Global impact of biotech crops: socio-economic and environmental effects 1996-2006

Biotech crop commercialization has resulted in significant global economic and environmental benefits and is making important contributions to global food security. 

“Since 1996, biotech crop adoption has contributed to reducing the release of greenhouse gas emissions from agriculture, decreased pesticide spraying and significantly boosted farmers’ incomes,” said Graham Brookes, director of PG Economics, co-author of the report. “The technology has also made important contributions to increasing the yields of many farmers, raising global production and trading volumes of key crops.  World price levels of crops like corn and soybeans would also probably be higher than the current (record high) levels if this technology had not been widely adopted by farmers.  These economic and environmental gains have also been greatest in developing countries”

 Previewing the findings of the comprehensive study, the key findings are:

• Biotech crops have contributed to significantly reducing the release of greenhouse gas emissions from agricultural practices. This results from less fuel use and additional soil carbon storage from reduced tillage with biotech crops.  In 2006, this was equivalent to removing 14.8 billion kg of carbon dioxide from the atmosphere or equal to removing nearly 6.6 million cars from the road for one year;

• Biotech crops have reduced pesticide spraying by 286 million kg (-7.8%: equivalent to about 40% of the annual volume of pesticide active ingredient applied to arable crops in the European Union) and as a result decreased the environmental impact associated with herbicide and insecticide use on the area planted to biotech crops by 15.4%;

• There have been substantial net economic benefits at the farm level amounting to nearly $7 billion in 2006 and $33.8 billion for the eleven year period.   The farm income gains in 2006 is equivalent to adding 3.8% to the value of global production of the four main biotech crops of soybeans, corn, canola and cotton;

• Of the total farm income benefit, 43% ($14.54 billion) has been due to yield gains, with the balance arising from reductions in the cost of production.  Two thirds of the yield gain derive from adoption of insect resistant crops and the balance from herbicide tolerant crops; 

• Farmers in developing countries obtained the largest share of the farm income gains in 2006 (54%) and over the eleven year period obtained 49% of the total ($33.8 billion) gains;

• The cost farmers paid for accessing GM technology in 2006 was equal to 28% of the total technology gains (a total of $9.6 billion inclusive of farm income gains ($6.91 billion) plus cost of the technology payable to the seed supply chain ($2.7 billion[1]));

• For farmers in developing countries the total cost of accessing the technology in 2006 was equal to about 17% of total technology gains, whilst for farmers in developed countries the cost was 38% of the total technology gains.  Whilst circumstances vary between countries, the higher share of total technology gains accounted for by farm income gains in developing countries relative to the farm income share in developed countries reflects factors such as weaker provision and enforcement of intellectual property rights in developing countries; 

• Since 1996, biotech traits have added 53.3 million tonnes and 47.1 million tonnes respectively to global production of soybeans and corn.  The technology has also contributed an extra 4.9 million tonnes of cotton lint and 3.2 million tonnes of canola;   

• Production of soybeans, corn, cotton and canola on the areas planted to biotech crops, in 2006, were respectively +20%, +7%, +15% and +3% higher than levels would have otherwise been if GM technology had not been used by farmers; 

• If GM technology had not been available to the (10 million plus) farmers using the technology in 2006,  maintaining global production levels at the 2006 levels would have required additional plantings of 4.6 million ha of soybeans, 2 million ha of corn, 1.8 million ha of cotton and 0.15 million ha of canola; 

• Whilst the additional volumes of food and fibre production arising from the use of GM technology suggest a small impact relative to global production, these volumes are far more significant in terms of global trade in these commodities – equal to +17% of global trade on soybeans, +11% of global trade in corn, +14%of global trade in cotton lint and +3% of global trade in canola.  This means that global trade levels in these crops are probably significantly higher than the levels would have been in the absence of use of GM technology and therefore world prices of these traded crops in 2006 were probably lower than they would otherwise have been.  In other words, GM technology is having an important impact on contributing to global supplies of these food, feed and fibre commodities and to limiting the level of price increases that have occurred in the last 2-3 years.

For additional information, contact Graham Brookes.  Tel 00 44 (0) 1531 650123

www.pgeconomics.co.uk