 2015 Update on Cotton Production Research

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3 SEPTEMBER Contents Introduction 3 Prices of Biotech Planting Seed and Technology Fees for Biotech Traits 5 The Social, Environmental and Economic Performance of Cotton 11 Development of Advance Mapping Populations in Cotton 18 By Dharminder Pathak and Dharminder Bhatia, Punjab Agricultural University, India Pages Introduction The first article Prices of Biotech Planting Seed and Technology Fees for Biotech Traits is an update of the two articles that were previously published in the March and June 2009 issues of the ICAC RECORDER. Comparable data were not available for some countries, and in others, the cotton grown is all biotech. The herbicide tolerant feature, which is popular in Argentina, Australia, Brazil, Colombia, Mexico, South Africa and the USA is not discussed. Cultivation, preemergence herbicide chemical control and manual weeding are used in China, India and Pakistan, where insect resistant biotech is grown on almost all the area but herbicide tolerance is not widely used. Technology fees vary among countries and there are many reasons why this occurs. The primary factor in determining the price has been the benefits received by farmers from planting a biotech variety. In most cases this benefit has taken the form of reduced use of insecticides and increases in yields. Farmers want new products and events and these will only keep coming if companies are allowed to recover their investments by reaping returns from the developed technologies. However, high tech fees can be a constraint in the adoption of technology. Farmers may wish to use a biotech product but the return may not justify its high cost. Lower prices and long-term price controls could have negative implications for product development. Price controls may delay new product launches, as a result of which farmers may lose in the long run, since they will not get access to improved events and new special features. Unfortunately, determination of technology fees for specific traits has not been transparent. A comparison of the cost of technology fees in relation to the expected benefits deriving from different traits may require a general reappraisal and may force technology providers to reduce the fees they are charging. The ICAC formed an Expert Panel on Social, Environmental and Economic Performance of Cotton (SEEP) in The second article in this issue of the ICAC RECORDER is a summary of the report Measuring Sustainability in Cotton Farming Systems: Towards a Guidance Framework published by SEEP in April The SEEP is composed of representatives from all segments of the cotton industry and has held 13 face-to-face meetings and 27 meetings by conference call over the past seven years. In its work, the SEEP has pursued quantitatively measurable targets for which it was necessary to identify indicators that could be measured. After intensive debate, a list of indicators was developed through a process that involved three stages: review of programs and creation of an inventory of indicators; refinement of the inventory; and review of selected indicators. In the first phase, SEEP selected 189 indicators that were directly and indirectly relevant to all aspects of the sustainability of cotton. Later, the number of indicators was reduced to 68. The list of 68 recommended indicators is a starting point for discussion among cotton sector stakeholders, so that areas of agreement on key issues can be found. All 68 indicators may not be relevant to all production systems and there are a few that are certainly more general and better suited for further use. The next task is to find which of the 68 indicators are most appropriate for rating. SEEP has suggested using three criteria -- relevance, feasibility and usefulness -- to score and rank indicators in the report. Read more in the article and also full report of the Expert Panel at < International-Cotton-Advisory-Committee-ICAC/measuringsustainability-cotton-farming-full-english.pdf>. Dr. Dharminder Pathak and Dr. Dharminder Bhatia of the Punjab Agricultural University, Ludhiana, India have contributed the third article Development of Advanced Mapping Populations in Cotton. Conventional cotton breeding has many limitations that slow the process of developing better genotypes and that often also make it impossible to achieve desired results/combination of positively contributing genes/alleles. The limitations include complex antagonistic relationships among important traits, low recombination rates, linkage drag effects, sterile interspecific hybrids and The ICAC RECORDER (ISSN ) is published four times a year by the Secretariat of the International Cotton Advisory Committee, 1629 K Street, NW, Suite 702, Washington, DC , USA. Editor: M. Rafiq Chaudhry <rafiq@icac.org>. Subscription rate: $ hard copy, $ electronic version. Copyright ICAC No reproduction is permitted in whole or part without the express consent of the Secretariat.

4 4 ICAC RECORDER many more. Dr. Pathak and his co-author observed that it has become necessary to develop advanced mapping populations, such as advanced backcross QTL lines, backcross inbred lines, advanced intercrossed lines, near isogenic lines, chromosome substitution lines, high throughput genotyping multi-parent advanced generation inter-crosses, association panels, nested association mapping populations for the purpose of gene/ QTL mapping in cotton. These populations are least affected by the limitations of conventional mapping populations. The authors also suggested that among the traits that merit special attentions are nutrient (nitrogen) and water use efficiency, tolerance to drought and salinity, fiber strength and resistance to the cotton leaf curl disease. Registration for the World Cotton Research Conference-6 Registration and abstract submission for the WCRC-6 and the 2016 Biennial Conference of the International Cotton Genome Initiative (ICGI), two of the largest events in cotton research, are now open. The WCRC-6 will be held in Goiânia, Brazil from May 2-6, The deadline for submission of abstracts is February 15, The program includes two keynote speakers on the first day of the Conference and eight plenary speakers, in the morning sessions over the week. A number of concurrent sessions are planned. The Organizing Committee has planned two field trips, the first to visit a cotton farm and a cotton gin and the second to visit a fiber testing lab and a research center. Program outline, registration and hotel booking are available at < 12 th Meeting of the Inter-Regional Cooperative Research Network on Cotton for the Mediterranean and Middle East The 12 th Meeting of the Inter-Regional Cooperative Research Network on Cotton for the Mediterranean and Middle East was held in Sharm El-Sheikh, Egypt from October 7-9, Delegates from 11 countries (Bangladesh, Egypt, France, Greece, India, Iran, Pakistan, Spain, Sudan, Turkey, Syria and the ICAC) attended the meeting. A detailed report on the meeting will be published in December issue of the ICAC RECORDER. All the papers presented will be posted at < Regional-Cooperative-Research-Network-on-Cot>. New Publications from the Technical Information Section The Technical Information Section is releasing three new publications at the 74 th Plenary Meeting of the ICAC. Dictionary of Cotton This is a joint publication of the ICAC with the International Cotton Researchers Association (ICRA). Thirty-three researchers from around the world have contributed to this work, which includes definitions of over 2,0000 terms used in cotton production, processing and use. The publication is available from the ICAC. Climate Change and Cotton Production in Modern Farming Systems This publication is from the ICAC series of review articles published jointly with the CABI. Under the leadership of Dr. Mike Bange of CSIRO, Australia, eleven other researchers have contributed various sections to this publication. ICAC and CABI jointly sponsored the publication of this review article. The publication is available from CABI. Structure of Cotton Research, Input Supply and Transfer of Technology This is a regular three yearly publication of the ICAC but with many significant changes. In the past it was called Current Research Projects and has been available free of cost, almost half as a text and half searchable database to find researchers and their projects. The new publication, as apparent from the name is more focused on structure of research, variety approval and seed supply, fertilizer and pesticides supply systems, transfer of technology, research institutes and cotton maps of countries. The publication can be downloaded from the ICAC website free of cost.

5 SEPTEMBER Prices of Biotech Planting Seed and Technology Fees for Biotech Traits Farmers must pay for the biotech traits they want to use and the price of the trait, commonly referred to as the technology fee, varies from country to country, from trait to trait and even among the biotech genes within a given trait. In insectresistant biotech cotton, many reasons exist for the variation in the technology fee, but the primary criteria that determine how much a farmer will be called upon to pay for a particular trait are: the savings derived from the decreased use of insecticides and the commensurate increases in income resulting from higher yields. Areas where the target insects are not serious pests are, of course, not candidates for the adoption of insectresistant biotech cotton. Conversely, herbicide-tolerant cotton, particularly Roundup Ready Flex, requires increased use of herbicides. This makes it possible to increase yields by reducing weed infestation, but also increases the cost of weed control (due to repeated use of Roundup or similar products). There are areas where the target pests controlled by insectresistant genes do attack the cotton crop, but the expected benefits may not justify the additional cost of the technology fee. Declining trends in pest pressure in certain areas may make some locations less attractive for the currently available insect-resistant biotech genes. A comparison of the cost of technology fees in relation to the expected benefits deriving from different traits may require a general reappraisal and may force technology providers to reduce the fees they are charging. The ICAC has tried to keep track of the technology fees charged in different countries for various traits. Two articles dealing with this subject, Biotech Cotton and Technology Fees, were published in the March and June issues of the ICAC RECORDER in The present article provides an update of the data published in 2009 for all the countries for which data were available. Comparable data were not available for some countries, and in others, the cotton grown is all biotech. Technology Fee in Argentina Argentina started to commercialize biotech cotton in the 1998/99 season but over the following ten years, the area planted to biotech varieties remained below 25% of the total cotton area. The primary reason for the poor adoption rate was the generally low level of yields and net benefits deriving from the adoption of the technology. Another consideration may have been the high cost of the technology fee. Past performance notwithstanding, biotechnology-related developments in Argentina have gained momentum in the more recent past. The creation in 2007 of the Ministry of Science, Technology and Innovative Production focused on the development of state-of-the-art technology in several fields, including biotechnology, and this might be another factor to Year Table 1: Technology Fee for Biotech Planting Seed in Argentina Price of Biotech Seed US$/Ha Bollgard Roundup Ready Bollgard + Roundup Ready 1998/ Not approved / Approved / / / / / / / / / /10 Stopped Approved 2010/ / / / / be taken into account. While the technology fee for a stackedgene Bollgard II + Roundup Ready cotton is still untenable, it is believed that biotech cotton is currently planted on about 80-90% of the cotton area. Only stacked-gene Bollgard II cotton is approved for cultivation, so herbicide tolerance may be the driving force behind increases in the biotech cotton area. Argentine farmers discontinued the use of single-gene insect-resistant Bollgard cotton as of the 2011/12-crop season (table 1). Technology Fee in Brazil In Brazil, cotton is at higher risk of being damaged by the bollworm than by any other insect. H. armigera, against which biotech cotton has proved to be the most effective recourse, was not even a pest on cotton back in 2006/07 when biotech cotton was commercialized, so its adoption rate was very slow. Given the fact that the presence of the bollworm has been verified over the last two to three years, demand for biotech cotton resistant to the bollworm is expected to grow (table 2). Technology Fee in China In China, the technology fee for biotech cotton, which was initially limited to cry 1Ac, has always differed from region to region. In 1999, the average price for a non-biotech seed was US$0.35/kg as compared to US$3.00/kg for biotech seed. Demand was high and locally produced genes were not in use yet, but the price differences eventually dwindled. (See complete data on table 3). Technology Fee in Colombia In Colombia, cotton is grown in two regions and the technology fee differs slightly from one region to the other, despite the

6 6 ICAC RECORDER Table 2: Technology Fee for Biotech Planting Seed in Brazil Year Price of Biotech Planting Seed/Ha Bollgard Bollgard II RR RR Flex Bollgard + RR BG II + RR BG II + RR Flex 1996/97 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 1997/98 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 1998/99 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 1999/00 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 2000/01 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 2001/02 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 2002/03 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 2003/04 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 2004/05 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 2005/06 Not approved Not approved Not approved Not approved Not approved Not approved Not approved 2006/ Not approved Not approved Not approved Not approved Not approved Not approved 2007/ Not approved Not approved Not approved Not approved Not approved Not approved 2008/ Not approved Not approved Not approved? Not approved Not approved 2009/10 - Not approved Not approved Not approved? Not approved Not approved 2010/11 - Not approved Not approved Not approved US$ 60,00 Not approved Not approved 2011/12 - Not approved Not approved Not approved US$ 60,00 Not approved Not approved 2012/13 - Not approved Not approved U$ US$ 60,00 Not approved? 2013/14 - Not approved Not approved U$ US$ 60,00 Not approved US$ 240, /15 - Not approved Not approved U$ US$ 60,00 Not approved US$ 240,00 Year Price of Biotech Planting Seed/Ha Wide Strike WideStrike + RR WideStrike + RRFlex LibertyLink (LL) GlyTol + LL TwinLink + GlyTol + LL 1996/97 Not approved Not approved Not approved Not approved Not approved Not approved 1997/98 Not approved Not approved Not approved Not approved Not approved Not approved 1998/99 Not approved Not approved Not approved Not approved Not approved Not approved 1999/00 Not approved Not approved Not approved Not approved Not approved Not approved 2000/01 Not approved Not approved Not approved Not approved Not approved Not approved 2001/02 Not approved Not approved Not approved Not approved Not approved Not approved 2002/03 Not approved Not approved Not approved Not approved Not approved Not approved 2003/04 Not approved Not approved Not approved Not approved Not approved Not approved 2004/05 Not approved Not approved Not approved Not approved Not approved Not approved 2005/06 Not approved Not approved Not approved Not approved Not approved Not approved 2006/07 Not approved Not approved Not approved Not approved Not approved Not approved 2007/08 Not approved Not approved Not approved Not approved Not approved Not approved 2008/09 Not approved Not approved Not approved Not approved Not approved Not approved 2009/10? Not approved Not approved? Not approved Not approved 2010/11? Not approved Not approved? Not approved Not approved 2011/12? Not approved Not approved? Not approved Not approved 2012/13 U$ Not approved Not approved U$ Not approved Not approved 2013/14 U$ Not approved Not approved U$ 40.00?? 2014/15 U$ Not approved Not approved U$ U$ U$ NOTES: 1. Bollgard II has been aproved only stacked with RRFlex 2. GlyTol has been aproved only stacked with LibertyLink 3. TwinLink has been aproved only stacked with Glytol and LibertyLink Table 3: Price of Biotech Planting Seed in China Year Bollgard Guokang Seed Rate/Ha Exchange Rate/US$ Yuan/ha US$/Ha Yuan/ha (In US$/Ha) (Kg) (Yuan) 1997/ / / / / / / / / / / / to to / to to / / / / / Notes: 1. Exchange rate is for February 15 each year, which is high time for seed sale. 2. There have been no Bollgard seed in China market since 2010.

7 SEPTEMBER Table 4: Technology Fee for Biotech Planting Seed in Colombia (US$/kg) Year Conventional + RR Bollgard I Bollgard Bollgard + RR Bollgard II + RR Flex Conventional Seed Interior Costa Interior Coastal Interior Costa Interior Costa Interior Costa Interior Costa 2004/ / / / / / n.a / / / / / fact that the seed supplier is the same. Even when the price of the seed and the technology fee are equal in both regions, the seed cost/ha will be higher in the Costa region because of the higher seeding rate used there. Moreover, cotton yields are also lower in the state of Cordova, which is responsible for more than 2/3 of production in the Costa region. The higher technology fee has been a bone of contention from the very beginning for farmers and other segments of the cotton industry, particularly farmer associations and federations, but no other option was available given that the national industry was unable to produce planting seed locally. The government has not intervened and, hence, farmers have not been enticed, but forced, to grow biotech varieties, since conventional cotton seeds are no longer available (table 4). Technology Fee in India India is the only country where biotech-planting seed was sold along with the non-biotech varieties. The non-biotech seed compelled growers to adhere to existing refuge requirements. In the beginning, refuge requirements were common to all regions throughout the cotton production belt, but were later revised. Farmers were given a choice: they could opt for a sprayed refuge or an unsprayed refuge. As in the USA and many other countries, farmers were required to plant 80% of their total cotton area to insect-resistant biotech varieties and 20% or five rows, whichever was greater to non-biotech varieties. Other restrictions also applied. It has been reported that the sprayed option was more popular among farmers. This was due to the heavy damage suffered by crops in unsprayed areas. Singla et al. (2012) examined refuge requirements for biotech cotton in the North, Central and South cotton producing regions of India, focusing on the development of resistance by the American/cotton bollworm, Helicoverpa armigera, to the Bt toxins and pyrethroids used on cotton over a long period of time. They based their conclusions on biological factors, yields, and regulatory protocols. They concluded that the refuge requirements considered as optimal varied significantly across cotton-growing regions. The North and Central regions had higher refuge requirements than the South region. The findings suggested that the sprayed refuge was more profitable than the unsprayed refuge. Refuge requirements were found to be sensitive to the relative proportions of pests in natural refuges, as well as to the initial Bt resistance levels in all three regions. A greater population of resistant pests meant that there was more need for a larger refuge area. The biotech planting seed was sold in small packets of 450-gm, in conjunction with 125-gm packets of non-biotech seed, i.e., enough to plant 0.4 hectares. Seed is expensive because prices may vary as a function of the seed varieties and the diverse seed companies, but the average price for Bollgard and Bollgard II genes is US$32/ha and US$36/ha, respectively. The technology fee in India was originally higher due also to the price of hybrid seed, as the biotech genes could only be sold through hybrids. Thus, the planting seed fee incorporated a factor that was unique to India. Today, biotech hybrids are also sold in China. Biotech cotton in India is often acknowledged as a success story free of any significant controversies thanks to the huge impact it had on cotton yields since 2002/03. It was not only the biotech genes that benefitted India, but also the introduction of modern production practices and programs that led to unexpected increases in yields. Among these factors were: At the time of the adoption of biotech cotton, the country s yields were lower than its production potential as measured by the level of technology, the varieties/ hybrids available, types and amounts of inputs used and the research conducted. There was a huge recoverable potential that had yet to be tapped. The existing insecticide application technology and systems had many drawbacks. Insecticides were used extensively, but were not sprayed properly. The insecticide resistance issue was at its peak and insectresistant biotech cotton provided a convenient solution to both problems. The technology missions of the Government of India came at just the right time. The Central Government, along with the state governments, focused on getting technology transfers into the hands of the farmers, which was the crux of the problem. Cotton growers were anxious to explore any option that might help them to raise yields, so they welcomed biotech cotton. The right decisions were made at various levels at the right time. The private sector seed industry came to

8 8 ICAC RECORDER the conclusion that the future of cotton was intimately linked to the development of newer biotech genes. India quickly developed its own biotech genes, a factor that also played a major role in getting the technology into the hands of growers throughout the country. The technology fee in India has its own history, one that is not comparable to the experience of any other country that has adopted biotech cotton. In 2004, the cost of the biotech seed needed to plant a hectare of cotton was about US$47 greater than the cost of its isogenic line without the biotech gene. In 2006, the official price for a 450-gram packet of biotech seed, the amount needed to plant an acre of cotton, was around US$36 (Rs. 1,600), i.e., about four times the price of a non-biotech seed. It is estimated that out of the seed price of US$36 charged by companies, US$28 (Rs. 1,250) was defined as the trait value, and US$8 (Rs. 350) as the cost of conventional hybrid planting seed. A surprising turn of events took place in 2006 when the state of Andhra Pradesh imposed a ceiling of US$17 (Rs. 750) on the price of a 450-gram bag of biotech planting seed (Singla et al., 2012). The objective was to ensure that the technology would be affordable and accessible to small and marginal growers in the state. Later, other states in India also imposed the same ceiling. This reduction of more than 50% in the price of a bag of planting seed might have been detrimental to the further spread of the technology in India because of the slimmer income margin accruing to seed companies. However, in practice, seed companies have assimilated the tighter net income margin on the seed and continued to disseminate the technology without any negative impacts from the reduction in the price charged for the seed. At least four factors contributed to the continued focus on furthering the adoption of the biotech cotton. Firstly, the technology adoption rate over the first four years was exceptionally high and the momentum that had already been built up would have required a much bigger obstacle to slow it down. Secondly, the Genetic Engineering Approval Committee changed the approval process to an event-based approval, rather than a case-by-case approval for each and every variety having the same biotech gene. Event-based approval did not require extensive bio-safety and agronomic testing for each new variety. Thus, event-based approval resulted in a great influx of biotech hybrids, thereby increasing competition in the planting seed industry. Thirdly, just prior to the 2006 planting season, the Genetic Engineering Approval Committee approved Bollgard II for commercial release in the Central and Northern regions. Fourthly, also in 2006, two local seed companies released their own insectresistant biotech cotton events. All these factors together practically guaranteed that the rate of technology adoption would not suffer a setback, not even with a 50% reduction in the price charged for the technology in the seed. Technology Fee in Pakistan Pakistan commercialized biotech cotton in a way that was different from the method followed by other countries. Private seed companies inserted the cry1ac gene in local varieties and prepared to distribute biotech varieties without any advance preparation within the farming community to help them accept the new technology. Agronomic practices were not fine-tuned to obtain the best possible results from biotech varieties and technology transfer messages were not revised commensurately. The planting seed companies locked horns in a desperate struggle to defend their market share and cotton farmers were left to play the role of uninformed bystanders. Having chosen to rely on the advantages of the biotech product, seed companies exploited the biotech trait to improve their respective market shares. The seed industry found itself in a state of such disarray that no safeguards were instituted to prevent the spread of poor quality planting seed or to protect the insect-resistant technology embodied in the seed. Farmers were, of course, in no position to evaluate the quality of a given seed source or to verify the presence or absence of technological traits in the seed. The weak regulatory system and the inexperience of the seed industry itself led to a detrimental situation that could not be sustained by the seed industry. The deteriorated seed situation in the country motivated policy initiatives to avoid a range of negative consequences and make better use of the emerging new technologies that were being developed in the country. Just recently, when planting for the current season had almost been completed, the Government of Pakistan amended the Seed Act in consultation with the seed sector (including private companies). Private sector companies are now allowed to produce basic seed, which had previously been the exclusive domain of the two public sector corporations in the Punjab and Sindh. Key provisions of the Act, whose primary focus is on eliminating unregulated participation in the seed industry, are listed below. The amendments would bring the private sector under the purview of the Seed Act. Currently, the Act makes little mention of the private sector, leaving private companies, which were formed under other regulatory statutes (the 1984 Companies Act for example), largely unregulated. Anyone seeking to participate in the seed industry would be required to have a seed processing plant or operate as a registered seed dealer. Sales of seed without the proper registration or sales of misbranded seed are subject to jail sentences or fines. Biotech seeds are not allowed to contain terminator genes, i.e., genes that prevent the replanting of a crop, but are not found in commercial crops. Biotech seeds must have a certificate of approval from the National Biosafety Committee stating that they will not have any adverse effects on human, animal, or plant life and health, or on the environment. The technology has been extended to almost the entire area planted to cotton in the country. There can be no doubt that the country s 2.2 million cotton growers benefitted from

9 SEPTEMBER having to pay a minimal amount for the technology fee. The technology fees charged by private companies were limited and unregulated, but they nevertheless existed. Even now there is no specified technology fee for a given biotech gene, but, on average, a biotech variety planting seed sells at about US$40-44/ha more than a conventional variety seed. Prices vary from company to company, variety to variety, area to area and year to year. The current regulatory system that oversees the development and delivery of improved seed and seed-based technologies has prohibited the stacking of cry 1Ac with cry 2Ab in the country. However, the seed industry seems to be streamlining its operations in order to utilize third generation insect-resistant genes together with other locally developed biotech products. Technology Fee in South Africa The technology fee given in table 5, refers to a 25-kg pack of seed, sufficient to plant a hectare of cotton. To derive the full cost of the 25-kg pack of biotech seed, the price of a conventional seed should be added to the technology fee. Technology Fees in the USA The technology fee in the USA has changed from a per hectare basis to fixed-quantity seed counts since 2004/05. Data for the Mississippi Delta regions are presented in the table 7. As a consequence, farmers are more careful to use precision planting and save as much as they can on seed costs without compromising their optimum plant stand. The seed count varies from one variety to another because of seed size and weight. Data for Georgia, Florida and Southern Alabama for 2015 appear in the table 6 ( Analysis of the Technology Fee Special traits, such as the ones found in transgenic cottons, require special research protocols that are extraordinarily costly and it is simply impossible to compare them with the costs involved in the development of conventional varieties. The difference can be a single gene, two to three genes or an even greater number of genes, as in the case of Starlink corn. The issue is that finding a suitable gene, getting it to survive all the biosafety protocols and ultimately having it approved always entails great expense. Thus, it is the markups on the end product that act as an incentive for private companies to continue developing new technologies. The technology fee Table 5: Technology Fee for Biotech Planting Seed in South Africa (Technology fee is for a 25 kg pack) Year Roundup Ready Bollgard Bollgard + Roundup Ready Bollgard II + Roundup Ready Flex Conventional Seed 1998/ / / / / / / / / / / / / / / / / Notes: 1. Data converted from Rands into US$ using the IMF Principal Rate Period Average (calendar year). 2. Price for BG II + RRF for 2013/14 and 2014/15 includes price of seed and technology fee. 3. Exchange rate varies a lot from year to year. varies among countries and there are many reasons why this occurs. Prices have been controlled, companies have lowered the prices for the same products, and so on, but the overriding factor determining the end price continues to be the benefit that farmers can reap by planting a biotech variety. In most cases the benefit has been in the form of savings on insecticides along with increases in yields. If the companies do not make any profits, they will cease to develop new products. Farmers desire new products and events and these will continue to be developed only if the companies can recover their investment in the development of new technologies. High prices can also become a constraint affecting the adoption of the new technologies. Farmers may wish to use a biotech product, but the returns ultimately obtained may not justify the high cost of the technology fee. Thus, not only farmers but entire countries may refrain from using a certain biotech product, a result that is also detrimental to technology Table 6: Technology Fee for Planting Seed for 2015 (US$/count) (Georgia, Florida and Southern Alabama) Trait Seed Count 250, , ,000 Bollgard II Roundup Ready Flex Bollgard II + Roundup Ready Flex Bollgard II XtendFlex TM XtendFlex TM Chemistry Discount Introductory Price Seed Count Information: 250,000 = Deltapine 230,000 = Americot, Croplan Genetics, NexGen, Phytogen 220,000 = ALL-Tex, Dyna-Gro, Fibermax, Stoneville Note: These are genuity products. XtendFlex is tolerant to three group of herbicides: Dicamba, glyphosate and glufosinate It is only introductory, Dicamba cannot be sprayed in 2015.

10 10 ICAC RECORDER Table 7: Technology Fee for Biotech Planting Seed in the USA (Mississippi Delta Region) Year BXN Bollgard Bollgard II (Cost/1,000 Seeds) Roundup Ready RR Flex BG + RR BG + RR Flex BG II + RR BG II + RR Flex Liberty Link BG II + Liberty Link WideStrike + RR Flex Conventional Seed 1995/ kg+74.1/ha kg 1996/ /kg+79.1/ha /kg 1997/ /kg+79.1/ha /kg+NA /kg 1998/ /kg+79.1/ha /kg+NA /kg 1999/ /kg+79.1/ha /kg+22.2/ha /kg 2000/ /kg+NA 2.38/kg+79.1/ha /kg+22.2/ha /kg+101.3/ha /kg 2001/ /kg+NA 8.47/kg /kg /kg /kg 2002/ /kg+NA 8.71/kg /kg /kg /kg 2003/ /kg+NA 9.11/kg /kg /kg /kg 2004/ /1,000 seeds /1,000 seeds /1,000 seeds /1,000 seeds /1,000 seeds /1,000 seeds 2005/06 NA+0.57/1,000 seeds 0.95/1,000 seeds /1,000 seeds /1,000 seeds /1,000 seeds /1,000 seeds 2006/ /1,000 seeds+na 0.99/1,000 seeds 1.25/1,000 seeds 1.53/1,000 seeds NA NA+1.38/1,000 seeds 0.62/1,000 seeds /1,000 seeds 2007/08 NA+0.28/1,000 seeds 0.98/1,000 seeds 1.27/1,000 seeds 1.55/1,000 seeds 1.88/1,000 seeds 0.62/1,000 seeds /1,000 seeds 2008/09 Stopped 1.1/1,000 seeds 1.36/1,000 seeds 1.53/1,000 seeds 0.51/1,000 seeds+na 1.9/1,000 seeds 0.62/1,000 seeds - - NA 2009/ /1,000 seeds 1.55/1,000 seeds 1.68/1,000 seeds 2.02/1,000 seeds 0.62/1,000 seeds / /1,000 seeds 2.10/1,000 seeds 1.05/1,000 seeds 2.29/1000 seeds 2.04/1000 seeds 2011/ /1,000 seeds 2.10/1,000 seeds 1.05/1,000 seeds 1.86/1000 seeds 2.08/1000 seeds 2012/ /1,000 seeds 2.17/1,000 seeds 1.15/1,000 seeds 1.91/1000 seeds 2.12/1000 seeds 2013/ /1,000 seeds 1.93/1000 seeds 2014/ /1,000 seeds 1.95/1000 seeds Notes: 1. Wherever there are two numbers in a cell, the first is the price of seed and second is the price of technology fee. One number denotes seed price+technology fee /02 - maximum technology fee/ha for BG = US$79.1, BG+RR = $101.3, RR = $ /03 - maximum technology fee/ha for BG = US$79.1, BG+RR = $101.3, RR = $ /04 - maximum technology fee/ha for BG = US$79.1, BG+RR = $101.3, RR = $ /05 - maximum technology fee/ha for BG = US$79.1, BG II = $98.8, BG+RR = $106.3, BGII+RR = $126.1, RR = $ /06 - maximum technology fee/ha for BG = US$49.4, BG+RR = $121.1, BGII+RR = $135.9, RR = $ /07 - maximum technology fee/ha for BG = US$48.2, BG+RR = $121.1, BGII+RR = $138.4, RR = $71.7, RRF = $98.8, BGII+RRF = $ /08 - maximum technology fee/ha for BG = US$48.2, BG+RR = $121.1, BGII+RR = $138.4, RR = $71.7, RRF = $98.8, BGII+RRF = $ /09 - maximum technology fee/ha for BG = US$48.2, BG+RR = $121.1, BGII+RR = $138.4, RR = $71.7, RRF = $98.8, BGII+RRF = $ /10 - maximum technology fee/ha for BGII+RRF = $166.8, BG+RR = $129.7, RR = $87.7, RRF = $ /11 - maximum technology fee/ha for BGII+RRF = $171.1, BGII = $87.1, RRF = $119.8, WS = $ /12 - maximum technology fee/ha for BGII+RRF = $171.1, BGII = $87.1, RRF = $119.2, WS = $ /13 - maximum technology fee/ha for BGII+RRF = $154.9, BGII = $77.6, RRF = $107.9, WS = $ /14 - maximum technology fee/ha for BGII+RRF = $154.9, BGII = $31.39, RRF = $107.9, WS = $ /15 - maximum technology fee/ha for BGII+RRF = $154.9, BGII = $77.6, RRF = $107.9, WS = $59.3 NA Not available

11 SEPTEMBER developers. In the long run, reduced prices and price controls can have negative implications for product development. Price controls may delay the launch of new products, causing farmers to incur losses in the long run as a result of their lack of access to improved events and new special features. Technology fees must be sufficiently fair so that farmers can afford to use them and technology developers can make a fair profit to finance further research. Unfortunately, the determination of specific technology fees for specific traits has not always been a transparent process. The win-win solution might be something like the minimum threshold prices that many governments fix for seedcotton, an arrangement where technology developers are assured a fair profit and farmers are not overcharged. References Technology fee data for various countries have been collected from many sources, all of which have been acknowledged in the body of the text. Arora, Anchal and Sangeeta Bansal Price Control on Bt Cotton Seeds in India: Impact on Seed Providers, < ac.in/sis/citd/discussionpapers/dp02_2012.pdf>. Singla, Rohit, Phillip Johnson and Sukant Misra Examination of Regional-level Efficient Refuge Requirements for Bt Cotton in India. AgBioForum, 15(3): The Social, Environmental and Economic Performance of Cotton This article is based on the report Measuring Sustainability in Cotton Farming Systems: Towards a Guidance Framework published by the ICAC s Expert Panel on Social, Environmental and Economic Performance of Cotton Formation of the Expert Panel Delegates to the Plenary Meetings of the International Cotton Advisory Committee (ICAC) are the authority empowered to constitute expert groups/panels and advise the ICAC Secretariat in the implementation of its decisions. While the decisions taken at Plenary Meetings are policy decisions, the Secretariat is responsible for proposing to the Standing Committee ways in which to achieve ultimate implementation of Plenary decisions. The Standing Committee then evaluates and approves the methodology by which the decisions are to be implemented. Delegates to the Standing Committee consult their governments to make certain that the real purposes of the policy decision are properly served. The 65 th Plenary Meeting of the ICAC was held in Brazil in 2006 and the theme of the meeting was The Social and Environmental Impacts of Cotton Production and Use. The meeting noted that despite significant advances that had taken place in cotton production, additional studies were required into agricultural production systems, including topics such as indebtedness linked to input finance; the difficulty of the work, especially for women and children; and inappropriate use of chemicals and other inputs which have environmental consequences and may result in the exposure of farm workers. The Committee directed the Secretariat to form an Expert Panel on the Social, Environmental and Economic Performance of the world cotton industry. The Expert Panel was expected to provide objective, science-based information to the Committee on the positive and negative aspects of global cotton production and make recommendations for further action as appropriate. As one component of its mandate, the Expert Panel was also charged with gathering information from around the world on costs of agricultural labor and the factors that affect these costs. The ICAC member governments having nominated candidates to sit on the Expert Panel in February 2007, the Standing Committee approved ten names for the Panel, with the provision that additional names could be added later as convenient. The Expert Panel was allowed to develop its own mandate within the general terms of reference approved by the Standing Committee. The Expert Panel on Social, Environmental and Economic Performance (SEEP) met for the first time in September Over the past seven years, SEEP has held 13 face-to-face meetings and 27 meetings by conference call. The number of SEEP members has evolved over time. At the time of the publication of the report summarized herein, the body had 15 members. See the list at the end of this article. Sustainability There are many operational definitions of sustainable production, but in its 1987 report the World Commission on Environment and Development (Brundtland Commission) defined sustainable production in the following terms: Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. An article entitled Improving the Sustainability of Cotton Production was published in the September 2005 issue of the ICAC RECORDER, Vol. XXIII No. 3. The article identified the five pillars of sustainability as: Habitat Management, Crop Attributes, Plant Growth and Input Use, Integrated Pest Management and Economics. Cotton Incorporated further categorized the broad UN definition and the ICAC pillars into social, environmental and economic aspects. One cannot envisage any issue that is not covered under social,

12 12 ICAC RECORDER environmental and economic aspects. The SEEP, recognizing the Brundtland report definition and the three pillars of sustainability environmental, economic and social added that each pillar comprises a number of themes. According to the SEEP report, the environmental pillar encompasses five themes: Pest and Pesticide Management; Water Management; Soil Management; Biodiversity and Land Use; and Climate Change. The economic pillar includes two major themes: Economic Viability, Poverty Reduction and Food Security on the one hand, and Economic Risk Management, on the other. The social pillar contains four themes: Labor Rights and Standards; Worker Health and Safety; Equity and Gender; and Farmer Organization. Given the focus of the ICAC RECORDER on production research matters, the environmental issue is discussed here in greater depth. Economic and social aspects are equally important and are presented in detail in the SEEP report, so readers are strongly advised to consult the full report at < International-Cotton-Advisory-Committee-ICAC/measuringsustainability-cotton-farming-full-english.pdf>. Pest and Pesticide Management At one point in time, insecticide use was encouraged and farmers became greatly accustomed to using them, to the extent that insecticides became an indispensible component of cotton production systems. Without them, yields would drop, and farmers who were not using insecticides would be considered ignorant of modern production technologies. This was taking place despite the obvious fact that, throughout this time, insecticides were: contaminating our drinking water, river systems, groundwater and aquifers; showing longterm persistence in soils, thereby impacting rotational crops and beneficial soil organisms, as well as causing the loss of ecosystem services; poisoning wildlife (including livestock, birds and bees), thereby initiating biodiversity losses, reducing populations of beneficial insects important for crop yields; and polluting the air. All these consequences were the result not only of improper use of pesticides, including their overapplication, improper timing of applications and use of nonselective insecticides, but because of their mere use. Saddest of all were the human losses due to long-term poisoning and chronic illnesses. All of the above-listed consequences were present, and could only be mitigated if products were sprayed wisely, only when needed, in lower quantities and according to all recommendations of the pesticide industry. Farmers, particularly cotton growers, were adhering to recommendations because the industry experts lectured them on the use of insecticides and how to escape crop losses. The International Code of Conduct on Pesticide Management, which is a voluntary instrument but constitutes one of the most important reference frameworks for the appropriate use of pesticides, existed, but monetary returns through higher yields was the overriding goal. The Food and Agriculture Organization (FAO) and the World Health Organization (WHO), in close consultation with the United Nations Environment Program (UNEP), the pesticide industry and civil society organizations, developed this Code in Since then the Code has been revised four times until its most recent review, which was published in The Code provides guidance on the use of pesticides throughout every phase of their life cycle and promotes integrated pest management. It was only in the 1980s that the serious consequences and implications of the indiscriminate use of insecticides on cotton were realized and trend reversal campaigns began to be fostered. Certain products, which were undoubtedly effective, helped establish other secondary pests as major threats to cotton producers. Since then the cotton industry has been implementing responsible measures to alleviate the consequences of over-application and get along with minimal use of dangerous chemicals. The cotton industry has attained tremendous success over the last thirty years. The extent of this success can be measured quantitatively in many ways. The ICAC does a survey of the cost of production of cotton every three years. The data in the chart below show that the amount of money spent on insect control has declined significantly in the last twenty years. The same data, when expressed in terms of the ratio of insecticide expenditures to total net cost (total gross cost minus land rent and value of seed after ginning) showed that the share of insecticides in total net costs has halved in two decades. Farmers are now spending more money on fertilizers and weeding. Insecticide Costs & Cost of Production - World US$/Kg Lint % of Net Cost /95 97/98 00/01 03/04 06/07 09/10 12/13 % of Net Cost 40 Water Management When discussing the sustainability of cotton production, the second most important issue is the use of irrigation water. Cotton is, by its very nature, a drought-tolerant crop and can produce yields surpassing the average world yield of cotton under rainfed conditions (e.g., Australia and Brazil). ICAC data suggest that, on the average, yields under irrigated conditions are higher by 70% than in rainfed areas. According to ICAC statistics, in 2013/14, 61% of the cotton area had assured irrigation while 39% was grown under rainfed conditions. Because of higher yields, 61% of the world

13 SEPTEMBER cotton area produced 73% of the world s cotton. The two most common methods of irrigation are flooding and furrow irrigation. Sprinkler and drip irrigation are expensive to implement and generally limited to conditions with scarce or irregular supply of water. The goal in the irrigation of cotton is not to eliminate the use of irrigation water (because this would reduce yields), but to improve water use efficiency so that a greater area can be irrigated with the same amount of water. A reduction in water use could allow cotton producers to use water savings for irrigating food crops or competing crops that are, again, mostly food crops. The SEEP report covers a range of different ways of saving water, often referred to generically or interchangeably as water use efficiency. The four means of measuring water use are: Water use (ETa) is the actual evapotranspiration (ET) of water from the field. Evapotranspiration is a combination of two separate processes whereby water is lost from the soil surface through evaporation and used by the crop through transpiration. It provides a measure of the total amount of water used to grow the crop in the field, but does not take into account the efficiency of water use in terms of the actual production of lint and cottonseed associated with that water. Water crop productivity (WCP), on the other hand, is an index that provides a measure of the production associated with water use. The WCP is the quantity (mass, calories) or value of output (including services) in relation to the volume of water used to produce this output (i.e. volume of vegetative growth, for a given water use, i.e. WCP = kg/m 3 ET. The irrigation water use index (IWUI) is similar, but is defined as the quantity of output per volume of water applied through irrigation, i.e. IWUI = kg/m 3 irrigation (or for example, tons per megaliter of irrigation water). Water use efficiency (WUE %) is the ratio of the amount of water actually used (ET) to the amount of water withdrawn or diverted from its source (river, lake, etc.). It is sometimes also referred to as water supply efficiency or irrigation efficiency. The other measures of water use efficiency mentioned in the SEEP report are: application efficiency, which is the ratio of irrigation water directly available to the crop to the amount of water supplied to the crop; and farm efficiency, which is the ratio of irrigation water directly available to the crop to the total amount of water supplied to the farm. SEEP cautions that excessive use of water generally results in water depletion, pollution, eutrophication and soil salinization. Testing of water quality as it enters and leaves the farm requires adequate logistical support and solid sampling protocols, but this method applies mainly to furrow irrigation and systems where water is collected at the end of the furrows and reused, a kind of system least frequently used in connection with cotton production. Rather than water runoff, water penetration beyond the root zone carrying salts along with it is a major concern in most highly-irrigated cotton-producing countries. Soil Management The impacts that are most relevant to soil health and soil management are salinization, fertility, and erosion. Erosion is a site-specific issue and generally the least directly relevant to cotton production. Salinization is under control in general and, being a salt-tolerant and tap-root system crop, cotton will pick up most of the nutrients needed by the plant. The third issue, nutrient depletion and imbalances among nutrients, could have a major impact on yields and adverse effects on the quality of fiber produced. The reduced use of organic fertilizers, along with mono-cropping systems and high cropping intensity, has the effect of depleting the soil. Heavy reliance on major nutrients and poor return of crop residue to the fields diminish the availability of organic matter, creating a shortage of micronutrients and, consequently, reducing the economic sustainability of cotton production. A detailed article on Optimized nitrogen use in cotton production was published in the March 2015 issue of the ICAC RECORDER. Over-fertilization of cotton with nitrogen is still rare, but is an emerging issue. The cost of fertilizers is increasing and stepping up doses of fertilizers is simply not viable from an economic viewpoint. Better utilization of the amounts of nutrients currently applied is necessary and requires a higher research priority. Biodiversity and Land Use The most promising indicator available for assessing land conversion is the proxy of production efficiency per hectare. Greater productive efficiency reduces the pressure on land conversion (indicator 4.1). Global Positioning System (GPS) mapping may provide a useful approach to low cost measurement of land conversion trends (indicator 4.2). Efficiency of input use (water, fertilizers and pesticides) can be employed as a proxy for biodiversity impacts resulting from water depletion, eutrophication and pesticides, respectively. Direct assessment of actual biodiversity offers the most effective way of monitoring the desired outcome, but suffers from the fact that biodiversity is largely determined by the lay of the land rather than on-farm activities alone. This suggests that farm-level biodiversity impacts would be more accurately measured by tracking specific farm practices. In addition to tracking input use efficiency, tracking of the use of land set aside for conservation can provide an indication of trends towards biodiversity conservation in the sector (indicator 4.3). The SEEP Approach The SEEP was free to devise its terms of reference. This flexibility allowed the Panel to focus on the long-term interests of the cotton industry, not just the production of a report but the pursuit and identification of quantitatively measurable targets. With this goal in SEEP s mandate, it was very important to