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

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. 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.
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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
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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
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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
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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
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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
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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
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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
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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.”
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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.
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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
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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
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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
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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,
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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
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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
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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. “
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19. Thanks for your attention!!
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