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This paper updates previous estimates for the global value of using genetically modified (GM) crop technology in agriculture at the farm level. It examined impacts on yields, important variable costs of production, including the cost of the technology, direct farm (gross) income, and impacts on the production base of the main crops where the technology is used (soybeans, corn, cotton, and canola). Over the period 1996 to 2020, the economic benefits have been significant with farm incomes for those using the technology having increased by $261.3 billion US dollars. This equates to an average farm income gain across all GM crops grown in this period of about $112/hectare. In 2020, the farm income gains were $18.8 billion (average of $103/ha). The cumulative farm income gains have been divided 52% to farmers in developing countries and 48% to farmers in developed countries. Seventy-two percentage of the gains have derived from yield and production gains with the remaining 28% coming from cost savings. These yield and production gains have made important contributions to increasing global production levels of the four main crops, having, for example, added 330 million tonnes and 595 million tonnes respectively, to the global production of soybeans and maize since the introduction of the technology in the mid-1990s. In 2020, the extra global production of the four main crops in which GM technology is widely used (85 million tonnes), would have, if conventional production systems been used, required an additional 23.4 million ha of land to be planted to these crops. In terms of investment, for each extra dollar invested in GM crop seeds (relative to the cost of conventional seed), farmers gained an average US $3.76 in extra income. In developing countries, the average return was $5.22 for each extra dollar invested in GM crop seed and in developed countries the average return was $3.00.
KEYWORDS: Cost, genetically modified crops, income, production, yieldCrops containing genetically modified (GM) traits have been widely grown for 25 years and in 2020, the global area planted to crops was about 186 million hectares. The main crops using this technology are soybeans, maize, cotton, and canola, with GM traits present in just over 47% of the global area of these four crops in 2020.
Since the introduction of GM crop technology in the mid-1990s, there have been many analytical papers assessing the farm level economic and income impacts associated with the adoption of this technology. The author of this paper has undertaken some of these studies (eg, Brookes) 1 and since 2005, has engaged in a regular (typically annual) exercise to identify, update, and aggregate the sum of these various studies, and where possible, to supplement them with new analysis. The aim of this has been to provide an up-to-date and as accurate as possible assessment of some of the key farm-level economic impacts associated with the global adoption of crops containing GM traits. It is also hoped the nalysis continues to contribute to understanding the impact of this technology and to facilitate more informed decision-making, especially in countries where crop biotechnology is currently not permitted.
This study updates the findings of earlier analysis into the global impact of GM crops since their commercial introduction in 1996 by extending analysis to include the years of 2019 and 2020. Previous analysis by the current author has been published in various journals, with the last analysis being Brookes and Barfoot 2020. 2 The methodology and analytical procedures in this present discussion are unchanged so as to allow a direct comparison of the new with earlier data and analysis. Readers should note that some data presented in this paper are not directly comparable with data presented in previous analysis because the current paper also takes into account the availability of new data and analysis that may have not previously been available, including revisions to data for earlier years.
In order to save readers of this paper the chore of consulting the past papers for details of the methodology and arguments, these are included in full in this paper.
The analysis focuses on gross farm income effects because these are a primary driver of adoption amongst farmers (both large commercial and small-scale subsistence). It also quantifies the (net) production impact of the technology. The authors recognize that an economic assessment could examine a broader range of potential impacts (eg, on labor usage, household incomes, local communities, and economies). However, these are not included because undertaking such an exercise would add considerably to the length of the paper and an assessment of wider economic impacts would probably merit a separate assessment in its own right.
The report is based on detailed analysis of existing farm-level impact data for GM crops, much of which can be found in peer-reviewed literature. Most of this literature broadly refers to itself as “economic impact” literature and applies farm accounting or partial budget approaches to assess the impact of GM crop technology on revenue, the main variable costs of production (seed cost, crop protection, and weed control, use of labor and fuel/machinery) and gross farm income. Although primary data relating to impacts of commercial cultivation were not available for every crop, in every year and for each country, a substantial body of representative research and analysis is available and this has been used as the main basis for the analysis presented. The author has also undertaken his own analysis of the impact of some trait-crop combinations in some countries where the availability of published research is more limited (notably GM herbicide tolerant (HT) traits in North and South America). This analysis is mostly based on analysis of key input data, such as herbicide and insecticide usage/costs and seed variety use/costs.
The farm level economic impact of the technology varies widely, both between and within regions/countries. Therefore, the analysis is considered on a case by case basis, using average performance and impact recorded in different crop and trait combinations by the studies reviewed. Where more than one piece of relevant research (eg, on the impact of using a GM trait on the yield of a crop in one country in a particular year) has been identified, the findings used in this analysis reflect the authors assessment of which research is more likely to be reasonably representative of impact in the country as a whole and in a particular year. For example, there are many papers on the impact of GM insect resistant (IR) cotton in India in its early years of widespread usage. Few of these studies were reasonably representative of cotton growing across the country, with most based on small-scale, local, and therefore unrepresentative samples of cotton farmers. Only the reasonably representative research has been drawn on for use in this paper – readers should consult the references to this paper to identify the sources used.
This approach may still both, overstate, or understate, the impact of GM technology for some trait, crop and country combinations, especially in cases where the technology has provided yield enhancements. However, as impact data for every trait, crop, location, and year data is not available, the author has had to extrapolate available impact data from identified studies to years for which no data are available. In addition, if the only studies available took place several years ago, there is a risk that basing current assessments on such comparisons may not adequately reflect the nature of currently available alternative (non-GM seed or crop protection) technology. The author acknowledges that these factors represent potential methodological weaknesses. To reduce the possibilities of over/understating impact due to these factors, the analysis:
Directly applies impacts identified from the literature to the years that have been studied. As a result, the impacts used vary in many cases according to the findings of literature covering different years. Examples where such data is available include the impact of GM insect resistant (IR) cotton: in India (see Bennett R et al. 2004, 3 IMRB 2006 4 and IMRB 2007, 5 ) in Mexico (see Traxler et al. 2001 6 and Monsanto/Bayer Mexico annual monitoring reports submitted to the Ministry of Agriculture in Mexico 7 ) and in the USA (see Sankala & Blumenthal, (2003 8 and 2006 9 ) Mullins & Hudson 2004. 10 ) Hence, the analysis takes into account variation in the impact of the technology on yield according to its effectiveness in dealing with (annual) fluctuations in pest and weed infestation levels;
Uses current farm-level crop prices and bases any yield impacts on (adjusted – see below) current average yields. This introduces a degree of dynamic analysis that would, otherwise, be missing if constant prices and average yields identified in year-specific studies had been used;
Includes changes and updates to the impact assumptions identified in the literature based on new papers, annual consultation with local sources (analysts, industry representatives, databases of crop protection usage and prices) and analysis of changes in crop protection product usage and prices and of seed varieties planted;
Adjusts downwards the average base yield (in cases where GM technology has been identified as having delivered yield improvements) on which the yield enhancement has been applied. In this way, the impact on total production is not overstated.
Detailed examples of how the methodology has been applied to calculate the 2020 impacts are presented in Appendix A.
Other aspects of the methodology used to estimate the impact on direct farm income are, as follows:
Where stacked traits have been used, the individual trait components were analyzed separately to ensure estimates of all traits were calculated. This is possible because the non-stacked seed has been (and in many cases continues to be) available and used by farmers and there are studies that have assessed trait-specific impacts;
All values presented are nominal for the year shown and the base currency used is the US dollar. All financial impacts in other currencies have been converted to US dollars at prevailing annual average exchange rates for each year (source: United States Department of Agriculture Economics Research Service);
The analysis focuses on changes in farm income in each year arising from impact of GM technology on yields, key costs of production (notably seed cost and crop protection expenditure) but also impact on costs, such as fuel and labor. Inclusion of these latter costs is more limited than the impacts on seed and crop protection costs because only a few of the papers reviewed have included consideration of such costs. In most cases, the analysis relates to impact of crop protection and seed cost only, crop quality (eg, improvements in quality arising from less pest damage or lower levels of weed impurities, which result in price premia being obtained from buyers) and the scope for facilitating the planting of a second crop in a season (eg, second crop soybeans in Argentina following wheat that would, in the absence of the GM HT seed, probably not have been planted). The farm income effect presented is, essentially, a gross margin impact (gross revenue minus variable costs of production) rather than a full net cost of production assessment. Through the inclusion of yield impacts and the application of actual (average) farm prices for each year, the analysis also indirectly takes into account the possible impact of GM crop adoption on global crop supply and world prices.
The paper also includes estimates of the production impacts of GM technology at the crop level. These have been aggregated to provide the reader with a global perspective of the broader production impact of the technology. These impacts derive from the yield impacts and the facilitation of additional soybean cropping within a season in South America. Details of how these values were calculated (for 2020) are shown in Appendix A.
GM HT crops were first grown widely in 1996 and in 2020 accounted for about 60% of the total GM crop plantings. The vast majority of these crops have been tolerant to the herbicide active ingredient glyphosate, although in the last few years the availability and use of crops tolerant to other herbicides has increased. The main impact of this technology has been to provide more cost-effective (less expensive) and easier weed control for farmers. Some users of this technology have also obtained higher yields from better weed control (relative to weed control obtained from conventional technology). The magnitude of these impacts varies by country and year, and the variation is due to several factors. These include the prevailing costs of different herbicides used in GM HT systems versus weed control practices in conventional (non-GM crops), which may include different/alternative herbicides to those used with GM HT crops and/or other forms of weed control (eg, hand or mechanical weeding), the mix and amounts of herbicides applied, the cost farmers pay for accessing the GM HT technology and the underlying levels of weed problems faced by farmers. Important factors affecting the level of cost savings achieved include:
The mix and amounts of herbicides used on GM HT crops and conventional crops are affected by price and availability of herbicides. Herbicides used include both “older” products that are no longer protected by patents and newer “patent-protected” chemistry, with availability affected by commerical decisions of suppliers to market or withdraw products from markets and regulation (eg, changes to approval processes and the imposition of restrictions/bans). Prices also vary by year and country according to factors, such as exchange rates, costs of manufacture and distribution;
The amount farmers pay for use of the technology varies by country and year. Pricing of technology (all forms of seed and crop protection technology, not just GM technology) varies according to the level of benefit that the technology providers perceive farmers are likely to derive from it. In addition, it is influenced by intellectual property rights (patent protection, plant breeders’ rights, and rules relating to use of farm-saved seed). In countries with weaker intellectual property rights, the cost of the technology tends to be lower than in countries where there are stronger rights. This issue is examined further below as it is a key factor determining take-up levels of the technology. Also, the HT technology available in 2020 is, in some countries, not the same as the technology available in the early years of adoption. As indicated above, in the first 15–20 years of widespread use of GM HT crop technology, crops tolerant to glyphosate dominated. In 2020, farmers, notably in North America now have the option of using seed tolerant to glyphosate plus other active ingredients like glufosinate, 2,4-D and dicamba. These forms of “stacked” herbicide tolerances are typically more expensive than the single herbicide tolerance traits of the early years of use;
Where GM HT crops tolerant to glyphosate have been widely grown for a number of years, incidence of weed resistance to glyphosate have increased and become a major concern in many regions. This has been attributed to how glyphosate was used with GM HT crops in the early years of adoption. Due to its broad-spectrum, post-emergence activity and effectiveness in controlling weeds cheaply, it was often used as the sole method of weed control. This approach to weed control put tremendous selection pressure on weeds and contributed to the evolution of weed populations predominated by resistant individual weeds. It should, however, be noted that there are hundreds of resistant weed species confirmed in the International Survey of Herbicide Resistant Weeds (www.weedscience.com. 11 ) Worldwide, there are 56 weed species that are currently resistant to glyphosate (accessed May 2022), compared to 169 weed species resistant to ALS herbicides (eg, chlorimuron ethyl commonly used in conventional soybean crops) and 87 weed species resistant to photosystem II inhibitor herbicides (eg, atrazine commonly used in maize production). It should also be noted that the problem of herbicide-resistant weeds has not been accelerated or exacerbated by the adoption of GM HT crops and the overall rate of newly confirmed herbicide-resistant weed species to all herbicide sites of action has slowed in the US since 2005 (Kniss, 2018. 12 ) In addition, GM HT technology has played a major role in facilitating the adoption of no and reduced tillage production techniques in North and South America. This has also probably contributed to the emergence of weeds resistant to glyphosate and to weed shifts toward those weed species that are not well controlled by glyphosate. As a result, growers of GM HT crops have been, and continue to be advised to include other herbicides (with different and complementary modes of action) in combination with glyphosate in their weed management systems, even where instances of weed resistance to glyphosate may have not been found. In some cases, farmers may also be advised to revert to adopt cultural weed control practices such as plowing. This change in weed control practices also reflects the broader agenda of developing strategies across all forms of cropping systems to minimize and slow the potential for weeds developing resistance to existing weed control technology (eg, Norsworthy et al., 2012. 13 ) In addition, in the last 5 years, the increasing array of new GM HT technology referred to above has offered farmers (notably in North America) crops that are tolerant to other herbicide active ingredients typically in combination with tolerance to glyphosate (and sometimes offering tolerance to three active ingredients). At the macro level, these changes have influenced the mix, total amount, cost, and overall profile of herbicides applied to GM HT crops. It has also resulted in the weed control costs associated with growing GM HT crops generally being higher in 2020 than in the early 2000s. However, as the analysis presented below shows, GM HT crops have continued to be popular with farmers as they offer important economic advantages for most users relative to the conventional (non-GM) alternative, either in the form of lower costs of production or higher yields (arising from better weed control). An important contributory factor to this (maintenance of cost saving advantage of GM HT systems versus conventional alternatives) is that many of the herbicides used in conventional production systems also face significant weed resistance issues themselves (in the mid 1990s this was one of the reasons why glyphosate tolerant soybeans were rapidly adopted, as glyphosate provided good control of these weeds). It is also important to note that if GM HT technology was no longer delivering net economic benefits, it is likely that farmers around the world would have significantly reduced their adoption of this technology in favor of conventional alternatives. The fact that GM HT global crop adoption levels have not fallen in recent years suggests that farmers must be continuing to derive important economic benefits from using the technology.
These points are further illustrated in the analysis below.
The most common farm income gain arising from the use of this seed technology has derived from a reduction in the cost of production, mainly through lower expenditure on weed control (typically herbicides). These gains have averaged between $6/ha and $33.5 ha ( Table 1 ).