GMO.ppt - Agricultural Biotechnology

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GMO.ppt - Agricultural Biotechnology

  1. 1. GMO Crops: To Grow or Not to Grow? Marshall A. Martin Professor and Associate Head Department of Agricultural Economics Purdue University Crop Production Clinic Madison County, Indiana December 7, 2000
  2. 2. Organization of Today’s Presentation • GMO crops
  3. 3. Organization of Today’s Presentation • GMO crops • Public attitudes towards GMO crops
  4. 4. Organization of Today’s Presentation • GMO crops • Public attitudes towards GMO crops • Economics of transgenic corn adoption
  5. 5. Organization of Today’s Presentation • GMO crops • Public attitudes towards GMO crops • Economics of transgenic corn adoption • Crop segregation
  6. 6. Organization of Today’s Presentation • GMO crops • Public attitudes towards GMO crops • Economics of transgenic corn adoption • Crop segregation • The Starlink case
  7. 7. What is a GMO crop? • Transfer of a gene from a soil bacteria that codes for a protein
  8. 8. What is a GMO crop? • Transfer of a gene from a soil bacteria that codes for a protein • Protein becomes a toxin and kills selected insects
  9. 9. Insect Control with Biotechnology • Insect resistant crops commercially available, e.g., Bt corn, cotton, and potatoes
  10. 10. Insect Control with Biotechnology • Insect resistant crops commercially available, e.g., Bt corn, cotton, and potatoes • Transgenic corn for rootworm control under development
  11. 11. Crop Applications of Biotechnology • Herbicide tolerant crops, e.g., Roundup Ready corn and soybeans
  12. 12. U.S. Crop Biotechnology Adoption (USDA Survey) 1999 2000 2000 US US IN Corn 33% 25% 11% Soybeans 57% 54% 63% Technology Adoption Rates 0 20 40 60 80 100 1 3 5 7 9 11 13 15 17 19 Years -%_
  13. 13. Biotechnology Critics What are the public concerns?
  14. 14. Monarch Butterfly • Cornell and Iowa State University laboratory studies of adverse Bt corn pollen impact
  15. 15. Monarch Butterfly • Cornell and Iowa State University laboratory studies of adverse Bt corn pollen impact • Recent field studies suggest minimal adverse impact
  16. 16. Undesired Gene Flow • Cross pollination
  17. 17. Undesired Gene Flow • Cross pollination • Organic farmer concerns
  18. 18. Undesired Gene Flow • Superweeds
  19. 19. Food Safety • Allergenicity
  20. 20. Food Safety • Allergenicity • Unknown diseases or future health consequences
  21. 21. Structure of Agriculture • Corporate control of the food system
  22. 22. Structure of Agriculture • Corporate control of the food system • Ownership of intellectual property rights
  23. 23. Many Europeans uneasy about biotechnology • Strong environmental movement
  24. 24. Many Europeans uneasy about biotechnology • Strong environmental movement • No coherent regulatory system
  25. 25. Many Europeans uneasy about biotechnology • Strong environmental movement • No coherent regulatory system • Weak public trust in government since mad cow disease (BSE)
  26. 26. Many Europeans uneasy about biotechnology • Strong environmental movement • No coherent regulatory system • Weak public trust in government since mad cow disease (BSE) • EU consumers perceive no benefits with potential risk
  27. 27. Many Europeans uneasy about agricultural biotechnology • Strong environmental movement • No coherent regulatory system • Weak public trust in government since mad cow disease (BSE) • EU consumers perceive no benefits with potential risk • Protectionist farm policies
  28. 28. Many Europeans uneasy about agricultural biotechnology • Strong environmental movement • No coherent regulatory system • Weak public trust in government since mad cow disease (BSE) • EU consumers perceive no benefits with potential risk • Protectionist farm policies • Strong support for labeling
  29. 29. U.S. Consumer Attitudes towards Food Biotechnology • About 3/4 Americans have heard of biotechnology
  30. 30. U.S. Consumer Attitudes towards Food Biotechnology • About 3/4 Americans have heard of biotechnology • About 1 out of 3 consumers know that GMO foods are now in our supermarkets
  31. 31. U.S. Consumer Attitudes towards Food Biotechnology • About 3/4 would buy a GMO food if less pesticide use
  32. 32. U.S. Consumer Attitudes towards Food Biotechnology • About 3/4 would buy a GMO food if less pesticide use • About 3/4 support FDA labeling of biotechnology foods with health and nutrition information
  33. 33. My Biotechnology Research • Economics of Corn Insect Control – graduate student research – ID-219 (extension pub) – Review of Agricultural Economics 21(2):1999 – AgBioForum, 3(1):2000 – 1998, 1999, & 2000 AAEA Selected Papers
  34. 34. European Corn Borer • $1 billion annual damage in U.S.
  35. 35. European Corn Borer • $1 billion annual damage in U.S. • Physiological damage
  36. 36. European Corn Borer • $1 billion annual damage in U.S. • Physiological damage • Mechanical damage
  37. 37. European Corn Borer Infestation
  38. 38. Multi-State Study • Indiana • Illinois • Iowa • Kansas
  39. 39. Decision Analysis Model • A decision tree Date Event Fall-Winter Seed choice Apr 1 - June 15 Planting June 7 1st gen. ECB August 6 2nd gen. ECB September 2 3rd gen. ECB
  40. 40. Data • Collaborative arrangements – Indiana: Bledsoe and Obermeyer – Illinois: Steffey – Iowa: Hellmich – Kansas: Buschman and Higgins
  41. 41. Data • Scouting and spraying costs
  42. 42. Data • Scouting and spraying costs • Spraying efficacy
  43. 43. Data • Scouting and spraying costs • Spraying efficacy • Corn planting dates – Probability distribution – Yield losses for late planting
  44. 44. Data • Scouting and spraying costs • Spraying efficacy • Corn planting dates – Probability distribution – Yield losses for late planting • ECB yield damage by planting date
  45. 45. Data • Probability of number of ECB given plant date and infestation
  46. 46. Data • Probability of number of ECB given plant date and infestation • Probability of number of ECB per plant given infestation
  47. 47. Data • Probability of number of ECB given plant date and infestation • Probability of number of ECB per plant given infestation • Overall probability of infestation
  48. 48. Results – Indiana and Iowa • Returns to spraying less than per acre scouting costs
  49. 49. Results – Indiana and Iowa • Returns to spraying less than per acre scouting costs • Compare Bt corn to non-Bt without a spraying program
  50. 50. Results - Indiana
  51. 51. Results - Indiana • Risk Neutral Revenue 30% 40% $300 $4.53 $6.24 $350 $5.28 $7.29 $400 $6.04 $8.33 $450 $6.79 $9.37
  52. 52. Results - Indiana • Risk Averse Revenue 30% 40% $300 $5.12 $6.99 $350 $6.09 $8.31 $400 $7.11 $9.67 $450 $8.17 $11.09
  53. 53. Results - Iowa
  54. 54. Results - Iowa • Risk Neutral Revenue 40% 60% $300 $6.55 $10.32 $350 $7.64 $12.04 $400 $8.74 $13.76 $450 $9.83 $15.48
  55. 55. Results - Iowa • Risk Averse Revenue 40% 60% $300 $7.30 $11.26 $350 $8.68 $13.33 $400 $10.10 $15.45 $450 $11.57 $17.64
  56. 56. Conclusions • Value of Bt corn increases from east to west in Corn Belt
  57. 57. Conclusions • Value of Bt corn increases from east to west in Corn Belt • Very valuable where SWCB are present
  58. 58. Conclusions • Value of Bt corn increases from east to west in Corn Belt • Very valuable where SWCB are present • Resistance may occur if farmers do not comply with EPA 20% refuge requirement
  59. 59. Corn Rootworm Control
  60. 60. Corn Rootworm Larvae Damage
  61. 61. Western Corn Rootworm Variant in Northern Indiana
  62. 62. Soil Insecticides • One-time proactive application to protect roots Benefits Limitations • Simplicity • Efficacy variability • Known cost • No adult control ($13-$17/acre) • Environmental concerns? • Secondary pests • Grower exposure to chemicals
  63. 63. Transgenics • Insertion of Cry gene from Bacillus thuringiensis into corn genome-root expression leads to root protection Benefits Limitations • Simplicity • Resistance development • Consistency/efficacy • Refuge requirements • Reduced insecticide use • GMO marketing concerns and chemical exposure
  64. 64. Root Protection Soil Insecticide Zone Transgenic Zone Corn Roots Protected Zone (Size Varies Year to Year) Corn Roots / Protected Zone
  65. 65. Indiana Research Sites http://www.aes.purdue.edu/AgResearch/AgCenters.html
  66. 66. Indiana: 1990-1999 (excluding 1996) 8.80 9.45 10.34 - Lorsban -1.16 -1.31 -1.14 - 1.68 1.53 1.70 2.84Untreated 130.82 131.47 132.36 122.02 Corn Rootworm Treatment Force Counter Average Root Rating Root Rating Difference of Treated vs. Untreated Average Yield (bushels/acre) Bushel Difference of Treated vs. Untreated
  67. 67. Conclusions • Based on cost to the producer, yield benefits, efficacy/consistency, simplicity, and environmental implications, transgenics potentially hold the most economic value for producers
  68. 68. Conclusions • Based on cost to the producer, yield benefits, efficacy/consistency, simplicity, and environmental implications, transgenics potentially hold the most economic value for producers • But must have a refuge management plan
  69. 69. Some Considerations Before Adopting Transgenic Corn
  70. 70. Adopting a Transgenic Crop: Production Considerations • Technology fee
  71. 71. Adopting a Transgenic Crop: Production Considerations • Technology fee • Pest infestation probabilities
  72. 72. Adopting a Transgenic Crop: Production Considerations • Technology fee • Pest infestation probabilities • Yield drag
  73. 73. Adopting a Transgenic Crop: Production Considerations • Technology fee • Pest infestation probabilities • Yield drag • Reduction in pesticide costs
  74. 74. Adopting a Transgenic Crop: Environmental Considerations • Refuge requirements
  75. 75. Adopting a Transgenic Crop: Environmental Considerations • Refuge requirements • Impacts on beneficial insects
  76. 76. Adopting a Transgenic Crop: Environmental Considerations • Refuge requirements • Impacts on beneficial insects • Tillage system adjustments
  77. 77. Adopting a Transgenic Crop: Marketing Considerations • Potential premiums or discounts
  78. 78. Adopting a Transgenic Crop: Marketing Considerations • Potential premiums or discounts • Market segregation costs
  79. 79. Adopting a Transgenic Crop: Marketing Considerations • Potential premiums or discounts • Market segregation costs • How much premium?
  80. 80. How much premium needed to segregate? • Recent Midwest commercial farmer survey (Norm Larson of AFS Services) Premium per Bushel • < $0.10 2% • $0.10 - $0.20 22% • $.020 - $0.30 28% • $0.30 - $0.40 26% • $0.40 - $0.50 11% • >$0.50 12%
  81. 81. What does it take to segregate your crop? • Seed source
  82. 82. What does it take to segregate your crop? • Seed source • Planting considerations
  83. 83. What does it take to segregate your crop? • Seed source • Planting considerations • Harvesting considerations
  84. 84. What does it take to segregate your crop? • Seed source • Planting considerations • Harvesting considerations • Storage challenges
  85. 85. What does it take to segregate your crop? • Seed source • Planting considerations • Harvesting considerations • Storage challenges • Hauling and shipping
  86. 86. What does it take to segregate your crop? • Seed source • Planting considerations • Harvesting considerations • Storage challenges • Hauling and shipping • Beyond the farm gate
  87. 87. The Starlink Case • Aventis request to EPA- April ’97
  88. 88. The Starlink Case • Aventis request to EPA- April ’97 • EPA approved- May ’98 for domestic feed and industrial use only
  89. 89. The Starlink Case • Aventis request to EPA- April ’97 • EPA approved- May ’98 for domestic feed and industrial use only • Grower agreements required
  90. 90. The Starlink Case • Aventis request to EPA- April ’97 • EPA approved- May ’98 for domestic feed and industrial use only • Grower agreements required • Acres planted – 2,000 in ’98 – 248,000 in ’99 – 340,908 in ‘00
  91. 91. U.S. Starlink Corn Acres: 2000 • Iowa 134,910 • Nebraska 41,529 • Minnesota 35,691 • S.Dakota 34,290 • Kansas 21,390 • Illinois 17,466 • INDIANA 3,564 • U.S. 340,908
  92. 92. Indiana Starlink Corn Acres: 2000• La Porte 594 • Starke 507 • Marshall 339 • Knox 288 • Jasper 279 • Delaware 189 • Lake 180 • Bartholomew 171 • Owen 141 • Randolph 108
  93. 93. The Starlink Case • Sept ’00 found in taco shells and recalls initiated
  94. 94. The Starlink Case • Sept ’00 found in taco shells and recalls initiated • Oct ’00 processors stop using Cry9c corn
  95. 95. The Starlink Case • Sept ’00 found in taco shells and recalls initiated • Oct ’00 processors stop using Cry9c corn • Nov ’00 disruption in grain industry
  96. 96. The Starlink Case • Sept ’00 found in taco shells and recalls initiated • Oct ’00 processors stop using Cry9c corn • Nov ‘00 disruption in grain industry • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn
  97. 97. The Starlink Case • Sept ’00 found in taco shells and recalls initiated • Oct ’00 processors stop using Cry9c corn • Nov ’00 disruption in grain industry • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn • Nov ’00 new data submitted to EPA
  98. 98. The Starlink Case • Sept ’00 found in taco shells and recall s initiated • Oct ’00 processors stop using Cry9c corn • Nov ‘00 disruption in grain industry • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn • Nov ’00 new data submitted to EPA • Dec ’00 report from SAP says “medium risk” with Cry9c and “low probability” of risk to consumers
  99. 99. The Starlink Case • Sept ’00 found in taco shells and recall starts • Oct ’00 processors stop using Cry9c corn • Nov ‘00 disruption in grain industry • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn • Nov ’00 new data submitted to EPA • Dec ’00 report from SAP says “medium risk” with Cry9c and low probability of risk to consumers • EPA action expected in a few weeks
  100. 100. Questions

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