Transcript Document

THE SIZE AND DISTRIBUTION OF BENEFITS FROM
THE ADOPTION OF BIOTECH SOYBEAN VARIETIES
N. Kalaitzandonakes, J .Alston and J. Kruse
Un of Missouri, UC Davis and WAEES
Research Objectives
Measure the global economic impacts from the
adoption of biotech corn, soybeans, cotton & canola
over the years 1996-2009
To measure the distribution of benefits and costs
between
Technology suppliers
Producers and consumers in the various countries
farmers who adopted
farmers who did not adopt
consumers
Adoption of Biotech Crops
©
Global Adoption across Key Biotech Crops
(in million hectares and % of total, data for 2011)
Source: Klive James, ISAAA 2011, percentages based on FAO and USDA data
Adoption of biotech crops across main
commodity producers and crops
Source: various, national ministries of agriculture and ISAAA
Measurement of economic impact
©
A Commodity-Market Model with a Parallel Shift
Price
Producer share of both
benefits and costs
= h/(h+e)
S0
a
S1
P0
b
P1
d
I0
Consumer share of both
benefits and costs
= e/(h+e)
c
h and e are the
elasticities of demand
and supply
D
k
I1
0
Q0
Q1
Quantity
A Commodity-Market Model with a Parallel Shift
and Global Trade
Figure 2: A Supply and Demand Model of Impacts of Innovation by an Exporter
Price
Price
Price
SB,0
SA,0
ESA,0
SA,1
P0
P1
SB,1
ESA,1
a
P0
e
h
f
P1
b
i
EDB,0
k
EDB,1
j
c
d
g
QT0
QT0
QT1
0
CA,0 CA,1
QT1
DA,0
QA,0 QA,1
Home Country Quantity
(A) Home Country Production,
Consumption & Trade
0
QT0 QT1
Traded Quantity
(B) Excess Supply, Demand, &
Trade
0
QB,1 QB,0
CB,0 CB,1
ROW Quantity
(C) ROW Production, Consumption
& Trade
Distribution of benefits – gains of adopters
Market
Benefits
($/ha)
Nonpecuniary
Benefits
Gross
(market)
Benefits
$/ha
Variable Cost
Savings
Yield Gain
Total Crop
Area
Area
(ha)
0
Adopters
GM Hectares
Non-Adopters
Conventional
Hectares
Distribution of Benefits – tech supplier gains
Market
Benefits
($/ha)
Technology
Suppliers
Gross
(market)
Benefits,
$/ha
GM Seed
Premium,
$/ha
Adopter Net
Benefits
Total Crop
Area
Area
(ha)
0
Adopters
GM Hectares
Non-Adopters
Conventional
Hectares
Distribution of Benefits –consumer gains
Market
Benefits
($/ha)
Technology
Suppliers
Gross
(market)
Benefits,
$/ha
GM Seed
Premium,
$/ha
Adopter Net
Benefits
Price
Impact,
GM
Producers, 0
$/ha
Consumer
Benefits
Total Crop
Area
Area
(ha)
Adopters
GM Hectares
Non-Adopters
Conventional
Hectares
Distribution of benefits – consumer gains
Does not include impacts of
induced price changes for other
crops
Market
Benefits
($/ha)
Technology
Suppliers
Gross
(market)
Benefits
$/ha
Adopter Net
Benefits
Price
Impact,
GM
Producer 0
s, $/ha
GM Seed
Premium,
$/ha
Consumer
Benefits & Costs
to Non-Adopters
Consumer
Benefits
Adopters
GM Hectares
Non-Adopters
Conventional
Hectares
Price Impact
Non-GM
Producers, $/ha
Area
(ha)
Measurement of farm level impacts –
key challenges
©
Evidence of farm level impacts from
Market Research
©
Pricing of technology and variable farm costs for
US biotech and conventional soybean production
Estimated Costs Associated w/ RR Soybean Use in 2005
(excludes burndown cost)
Seed
Total=$43.50
Technology
Herbicide
Total=$44.05
$45
$40
Average Costs
$35
$13.70
$25.20
$30
$9.00
$25
$20
$15
$10
$18.30
$21.35
$5
$0
Conventional
Roundup Ready
Yields performance of biotech and
conventional soybeans in the US
Comparison of Yield Potential Between RR Soybeans &
Non-RR Soybean Acres
Post Harvest 1996
43
43.5
Avg. Yield (Bushels Per Acre)
Post Harvest 1997
43
42.5
42
41.5
41
41.2
41
40.5
40
39.5
RRSB
Non-RRSB
43.1
Comparison Of Yield Potential Between Roundup Ready Soybeans
And Non-Roundup Ready Soybean Acres -- 1999 to 2006
RR soybean yields are:
Much better than non-trait
Somewhat better than non-trait
Percent Very/ Somewhat
Percent of Respondents
1999
3
12
2000
15%
9
2001
6
24%
11
2002
9
2003
10
2004
10
2005
12
2006
12
0
15
17%
16
25%
18
28%
25%
15
31%
19
38%
26
25
50
75
Q In terms of yield potential, would you say the yields on your [trait] are:
100
Yield Difference Between Roundup Ready Soybeans And Non-Roundup
Ready Soybean Acres 2006
RR soybean yields are ___ compared to non-RR soybean acres.
Greater than 5 bushels less/acre
Same yeild/acre
Greater than 5 bushels more/acre
Average*
Bushels Per
Acre
1 to 5 bushels less/acre
1 to 5 bushels more/acre
+1.5
Percent of Respondents
+1.5
Overall (n=446) 2
6
60
21
11
+1.4
NCE (n=196) 1 6
58
24
11
*Within an acceptable range (-20 to +20 bushels per acre)
NCW (n=240) 2
0
7
61
25
18
50
75
12
100
Q.1 In terms of yield potential, would you say the yields on your [trait] are:
Q.2 How many [more/fewer] bushels per acre do you get with [trait] than non-[trait]?
Adoption of Biotech Soybeans and US of no-till
Summary Of Roundup Ready Tillage Practices by Region, 2005
No-Till
Minimum Till
Conventional
53%
Coastal (n=126)
23%
36%
NCW (n=400)
34%
30%
66%
NCE (n=325)
50%
Overall (n=851)
0%
20%
24%
19%
27%
40%
60%
Percent of RRSB Acres
15%
23%
80%
100%
Adoption of Biotech Soybeans and
non-pecuniary value
Q.1 In evaluating the entire Roundup Ready soybean system, taking into account any
differences in convenience, labor, peace of mind, etc., do you believe the Roundup Ready
soybean system has a _____ than non-Roundup Ready soybeans?
Q.2 If you had to assign a dollar figure to the [added/lower] value of the Roundup Ready
soybean system, [above/below] the value of non-Roundup Ready soybeans, how much
would you say the [added/lower] value would be on a per-acre basis? In other words,
how much [more/less], per acre, would you say the Roundup Ready soybean system is
worth to you compared to other programs?
Adoption of Biotech Soybeans and nonpecuniary value
% Greater value
Dollar value
80%
$16
$14.08
$12.50
$14
$13.70
$12
$8.63
$8.40
40%
30%
$13.90
$13.20
60%
50%
$13.45
68%
71%
75%
74%
72%
73%
74%
$10
$8
$6
54%
20%
$4
10%
$2
0%
$0
1999
2000
2001
2002
2003
Year
Source: Marketing Horizons, various years
2004
2005
2006
Net Difference in System Value
Percent of Respondents
70%
Adoption of Biotech Soybeans and sources of
non-pecuniary value
Allocation of Non-Pecuniary Added Value of Roundup Ready
Soybeans vs. Conventional Methods Overall
Other
8%
Peace of mind
24%
Reduced labor
22%
Convenience
46%
What farm level impacts do we account
for?
©
Results – global economic impacts of
RR soybeans
©
Price impacts from adoption of biotech soybeans across
commodities (% change relative to baseline)
Producer and consumer surplus from
adoption of biotech soybeans 1996-2009
Producer and consumer surplus from
adoption of biotech soybeans 1996-2009
Tech supplier gross benefits from adoption of
biotech soybeans in the US
What did we learn?
Measurement of economic benefits from
adoption of biotech soybeans and other crops
complicated by sparse data on farm level
impacts
Many impacts remain difficult to measure and
may explain divergence of adoption and
measured impacts found in many studies
Global impacts from adoption of biotech crops
are very large – close to $60 billion between
1996 and 2009 in the case of soybeans