GM technology is currently being used by over 18 million farmers on 180 million hectares of land (an equivalent land mass larger than France, Germany, the UK and Ireland put together). Over 90 per cent of those using the technology are resource-poor farmers in developing countries growing food, feed and materials on an area often considerably less than 10 hectares per farmer.
They choose GM for a variety of reasons, but primarily it is due to a simple economic reality: GM crops can offer them a better return on investment. Research on GM crops is currently thriving in Africa, with public-private partnerships looking at everything from disease-resistant bananas to drought-resistant sorghum.
So why do farmers in the developing world use GM technology?
Resource-poor farmers utilise GM technology for a variety of reasons, but proven benefits include:
Commercialised GM crops include maize, cotton, canola, soybean, squash, papaya, sugar beet, tomato, sweet pepper and alfalfa. Trials are currently in progress on crops including sorghum, bananas and wheat. Drought tolerance technology, which allows crops to withstand periods of low soil moisture, is anticipated to be commercialised within 5 years. The technology will have particular relevance for areas like sub-Saharan Africa, where drought is a common occurrence and access to irrigation is limited.
What is the economic and social impact of GM for these farmers?
1.4 billion people worldwide live in poverty, and an estimated one billion of these people live in rural areas. This problem is particularly acute in rural Sub-Saharan Africa, where over 60 per cent of the rural population live in poverty. A recent report by the ODI showed that issues of poverty can be best tackled by investment in the agricultural sector, with GDP growth in agriculture contributing twice as much to poverty reduction than any other sector.
The availability of GM crops can help tackle rural poverty by providing substantial productivity and incomes advantages to farmers when compared with traditional methods. These are mainly achieved through better yields and crop reliability. A 2011 study found that the combination of enhanced productivity and efficiency of GM technology provided a major boost to farmer income5. It is estimated that between 1996 and 2009, this was the equivalent of adding over 4 per cent to the value of global production of the four main crops of soybeans, corn, cotton and canola.
But are small scale farmers priced out of GM technology?
Despite the high cost of developing the technology (see below), the use of GM crops remains financially viable for both small and large scale farmers. For example, only one third of the benefits of GM crops go to gene producers and seed suppliers6, the remaining two thirds being shared by farmers and consumers. Research has also shown that farmer income gain from GM crop production between 1996 and 2009 has been shared equally between developed and developing countries.
GM seeds are priced appropriately for each market where they are sold, where they have to compete with non-GM seeds. They may be more expensive than conventional seeds in many cases (roughly 18 per cent for a crop such as sugar beet), but the resulting savings and/or higher income potential make them a good investment for resource-poor farmers, through lower pesticide and herbicide costs and more reliable and higher yields.
There is a vibrant and competitive seed market between large and small seed companies and between the use of purchased seed and legitimate farm saved seeds; it is not in the commercial interest of abc companies to ignore the needs of small-farmers who represent 90 per cent of their customers, since to do so would mean commercial failure in that market. Despite this healthy competition, some activists still use false arguments about multinational companies restricting choice for small-scale farmers. For example, the concept of inserting a gene that would limit a plant’s capacity to set fertile seed (so called ‘terminator
technology’) has never been developed in practice and the industry has committed publicly to not use it in the future.
How can developing countries overcome the high R&D costs of GM?
GM technology requires substantial investment in research and development (R&D). The sector ranks in the top four global industries in terms of percentage of sales invested in R&D. The industry’s top 10 companies invest $2.25 billion, or 7.5 per cent of sales, in R&D and innovation. The UK Department for International Development, is heavily involved in supporting agricultural projects in the developing world, through organisations such as the African Agricultural Technology Foundation.
abc member companies are partners in a number of (non-DfID related) initiatives for resource poor farmers, for example in collaboration with the Bill and Melinda Gates Foundation and other NGOs (see the case studies below). Such public private partnerships, in which companies waive or limit their intellectual property rights to the use of specific genes and transformation techniques, allow the benefits of this technology to be exploited in areas where no commercial business model exists.
Other benefits of GM to the developing world
Between 1996 and 2009, 229 million tons of additional food, feed and fibre were produced thanks to GM crops. Without the technology, an additional 75 million hectares of conventional crops would have been required to produce the same tonnage. Some of these additional hectares could have required fragile marginal lands, not suitable for crop production, to be ploughed, and for tropical forest, rich in biodiversity, to be felled to make way for slash and burn agriculture in developing countries.
GM crops can help countries to meet the Millennium Development Goals on reducing poverty by empowering resource-poor farmers in developing countries. They can produce more food on less land with GM crops, and drought-resistant GM crops could help to mitigate the effects of climate change in arid regions. GM technology can help small scale farmers to meet their subsistence needs and improve the standard of living of their households. The extra income can increase the purchasing power of farmers and promote local, regional and national economic growth.
It is worth noting that, during the recent crisis in the Horn of Africa, the Kenyan government decided to import GM maize. Science and Technology Minister, Prof Hellen Sambili, said that ‘embracing modern biotechnology crops was aimed at cushioning Kenyans against current drought and at gaining food sustainability’.
The BBC recently featured a report on the work being undertaken in Uganda to increase the yield of bananas, and address food security issues in the country.