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Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014
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Falck zepeda presentation on experiences with socieoconomics biosafety and biotechnology made at USDA FAS February 2014

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A review of the experiences with the potential or actual inclusion of socioeconomic considerations in decision making as related to genetically modified crops in developing countries. I examine such …

A review of the experiences with the potential or actual inclusion of socioeconomic considerations in decision making as related to genetically modified crops in developing countries. I examine such issues including background, relationship to the Cartagena Protocol on Biosafety, achieving conceptual clarity, definitions, scope and implementation. I discuss a set of case studies conducted in selected developing countries, experience with implementation in Brazil and Argentina, examine the positive and negative consequences of inclusion and conclude summarizing these experiences.

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  • 1. “Experiences with Genetically Modified Crops, Socioeconomic Assessments, Biosafety and Decision Making” José Falck Zepeda Senior Research Fellow International Food Policy Research Institute Leader Policy Team for the Program for Biosafety Systems (IFPRI - PBS) Photos: Bt/RR maize Isabela province, Northern Luzon, Philippines, 2012 Presentation made at USDA-FAS, Washington DC, February 25, 2014. Program for Biosafety Systems – http://pbs.ifpri.info/
  • 2. Content • Background • What we know • Approaches – Brazil & Argentina • Potential implications from SEC inclusion Program for Biosafety Systems – http://pbs.ifpri.info/
  • 3. Socioeconomic Considerations (SEC) Definition • Slight paraphrase of International Association of Impact Assessment (IAIA) “All the issues of interest to humans that may be affected by an intervention or natural phenomena following a line of causality, that is, from cause to effect. The characterization of socioeconomics considerations may include all the potential ways by which people and communities interact with their socio-cultural, economic and biophysical surroundings and the impact that such intervention or causal agent may have on them.” • Simplified version (author to be revealed someday…) "Socioeconomic assessment can include examination of a variety of social and economic factors with the objective to better understand the potential impacts of relevant interventions on people and communities." Program for Biosafety Systems – http://pbs.ifpri.info/
  • 4. The Netherlands Commission on Genetic Modification (COGEM 2009) proposal on SECs Benefits to society – e.g. yield increase or food quality improvement Economics and prosperity – such as increased employment and productivity Health and welfare – for workers, the local population and consumers Local and general food supply – these should remain at the same level or improve Cultural heritage – if desired, specific elements of cultural heritage or local customs should be preserved Freedom of choice – both consumers and producers should be able to choose between GMO and GMOfree products Safety – in terms of bother personal and the environment Biodiversity Environmental quality Program for Biosafety Systems – http://pbs.ifpri.info/
  • 5. What drives SEC inclusion in decision making • International agreements • Regional considerations • National laws and regulations – National Biosafety Frameworks – Implementing regulations, directives, administrative acts • Stakeholder interests Program for Biosafety Systems – http://pbs.ifpri.info/
  • 6. Article 26.1 of the Cartagena Protocol on Biosafety • Applies to decision on import only, or • National measures • Voluntary – NOT mandatory • Especially –not limited to - WTO • Strictly a specific focus and line of causality • Explicit impact indicator and emphasis on one target group 1 . The Parties, in reaching a decision on import under this Protocol or under its domestic measures implementing the Protocol, may take into account, consistent with their international obligations, socio-economic considerations arising from the impact of living modified organisms on the conservation and sustainable use of biological diversity, especially with regard to the value of biological diversity to indigenous and local communities Program for Biosafety Systems – http://pbs.ifpri.info/
  • 7. Assessments as tools/inputs for decision making Biosafety assessments SocioEconomic Assessments Biosafety regulatory processes are: • Time and budget constrained • Mandated to render a decision as an outcome • Decisions and options tradeoffs Program for Biosafety Systems – http://pbs.ifpri.info/ Decision Making
  • 8. Socio-economics and biosafety & biotechnology decision making BEFORE RELEASE AFTER RELEASE An impact assessment during the biosafety regulatory stage to decide on the approval of a technology needs to be ex ante For monitoring purposes or for standard technology evaluation purposes this is a conventional ex-post assessment Program for Biosafety Systems – http://pbs.ifpri.info/
  • 9. What can a decision maker do with the results a socio-economic assessment? DECISION MAKING ASSESSMENT OUTCOME SEC assessment Biosafety assessment Negative Socio – Economic Assessment due to institutional issues Biosafety renders product to be “safe” Program for Biosafety Systems – http://pbs.ifpri.info/ Not approve? Require more information? Approve after resolving institutional issues?
  • 10. SEC and regulatory design and implementation issues Issues Options Type of inclusion? • No inclusion vs. Mandatory vs. Voluntary Who? • Developer vs. dedicated government unit vs. third party experts Scope? • Narrow interpretation article 26.1 • Narrow set of socio-economic issues • Broader set of assessments (SIA or SL) Approach? • Concurrent but separate vs. Sequential vs. Embedded • Implementation entity Assessment trigger? • Each submission vs. Event-by-event vs. class of events When? • Laboratory/greenhouse vs. CFTs vs. Commercialization • For post release monitoring How? • • • • Will the assessment require a de novo study? Choice of methods limited Decision making rules and standards Method integration, standards, tolerance to errors Program for Biosafety Systems – http://pbs.ifpri.info/
  • 11. 2. What do we know about the socioeconomic impact of GE technologies? Program for Biosafety Systems – http://pbs.ifpri.info/
  • 12. What do we know from the economic impact assessment literature to date? • A review of 187 peer reviewed studies • Examined studies with a focus on: – Farmers, household and community – Industry and markets – Consumers – Trade Citation: Smale, Melinda; Zambrano, Patricia; Gruère, Guillaume; Falck-Zepeda, José; Matuschke, Ira; Horna, Daniela; Nagarajan, Latha; Yerramareddy, Indira; Jones, Hannah. 2009. Measuring the economic impacts of transgenic crops in developing agriculture during the first decade: Approaches, findings, and future directions. (Food policy review 10) Washington, D.C.: International Food Policy Research Institute (IFPRI) 107 pages Program for Biosafety Systems – http://pbs.ifpri.info/
  • 13. Food Policy Review 10 conclusions • On average GM crops have a higher economic performance — averages do not reflect agro-climate, host cultivar, trait, and farmer variability • Too few traits, too few cases/authors— generalizations should not be drawn yet...need more time to describe adoption These conclusions are no different than those for most technologies released to date… Program for Biosafety Systems – http://pbs.ifpri.info/
  • 14. Food Policy Review 10 conclusions • Address cross cutting issues for further study including impacts of poverty, gender, public health, generational, cross links with environmental and health issues • Develop improved methods and multi-disciplinary collaborations to examine broader issues Program for Biosafety Systems – http://pbs.ifpri.info/
  • 15. Black Sigatoka Resistant Bananas in Uganda  Consider irreversible and reversible cost and benefits  With one year delay, forego potential annual (social) benefits of +/- US$200 million  A GM banana with tangible benefits to consumers increases their acceptance for 58% of the population Photos credits: Kikulwe 2009 and Edmeades 2008 Kikulwe, E.M., E. Birol, J. Wesseler, J. Falck-Zepeda. A latent class approach to investigating demand for genetically modified banana in Uganda Agricultural Economics 2011. Program for Biosafety Systems – http://pbs.ifpri.info/
  • 16. Bt cotton in Uganda  Positive yield impacts and net benefits  Smaller rate of return probably explained due to low base yields  Need to improve overall cotton productivity Photos credit: © Horna 2009  Probability of a negative return can be as high as 38% with a technology fee as charged elsewhere Horna, et al. (2013) . “Economic Considerations in the Approval Process of GM Cotton in Uganda: Designing an Ex-ante Assessment to Support Decision-making. “IFPRI Monoograph Program for Biosafety Systems – http://pbs.ifpri.info/
  • 17. Bt maize in the Philippines • Growing Bt maize significantly increases profits and yields • Significant insecticide use reductions • Adopters tend to be – – – – Cultivate larger areas Use hired labor More educated have more positive perceptions of current and future status Bt maize studies in Philippines led by Dr. Jose Yorobe Jr. with 466 farmers in 16 villages Isabela Province, Luzon, South Cotabato Province, Mindanao Change in economic surplus (mill pesos) Producer Surplus Seed Innovator Total Surplus 7906 703 8609 Producer Share (%) 92 Innovator Share (%) 8 Program for Biosafety Systems – http://pbs.ifpri.info/
  • 18. Bt/RR maize in Honduras  Excellent target pest control  Bt yield advantage 893-1136 Kg ha-1 yield (24-33%)  Bt maize yields preferred even by risk averse producers  100% higher seed cost than conventional hybrid  Institutional issues important Source: Falck-Zepeda, J., A. Sanders, C. Rogelio Trabanino, & R. BatallasHuacon. Caught Between Scylla and Charybdis: Impact Estimation Issues from the Early Adoption of GM Maize in Honduras. AgBioForum, 15(2), 138-151. Available on the World Wide Web: http://www.agbioforum.org. Program for Biosafety Systems – http://pbs.ifpri.info/ Photos credit: © Sanders and Trabanino 2008
  • 19. A meta-analysis paper by Areal, Riesgo and Rodriguez-Cerezo (2012) “GM crops perform better than their conventional counterparts in agronomic and economic (gross margin) terms” “GM crops tend to perform better in developing countries than in developed countries, with Bt cotton being the most profitable crop grown” Program for Biosafety Systems – http://pbs.ifpri.info/
  • 20. 3. How are socioeconomics included in decision making ….or not… Program for Biosafety Systems – http://pbs.ifpri.info/
  • 21. The case of Brazil In Brazil, Law 11.105, of 2005, an several normative resolutions from CTNBio – National Technical Commision on Biosafety regulate the processes for the evaluation, import authorization, transport, research and deliberate release (limited or commerical) of LMOs Proponent (legal entity) CIBio ANVISA (Health) IBAMA (Environment) CNBS Ministries of Health, Agriculture, and Environment CTNBio Society Source: Paulo Paes de Andrade, 2012 Program for Biosafety Systems – http://pbs.ifpri.info/
  • 22. Risk Assessment Biological Aspects CIBios CTNBio Research institutions, universities, private and public companies Multidisciplinary body with 54 members CNBS 11 Ministries Proponent Research Comercialization Public consultation Risk management Risk communication Federal monitoring entities – Ministries Agriculture and Program for Biosafety Systems – http://pbs.ifpri.info/ Health Source: Paulo Paes de Andrade, 2012
  • 23. Issue Brazil Type of inclusion Only if an SEC identified during the scientific biosafety assessment Scope / What Not clear / open Who • Three separate bodies Institutional Biosafety Committee, CTNBio = biosafety assessments, CNBS (National Biosafety Council): decision making body. • CNBS commissions a third party When Commercialization Comments • Rationale for dual bodies was to separate technical assessment from the “political” decision making • Mexico has a similar approach Program for Biosafety Systems – http://pbs.ifpri.info/ Source: based on Falck Zepeda, Wesseler and Smyth, 2010 and Pray, 2010
  • 24. Permits for GM crops in Brazil (cultivation, importation, export) Old regulatory framework New regulatory framework Number of approved events Maize Simple majority voting Cotton Soybeans Beans Year of approval Source: Paulo Paes de Andrade, 2012 Program for Biosafety Systems – http://pbs.ifpri.info/
  • 25. Argentina – Key regulatory steps • CONABIA: Evaluates agricultural and environmental impacts through trials • SENASA: Food safety evaluation • DNMA: Evaluates potential commercial impact focusing on export markets • CONABIA makes final report Program for Biosafety Systems – http://pbs.ifpri.info/
  • 26. Regulatory activity • Number of evaluated applications 1991-2011 – Soybeans: 703 – Cotton: 123 • Basic biosafety measures – Isolation distances • Soybeans: 3-30 meters • Cotton: 800 meters – Year post release monitoring • Soybean: 1 • Cotton: 3 Program for Biosafety Systems – http://pbs.ifpri.info/
  • 27. Issue Argentina Type of inclusion Mandatory Scope / What? Economic impacts on trade and/or competitiveness. Other impacts being considered. Who? Minister of Finance and Trade – special unit When? Comments Commercialization For a while..policy of only approving those already approved in trade sensitive markets Program for Biosafety Systems – http://pbs.ifpri.info/ Source: based on Falck Zepeda, Wesseler and Smyth, 2010 and Pray, 2010
  • 28. 3. Potential implications Photos: KARI –Kenya glasshouse, KARI-Thika confined field trial of Bt cotton, IRRI conventional rice trials Los Baños, Philippines Program for Biosafety Systems – http://pbs.ifpri.info/
  • 29. Potential implications from SEC inclusion into decision making • Gain more and/or better information about technology impacts for decision making - may support valuable technologies • Balance gains in information, additional costs & effort, and impacts on innovation • Potential for introducing uncertainty that can lead to an unworkable system if rules and standards are not clear Program for Biosafety Systems – http://pbs.ifpri.info/
  • 30. Potential implications from SEC inclusion into decision making • Cost of compliance costs will increase • Potential regulatory delays – Reduction in the number of technologies especially those released by the public sector and crops/traits of a public good nature – Some public sector institutions may not be able to deploy technologies due to fixed costs necessary to enter market Program for Biosafety Systems – http://pbs.ifpri.info/
  • 31. Contrasting baseline net benefit levels from GE crop adoption with higher costs in the Philippines Notes: 1) Source: Bayer, Norton and Falck Zepeda (2008), 2) Baseline values for each technology expressed in millions US$ using a discount rate for the estimation of Net Present Value = 5%, 3) Change in Net benefits defined as the total benefits estimated using the economic surplus minus total regulatory costs. Program for Biosafety Systems – http://pbs.ifpri.info/
  • 32. Contrasting benefit levels from GE crop adoption with larger regulatory lags in the Philippines Notes: 1) Source: Bayer, Norton and Falck Zepeda (2008), 2) Baseline values for each technology expressed in millions US$ using a discount rate for the estimation of Net Present Value = 5%, 3) Change in Net benefits defined as the total benefits estimated using the economic surplus minus total regulatory costs. Program for Biosafety Systems – http://pbs.ifpri.info/
  • 33. Risk impacts and the stream of benefits • Regulatory delays have a negative impact on returns to investments 40 20 • With a 20% rate of return, expect year 6 of regulatory delay to be the trigger point for suspending investment in new R&D Values in Millions 0 -20 -40 -60 -80 -100 • Investment risk increases over time -120 1 • Likelihood that investments will not be made increases with no information about probability of success Source: Smyth, McDonald and Falck-Zepeda, 2013 Program for Biosafety Systems – http://pbs.ifpri.info/ 2 3 4 5 6 7 Years after the onset of benefits 5% - 95% +/- 1 Std. Dev. Mean 8
  • 34. Program for Biosafety Systems – http://pbs.ifpri.info/
  • 35. Summarizing • Socioeconomic consideration inclusion in decision making is not mandatory • Inclusion of socioeconomics in decision making – – – – Can have positive and negative impacts linked significantly to implementation Increase the cost of compliance Time delays are significant Investment risk can increase • GM crop adoption impacts have been mostly positive with some caveats • There are feasible approaches for implementation but need to focus on options and processes • Prudent for countries to consider carefully whether the gains in information and assurance are actually outweighed by the cost and other implications from the inclusion of socioeconomics Program for Biosafety Systems – http://pbs.ifpri.info/
  • 36. José Benjamin Falck-Zepeda, Ph.D. Senior Research Fellow / Leader Policy Team Program for Biosafety Systems IFPRI 2033 K Street NW Washington, DC 20006-1002 USA j.falck-zepeda@cgiar.org Brief bio/pubs: http://www.ifpri.org/staffprofile/jose-falck-zepeda Blog: http://socioeconomicbiosafety.wordpress.com/ Follow me on Twitter: @josefalck Program for Biosafety Systems – http://pbs.ifpri.info/

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