“Adoption Impacts and Access to Innovation inSmall Resource Poor Countries: Results from aSecond Round Survey and Institut...
05101520252000 2002 2004 2006 2008 2010%ofGDPAgricultureValue AddedSub-Saharan AfricaWorldHondurasUnited StatesHonduras: H...
Graphs: WorldBank Development Indicators (2013)Map: National System of Environmental Indicators, SINIA05101520252000 2002 ...
0100020003000400050006000700080002000 2002 2004 2006 2008 2010Kilograms/hectareCerealYieldSub-Saharan AfricaWorldHondurasU...
Corn is an essential part of Honduran diet1FAO Statistics Division, 2012, 2Ministry of Agriculture and Livestock, 2012Top ...
Corn supply in Honduras increasinglydependent on imports0200040006000800002004006008001985 1987 1989 1991 1993 1995 1997 1...
Honduras: The problem withproduction intensification Damage by lepidopteran insects can be as high as 40-70% Increasing ...
GMOs in Honduras8th Latin American country adopting GMOs since 200211ISAAA, 2012Only country in CentralAmericacultivating ...
WHY GMOs adopted in Honduras?
Honduras: promotional environment favoring biotechnologyadoptionFavorable policy,economic and social conditions facilitate...
 Established Biosafety Framework and Regulations Incorporated biotechnology in National Food Self Sufficiency Strategy ...
Honduras in the LatinAmerican innovationsphereSmall markets MediummarketsLarge marketsNon-selectiveimporters oftechnologyE...
Which policies are important?Public sectorinvestments inbiotechnologyapplicationsIntellectualpropertymanagementBiosafetyre...
HOW HAS GM CORN WORKED INHONDURAS?
 GM maize provided excellenttarget pest control Bt yield advantage 856-1781 Kgha-1 yield Bt maize yields preferred even...
The 2013 (second) survey to observe experiencesof conventional & GM corn farmersEconomic, social and agronomic impactsFarm...
Disclosure: Results presented here are preliminary These may change with further work
Major maize producing areas inHonduras
Olancho: The main corn producing state inHonduras- 180,000 metric tons- 35,000 planted hectares >30 % national corn produ...
Number ofapplications Conventional GMBoth types,conventional plotBoth types,GM plot< 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ...
EnvironmentalImpact Quotient Conventional GMBoth types,conventional plotBoth types,GM plot< 7 ha > 7 ha < 7 ha > 7 ha < 7 ...
Cost structure in corn production Conventional GM< 7 hectares > 7 hectares < 7 hectares > 7 hectaresTotal costs (US$/ha) 7...
Of Cook’s D, the issue of outliers andsampling biases…our data shows it’s present135112021 404256 606876777884858688899091...
Production function approachRobust Regression (MM-Regression 85% efficiency,ROBREG)Robust Regression (MSREGRESS)Instrument...
Second stage (2SLS net income) First stage, dependent variables is GM corn user)Variable Coef. Std. Err. Coef. Std. Err.GM...
THEN…WHY HAVE WE NOTOBSERVED FULL ADOPTION BYHONDURAN PRODUCERS?
Characteristic• Monthly income >500 US$• Access to technical assistance• Access to credit• Farmers applying fungicides• In...
Access to markets may limit profitabilityFarmers with smaller plots or in remote areasare less likely to adopt biotechnolo...
Gender/seed typePreferred for production Preferred for consumptionConventional GM Conventional GMMale/Conventional 0 13 0 ...
Conclusions For the sample of producers included in our survey, GM maizecontinues to perform as expected compared to a co...
Arie SandersMaria Mercedes RocaMiljian VillaltaAlan B. BennettCecilia Chi-HamDenisse McLeanJose Falck-ZepedaPatricia Zambr...
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Falck zepeda et al ravello icabr june 2013 final 2

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A presentation made at the 17th ICABR conference in Ravello, Italy June 21 2013.

Adoption Impacts and Access to Innovation in Small Resource Poor Countries: Results from a Second Round Survey and Institutional Assessment in Honduras. Falck-Zepeda Jose; McLean Denise; Zambrano, Patricia; Sanders Arie; Roca Maria Mercedes; Chi-Ham Cecilia.

We conducted a first round survey of maize producers who have adopted Bt/RR maize in Honduras in 2007. Honduras is the only country in Central America who has adopted a GM crop. Our first round survey showed that the adoption of Bt/RR maize was beneficial for maize producers in the country as it provided a yield advantage and in some cases reductions in pesticide applications compared to its conventional counterpart. These outcomes lead to a positive net income gain to producers who adopted the technology. Although the question of whether this result would be replicable in other years is important, other critical questions arose after our first study concluded about the institutional setting -including the knowledge and decision making network- that facilitated the adoption of a GM crop technology and what are the factors that may facilitate or limit the adoption by smallholder producers. In this paper we report the results from a second round survey of producers in Honduras conducted in 2012, but also small group discussions, a Net and process mapping, and semi-structured interviews with current and past relevant decision makers. Our preliminary results from the producer survey support the overall conclusions of our first survey. Our qualitative studies describe the characteristics of an innovation pathway that lead to an innovation in a resource poor country including biosafety regulatory issues, IP, legal frameworks and an assertive agricultural policy supporting sustainable agriculture and development.

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Falck zepeda et al ravello icabr june 2013 final 2

  1. 1. “Adoption Impacts and Access to Innovation inSmall Resource Poor Countries: Results from aSecond Round Survey and InstitutionalAssessment in Honduras”José Falck Zepeda1, Denise McLean2, Patricia Zambrano1, ArieSanders2, Maria Mercedes Roca2, Cecilia Chi-Ham31 IFPRI2 Zamorano University3 UC Davis PIPRAPaper presented at the 17th ICABR meeting, Ravello Italy, June 21 2013© 2013 UC-Davis and IFPRI
  2. 2. 05101520252000 2002 2004 2006 2008 2010%ofGDPAgricultureValue AddedSub-Saharan AfricaWorldHondurasUnited StatesHonduras: High reliance on agricultureAgricultural sector 13% of GDP1Agribusiness and related sector  40-45%2 GDP1 World Bank, 20112http://www.hondurasopenforbusiness.com/SITEv2/files/pdf/Oportunidades_de_inversion_Agroindustria.pdf
  3. 3. Graphs: WorldBank Development Indicators (2013)Map: National System of Environmental Indicators, SINIA05101520252000 2002 2004 2006 2008%ofLandAreaArable LandSub-Saharan AfricaWorldHondurasUnited StatesHonduras: Limited resources for agricultural productionespecially land87% of territory corresponds to hillsidessusceptible to erosion
  4. 4. 0100020003000400050006000700080002000 2002 2004 2006 2008 2010Kilograms/hectareCerealYieldSub-Saharan AfricaWorldHondurasUnited StatesHonduras: Low productivity of major staplecropsHonduras’ Productivity:1/3 of world averages and1/7 of US yields
  5. 5. Corn is an essential part of Honduran diet1FAO Statistics Division, 2012, 2Ministry of Agriculture and Livestock, 2012Top commodity available for consumption  739 kcal/person/dayBasic grains represent up to 60% of Honduran diet48% of total demand is for human consumptionProductionValue, Top Commodities (2011)Value [1000 Int$] Value [1000 Int$]1 Coffee, green 303357 8 Tomatoes 565802 Cow milk, whole 230723 9 Oranges 541263 Chicken Meat 222122 10 Beans, dry 517914 Bananas 204849 11 Pineapple 394165 Cattle Meat 165830 12 Eggs 366616 Sugar cane 164766 13 Melons 331397 Palm oil 139218 14 Corn 32068Corn in Honduras is grown mostly for food/feed
  6. 6. Corn supply in Honduras increasinglydependent on imports0200040006000800002004006008001985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009Population(thousands)Tons(thousands)Corn Production andTradeCorn production Corn imports Corn exports Population totalNearly 40% of corn is imported andthus high concerns for corn pricevolatility in international marketsHondurasAgriculture Ministry Jacobo Regalado:“From the million ton we need we are only producing 600thousands.We are still importing 400 thousands(…)The idea is to accelerate the pace to substitute those 400thousands with local production”.Hondudiario, March 19, 2012
  7. 7. Honduras: The problem withproduction intensification Damage by lepidopteran insects can be as high as 40-70% Increasing issues with other pests and diseases Heavy damage due to aflatoxins / mycotoxins Need to explore new control alternatives amenable tosmallholder´s producers Smallholder producers: Little access to technology, pest control alternatives andcredit Knowledge limitations: to determine damage and to makecorrect chemical applications….
  8. 8. GMOs in Honduras8th Latin American country adopting GMOs since 200211ISAAA, 2012Only country in CentralAmericacultivating GMOs for food-USA*-Brazil*-Argentina*-South Africa*-Canada*-Uruguay x1.5-Philippines x3-Spain x5-Chile x7-Honduras-Portugal x.8-Czech Republic x .7-Poland x3-Egypt x9-Slovakia x0.4-Romania x2• By 2011, 72 thousand ha with hybrids and GM  15% area planted1• GM estimated around 25-30 thousand haBT (MON810), RR (NK603), Herculex 1 ,YGVTPro(MON89034) traits approved for commercialization
  9. 9. WHY GMOs adopted in Honduras?
  10. 10. Honduras: promotional environment favoring biotechnologyadoptionFavorable policy,economic and social conditions facilitated adoptionUN Statistics Division, 2011. WTO Statistics, TradeProfiles, 2012Strategic interest in aligning agricultural policies withthe major economic and trade partners• Honduras trade is essentially tied to the United States• Historically strong presence of agricultural multinationals interested in increasedagricultural productivity
  11. 11.  Established Biosafety Framework and Regulations Incorporated biotechnology in National Food Self Sufficiency Strategy Coordinated a joint agricultural and environmental political agenda‘To facilitate the process to incorporate hybrids and transgenicseeds in 25% of the area planted at the national level by 2014’Honduras Agricultural and Livestock Ministry goalPublic Agricultural and Food Sector Strategy1996/98: Biosecurity Regulation with Emphasis inTransgenic Plants1998: National Committee of Biotechnology and Biosecurity (NCBB)2006: CAFTA-DR Phytozoosanitary Law modification2008: Cartagena Protocol Ratification2001/12: Law for the Protection of NewVarieties of PlantsUSAID GAIN Report 2012.Honduran government specific policy support for easing a transitiontowards biotechnologiesHonduras: A case study tounderstand biotechnologyadoption in small resource poordeveloping countries
  12. 12. Honduras in the LatinAmerican innovationsphereSmall markets MediummarketsLarge marketsNon-selectiveimporters oftechnologyEl Salvador,Guatemala,Honduras,Nicaragua,PanamáBolivia, EcuadorSelectiveimporters oftechnologyCosta Rica,UruguayParaguay, Peru VenezuelaTool users - Colombia, Chile Argentina, MexicoInnovators BrazilNotes: 1) Source: Trigo, Falck-Zepeda and Falconi (2010), 2)Non-adopters are listed in italic text.
  13. 13. Which policies are important?Public sectorinvestments inbiotechnologyapplicationsIntellectualpropertymanagementBiosafetyregulationsFood/feedsafety andconsumerprotectionSupport forpublic sectorparticipationand techtransferincluding seedsystemsNon-adoptersBolivia 0 0 - - 0Ecuador 0 0 - - 0Guatemala 0 - 0 0 -Perú 0 - - 0 0Venezuela + - - 0 0AdoptersArgentina + 0 0 + +Brazil + - 0 0 +Costa Rica + - 0 0 +Honduras 0 - 0 0 -Mexico + 0 0 0 +Uruguay + 0 0 0 +Notes: 1) Source: selected countries from Trigo, Falck Zepeda and Falconi (2010), 2) + signifies promotional policies, 0 denotesneutral policies, - reflects preventive policies, 3) Brazil was categorized as having a preventive biosafety policy in the Trigo et al. paper,but is reclassified here as neutral based on recent developments in the country.
  14. 14. HOW HAS GM CORN WORKED INHONDURAS?
  15. 15.  GM maize provided excellenttarget pest control Bt yield advantage 856-1781 Kgha-1 yield Bt maize yields preferred even byrisk averse producers 100% higher seed cost thanconventional hybrid Institutional issues importantPhotos credit: © Sanders and Trabanino 2008Falck-Zepeda, J., A. Sanders, C. Rogelio Trabanino, & R. Batallas-Huacon.Caught Between Scylla and Charybdis: Impact Estimation Issues from the EarlyAdoption of GM Maize in Honduras. AgBioForum, 15(2), 138-151. Available onthe World Wide Web: http://www.agbioforum.org.2008 GM maize crop cycle inHonduras: Results from our first survey
  16. 16. The 2013 (second) survey to observe experiencesof conventional & GM corn farmersEconomic, social and agronomic impactsFarmers by corn typeSizeTotal< 7 hectares > 7 hectaresConventional only 58 25 83GM only 39 57 96Both types of corn 11 19 30Total 108 101 209o We chose a representative sample of corn farmers from themain corn producing state in Honduras
  17. 17. Disclosure: Results presented here are preliminary These may change with further work
  18. 18. Major maize producing areas inHonduras
  19. 19. Olancho: The main corn producing state inHonduras- 180,000 metric tons- 35,000 planted hectares >30 % national corn production- 12,000 hectares with GM  >40% GM corn production- 10,000 farmers- A range of different corn production systemsWe captured diversity within the commercial corn productionchain
  20. 20. Number ofapplications Conventional GMBoth types,conventional plotBoth types,GM plot< 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 haInsecticides 1.7 1.9 1.6 1.3 1.9 2.0 1.0 1.1 SHerbicides 2.6 2.7 1.7 1.5 2.7 2.1 1.7 1.6 SFungicides 1.0 1.5 1.2 1.5 1.0 1.3 1.0 1.0 NSFertilizers 2.2 2.3 2.4 2.3 1.9 2.6 2.3 2.6 NSS: Significant, NS: Not significantOur findings: In average GM corn farmer seem to beusing less pesticidesGM corn producers from sample made one insecticideand herbicide application less
  21. 21. EnvironmentalImpact Quotient Conventional GMBoth types,conventional plotBoth types,GM plot< 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 haInsecticides 5.2 6.3 4.3 11.0 4.6 8.2 3.1 6.1 NSHerbicides 24.3 29.6 27.1 28.6 42.6 12.5 24.6 16.0 NSFungicides 3.0 3.7 14.5 10.4 7.1 7.1 7.1 9.4 NSFertilizers 23.7 27.4 36.6 41.6 36.2 16.9 25.5 22.6 NSS: Significant, NS: Not significantGM and conventional corn farmers seem to havea similar environmental impact measured by theEIQEIQ: J. Kovach et al, IPM Program, Cornell University, New York State Agricultural Experiment Station Geneva, New York 14456
  22. 22. Cost structure in corn production Conventional GM< 7 hectares > 7 hectares < 7 hectares > 7 hectaresTotal costs (US$/ha) 717.1 749.7 1209.1 1460.8 *Yield (ton/ha) 2.8 3.4 5.4 5.5 *Price (US$/ton) 273.7 294.4 352.3 394.5 *Income (US$/ha) 748.5 1018.6 1929.7 2189.1 *Profit (US$/ha) 32.1 269.9 722.5 730.4 *11 At small scaleGM corn farmers seem to be obtaininghigher yields & profits
  23. 23. Of Cook’s D, the issue of outliers andsampling biases…our data shows it’s present135112021 404256 6068767778848586888990919293949699100101 103104 106107 109110111112114 115116117120121 122125127129130131132133135 136137140141144145152153154155157158159161 164166168170171173174175176182183184185186191198199200203204206 208212213214215216230232233-2002040Robuststandardizedresiduals0 500 1000 1500 2000Robust_distanceObservation ID Yield Cook’s D42 6.500 0.05384 5.200 0.38599 7.475 0.033116 4.543 0.039120 9.100 0.020121 2.507 0.022129 2.839 0.021131 6.500 0.688132 3.250 0.054143 1.817 0.028152 5.200 1.230155 7.800 0.036169 1.083 0.020170 6.045 2.381173 0.975 0.030174 8.060 0.032182 0.195 0.060200 5.200 0.033212 7.800 0.032217 1.300 0.020222 9.100 0.022230 6.500 0.026“The classical instrumental variables (IV) estimator is extremely sensitive to thepresence of outliers in the sample. This is a concern as outliers can strongly dis-tort the estimated effect of a given regressor on the dependent variable. Althoughoutlier diagnostics exist, they frequently fail to detect atypical observations sincethey are themselves based on non-robust (to outliers) estimators. Furthermore,they do not take into account the combined influence of outliers in the first andsecond stages of the IV estimator” Desbordes and Verardi, Stata Journal 2012
  24. 24. Production function approachRobust Regression (MM-Regression 85% efficiency,ROBREG)Robust Regression (MSREGRESS)InstrumentalVariables (IVREG2)Variable Coef.RobustSE Coef. Robust SE Coef. SEGM corn user (1=Yes) 1.254 0.319*** 1.157 0.387*** 1.453 0.329***Located in Juticalpa/Catacamas (1=Yes) 0.346 0.414n.s. 1.303 0.199*** 0.336 0.304n.s.Time cultivating GM maize -0.014 0.007** -0.026 0.005*** -0.010 0.006n.s.Total income 0.251 0.105** 0.189 0.075** 0.216 0.078***Total area in production (ha) 0.002 0.001* -0.002 0.002n.s. 0.002 0.001n.s.Total area cultivated with maize (ha) -0.004 0.006n.s. 0.004 0.002* -0.004 0.004n.s.Seed quantity planted (kg/ha) -0.002 0.016n.s. 0.117 0.020*** -0.005 0.015n.s.AI insecticide (Kg/ha) 1.030 0.593* 2.156 1.139* 0.718 0.561n.s.AI herbicide (Kg/ha) 0.070 0.064n.s. 0.084 0.114n.s. 0.158 0.070**AI fertilizer used (Kg/ha) 0.009 0.004** 0.017 0.002*** 0.005 0.002**AI other pesticides(Kg/ha) 3.268 1.758* 1.736 0.555*** 1.516 0.883*Cost labor per day ($/ha) -0.008 0.006n.s. -0.006 0.006n.s. -0.004 0.006n.s.Seed planted squared 0.000 0.000n.s. -0.002 0.000*** 0.000 0.000n.s.AI insecticide squared -0.261 0.133** -2.090 0.736*** -0.167 0.143n.s.AI herbicide squared -0.003 0.002n.s. 0.016 0.009* -0.006 0.003**AI fertilizer squared 0.000 0.000** 0.000 0.000*** 0.000 0.000n.s.AI other pesticides squared -3.978 2.040* -1.207 0.290*** -0.926 0.654n.s.Constant 4.822 1.365*** 3.592 0.846*** 2.665 0.603***
  25. 25. Second stage (2SLS net income) First stage, dependent variables is GM corn user)Variable Coef. Std. Err. Coef. Std. Err.GM corn user (1=Yes) 279.1 131.7 **Located in Juticalpa/Catacamas (1=Yes) 166.3 123.9 n.s. 0.209 0.067 **Time cultivating GM maize -7.1 2.7 *** 0.003 0.001 *Total income 96.7 34.4 *** 0.002 0.018 n.s.Total production area (ha) 1.1 0.3 *** 0.000 0.000 n.s.Total maize area (ha) 0.0 1.2 n.s. 0.002 0.001 **AI insecticide (Kg/ha) 98.7 209.2 n.s. -0.183 0.130 n.s.AI herbicide used (Kg/ha) 46.5 26.4 * 0.001 0.017 n.s.AI fertilizer used (Kg/ha) -1.0 1.1 n.s. 0.000 0.001 n.s.AI other pesticides (Kg/ha) 201.1 402.1 n.s. 0.002 0.209 n.s.Cost labor per day ($/ha) -8.5 2.8 *** 0.000 0.001 n.s.Seed planted squared 0.0 0.0 n.s. 0.000 0.000 n.s.AI insecticide squared -60.1 49.4 n.s. 0.035 0.033 n.s.AI herbicide squared -1.7 0.9 * 0.000 0.001 n.s.AI fertilizer squared 0.0 0.0 n.s. 0.000 0.000 n.s.AI other pesticides/fungicides usedsquared-205.6 240.3 n.s. 0.071 0.155 n.s.Price GM seed 0.033 0.005 **Year cultivating GM seed -0.275 0.032 **Constant 659.2 214.6 *** 0.252 0.161 n.s.Net income
  26. 26. THEN…WHY HAVE WE NOTOBSERVED FULL ADOPTION BYHONDURAN PRODUCERS?
  27. 27. Characteristic• Monthly income >500 US$• Access to technical assistance• Access to credit• Farmers applying fungicides• Insecticide costs• Fertilizer costs• Cost of the use of machineryGM• 82 to 98% of farmers• 16 to 30% of farmers• 24 to 56% of farmers• 58 to 50% of farmers• 28 to 62 US$/ha• 328 to 373 US$/ha• 192 to 275 US$/haConventional• 40 to 64% of farmers• 11 to 0% of farmers• 19 to 28% of farmers• 4 to 8% of farmers• 11 to 16 US$/ha• 213 to 237 US$/ha• 106 to 104 US$/haAccess to inputs may restrict adoptionFarmers without information, credit or other inputs are lesslikely to adopt GM cropsDepending on plot size
  28. 28. Access to markets may limit profitabilityFarmers with smaller plots or in remote areasare less likely to adopt biotechnologyCharacteristic• Closer to urban areas• Sell directly to industry• Transportation costs• Selling price• Agronomic cycleGM• 92 to 93% of farmers• 45 to 80% of farmers• 134 to 152 US$/ha• 352 to 395 US$/ton• 3-4 monthsConventional• 12 to 16% of farmers• 2 to 4% of farmers• 17 to 40 US$/ha• 274 to 294 US$/ton• 4-5 monthsDepending on plot size
  29. 29. Gender/seed typePreferred for production Preferred for consumptionConventional GM Conventional GMMale/Conventional 0 13 0 0Male/GM 0 18 5 1Female/Conventional 20 0 18 0Female/GM 0 12 8 0All 20 43 31 1Farmers may prefer other traitsLocal corn varieties make better tortillasPreliminary data from exploratory panel, 2013. Unpublished.Preferred traits for production by production size & locationLarge/valley Large/hills Small/valley Small/hillsBlack spot resistance Black spot resistance Black spot resistance Black spot resistanceHigh yield High yield High yield High yieldHeavy grain Heavy grain Heavy grainBT BT BTRR RRPrice PriceDrought resistance Drought resistance% germinationFull cobFarmers have greaterpreference for protectionagainst risk
  30. 30. Conclusions For the sample of producers included in our survey, GM maizecontinues to perform as expected compared to a conventional Positive yield advantage Higher net income Reduction in pesticide applications Unclear environmental impact (need more work) For expansion of area with GM maize in Honduras, issue is not atechnical issue but seems to be institutional Additional work needed to examine Production and financial risk Distribution of impact by size Impacts of institutional and governance issues on adoption Policies to support the smallest of the smallholders
  31. 31. Arie SandersMaria Mercedes RocaMiljian VillaltaAlan B. BennettCecilia Chi-HamDenisse McLeanJose Falck-ZepedaPatricia ZambranoSandra Mendoza. Participatory researchconsultantResearch funded by:

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