The global agricultural biotech research base and product development pipeline, including GM seeds, is expanding at a rapid rate in a direct response to the global food security challenge. Properties such as pesticide- or herbicide resistance are known as crop ‘traits’. Traits have been developed for commodity crops such as soybean, cotton, maize and oilseed rape and uptake has been dramatic – it is estimated that, for example, 88% of the cotton grown in India is now GM due to its greater resistance to pests.
Biotech crops can play a positive economic role due to the inherent benefits that they bring to farmers. Through using less pesticide use and fewer requirements for tillage, growers can reduce their input costs. Through boosting yield, farmers can achieve a greater level of income for the same area of land that they manage, improving food security in a financially sustainable way. In 2014, 18 million farmers from around the world planted GM crops due to the economic benefits that they accrued. (Source: ISAAA, Global Status of Commercialized Biotech/GM Crops: 2015)
In 2010 the direct global farm income benefit from biotech crops was US$14 billion. This represented the equivalent of adding 4.3% of the value of global production of soybean, maize, canola and cotton crops through use of the technology. Since 1996, developments in biotechnology have increased farm incomes by $78.4 billion. In 2010, around 55% of this benefit was earned by farmers in developing countries (Source: Brookes, G., Barfoot, P. (2011) The global, environmental and economic impact of biotech crops 1996 – 2010)
Going for Growth
From a national perspective, agricultural biotechnologies can play a role in boosting economic performance. Existing target biotech revenues for many countries are significant and the growth forecasts remarkable: China has a target for biotech revenues of 5-8% of GDP by 2020. Malaysia received 2.5% of its GDP from biotech in 2010 from a standing start in 2005. In Argentina, a recent study concluded that biotechnology had added over $70bn USD to the country’s economy since 1996.
Globally, the biotech seed market continues to grow at a rapid rate. Over the last 10 years it has expanded by 450% - with growth of 140% in the last five years. However, in Europe, progress has been slower. Due to a dysfunctional approvals process, European farmers do not have the same levels of access to new biotechnologies, despite estimates indicating that their margins could increase by up to €900 million per annum if they did.
Despite this, agricultural biotechnologies play a significant economic role in the European food supply system and in supporting its science base. The EU already imports 80% of its required feed for livestock, the vast majority of which derives from GM crops grown in other parts of the world. Without this supply chain, food prices could increase significantly given the demands placed on domestic European agriculture. Research institutes across Member States are engaged in exporting scientific expertise in biotechnologies and significant partnerships exist with locations where GM is used. However, this activity is constrained by the lack of progress that has been made in approving technologies for cultivation.
From a UK perspective, public spending on agronomic research currently sits at around £400m per year. This supports a viable and vibrant research base which is particularly successful at developing early stage breakthroughs. However, again due in part to the regulatory constraints imposed at a European level the economic role of such successes has been tempered and the potential benefits have not been realised.
Case study: Embrapa
The Brazilian agency EMBRAPA (Empresa Brasileira de Pesquisa Agropecuária) has become one of the world’s biggest funders of agricultural research and development, with a budget of approximately US$1.11 billion in 2009. Productivity growth in recent decades has allowed Brazil to become one of the world’s largest agricultural exporters.
China’s spending on agricultural R&D increased by about 10% per year since 2001, reaching almost US$1.8 billion in 2007. Private sector investment in R&D has also matured; less than 2% of total agricultural R&D was privately funded in 1999 but this increased to 22% in 2006
In October 2013, EU farming groups came together to express 'deep concern' at the effects of GM policies and regulations. In an open letter to the European Commission, they called for farmers to have access to the best crops, including GM varieties. Dr Helen Ferrier, NFU chief science and regulatory affairs adviser said, “The heads of EU institutions have a great deal of power to sort out this mess and ensure the EU doesn’t become uncompetitive in both agricultural production and scientific research. This letter demonstrates the strength of feeling in the agriculture sector across Europe. Swift action must be taken.”