Labeling genetically modified food in India: Economic consequences in four marketing channels

In 2006, India proposed a draft rule requiring the labeling of all genetically modified (GM) foods and products derived thereof. In this paper, we use primary and secondary market data to assess the economic implications of introducing such a mandatory labeling policy for GM food. We focus on four products that would likely be the first affected by such a regulation in India: cottonseed oil, soybean oil, brinjal (eggplant), and rice. We find that GM food labeling would generate a specific market outcome for each of these products. With GM labeling, virtually all cottonseed oil would be labeled as GM, with limited costs for all actors involved, but also limited benefit for consumers. Labeling soybean oil derived from GM crops could affect market shares for edible oils at the benefit of domestic oils, and non-GM soybean oil could appear on the market at a very limited scale. Labeling GM brinjal would be extremely challenging. Assuming it was implemented, some non-GM brinjal would be sold at a premium in high-income retail outlets, while virtually all others would be labeled GM. A similar outcome would occur for rice, with high-quality rice used for both domestic consumption and exports markets certified non-GM and most of the remaining rice labeled as GM. In each of the cases, labeling would generate significant adjustment costs for the industry and large enforcement costs, and consumer benefit would not always be visible and would highly depend on the degree of enforcement. In fact, voluntary labeling could achieve less-distorted results with lower costs and therefore appears to be a superior regulatory solution. Still, provided enforcement is ensured, a well-designed mandatory labeling regulation with limited product coverage, a non-zero labeling threshold, and an informative labeling content would lead to a much better outcome and lower costs in India than the current draft rule, especially if it is accompanied by a large awareness campaign regarding GM food and consumer safety in India.Genetically modified food, Labeling, market shares, domestic consumption, soybean oil, export markets, rice, cottonseed oil, enforcement costs, consumer safety, Food marketing, Genetic resources,

Biosafety decisions and perceived commercial risks: The role of GM-free private standards

"We herein investigate the observed discrepancy between real and perceived commercial risks associated with the use of genetically modified (GM) products in developing countries. We focus particularly on the effects of GM-free private standards set up by food companies in Europe and other countries on biotechnology and biosafety policy decisions in food-exporting developing countries. Based on field visits made to South Africa, Namibia, and Kenya in June 2007, and secondary information from the press and various publications, we find 31 cases of interactions between private GM-free standards and biosafety policy decisions in 21 countries. Although we cannot infer the direct involvement of supermarkets and food companies in biosafety policy processes in developing countries, we find that by setting up GM-free standards, these actors are indirectly influential via their local traders, who face the possibility of exclusion if they do not comply with the standards. Organic producers' and anti-GM organizations also play a role in spreading perceptions of commercial risks that are not always justified. By comparing cases, we differentiate three types of relevant commercial risks: real risks, potential risks, and unproven risks. We then identify two critical, yet misleading, presumptions perpetuated by the various interest groups to spread the fear of potential or unproven risks: the infeasibility of non-GM product segregation and the lack of alternative buyers. We also find that information asymmetries and risk-averse behaviors related to perceived market power can help insert unfounded export concerns into biosafety or biotechnology policy decisions. The results of our analysis are used to suggest a simple framework to separate real commercial risks from others, based on five critical questions designed to aid decision makers when they face pressures to reject GM crop testing, application, consumption or use for fear of alleged export losses. " from authors' abstractGenetically modified food, Private standards, International trade, Biosafety, Science and technology, biotechnology, Developing countries,

Biosafety at the crossroads: An analysis of South Africa's marketing and trade policies for genetically modified products

"South Africa is the only country in Africa that has both adopted genetically modified (GM) crops and developed a functional biosafety system to manage any risks related to the use of GM products. But it is also one of the only countries that trade both GM and non-GM crops, despite being surrounded by countries banning the use of GM products. In this paper, we analyze the marketing and trade policies for GM products in South Africa that have been successful in the past and critically review recent reforms to these policies. By providing trade volume estimates of potentially GM products, we show that South Africa is effectively a significant exporter and importer of both GM and non-GM products. We then show that although its import approval system has been effective, recent reforms have allowed regulators to use biosafety regulations as an apparent nontariff barrier to trade. On the export side, South Africa has been able to adapt to each specific demand, but potential export risks have gradually entered the decisionmaking process through the inclusion of socioeconomic considerations. On the marketing side, we show that although non-GM maize segregation has been successful so far, it has generated some adjustment costs and could be improved. At the same time, by excluding all current GM products, the GM food labeling regulation in place has not been fully satisfactory and is bound to change; it could be heading toward a strict mandatory system, despite limited public demand. Therefore, there is a clear movement toward more costly and rigid trade and marketing regulations for GM products in South Africa, with local special-interest groups having an increasing influence on decisionmaking. Yet, the past 10 years have demonstrated that South Africa's success in taking advantage of biotechnologies under changing global conditions stems mainly from its adaptation capacity and the flexibility of its system. Based on the analysis presented in this paper, we provide six policy recommendations to improve rather than rigidify market and trade regulations—policies that would allow South Africa to better adapt to global changes, to manage risks rigorously but efficiently, and to take advantage of safe and potentially promising new GM technologies." from authors' abstractTrade regulations, Genetically modified crops, Marketing, trade policies, Genetically modified products, Biosafety, Genetic resources, Science and technology,

Marketing underutilized plant species for the benefit of the poor: a conceptual framework

"Modern crop production is based on only a few plant species. Particularly in marginal environments of developing agricultural economies, many less well-known agricultural or non-timber forest species, continue to be grown, managed or collected, thus contributing to the livelihood of the poor and to agricultural biodiversity. Some of these species, called underutilized plant species, are characterized by the fact that they are locally in developing countries but globally rare, that scientific information and knowledge about them is scant, and that their current use is limited relative to their economic potential. In this paper, we first identify the economic factors that cause these plants to be ‘underutilized'. Based on this analysis, we propose a classification of underutilized plant species based on the relationship of the observed to the potential economic value of the species, and the presence or absence of and constraints to output markets. Then, focusing on a subset of underutilized plant species with market potential, we identify three necessary conditions for the successful commercialization of underutilized plant species for the benefit of the poor: demand expansion, increased efficiency of supply and marketing channels, and a supply control mechanism. This conceptual framework is intended to provide a basis for an empirical assessment of marketing solutions for underutilized plant species among the rural poor in developing economies." Authors' abstractUnderutilized species, Agricultural biodiversity, Agricultural marketing, Agricultural development, Niche markets,

Agricultural, food, and water nanotechnologies for the poor: Opportunities, constraints, and role of the Consultative Group on International Agricultural Research

CGIAR, Developing countries, nanotechnology, research and development priorities,

The price and trade effects of strict information requirements for genetically modified commodities: Under the Cartagena Protocol on Biosafety

This paper assesses the global economic implications of the proposed strict documentation requirements on traded shipments of potentially genetically modified (GM) commodities under the Cartagena Protocol on Biosafety. More specifically, we evaluate the trade diversion, price, and welfare effects of requiring all shipments to bear a list of specific GM events (the does contain rule) in the maize and soybean sectors. Using a spatial equilibrium model with 80 maize- and 53 soybean-trading countries, we show that information requirements would have a significant effect on the world market for maize and soybeans. But they would have even greater effects on trade, creating significant trade distortion that diverts exports from their original destination. The measure would also lead to significant negative welfare effects for all members of the Protocol and nonmembers that produce GM maize, soybeans, or both. While non-GM producers in Protocol member countries would benefit from this regulation, consumers and producers in many developing countries would have to pay a proportionally much heftier price for such a measure.Cartagena protocol on biosafety, Genetically modified food, International trade,

An analysis of trade related international regulations of genetically modified food and their effects on developing countries:

"This paper reviews current trade–related regulations of genetically modified (GM) food and discusses their effects on developing countries. There is a large heterogeneity in current import approval and marketing policies of GM food worldwide. At the international level, the harmonization efforts are led by the Codex Alimentarius Commission, the Cartagena Protocol on Biosafety and the World Trade Organization. While internationally harmonized guidelines for safety approval have been finalized, we show that there is no clear consensus on labeling regulations for GM food, and there is an increasing risk of conflicts among international agreements. We analyze the GM food regulations of two large rich importers, Japan and the European Union (EU) and discuss their differences and their potential impact on international trade. We also show that the effects of international and domestic trade related regulations critically depend on the type of traded products and their intended use: food and unprocessed products are subject to more stringent regulations than animal feed and processed products. Finally, we identify the main spillover effects of national and international regulations on developing countries' policy making, and suggest four policy arrangements on GM food to enable developing countries to satisfy production, consumption, international trade, and risk management objectives simultaneously while complying with their international obligations.Genetically modified food Developing countries, Biosafety, Trade regulation, Labeling, International trade, Tariff,

Parables: applied economics literature about the impact of genetically engineered crop varieties in developing economies

"A vast literature has accumulated since crop varieties with transgenic resistance to insects and herbicide tolerance were released to farmers in 1996 and 1997. A comparatively minor segment of this literature consists of studies conducted by agricultural economists to measure the farm-level impact of transgenic crop varieties, the size and distribution of the economic benefits from adopting them, consumer attitudes toward GE products, and implications for international trade. This paper focuses only on the applied economics literature about the impact of transgenic crop varieties in non-industrialized agricultural systems, with an emphasis on methods. A number of studies have surveyed the findings for both industrialized and non-industrialized agriculture, at various points in time, but surveys of methods are less frequent and have typically examined only one overall question or approach. Clearly, the methods used in research influence the findings that are presented and what they mean. Understanding the methods therefore enhances understanding of the findings. Four categories of impact analysis are considered: farmers, consumers, industry and trade. In part due to methodological limitations and the relatively brief time frame of most analyses, results are promising, but the balance sheet is mixed. Thus, findings of current case studies should not be generalized to other locations, crops, and traits. The aim of this review is to progress toward the defining a “best practices” methodology for national researchers who seek to produce relevant information about emerging crop biotechnologies for national policymakers. " Authors' AbstractGenetically engineered crops, Economic impacts, Technology adoption, Developing economies, Economics methods, Best practices, biotechnology,

Marketing underutilized crops: the case of the African garden egg (Solanum ethiopicum) in Ghana

The overall objective of this study is to analyze constraints affecting the African garden egg market chain in Ghana. Furthermore, to identify the factors that help determine the success of market chain development of garden egg in Ghana; and to analyze the effect of market development on biodiversity

The Regulatory Status of Genome-edited Crops

Genome editing with engineered nucleases (GEEN) represents a highly specific and efficient tool for crop improvement with the potential to rapidly generate useful novel phenotypes/traits. Genome editing techniques initiate specifically targeted double strand breaks facilitating DNA-repair pathways that lead to base additions or deletions by non-homologous end joining as well as targeted gene replacements or transgene insertions involving homology-directed repair mechanisms. Many of these techniques and the ancillary processes they employ generate phenotypic variation that is indistinguishable from that obtained through natural means or conventional mutagenesis; and therefore, they do not readily fit current definitions of genetically engineered or genetically modified used within most regulatory regimes. Addressing ambiguities regarding the regulatory status of genome editing techniques is critical to their application for development of economically useful crop traits. Continued regulatory focus on the process used, rather than the nature of the novel phenotype developed, results in confusion on the part of regulators, product developers, and the public alike and creates uncertainty as of the use of genome engineering tools for crop improvement