Socio Economic Impact Of GM Crops Falck Zepeda 2008


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Socio economic impact assessment of GM Crops and the Cartagena Protocol on Biosafety. Presentation made at the 2008 conference organized by ICABR, Ravello Italy 2008

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Socio Economic Impact Of GM Crops Falck Zepeda 2008

  1. 1. Socio-Economic Considerations, the Cartagena Protocol on Biosafety and WTO: What are the issues and what is at stake for developing countries of Article 26.1? José Falck Zepeda Research Fellow / Leader Policy Team PBS Environment and Production Technology Division - IFPRI Paper presented at the 12th ICABR Conference “The Future of Agricultural Biotechnology: Creative Destruction, Adoption, or Irrelevance?, Ravello, Italy, June 12-14, 2008. This paper was partially funded through the support provided by unrestricted donors to IFPRI for the Genetic Resources Policies Project (GRP-1) and those for the activities of the Program for Biosafety Systems (PBS) by the Office of Administrator, Bureau for Economic Growth, Agriculture and Trade/ Environment and Science Policy, U.S. Agency for International Development, under the terms of Award No. EEM-A-00-03-00001- 00. The opinions expressed herein are those of the author and do not necessarily reflect the views of USAID. Friday, October 31, 2008
  2. 2. Socio Economic Considerations and Article 26.1 of the Cartagena Protocol Article 26.1 SOCIO-ECONOMIC CONSIDERATIONS 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. 2. The Parties are encouraged to cooperate on research and information exchange on any socio economic impacts of living modified organisms, especially on indigenous and local communities. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 2
  3. 3. What is biosafety anyway? • Defined as the regulatory systems and the risk analysis procedures designed to perform proper risk assessments, mitigation and communication of GM technologies • Objective is to ensure the safe use of these technologies • There is a no “best” approach to biosafety analysis • Contemplate a sequential set of steps. Advance to a subsequent step requires approval by a regulatory authority INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 3
  4. 4. The sequential step approach to biosafety Photo credits: Falck Zepeda 2007, Linacre 2006, Danforth Center,2006; Herman, 2006; Regulatory Decision Points Post- Commercialization Proof of concept Commercialization Confined Field Trials Yorobe Jr. and Bercilla,2006 Laboratory / Greenhouse TIME INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 4
  5. 5. Issues that may be considered during a biosafety evaluation process WHAT IS CHARACTERIZAT FOOD/FEED ENVIRONMENTAL EXAMINED? ION / FAMILIARITY SAFETY SAFETY When? The Parent Crop -History of safe use -Nutritional composition - Existence of wild relatives Laboratory -Toxins/allergens - Anti-nutrients - Center of diversity and/or -Asexual/sexual origin reproduction characteristics - Transformation - History of safe use - Existence of markers Not done process - Sources of genes - Insertion process - Gene construct Glasshouse/Greenhouse - Markers Gene product - History of safe use -Protein characterization, - Vertical and horizontal gene - Protein purification structure and expression transfer potential - Mechanism of action / - -Digestibility Specificity - Bioavailability - Homology - Acute toxicity - Allergenicity - History of safe use - In vitro digestibility assay - Weediness of crop plant Confined field trials The GM Crop / Food Many - Inheritance and - Allergenicity Skin - Out crossing / gene flow: Molecules phenotypic stability after Dermal potential transformation - Heat stability and amino - Out crossing / gene flow - DNA sequence of the acid homology impacts insert in the plant genome - Toxicology assessment - Effects on non-target - Border sequence Acute and repeat-dose organisms - Expression data oral, inhaled and dermal - Effects on biodiversity Scale up trials - Compositional analysis - toxicity Protein and amino acid Mutagenicity profile Sub-chronic and - Nutritional equivalence chronic toxicity Oncogenicity Effects on the immune and endocrine systems - Dietary risk Commercialization characterization INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 5
  6. 6. Cost of Compliance with Biosafety Regulations in Indonesia and the Philippines: A PBS study Country Technology Developer Actual Costs (US$) Indonesia Bt cotton Monsanto 99,870 Herbicide resistant Monsanto 112,480 cotton Bt rice RCB-IIS / LIPI 64,730 Drought tolerant PTPN XI Perseroan Terbatas 98,879 sugarcane Perkebunan Negara - Government Enterprise for Estate Crops Transgenic Citrus Udayana University Abandoned Resistant to CPVD Potato Resistance to Bogor Agricultural University Still analyzing regulatory Fungi / Nematode pathway Philippines Golden Rice IRRI 104,698 Bacterial blight Phil-Rice 99,213 resistant rice (Xa-21) Bt maize Monsanto 1,690,000 Delayed ripening IPB-UPLB Still analyzing regulatory papaya pathway INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 6
  7. 7. Sensitivity analysis increases in regulatory costs and lag years for four technologies in the Philippines Bt eggplant MVR tomato Bt rice RSV papaya Baseline 20,466,196 16,748,347 220,373,603 90,765,793 Regulatory Costs 75% 20,550,612 16,529,580 219,976,847 90,633,007 200% 20,128,529 16,164,968 219,315,587 90,411,698 400% 19,435,196 15,581,590 218,257,570 90,097,124 Regulatory lags 1 14,707,235 10,656,533 193,926,128 66,362,939 2 8,931,527 4,854,806 168,738,056 46,060,500 3 4,242,285 1,110,757 144,749,416 29,540,365 Source: Beyer, Norton and Falck Zepeda, 2008 • Regulatory delays matter a lot – in this case a 3 year delay causes a 3 fold decrease in the level of benefits • Regulatory costs are not significant – more important as a barrier to entry INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 7
  8. 8. International biosafety context • Initial scope of biosafety expanded to include food and feed safety • Proposal to expand it further to include socio-economics, ethical, religious, philosophical and other considerations • Socio-economics little to do with the safety profile • Two contrasting points of view • Oppose: • Decisions should be left to end-users • Open for blanket (no need to show real proof ) rejections of technology • Favor • Critical to ensure that GM crops will not harm communities and producers INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 8
  9. 9. What are countries doing in terms of socio-economic assessments and biosafety decision making? • Large variation in terms of approaches • Argentina requires SEA, but limited to impacts on Argentinean exports • South Africa limits scope to impacts on surrounding communities • India not formally required in regulations yet regulatory authority required a baseline impact study for Bt cotton and eggplant • USA, Canada, and probably the EU, still voluntary information that may be included with dossiers • Examples from draft policies and/or NBF Bangladesh, Honduras, Nigeria show • Significant requirements in terms of scope • Implementability becomes a question INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 9
  10. 10. Sample Countries Legislation Socio- Economic Considerations Country Party Party Conduct Approvals Language of relevant text considering socio Relevant Law, CBD CPB Confined for economic considerations Regulation Field Comm. Trials Argentina Y N Y Y Decision on the convenience of the commercialization the Resolution nº 656/92 genetically modified material over its impact on markets, in of SAGyP and charge of the National Market Directorate, so as to avoid Resolutions .n°39/03 potential negative impacts on Argentinean exports. and n°57/03 SAGPyA Brazil Y Y Y Y Article 48, Paragraph 1. The National Biosafety Council – Decree NO. 5,591, CNBS shall: II- analyze, upon request by CTNBio, in the OF November 23, context of convenience, socioeconomic opportunity and 2005 national interest, requests to grant license on the commercial use of GMO and GMO derivatives; Article 50. CNBS shall decide, upon request by CTNBio, on matters of socioeconomic convenience and opportunity and national interest on the granting of a license for GMO and GMO derivatives commercial license. Honduras Y N Y Y Socio-economic considerations will be conducted through Honduras draft policy partial studies that should include different social and economic impacts Kenya Y Y Y N “in reaching a final decision, the Authority shall take into Kenya draft policy account ... (e) socio-economic consideration arising from the impact of the GMO on the environment.” Uganda Y Y Y N “no approval shall be given unless the GMO will not have Uganda draft adverse socio-economic impacts.” regulations of 2005 Nigeria Y Y N N The decision-making procedures shall take into Nigeria National consideration risk assessment, which involves scientific, Biosafety Framework, socio-economic, cultural and ethical considerations. 2005. R. S. Africa Y Y Y Y “The Council may in performing its function in terms of sub GMO Act 1997 (Act regulation (8), consider the socio-economic impact that the No. 15 of 1997) introduction of a genetically modified organism may have on a community living in the vicinity of such introduction” Philippines Y Y Y Y “Socio-economic, cultural and ethical considerations. Executive Order 514 Impacts on small farmers, indigenous people, women, small (EO514) and medium enterprises, and the domestic scientific community to be taken in to account.” INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 10
  11. 11. Three detailed examples legislation/regulations dealing with socio economic considerations Nigeria Honduras Bangladesh (a) Anticipated changes in the Article 41.- Socio-economic (i) Factors such as the potential existing social and economic patterns considerations will be conducted impact on trade, labor, food security, resulting from the introduction of the through partial studies that should gender, small business development, GMO or product thereof; include: sustainable development and poverty (b) Possible threats to biological a. Estimation of changes in social and alleviation would be taken into diversity, traditional crops or other economic patterns as a result from consideration in the evaluation products and, in particular, farmers’ the introduction of GMO and their process. varieties and sustainable agriculture; products (ii) The impact on food security, (c) Impacts likely to be posed by the b. All those impacts related to the impact on livelihood of communities, possibility of substituting traditional potential substitution of traditional and ethical issues and the right to crops, products and indigenous crops and indigenous technologies choice would identified as key technologies through modern through modern biotechnology socioeconomic factors that need to be biotechnology outside of their agro- outside their agro-climatic zones. considered. climatic zones; c. Anticipate the social and economic (iii) Ethical issues and the right to (d) Anticipated social and economic costs resulting from losses resulting choice - The right to choice could be costs due to loss of genetic diversity, from labor reductions, market addressed by having an effective employment, market opportunities opportunities, and in general, the labeling system. and in general, means of livelihood of community livelihoods potential (iv) Where genes of certain animals the communities likely to be affected affected by the introduction of GM or human genes have been inserted to by the introduction of the GMO or crops and its products. produce GM crops, livestock or food, product thereof; d. Identify potential communities It is necessary to identify and (e) Possible countries and/or affected in terms of disruptions to incorporate the relevant socio communities to be affected in terms their economic and social welfare economic factors in the protocol for of disruptions to e. Identify potential effects that are risk assessment. Detailed their social and economic welfare; contrary to communities’ social, environmental impact analysis (f) Possible effects which are cultural, religious, ethical values; due including socio-economic impact contrary to the social, cultural, ethical to the introduction of GM crops and analysis will be the responsibility of and religious values of communities its products. the applicant/notifier/proponent and arising from the use or release of the the competent authority concerned or GMO or product thereof. NCB/MoEF would undertake a detailed review of this analysis with the technical support of BCC. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 11
  12. 12. What the Third World Network wants… Issues Questions and issues raised by the TWN Briefing Paper Control over tools and relations to Will the dissemination of GM seeds provide opportunities for poor farmers to have some control over the tools production of production? Will dissemination increase control by certain sectors? Income security Cost of GM seeds and other required inputs (share of total production) Expected potential net income or losses Consideration of hidden costs such as environmental and health effects Income and wealth distribution Assumption is that sine GM seeds are more expensive, they will be bought by richer farmers. Question is then whether GM adoption aggravates income inequality in rural areas? Rural labor Does the introduction of herbicide tolerance aggravate the “perennial” problem of rural unemployment? Markets DC countries, whose economies are particularly dependent on a specific crop, may be affected by production increases in other countries. i.e. Bt cotton expansion in India may affect resource poor farmers in West Africa Trade Major question is when deciding to plant GM crops or not, is the ability to compete with commodities of bigger and wealthier countries in export markets as they have to meet high international standards such as sanitary and phytosanitary standards, thus jeopardizing export prospects. GMO contamination and organic Proven cases of “GM contamination” poses serious threats to biodiversity and genetic base for long term food cultivation security Damage to organic agriculture where farmers may loose organic status and premium prices Food security Most GM crops sold today are intended for animal feed and not usually considered for food crops. If change occurs to GM crops, then a change from food crops to commodity crops for industrial use and export. Examine overall food security of communities Food aid Countries will be confronted with the decision whether they should accept or reject food aid under emergency situations Intellectual Property Rights (IPRs) GM crops are IP protected and thus concern over corporate control of agriculture IPR may hamper free flow of information, knowledge and genetic materials that are the basis of R&D in public universities Limit potential public research to pursue research that serves the interest of the poor INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 12
  13. 13. Issues and roles for Socio Economic Considerations in Biosafety • Socio economic assessments for biosafety purposes are ex ante by definition • We know how to do “feasible” Ex ante studies • Methods are not there to answer many of the questions posed by some stakeholder in an ex ante framework • Question of timing • Not all the technologies that enter the biosafety regulatory process will be released into the environment • The earlier assessments are required in the regulatory process, the more assumptions one has to make INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 13
  14. 14. Best practice standards for SEA studies? 1. Opinion editorials vs. peer reviewed pubs 2. One year vs. multiple year 3. Who conducts the study? 4. Generally recognized as statistically significant • Sample size • Experimental design and randomness • Statistical analysis/significance • Address sampling problems (self-selectivity, simultaneity, biases) 5. Meet standards for clinical trials for availability to regulatory authorities • Raw data • Protocols • Models and program codes INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 14
  15. 15. Summary of interesting socio economic assessment issues to decision makers / regulators Ex post vs. Ex ante What can be learned from ex-post Comparison of ex post and ex ante assessment approaches Baseline data Role of baseline surveys Use of experimental, confined field trial, side-by-side comparisons, and isogenic comparison to GM technology Problems and issues with surveys and baseline data o Selection bias o Randomness o Sample size Outcome variables Profitability Productivity increases Damage abatement Yield changes Decision making rules Cost/Benefit Pareto optimal Inclusion of broader considerations into socio-economic models Acceptance of data generated Data for assumptions elsewhere Impact assessments studies Relevance Beyond economic and socio-economic Contrasting ethical, sociological, anthropological and socio economic studies studies Decision making rules and standards that combine data from all sources Process itself • Decision making rules • Safety standard and clear legal authority • Transparency and predictability • Feasibility and cost • Efficiency, fairness, INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 15
  16. 16. Relationship to WTO and other international agreements • Text of article 26.1 shows that inclusion of socio economic considerations has to be consistent with international obligations • Almost all countries party to the Protocol are also members of WTO, WIPO, Codex • WTO emphasizes rules based on scientific risk assessment • Sanitary and Phytosanitary (SPS) agreement allows socio economic considerations but limits the scope to impacts on implementation INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 16
  17. 17. Summary comparisons between international agreements Issue Cartagena SPS Agreement TBT Agreement Protocol Scope: Commodities, Both, subject to Both, no difference in Mainly commodities living organisms different regimes regimes Precaution/science Can be described as co- Science based Science based requirement equal core values requirement pre-eminent, pre-eminent, precaution precaution. minimized minimized Advanced informed Required for GMO’s Not required, use Not required, use controlled agreement unless exceptions apply; controlled by trade by trade disciplines notification of AIA disciplines requirement by importing states needed for it to apply to commodities Requirement for Yes, content set out in Yes, content requirements Yes in some cases, contents assessment Annex, including role of from cases, minimize not clear yet precaution precaution as input Responsibility for Can be placed on State taking measure State taking measure assessment exporter, or costs paid by exporter Decision-making Science based risk Full scope of trade Full scope of trade parameters assessment, precaution, disciplines including disciplines including least trade restrictive, science-based science-based assessments, socio-economic factors, assessments, least trade least trade restrictive, non- impact on trade restrictive, non- discrimination as between discrimination as between foreign and other domestic foreign and other like products, non- domestic like products, discrimination as between non-discrimination as similar risks and national between similar risks and treatment national treatment Source: Mann, 2000 INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 17
  18. 18. Concluding Comments • COP/MOP 4 meeting in Bonn May did not reach an agreement on how to deal with socio-economic partly because the parties expressed need for more technical analysis and knowledge on how to do these assessments • Parties decided to support information exchange and capacity strengthening efforts • Inclusion of socio economics consideration into biosafety decision making has advantages/disadvantages “If a country, after careful considerations of the pros and cons, decides to include socio- economic considerations as part of the biosafety decision-making, then it is prudent to design carefully appropriate regulations that will ensure a functional system. Rules and regulations should clearly spell out procedures for inclusion of socio economic considerations to avoid blanket or un-supported regulatory decisions that other members of society may challenge, which are not supported by an evaluation process that complies with elements of best practice or disciplinary rigor. “ INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 18
  19. 19. Thanks for your attention!! INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 19