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Hiroyuki Takeshima Research Fellow Development Strategy and Governance Division IFPRI H.takeshima@cgiar.org Pressure Group Competition and GMO Regulations in Sub- Saharan Africa Insights from the Becker Model Takeshima, Hiroyuki & Guillaume Grure. (2011). Journal of Agricultural & Food Industrial Organization 9(1), Article 7.

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Background 2 Influential role played by lobbyists (Paarlberg, 2008; Graff, Hochman & Zilberman, 2009; Grure & Sengupta, 2009) => linkages between anti-GMO lobbying and seemingly irrational GMO regulation policies in these countries Despite studies suggesting positive effects of GMOs (Qaim 2001; Aerni 2006; Paarlberg 2006; Demont et al., 2009; Bout & Grure, 2011) progress in SSA has been slow => Due to the influence of anti-GMO lobbyists (Pinstrup-Anderson & Schioler, 2001; Paarlberg, 2008) including private importers or retailers (Cohen & Paarlberg, 2002; Grure & Sengupta, 2009)

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Questions 3 Why anti-GMO pressure groups effective ? Why anti-GMO lobbying can be effective in influencing GMO policies in SSA, while pro-GMO lobbying cannot ?

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Two possible reasons 4 Diffuse beneficiaries, low potential return from lobbying relative to costs (Pray & Naseem, 2007; Graff, Hochman & Zilberman, 2009) Already unfavorable conditions even in the absence of lobbying - unfavorable conditions make anti-GMO lobbying more effective

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Unfavorable conditions 5 Unsuitability of foreign varieties to specific local production environment Weak formal seed sector capacity in SSA countries Insufficient institutional and biosafety regulatory capacity (Pray & Naseem, 2007) Small market sizes and their lack of biosafety regulatory system (Takeshima, 2010)

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Why does it matter? 6 Different ways to support: If 1 st reasons => support for lobbying the policy makers by SSA producers who are often impoverished and diffused, and may have little capacity to organize and effectively lobby If 2 nd reason => lobbying may not be the sole reason for GMO policies in SSA countries understand what causes the anti-GMO lobbying to be more effective than pro-GMO lobbying

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Interaction b/w interest groups on opposite sides 7 Conceptualization of the workings of lobbying Both anti- and pro-GMO groups can compete in influence on GMO policies Becker, G. (1983). A Theory of Competition Among Pressure Groups for Political Influence. The Quarterly Journal of Economics 98(3) : 371400. Competing influence of pressure groups SSA policy makers goals are not all precisely determined => appropriate for our study

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Contribution to the literature 8 roles played by the political pressure groups for designing GMO policies in SSA countries how such roles may depend on exogenous factors for both anti- and pro- GMO lobbyists what they may imply for the appropriate support for SSA countries use Beckers model by showing how the model can be used to illustrate the case of the lobbying for anti- or pro-GMO policies

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GMO policies 9 a set of discrete decisions at various regulatory stages committee to further discuss issues associated with GMO biosafety bills and/or regulations on the development, testing and possible commercialization of GMO crops financial support to such development, confined field trials venture capital fund to finance biotech enterprises moratorium on imports of GMO products ban research, laboratory experiment and field trial of GMO Lobbyists' target authorities at each stage, including individual competent authorities (regulatory committees) (Newell 2007)

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Exogenous factors 10 Lobbying effectiveness depend on exogenous factors agro-ecological and socio-economic conditions potential productivity environmental impacts segregation costs (Grure and Sengupta, 2009) external cost for domestic consumers willing to avoid GMO products (Lapan and Moschini, 2004) others

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Becker model 11 Two homogeneous lobbying groups s and t s : subsidized, t: taxed R s = Z s - Z s 0 (redistribution to s) R t = Z t 0 - Z t (redistribution away from t) F(R t ) R t, F* = dF/dR t 1 and F** = d 2 F/dR t 2 0 G(R s ) R s, G* 1 and G** 0 RtRt F(Rt)F(Rt) RsRs G(Rs)G(Rs) DW

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Becker model 12 n t * F(R t ) = I t (p s, p t, x): influence function n s * G(R s ) = I s (p s, p t, x) I s + I t = 0: political budget constraint p = p(m, n), m = an: pressure p depends on the size n and each members contribution a Z s = Z s 0 + R s a s, Z t = Z t 0 R t a t :Full income of each member

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Becker model 13 Solved for equilibrium values of a s and a t a s, a s depend on F* and G* => Each member max income when dR s / da s = 1 dR t / da t = -1

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Theorem from Beckers model 14 Marginal DW => F* , G* => => Pressure from s , pressure from t Equilibrium subsidy Competition among pressure groups favors efficient methods of subsidy / taxation lower DW Exogenous factor (DW) affects Lobbying efforts Lobbying effectiveness

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Beckers theorem and GMO lobbying 15 Lobbying effectiveness depends on DW Unfavorable conditions for GMOs => Anti-GMO lobbying becomes effective Anti-GMO may be actually efficient Favorable conditions for GMOs => anti-GMO policy => DW pro-GMO policy => DW

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What conditions ? 16 Nature of GMO technology, Environmental and commercial risks Perceptions by producers and consumers Institutional constraints

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Favorable condition 17 Sufficient capacity developing appropriate GMO varieties disseminating GMO varieties Greater GMO benefits reduction in production costs a large number of producers => promoting GMO is an efficient way to support producers (i.e., a low DW for subsidizing pro-GMO lobbyists). => Anti-GMO policy - less efficient way to allocate benefits to anti-GMO consumers and importers

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Favorable condition 18 sufficient formal seed sector capacity Low segregation cost better tracking systems, identity preservation along the supply chains, strong enforcement of the biosafety regulatory framework Non-GMO may be provided to importers at a lower cost a high DW for subsidizing anti-GMO lobbyists Anti-GMO group may instead lobby for preferential agreements for importing non-GMO from SSA countries cooperate with GMO promotion in SSA countries

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Unfavorable conditions 19 Low domestic capacity to develop GMOs pro-GMO policy is inefficient way to support producer (cost reduction is minimal) a high DW for subsidizing pro-GMO lobbyists Aversion to GMO Alternative sources for non-GMO Weak institutional capacity High segregation costs Greater chance of regulatory response from importing countries => anti-GMO policies may be more efficient way to support anti-GMO consumers in importing countries or anti-GMO traders, than promoting GMO and segregating them from non-GMO

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Size of lobbying group 20 Another Beckers theorem smaller size of lobbyist group = more efficient However, biotech companies are also small, and yet generally not active in lobbying in Africa anti- GMO lobbying > pro-GMO lobbying it is likely that the situation in SSA is already unfavorable for GMO, less likely that the anti-GMO lobbyists are making the situation unfavorable for GMO

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Situations in SSA 21 Potential domestic gains large (Qaim, 2001; Aerni, 2006; Paarlberg, 2006; Demont et al., 2009, Bout and Grure, 2011) Damages of losing export to GMO sensitive countries small (Anderson & Jackson, 2005; Paarlberg, 2006; Grure & Sengupta, 2009) Consumer perceptions by consumers in various SSA countries - favorable - Bt maize / cotton,Golden Rice in Nigeria (Adeoti & Adekunle, 2007) - GMO Banana in Uganda (Kikulwe et al., 2010) - Bt maize in Kenya (Kimenju and De Groote, 2008) - Bt white maize in South Africa (Vermeulen et al., 2005) => Favorable conditions in terms of GMO potentials

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Institutional constraints unfavorable conditions in SSA 22 GM R & D regulatory capacity general law enforcement capacity (Binenbaum et al., 2003; Pray and Naseem, 2007)

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GM R&D Capacity in SSA 23 Only Republic of South Africa (RSA) and Egypt domestic GM research (Takeshima, 2010) Backcrossing varieties initially developed for use in the United States or other early-adopting countries (Takeshima, 2010) Biological characteristics of staple crops (cassava etc) less known (Falck- Zepeda & Cohen, 2006) Difficulty in applying GM to such crops - these technologies are developed in temperate zones (Naylor et al 2004) Patented technology - costly for African countries to develop GMO depend on developed countries partners for necessary technologies, than Asia or Latin America (Herdt, Toenniessen and OToole, 2007) GMO crops suitable for local production environment - takes longer (Eicher, Maredia & Sithole-Niang, 2006; Takeshima, 2010)

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Regulatory Capacity in SSA 24 Needed to minimize environmental, agronomic, and food and feed safety risks, ensure safe use by all (Birner & Linacre 2008) Minimize gene flow in confined field trials, testing Regulation on GMO imports / labeling (Grure & Rao 2007) Testing of sample, monitoring and tracking Lack institutional capacity to identify the best regulatory systems while involving various stakeholders (Wafula & Clark 2005) draft and enact their biosafety bill (Cohen & Paarlberg 2004) few public research institutions in SSA can afford the costs of biosafety assessments (Herdt, Toenniessen & OToole 2007)

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Law enforcement capacity 25 required to punish illegal use of patented technologies illegal entry of GMO cross porous borders illegal methods of producing GMO by farmers potential non-compliance with labeling regulations transaction costs for negotiating license with patent holders discourages patent holders to provide technologies local law does not recognize patent (Cohen & Paarlberg 2002) Illegally export of patented technologies to neighboring countries due to frequent transboundary movement of crops in SSA (Binenbaum et al 2003; Eicher et al 2006; Ushewokunze-Obatolu 2005) Royalty-free humanitarian licensing - still requires market segmentation clear definition of beneficiaries difficult where non-commercial markets cannot be sharply delineated by region difficult to exclude spillovers to non-targeted markets (Brewster et al., 2007)

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Other unfavorable factors 26 Weak formal seed sector limit the dissemination of commercial GMO that are authorized High seed recycling rate in Nigeria - only purchase rice, maize and cowpea seeds in any given year (Takeshima et al., 2010) Commercial risks associated with decisions to develop or commercialize GMO crops may be often more immediate than the benefits realized from the adoption of GMO, as anti-GMO groups can immediately respond to such decisions

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Conclusions 27 Sizeable opportunity cost of delayed adoption of GMO due to the constraints in regulatory capacity (Bayer, Norton & Falck-Zepeda, 2010) potential GMO benefits largely offset by institutional constraints Conditions highly unfavorable in SSA Pro-GMO policy inefficient (DW ) Anti-GMO policy efficient (DW ) More anti-GMO lobbying than pro-GMO lobbying for pro- GMO policy

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Applications for other countries (US, EU / Japan) ? 28 US - Favorable Vast land - greater benefits from GM on labor saving (?) => pro-GM lobbying (?) EU / Japan Unfavorable Small land - less benefit from labor saving GM tech (?) Japan - Dominance of rice (self-pollinating), small market for GM maize / soybean (?) => anti-GM lobbying (?)

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Future directions 29 Different assumptions Different models Empirical approach?

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Key reference 30 Becker, G. (1983). A Theory of Competition Among Pressure Groups for Political Influence. The Quarterly Journal of Economics 98(3) : 371400. Takeshima H & G Grure. (2011). Pressure Group Competition and GMO Regulations in Sub-Saharan Africa Insights from the Becker Model. Journal of Agricultural & Food Industrial Organization 9(1), Article 7.