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Kikulwe, E. M., Birol, E., Wesseler, J. and Falck-Zepeda, J. 2011. A latent class approach to investigating demand for genetically modified banana in Uganda. Agricultural Economics, no. doi: 10.1111/j.1574-0862.2010.00529.x

Cotton is the largest source of export receipts in several West African nations where yieldsare declining and pesticide use is rising. Although there may be payoffs to introducing genetically modified Bt (Bacillus thurigiensis) cotton, limited information is available to predict its potential economic impact and there is uncertainty about its performance. Recognizing these constraints, we use an economic surplus model augmented with stochastic simulation to estimate ex ante the impact and distribution of benefits from Bt cotton. We consider the effects of adoption on both yields and abating crop damage, and offer scenarios depicting the policy options faced by West African stakeholders. The findings indicate that although the total net benefits of adopting Bt cotton may be relatively small for the countries studied, these countries would be worse off without the technology. Our approach, which incorporates variability and uncertainty, may be useful in decisions about investments in crop biotechnology.

Tomato, cabbage, and garden egg (African eggplant, or Solanum aethiopicum) are important crops for small-scale farmers and migrants in the rural and peri-urban areas of Ghana. Genetic modification has the potential to alleviate poverty through combating yield losses from pests and diseases in these crops, while reducing health risks from application of hazardous chemicals. This ex ante study uses farm survey data to gauge the potential for adoption of genetically modified (GM) varieties, estimate the potential impact of adoption on farm profits, and highlight economic differences among the three crops. Farmers’ expenditures on insecticides are below the economic optimum in all three crops, and the estimated function for damage abatement shows that insecticide amounts are significant determinants of cabbage yields only. Nonetheless, yield losses from pests and disease affect insecticide use. A stochastic budget analysis also indicates a higher rate of return to vegetable production with the use of resistant seeds relative to the status quo, even considering the technology transfer fee for GM seed. Non–insecticide users could accrue higher marginal benefits than current insecticide users. Comparing among vegetable crops with distinct economic characteristics provides a wider perspective on the potential impact of GM technology. Until now, GM eggplant is the only vegetable crop that has been analyzed in the peer-reviewed, applied economics literature. This is the first analysis that includes African eggplant.

Banana is a staple crop consumed by Ugandan households. The Uganda National Agricultural Research Organization has implemented conventional and biotechnology programs that seek improving bananas and address the crop’s most important pest and disease problems. A major thrust is the development of genetically modified (GM) bananas. The purpose of this paper is to examine potential social welfare impacts of adopting a GM banana in Uganda. The study has three objectives. First, suggest and apply an approach to calculate reversible and irreversible benefits and costs of introducing a GM banana. The study applies a real option approach to estimate, ex ante, the maximum incremental social tolerable irreversible costs (MISTICs) that would justify immediate introduction of the technology. Second, suggest an approach for assessing producer/consumer preferences and willingness to pay (WTP) for introducing a GM banana. Finally, the paper discusses main implications for biosafety decision making for GM crops in Uganda. Results of MISTICs estimation for different scenarios indicate that in delaying the approval of a GM banana, Uganda foregoes potential annual benefits ranging approximately from US$179 million to US$365 million. Average annual MISTICs per household vary between US$34 and US$ 69. Results indicate that only if the average household is willing to give up at least US$38 per year to avoid introduction of a GM banana, should postponing an immediate release be considered. Results imply that although GM bananas promise vast benefits, realization of those benefits depends on consumers’ perceptions and attitudes and the willingness to pay for the GM technology.

As progressively more farmers in developing countries begin using biotech crops, careful evaluation of such crops' benefits becomes ever more important. This food policy review examines the applied economics literature regarding the impact of biotech crops on non-industrialized agriculture and investigates the research methods used in assessing how these crops affect farmers, consumers, the agricultural sector as a whole, and international trade. This analysis offers a tool for researchers who seek to produce objective, relevant analysis of emerging crop biotechnologies that can in turn be used by national policymakers in developing countries. A vast literature has accumulated since transgenic crop varieties were initially released to farmers in 1996. Several years after their introduction in the United States, crop varieties with transgenic resistance to insects or herbicide tolerance were supplied to farmers in countries with developing economies and nonindustrialized agriculture. Essays, editorials, newsletters, web conferences, articles, and books have argued the pros and cons of transgenic crops. The global debate continues in this second decade of their use. A comparatively minor segment of this literature consists of studies conducted by agricultural economists to measure the impact of transgenic crop varieties on farmers, the size and distribution of the economic benefits from adopting them, consumer attitudes toward products made with transgenic ingredients, and implications of the use of transgenic crops for international trade. An even smaller subset treats the impacts of transgenic crops in developing economies

Policy and institutional factors and the distribution of economic benefits and risk from the adoption of insect resistant (Bt) cotton in West Africa. 2008. Falck-Zepeda, Jose´ Benjamin; Horna, Daniela; Zambrano, Patricia; Smale, Melinda. Asian Biotechnology and Development Review 11(1): 1-32.

The Cartagena Protocol on Biosafety allows the possibility of including socio-economic considerations in biosafety regulatory approval processes and decision making for genetically modified products. Divergent opinions about the desirability of including socio-economic considerations have polarized the debate. For biosafety approval processes, assessment of socio-economic considerations will likely be before the fact, as the genetically modified product has not reached commercialization approval processes. This implies that there is a limited scope as to methods and approaches for assessments. To ensure that socio-economic assessments will not become an obstacle to the development and transfer of safe and efficacious products to farmers, all stakeholders need to understand clearly all regulations governing inclusion of socio-economic considerations. Furthermore, the decision-making process needs to clearly define decision-making rules and standards by which to guide approval processes.

A vast literature has accumulated since crop varieties with transgenic resistance to insects and herbicide tolerance were released to farmers in 1996 and 1997. A comparatively minor segment of this literature consists of studies conducted by agricultural economists to measure the farm-level impact of transgenic crop varieties, the size and distribution of the economic benefits from adopting them and the implications for international trade. This paper focuses only on the applied economics literature about the impact of transgenic crop varieties in non-industrialised agricultural systems, with a focus on the methods. A number of studies have surveyed the findings for both industrialised and non-industrialised agriculture at various points in time, but surveys of methods are less common and most treat one aspect of economic impact. Clearly, the methods used in research influence the findings that are presented and what they mean. Three levels of impact analysis are considered: farm, industry and trade. We conclude that because the methods used present challenges and limitations, the few transgenic crop-trait combinations released in developing economies and the relatively brief time frame of most analyses, the results are promising but the balance sheet is mixed. Thus, the findings of current case studies should not be generalised to other locations, crops and traits.

Genetically modified maize and cotton has been introduced to small scale farmers in the Eastern Cape of South Africa through a government development programme called the Massive Food Production Programme. This research presents case studies from four villages that have been recipients of the programme.