revolucion verde cgiar presentacion hecha en washington university st louis april 2007

8/14/2019 REvolucion Verde CGIAR Presentacion Hecha en Washington University St Louis April 2007

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Tuesday, November 17, 2009

Socio economic impact assessment andagricultural biotechnology innovations: The

Green Revolution and the CGIAR

José Falck-Zepeda [email protected]

Research FellowEnvironment and Production Technology Division

International Food Policy Research Institute (IFPRI)

Presentation made at Washington University - St. Louis, St. Louis, Missouri, April 5, 2007

mailto:[email protected]






INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

Content

• The Green Revolution, the CGIAR and IFPRI• Methodologies for socio-economic impact

assessment

• Biotechnology issues

• Review of studies assessing GM crops




The Green Revolution

• Transformation of agriculture during1940s-1970s that lead to significantincreases in yields

• Firmly based on:• Agricultural production needs to keep

pace with population growth• Agricultural sciences philosophy of

maximizing production per unit of land

• Plant breeding developments of thelate 19th early 20th centuries

• Initially focused on a few crops(Wheat, rice, maize) but has beenexpanded




The challenge according to FAO

• To feed a population of 9 billion persons by2050, without allowing for additional imports offood:

• Africa has to increase its food production roughly

300%; Latin America 80%; and Asia 70%.• Even the US has to increase food production by 30%

just to supply food for the projected population of 348million person




―New‖ constraints

• Erosion• Water and irrigation problems• Climate change => Global warming• Soil fertility• Land being retired due to environmental concerns

• Urbanization• Consumer concerns about intensive agriculture: Organic,

Fair Trade, Use of growth promoters• Competition from biofuels production• Social, philosophical, ethical and religious concerns over

the food production system• Concerns over globalization and corporate control of

agriculture




The Green Revolution: Frame of Mind

• Haiti Can’t- be-saved• Egypt Can’t-be-saved

• The Gambia Walking Wounded

• Tunisia Should Receive Food• Libya Walking Wounded

• India Can’t-be-saved

• Pakistan Should Receive Food

- Paul and William Paddock, 1967 book―Famine 1975!‖




The Green Revolution - Genesis

• Term coined by USAID director William Gaud in 1968• Contrasting explanatory theories about the genesis of

the GR1. Early 20th Century Progressives view science addressing

productivity issues in agriculture as way to free more labor forindustrial growth and improve the livelihoods of the fewer leftbehind in agriculture

2. Perkins (Geopolitics and the Green Revolution: Wheat,Genes, and the Cold War -1997 ) PNST –Population NationalSecurity Theory• Population growth leads to hunger, social unrest and thus

endanger National Security

• Research and institutions funded by RockefellerFoundation, Ford Foundation and National governments

• Perkins argues that investments in R&D after WWII areinstruments serving foreign policy




Norman Bourlag: Father of the GreenRevolution

• NB joined RockefellerFoundation team sent to Mexicoin 1944

• Developed the wheat programthat later became CIMMYT in1963

• Shuttle breeding• Incorporate short-stature genes

into wheat• Increased yield and rust resistance

in wheat

• Mexico:

• 1948 self sufficient wheat producer• 1965 Net exporter

• Won Nobel Peace Prize in 1970and World Food Prize

• Genesis of the CGIAR




How was the Green Revolution possible? An agronomistperspective…

•Incorporation of a dwarfing genes from naturalpopulations into wheat and rice

• In maize: more vertical orientation of leaves, reduces self-shading while allowing planting of narrower rows and thusincreases in densities

• Plants bred to dedicate a larger share ofphotosynthesis efforts to grain rather than to stemsand leaves• Harvest index of older varieties was 20% whereas HYV around

50-55%

• Relatively insensitive to day length – can be plantedin a wider range of latitudes

• Increased responsiveness to fertilizer and water




Green Revolution: Successes

• Significant increases in yields and production• From 1950 to 1992, the world’s grain output rose from 692 million

tons produced on 1.70 billion acres of cropland to 1.9 billion tons on1.73 billion acres

• India: food production increased from 50 to 205 million tons duringthe last 5 decades

• But, barely happened in Sub-Saharan Africa

• Economic output per hectare increases significantly

• 30% increase in cereal and calorie availability per person• Poverty reductions—some studies show this is attributed to

GR raising farmers incomes




Green Revolution: Social and EconomicCriticisms

• Does not address underlying social, cultural, ethnical andinstitutional constraints that create vulnerability and thusaffect livelihoods• Is hunger and food insecurity a question of production or unequal

distribution of resources?

• Increased mechanization affected rural labor employment• Debt effects and credit institutions necessary• Technology not scale neutral

• Uneven adoption as larger/wealthier farmers adopted first capturinglarger share of benefits

• Landowner/Landholder displacement• Dependence on pesticides and fertilizers




Green Revolution: Environmental/EcologicalCriticisms

• Loss of agricultural biodiversity, not so cleareffect on wild biodiversity• Focus on few crops => monocultures

• Increased used of pesticides and the pesticidetreadmill

• Increased use of fertilizers• Irrigation

• Negative impacts of salinization, damage to soils, andlowering of water tables

• Need to build dams and irrigation systems




Lessons Learned

• Increasing agricultural productivity is necessary but notsufficient to guarantee food security

• Scale neutral technologies

• Knowledge transfer to/from farmers

• Need to consider agriculture within the social,political, economic, national/international context

• We can’t continue to propose ―technology-onlysolutions‖ to complex problems....nevertheless

technological responses are indeed critical to the―solution‖

• Learn from mistakes and inexperience to come upwith better alternatives => Policy options,strategies and outcomes




CGIAR Changing Paradigm

Agronomic

Paradigm

• Increaseproduction

• Maximizeyields

• Improvefertilizer andwater

efficiency

Sustainable

Agriculture

Paradigm

• Improve and/ormaximize livelihoods

• Reduce vulnerability

• Environmental / ecological

• Gender

• Collective action

Time

Production

Economics

Paradigm

• Maximize profitor netreturns...is notthe maximumyield




CGIAR Research Centers

CIATTropical agricultureCali, Colombia

CIMMYTMaize and wheatMexico City, Mexico

IFPRI ®

Food policyWashington, D.C., USA

CIPRoots and tubers

Lima, Peru

IITATropical agriculture

Ibadan, Nigeria

BIOVERSITYAgricultural biodiversityRome, Italy

ICARDAAgriculture in the dry areasAleppo, Syria

IWMIWater resources

Colombo, Sri Lanka

ICRAFAgroforestry

ILRILivestockNairobi,Kenya

CIFORForestry

Bogor, Indonesia

IRRIRiceLos Baños, Philippines

ICRISATSemi-arid tropicalagriculturePatancheru, India

WorldFishPenang, Malaysia

WARDARice in West Africa

Bouaké, Côte d’Ivoire

IFPRI ® is one of 15 research centers supported by the Consultative Group on

International Agricultural Research (CGIAR).CGIAR




What does IFPRI do?

• Provide policy solutions thatachieve a world free of hungerand malnutrition

• Strategy• Global food system functioning,

• Global and national food systemgovernance,

• Food system innovations

• Divided into thematic andorganizational divisions




IFPRI Divisions

• Environment and ProductionTechnology

• Food, Nutrition andConsumption

• Markets, Trade and

Institutions Development• Development Strategy and

Governance

• ISNAR

• Communications




How do we work?

• Extensive field work• Multi-disciplinary• Global benefits• Generizeable results

• Research excellence ―stateof the art‖

• Results communicatedthrough different media toobtain results

• Capacity strengthening andtraining• Creation of international

public goods

Initiative




Some examples of IFPRI’s research

• Assessment of potential impact of Bt Cotton in West Africa: Benin, BurkinaFaso, Mali, Senegal and Togo

• Seed Systems – markets and varietal diversity• Mali - Case of Pearl Millet and Sorghum• India - case of minor millets in Kolli Hills and Dharmapuri Plains

• Biotechnology R&D capacity and Biofuels in Latin America• Best Practices: Assessing social and economic impact of transgenic crops in

Bolivia, Honduras, The Philippines and Colombia• Assessment of the programs PROGRESA in Mexico and the PRAF in

Honduras• Linking Nutrition Support with Treatment of People Living with HIV: Lessons

being Learned in Kenya• Patterns of Poverty and Inequality in Vietnam: A Decomposition of Spatially

Weighted Small-Area Estimates• Supermarkets Expansion and Dietary Patterns of Households: SomeEmpirical Evidences from Guatemala

• HOW MANY ETHIOPIAS ARE THERE? Understanding the Role ofGeography in Smallholder Livelihood Options




IFPRI’s Web Site

www.ifpri.org




II. Socio-economic impact assessment




Conceptual decision making process technology socio-economicassessment

Net

benefits

Research &

Development

costs

Technology

transfer

costs>= + +

Risk &

Uncertainty

(Premium)

Society

Individual

Net

benefits

Production

costsTechnology

access

costs

>= + +Risk &

Uncertainty

(Premium)

• Flows vs. stock => Changes in income versus expenditures• Public vs. private goods• Will all people ―winners‖ or ―losers‖ => Compensation criteria

Other costs

“Externalities” +




Methodologies used for socio- economicimpact assessment

Level of analysis Methodologies

Farmer (individual and / orhousehold)

• Change in net income, profit (or netpresent value)

• Partial or total budgetsIndustry • Aggregation of individual net income

•Economic surplus models

Market and Trade • Economic surplus

• General equilibrium models• Examination of trade flows




An example from Colombia: Potatoes 2003-2004

Production costs “Industrial” typevarieties (US$/ha)

Production costs “Parda Pastusa” variety(US$/ha)

Traditional IPM Traditional IPM

Activity Total % Total % Total % Total %

Direct costs

LaborResidue collection, Soil preparation,Planting, pest and disease control,crop management, harvest

921.1 25 976.3 26 783.2 21 830.5 22

InputsSeed, fertilizer/correctives, pesticides,.packing material, Biological control,etological control, transportation

2297.9 62 2352.6 62 2563.2 68 2599.5 68

Subtotal Direct costs 3218.9 87 3328.9 88 3346.3 89 3430.0 89

Indirect costsLeasing costs, administrative (6%),interest

467.9 13 473.8 12 407.0 11 413.5 11

TOTAL 3686.8 100 3802.7 100 3753.3 100 3843.5 100

Parda Pastusaincome:1,663 US$/ha

Industrial income:1,543 US$ /ha




Economic Surplus Methodology

• Economics is about scarcity,consumption, choice andtrade-offs

• People respond to incentives• Economy can be modeled

with supply and demand

functions• Supply/demand functions

aggregate all participants inthe market

• Price and quantity pairs thatexplain participant behavioras producers and consumers

• Limitations for work indeveloping countries

Po

Qo

Quantity

Supply

Price

Po

Qo Quantity

Demand Curve

Price

Consumer Surplus

SupplyMinimumprice (orbreakeven

cost) willingto producesomething

DemandMinimumprice willingto pay




Limitations economic surplus and other economicmodels

• Well-functioning markets

• Farmers risk neutral, maximize profits or minimizecosts =>

• Rely on key parameters from partial budgets andother sources which also have limitations

• Approach is partial, no effects in other markets

• ―Ignores‖ input/output abatement nature of

technologies and existing bio-physical models• Irreversibility ignored

• Externalities (environmental and public health)and impacts outside markets not included

“HOMOS ECONOMICUS”




Technical change: Cost reduction

Price

Po

Qo Quantity

P1

S1

So

K

K = Reduction in the unitarycost of production ($50 per

ton)




Standard versus ―customized‖ models

• Use standard models and formulas tomeasure producer and consumersurplus

• Derive formulas including quirks andparticularities of the economy

• Reference text is :

• ―Science Under Scarcity: Principleand Practice for Agricultural ResearchEvaluation, and Priority Setting‖Alston, Norton and Pardey

• Canned software• DREAM – IFPRI

• MODEXC - CIAT

• Example for the open economy

mode• Producer surplus in Country (PSA)

• Δ PSA = P0 QA (K - Z) (1 + 0.5 ZεA)

• P0 = Counterfactual price withoutinnovation

• K = (Yield difference) / εA = Shift ofthe supply curve

• Z = - (P1- P0)/ P0

• εA = Elasticity of supply




The process of data collection

• Fairly detailed surveys, examination of farm

records and/or results from experimental trialsthat describe:• Household characteristics• Production processes• Income and costs• Use of labor and capital• Financial/asset situation and allocation

• Increased use of qualitative and participatorymethodologies and analysis techniques• Group and Team Dynamics

• Focus groups including gender differentiated• Expert and leader opinion• Role play

• Farmer field schools• Direct and participant observation• Case studies• Structured interviews and experimental

economics




The process of data analysis

• Simple comparison of means,indicators and data

• Complex econometric/statisticalmodels econometric/statisticalanalysis measuring effects, causalityand relative importance

• Trying to control significant problemssuch as:

• Sample size• Non-randomness• (Self) selection and program placement

bias

• Simultaneity (decisions)• Un-observed and/or omitted variables




III. What about Genetically Modified Crops

and Biotechnology?




What is biotechnology?

• Manipulation of living organisms for a usefulpurpose

• Definition that covers a broad range oftechniques

• Traditional: Plant breeding, tissue culture, micro-propagation

• Modern: Marker assisted selection, GeneticModifications and Genomics

• Only GM products are currently regulated forbiosafety




Centered around• Four crops:• corn• soybeans• canola• cotton

• Four countriesrepresent 85%adoption

• USA,• Argentina• Canada• Brazil

• Two types ofevents• Tolerance to

herbicides• Insect

resistance




Research Questions?

• What is the potential size of the economicbenefits from use of a GM technology in aspecific site, country or region?

• How are these benefits likely to be distributed

among farmers, consumers, gene innovators,seed suppliers?

• GM innovations are in most cases IPRprotected, how is this new development likely to

affect previous questions?



Th f i i i N h




The case of insect resistant cotton in NorthernMexico (1997-1998)

But• Country and region have very

particular characteristics• Institutional setting is peculiar• Formula based agriculture

• Very good technical assistanceand knowledge transfer oftechnology use

• Credit tied to technicalassistance

• Irrigated

• High levels of damage

84%89%10%Producers % share of total surplus

16%11%90%Monsanto/D&PL %share of total surplus

2,345,2374,656,09134,382Total producer surplus

438,083560,747315,420Monsanto/D&PL totalnet incomel

6,2508,0004,500 Area planted with Bt inthe Comarca Lagunera

294.83582.017.64Net change inproducer profit

70.0970.0970.09Monsanto/D&PL netprofit /ha

Average19981997

Source: Traxler, Godoy-Avila, Falck-Zepeda andEspinoza-Arellano,2001

S i i i f h bi id l




Socio-economic impact of herbicide tolerantsoybeans in the U.S.

• Note the ―story a little bit different

• Producer seem to benefit very little from this technology => Why then theycontinue to adopt?

• Explanation is that economic surplus does not capture non-price effects suchas ease of management or ability to use reduced or no till managementpractices




What determines whether farmers ―win‖ or ―lose‖

• Price of the technology and of output

(fiber and seed)• Pest infestation and pest dynamics

(including secondary pests)

• Use of appropriate germplasm and

the ability to have the mostappropriate germplasm over timeand location• gene technology without the

appropriate germplasm is useless

• Production alternatives available• Available information to farmers

about technology

Wh t d t i h th f ― i ‖ ―l ‖




What determines whether farmers ―win‖ or ―lose‖

…continued

• Type of input and output economicmarkets (monopoly vs. competitive)

• Institutional issues: contractualagreements and obligations

• Input use and management• Ex ante and Ex post risk profile and

situation

• Functional seed markets

• Institutional framework• Credit and other financial

characteristics of the producer unit




Applied Economics Literature Review

• Experience in South Africafor example has changedover time

• ―Technological triumph,

but an institutional failure‖Gouse 2005

• Institutional andcommunity issues cannegate technological

benefits completely



Broader Implications

• Emerging picture is consistent with other ―new‖ crop

varieties:• Adoption and returns vary by location, time, crop, type of

technology• Impact difficult to measure; no single method sufficient• Time period is still short

• Institutional and governance factors and market arrangementsmay be more important than the technology itself as adeterminant of impact

• Biotechnology is a knowledge intensive innovation in terms ofR&D, deployment and transfer, and use by farmers

• Impacts on health, environment, equity, and poverty have notreceived much attention yet

• Literature: narrow authorship and generalizations are still a littleproblematic

revolucion verde cgiar presentacion hecha en washington university st louis april 2007

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