This document summarizes the results of a survey conducted in Honduras to assess the impacts of adopting genetically modified (GM) corn. The key findings are: 1) GM corn farmers reported using fewer pesticides (1-2 fewer applications of insecticides and herbicides on average) and obtained higher yields and profits than conventional corn farmers. 2) GM and conventional corn farmers showed similar environmental impacts based on an environmental impact quotient measuring pesticide use. 3) Statistical analysis found some outliers in the yield data that could distort results, highlighting the need for robust methods in impact analyses.

1. “Adoption Impacts and Access to Innovation in
Small Resource Poor Countries: Results from a
Second Round Survey and Institutional
Assessment in Honduras”
José Falck Zepeda1, Denise McLean2, Patricia Zambrano1, Arie
Sanders2, Maria Mercedes Roca2, Cecilia Chi-Ham3
1 IFPRI
2 Zamorano University
3 UC Davis PIPRA
Paper presented at the 17th ICABR meeting, Ravello Italy, June 21 2013
© 2013 UC-Davis and IFPRI

2. 0
5
10
15
20
25
2000 2002 2004 2006 2008 2010
%ofGDP
AgricultureValue Added
Sub-Saharan Africa
World
Honduras
United States
Honduras: High reliance on agriculture
Agricultural sector 13% of GDP1
Agribusiness and related sector  40-45%2 GDP
1 World Bank, 2011
2
http://www.hondurasopenforbusiness.com/SITEv2/files/pdf/Oportunidades_de_inversion_Agroin
dustria.pdf

3. Graphs: WorldBank Development Indicators (2013)
Map: National System of Environmental Indicators, SINIA
0
5
10
15
20
25
2000 2002 2004 2006 2008
%ofLandArea
Arable Land
Sub-Saharan Africa
World
Honduras
United States
Honduras: Limited resources for agricultural production
especially land
87% of territory corresponds to hillsides
susceptible to erosion

4. 0
1000
2000
3000
4000
5000
6000
7000
8000
2000 2002 2004 2006 2008 2010
Kilograms/hectare
CerealYield
Sub-Saharan Africa
World
Honduras
United States
Honduras: Low productivity of major staple
crops
Honduras’ Productivity:
1/3 of world averages and
1/7 of US yields

5. Corn is an essential part of Honduran diet
1FAO Statistics Division, 2012, 2Ministry of Agriculture and Livestock, 2012
Top commodity available for consumption  739 kcal/person/day
Basic grains represent up to 60% of Honduran diet
48% of total demand is for human consumption
ProductionValue, Top Commodities (2011)
Value [1000 Int$] Value [1000 Int$]
1 Coffee, green 303357 8 Tomatoes 56580
2 Cow milk, whole 230723 9 Oranges 54126
3 Chicken Meat 222122 10 Beans, dry 51791
4 Bananas 204849 11 Pineapple 39416
5 Cattle Meat 165830 12 Eggs 36661
6 Sugar cane 164766 13 Melons 33139
7 Palm oil 139218 14 Corn 32068
Corn in Honduras is grown mostly for food/feed

6. Corn supply in Honduras increasingly
dependent on imports
0
2000
4000
6000
8000
0
200
400
600
800
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Population(thousands)
Tons(thousands)
Corn Production andTrade
Corn production Corn imports Corn exports Population total
Nearly 40% of corn is imported and
thus high concerns for corn price
volatility in international markets
HondurasAgriculture Ministry Jacobo Regalado:
“From the million ton we need we are only producing 600
thousands.We are still importing 400 thousands(…)
The idea is to accelerate the pace to substitute those 400
thousands with local production”.
Hondudiario, March 19, 2012

7. Honduras: The problem with
production 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 to
smallholder´s producers
 Smallholder producers:
 Little access to technology, pest control alternatives and
credit
 Knowledge limitations: to determine damage and to make
correct chemical applications….

8. GMOs in Honduras
8th Latin American country adopting GMOs since 20021
1ISAAA, 2012
Only country in CentralAmerica
cultivating 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 ha
BT (MON810), RR (NK603), Herculex 1 ,YGVTPro
(MON89034) traits approved for commercialization

9. WHY GMOs adopted in Honduras?

10. Honduras: promotional environment favoring biotechnology
adoption
Favorable policy,economic and social conditions facilitated adoption
UN Statistics Division, 2011. WTO Statistics, Trade
Profiles, 2012
Strategic interest in aligning agricultural policies with
the major economic and trade partners
• Honduras trade is essentially tied to the United States
• Historically strong presence of agricultural multinationals interested in increased
agricultural productivity

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 transgenic
seeds in 25% of the area planted at the national level by 2014’
Honduras Agricultural and Livestock Ministry goal
Public Agricultural and Food Sector Strategy
1996/98: Biosecurity Regulation with Emphasis inTransgenic Plants
1998: National Committee of Biotechnology and Biosecurity (NCBB)
2006: CAFTA-DR Phytozoosanitary Law modification
2008: Cartagena Protocol Ratification
2001/12: Law for the Protection of NewVarieties of Plants
USAID GAIN Report 2012.
Honduran government specific policy support for easing a transition
towards biotechnologies
Honduras: A case study to
understand biotechnology
adoption in small resource poor
developing countries

12. Honduras in the LatinAmerican innovation
sphere
Small markets Medium
markets
Large markets
Non-selective
importers of
technology
El Salvador,
Guatemala,
Honduras,
Nicaragua,Panamá
Bolivia, Ecuador
Selective
importers of
technology
Costa Rica,
Uruguay
Paraguay, Peru Venezuela
Tool users - Colombia, Chile Argentina, Mexico
Innovators Brazil
Notes: 1) Source: Trigo, Falck-Zepeda and Falconi (2010), 2)
Non-adopters are listed in italic text.

13. Which policies are important?
Public sector
investments in
biotechnology
applications
Intellectual
property
management
Biosafety
regulations
Food/feed
safety and
consumer
protection
Support for
public sector
participation
and tech
transfer
including seed
systems
Non-adopters
Bolivia 0 0 - - 0
Ecuador 0 0 - - 0
Guatemala 0 - 0 0 -
Perú 0 - - 0 0
Venezuela + - - 0 0
Adopters
Argentina + 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 denotes
neutral 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. HOW HAS GM CORN WORKED IN
HONDURAS?

15.  GM maize provided excellent
target pest control
 Bt yield advantage 856-1781 Kg
ha-1 yield
 Bt maize yields preferred even by
risk averse producers
 100% higher seed cost than
conventional hybrid
 Institutional issues important
Photos credit: © Sanders and Trabanino 2008
Falck-Zepeda, J., A. Sanders, C. Rogelio Trabanino, & R. Batallas-Huacon.
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.
2008 GM maize crop cycle in
Honduras: Results from our first survey

16. The 2013 (second) survey to observe experiences
of conventional & GM corn farmers
Economic, social and agronomic impacts
Farmers by corn type
Size
Total
< 7 hectares > 7 hectares
Conventional only 58 25 83
GM only 39 57 96
Both types of corn 11 19 30
Total 108 101 209
o We chose a representative sample of corn farmers from the
main corn producing state in Honduras

17. Disclosure:
 Results presented here are preliminary
 These may change with further work

18. Major maize producing areas in
Honduras

19. Olancho: The main corn producing state in
Honduras
- 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 systems
We captured diversity within the commercial corn production
chain

20. Number of
applications Conventional GM
Both types,
conventional plot
Both types,
GM plot
< 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha
Insecticides 1.7 1.9 1.6 1.3 1.9 2.0 1.0 1.1 S
Herbicides 2.6 2.7 1.7 1.5 2.7 2.1 1.7 1.6 S
Fungicides 1.0 1.5 1.2 1.5 1.0 1.3 1.0 1.0 NS
Fertilizers 2.2 2.3 2.4 2.3 1.9 2.6 2.3 2.6 NS
S: Significant, NS: Not significant
Our findings: In average GM corn farmer seem to be
using less pesticides
GM corn producers from sample made one insecticide
and herbicide application less

21. Environmental
Impact Quotient Conventional GM
Both types,
conventional plot
Both types,
GM plot
< 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha
Insecticides 5.2 6.3 4.3 11.0 4.6 8.2 3.1 6.1 NS
Herbicides 24.3 29.6 27.1 28.6 42.6 12.5 24.6 16.0 NS
Fungicides 3.0 3.7 14.5 10.4 7.1 7.1 7.1 9.4 NS
Fertilizers 23.7 27.4 36.6 41.6 36.2 16.9 25.5 22.6 NS
S: Significant, NS: Not significant
GM and conventional corn farmers seem to have
a similar environmental impact measured by the
EIQ
EIQ: J. Kovach et al, IPM Program, Cornell University, New York State Agricultural Experiment Station Geneva, New York 14456

22. Cost structure in corn production Conventional GM
< 7 hectares > 7 hectares < 7 hectares > 7 hectares
Total 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 *1
1 At small scale
GM corn farmers seem to be obtaining
higher yields & profits

23. Of Cook’s D, the issue of outliers and
sampling biases…our data shows it’s present
1
3
5
11
2021 40
42
56 60
68
76
77
78
84
8586
8889
90
91
92
939496
99
100101 103104 106
107 109
110
111112114 115
116
117
120
121 122125
127
129
130
131
132
133
135 136137140141
144
145
152
153154
155
157158159
161 164
166
168
170
171
173
174
175
176182
183
184185
186191
198
199
200
203
204
206 208
212
213
214
215
216
230
232
233
-20
0
2040
Robuststandardizedresiduals
0 500 1000 1500 2000
Robust_distance
Observation ID Yield Cook’s D
42 6.500 0.053
84 5.200 0.385
99 7.475 0.033
116 4.543 0.039
120 9.100 0.020
121 2.507 0.022
129 2.839 0.021
131 6.500 0.688
132 3.250 0.054
143 1.817 0.028
152 5.200 1.230
155 7.800 0.036
169 1.083 0.020
170 6.045 2.381
173 0.975 0.030
174 8.060 0.032
182 0.195 0.060
200 5.200 0.033
212 7.800 0.032
217 1.300 0.020
222 9.100 0.022
230 6.500 0.026
“The classical instrumental variables (IV) estimator is extremely sensitive to the
presence 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. Although
outlier diagnostics exist, they frequently fail to detect atypical observations since
they are themselves based on non-robust (to outliers) estimators. Furthermore,
they do not take into account the combined influence of outliers in the first and
second stages of the IV estimator” Desbordes and Verardi, Stata Journal 2012

24. Production function approach
Robust Regression (MM-
Regression 85% efficiency,
ROBREG)
Robust Regression (
MSREGRESS)
InstrumentalVariables (
IVREG2)
Variable Coef.
Robust
SE Coef. Robust SE Coef. SE
GM 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. 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 used
squared
-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. THEN…WHY HAVE WE NOT
OBSERVED FULL ADOPTION BY
HONDURAN PRODUCERS?

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 machinery
GM
• 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$/ha
Conventional
• 40 to 64% of farmers
• 11 to 0% of farmers
• 19 to 28% of farmers
• 4 to 8% of farmers
• 11 to 16 US$/ha
• 213 to 237 US$/ha
• 106 to 104 US$/ha
Access to inputs may restrict adoption
Farmers without information, credit or other inputs are less
likely to adopt GM crops
Depending on plot size

28. Access to markets may limit profitability
Farmers with smaller plots or in remote areas
are less likely to adopt biotechnology
Characteristic
• Closer to urban areas
• Sell directly to industry
• Transportation costs
• Selling price
• Agronomic cycle
GM
• 92 to 93% of farmers
• 45 to 80% of farmers
• 134 to 152 US$/ha
• 352 to 395 US$/ton
• 3-4 months
Conventional
• 12 to 16% of farmers
• 2 to 4% of farmers
• 17 to 40 US$/ha
• 274 to 294 US$/ton
• 4-5 months
Depending on plot size

29. Gender/seed type
Preferred for production Preferred for consumption
Conventional GM Conventional GM
Male/Conventional 0 13 0 0
Male/GM 0 18 5 1
Female/Conventional 20 0 18 0
Female/GM 0 12 8 0
All 20 43 31 1
Farmers may prefer other traits
Local corn varieties make better tortillas
Preliminary data from exploratory panel, 2013. Unpublished.
Preferred traits for production by production size & location
Large/valley Large/hills Small/valley Small/hills
Black spot resistance Black spot resistance Black spot resistance Black spot resistance
High yield High yield High yield High yield
Heavy grain Heavy grain Heavy grain
BT BT BT
RR RR
Price Price
Drought resistance Drought resistance
% germination
Full cob
Farmers have greater
preference for protection
against risk

30. Conclusions
 For the sample of producers included in our survey, GM maize
continues 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 a
technical 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. Arie Sanders
Maria Mercedes Roca
Miljian Villalta
Alan B. Bennett
Cecilia Chi-Ham
Denisse McLean
Jose Falck-Zepeda
Patricia Zambrano
Sandra Mendoza. Participatory research
consultant
Research funded by: