Falck Zepeda Overview of Policy Issues SSA for the AfDB April 2011

8/6/2019 Falck Zepeda Overview of Policy Issues SSA for the AfDB April 2011

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Overview of Key Policy Issues Impacting theAdoption of Bio-technology in Africa

Jos Falck ZepedaResearch Fellow

Co-Leader Genetic Resources Policies Project andLeader Policy Team Program for Biosafety Systems (PBS)

IFPRI

Presentation made at the African Development Bank, Tunis, Tunisia April 14, 2011


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Outline

Policy Issues Investments in R&D

capacity

Legal issues: Liability and

redress Markets and trade:

Labeling

Socio-economic issuesassessment

Experience withassessments

Tool supporting decisionmaking


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1. Investments in R&D capacity


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Investments in priority setting

Sub-regional priority setting exercises completed,mostly based on expert opinion

Approaches used to date may have not lead to

the identification of best portfolio of activities Priority setting require a robust quantitative and

qualitative foundation

Proposal: Collect more and better regional and national data

More systematic analysis


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An example for biotechnologyprioritization from ASARECA

Commodity InterventionConstraints*

I F V W P D S B N Q G

Maize GM MM s m l

Beans GM MM m l l

Sorghum GM MM m m l

Banana TC GM MM s m s m

Wheat GM MM s,l s,l

Potatoes GM, TC m s s s

Coffee MM F GM, TC m s l s

Cotton GM, MM m,s s m s

Rice GM MM s s s m s

Cassava GM MM D s s,m s,l

Groundnut MM GM l m l

Sweet potato GM MM m s,m m,l s

Crop plants D, F s,l

Key to interventions:GM = genetic modificationF = fingerprintingD = diagnosticsTC = tissue cultureMM = molecular marker

Key to priorities: red = first , blue = second , yellow = third , green = fourth

Key to time-frame: s = short term (technology transfer) , m = medium term (genes known)l = long term (genes to be cloned)


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IFPRIs prototype economic evaluation and priority setting

approach for informing biotechnology strategy and investmentdecision making processes

Production, Trade, Prices

(levels, trends, projections)

Agroecological ZonesCrop diversity

Current & Future

RegionalImportance?

Commodity

Prioritisation

Compile available data on

the location, magnitude andeconomic consequences of

major production constraints

Type and impactof major production

constraints?

ConstraintPrioritisation

Economic

payoffs to constraintmitigation?

Design scenarios

for assessing effects ofmitigating constraints

Existing, emerging orpotential biotechnology

options

Policy and Investment

Implications forBiotechnology

R&D and Regulation

Payoff matrices

by crop and country

Payoff matrices

by crop and country

Payoff matrices

by crop and country

Technology-Specific

Payoff matrices(Crop/Country/Region)

Payoff matrices

by crop and country

Payoff matrices

by crop and country

Payoff matrices

by crop and country

Payoff matricesby crop and country

1. CommodityScreening

2. ConstraintScreening

3. Potential Payoffs:Commodity/Constraint-Scale

4. Potential Payoffs:Technology-Scale

Likely regulatory regimes

governing R&D, technology

use, marketing & time lag,and adoption implications

StakeholderDialogue

5. Strategy/PolicyProcesses.

Investment DecisionMaking

Source: Wood, Zambrano,You, Falck Zepeda, Sichra,2008


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Investments in R&D capacity 1990s under investment in R&D activities

2008 improving but still lagging

Concentration in a few countries

Many countries, especially Francophone Africa, face

fundamental capacity and investment challenges

Without appropriate funding the innovation system cannotaddress effectively SSA productivity constraints

Ourexperience is that biotech R&D also under invested

Proposal:

Systematic and focused capacity assessments

Alleviate the constraint political will

Source: partially based Beintema and Stads, 2011, IFPRI / ASTI

Food Policy Report 24


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Plant breeding investments by crop in Kenya(As a percentage of total breeding budget)

FAO study onplant breedingandbiotechnology

Compare /contrast withnationalpriorities

Identifyoutputs fromresearch - ROI

Contrast toother sectorinvestments

0

5

10

15

20

25

30

35

40

wheat

rice

maize

so

rghum

millet

othersmallgrain

oilseed

fibercrop

root&

tubers

Forages

o

therlegumes

veg&

fruits

misc.

1985 1990 1995 2001

Source: Falck Zepeda et al. 2007


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IFPRI matrix of policy status andpolicy objective based investments

Policy Status PolicyObjectives

Tools

plantgenetic

resources

conservation

and

enhancement

Tools

PlantBreeding

Tools

BiotechnologyTool

Cross

Cutting

(1) Setting the stage

for using biotech

products

Development

of conventional

capacitiesEstablishment

of a regulatory

system to

facilitate access

to

biotechnology

products

Improvement

of the

technology

delivery system

Invest in

germplasm

bankCharacterizati

on of plant

genetic

material

Support for

NARS applied

and adaptiveresearch in

agronomy and

conventional

plant breeding

(infrastructure and

human resource

development)

Development of

operational IPR

regulatory

frameworks

Design of seed

legislation

Development of

operational

biosafetyframeworks

Support for NARS

applied and

adaptive research in

molecular biology

and associated

sciences within

innovative cluster

(infrastructure and

human resource

development)

Promotion of

agricultural technical

services industrySupport entry of

private sector into

seed and R&D

systems

(2) Improving the efficiency and products of

agricultural research through increased used of

biotechnological tools

(3) Building capacities to develop

biotechnology based innovations

Source: Falck Zepeda et al. 2007


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2. Legal issues: Liability and redress


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What is liability and redress? Liability: refers to the obligation of a person or

institution to provide compensation for damage itis deemed to be responsible for. (Boadie 2007)

Redress: risk mitigation procedures Possibility of transboundary movements of GMOs

opened the possibility of international liabilitymanagement regimes

Consider concepts such as significant damage,likelihood, comparison to baseline, attribution tooperator, compensation, restoration,environmental biodiversity (human health)


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Strict liability and innovation Countries may implement civil liability systems with

strict liability clauses

Strict liability refers to those systems where

Imposition of liability on a party without a finding offault

Neither good faith nor the fact that the defendant tookall possible precautions are valid defenses

Strict liability often applies to those engaged inhazardous or inherently dangerous ventures

Innovators and product developers may not investin those countries with strict liability clauses


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Nagoya Supplementary Protocol onLiability and Redress Supplement to the Cartagena Protocol on Biosafety Guides parties to implement administrative procedure

where competent authorities require operators to takeresponse measures in the event of damage

Allows parties develop in their national laws civilliability procedures

Requires building/strengthening capacity to

Define and assess damage

Enforce response to damage

Establish financials security mechanisms

Establish risk management systems and instruments


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3. Market and trade issues: Labeling


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Labeling of GM crops Labeling viewed as way of addressing some

consumer concerns including safety, religious,ethical and the right to know about foods

Decision points for designing labeling systems

Mandatory vs. Voluntary

Product vs. Process

Coverage Thresholds

Decision options have a cost/benefit andenforcement implications especially in developingcountries


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Mandatory vs. Voluntary labeling ofGE food

Voluntary systems preferred as only those trulyinterested and willing to pay are targeted forimplementation

Mandatory systems increase cost to societywithout any consumer group discrimination

Some studies show an increase of 10% of foodprices

Complication: analytical methods to test for thepresence of GM products are not completelyreliable, lack sensitivity and are expensive


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Developing countries issues Many foods are sold unpackaged labelling is

impractical

With high illiteracy levels labels are ineffective

Where communications are poor and people areuneducated raising public awareness about GMOsis more difficult question value of label

Many countries often do not have the infrastructure

or financial capability to implement adequaterecord keeping - controls

Major issue: enforcement


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4. Socio-economic issues


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Motivations for the assessment ofsocio-economic considerations

For biosafety regulatory purposes one needs tounderstand:

the impact of the inclusion of socio-economic issues indecision making

The relationship /interaction with the risk assessment process

Consider technology flows, opportunities lost due to

additional regulatory hurdles and who is impacted more

Technologyassessments

Technology approvalwithin biosafety

regulatory processes


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Important distinction

What are the goal and objectives for socio-economicassessments as related to biosafety or technology decisionmaking?

Democratic societies right to know vs. Freedom to operate

vs. Freedom to choose

An impact assessmentduring the biosafetyregulatory stage needsto be ex ante

For monitoring orstandard technologyevaluation purposes this

is a conventional ex-post assessment


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What do we know from the economic impactassessment literature to date?

A review of 187 peerreviewed studies

Different impact domains

Farmers, household andcommunity

Industry and markets

Consumers

Trade

Citation: Smale, Melinda; Zambrano, Patricia; Grure, Guillaume; Falck-Zepeda, Jos; Matuschke, Ira; Horna, Daniela; Nagarajan, Latha;Yerramareddy, Indira; Jones, Hannah. 2009. Measuring the economic impacts of transgenic crops in developing agriculture during the first

decade: Approaches, findings, and future directions. (Food policy review 10) Washington, D.C.: International Food Policy Research Institute(IFPRI) 107 pages


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IFPRI Food Policy Reviewconclusions

On average, profitablebut averages maskvariability by agro-climate, host cultivar, trait,farmer

Too few traits, too few cases/authors

generalizations should not be drawn yet...needmore time to describe adoption

Next decade Cross cutting issues for further study including

impacts of poverty, gender, public health,generational

Need for improved methods


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Bt cotton in the U.S. First estimates

-22 -12 -14

58 37 37

141

8097

63

8593

-50

0

50

100

150

200

250

300

1996

Industry

US Farmers

Consumers

Foreign Farmers

1997 1998

Industry

36%

Consumers19%

US Farmers

45%

Total benefit estimates(Millions US $)

Falck-Zepeda, Traxler & Nelson 1999, 2000


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Black Sigatoka Resistant Bananas inUganda

If approval delayed,forego potential annual(social) benefits of +/-US$200 million

GM crops (food) withtangible benefits,increases consumersacceptance of GMbanana for 58% of thepopulation

Higher negativeperceptions amongst theurban elite as comparedto rural producers

Photos copyright: Kikulwe 2009

Kikulwe, E.M., E. Birol, J. Wesseler, J. Falck-Zepeda. A

latent class approach to investigating demand for geneticallymodified banana in Uganda Agricultural Economics.Publication Forthcoming 2011.
http://www.gmo-compass.org/features/zoomimage.php?image=/data/imagescontent/grocery_shopping/017_banana-blacksigatoka_zoom.jpg&width=500&height=332


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Bt cotton in Uganda

Positive yield impacts onnet benefits

Smaller IRR probablyexplained due to lowinitial yields need to

improve overall cottonproductivity

Probability of a negativereturn can be as high as

38% with a technologyfee as charged in othercountries

Photos credit: Horna 2009


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Ex ante studies at a regional level

Country Crop/Trait Representative findings

West Africa Bt cotton Countries are worse off by not adopting Smaller net benefits and returns than other

studies Negotiating downward the technology fee is key

India, China,Philippinesand otherAsian

Bt rice Adoption gains are up to 10 times the level oflosses due to potential closing of export market totrade sensitive countries

Falck Zepeda, J.B., D. Horna, P. Zambrano and M. Smale. Policy and Institutional Factors and the Distribution of Economic Benefits and Risk fromthe Adoption of Insect Resistant (Bt) Cotton in West Africa. 2008. Asian Biotechnology Development Review 11(1):1-32.

Falck Zepeda, J., D. Horna and M. Smale. Distribution of economic benefits and risk from the adoption of insect resistant co tton in West Africa2008. African Journal of Agricultural and Resource Economics.


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Bt maize in the Philippines

Growing Bt maizesignificantly increasesprofits and yields

Significant insecticide

use reductions Adopters tend to be

larger, use hired laborare more educated,

have more positiveperceptions of currentand future status

Change in economic surplus

(mill pesos)

Producer Surplus 7906

Seed Innovator 703

Total Surplus 8609

Producer Share (%) 92

Innovator Share (%) 8

Bt maize studies in Philippines led by Dr. Jose Yorobe Jr. with 466 farmers in16 villages Isabela Province, Luzon, So. Cotabato Province, Mindanao


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Bt cotton in Colombia

Evidence of yieldenhancement rather thanpesticide reductions

Bt farmers benefited

where the target pest iseconomically important

Sampling biasimportant: adopters were

better off farmers Institutional context

crucial

Photos credit: Zambrano 2009

Source: Zambrano, P., L. A. Fonseca, I. Cardona, and E. Magalhaes. 2009. Thesocio-economic impact of transgenic cotton in Colombia. In Biotechnology andagricultural development: Transgenic cotton, rural institutions and resource-poor

farmers, ed. R. Tripp. Routledge Explorations in Environmental Economics 19.London: Routledge. Chapter 8. Pp. 168-199


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Bt maize in Honduras

Excellent insect control Bt yield advantage was

24-33%

Bt maize yields preferred

even by risk averseproducers

100% higher seed costthan conventional hybrid

Institutional issuesimportant

Photos credit: Sanders and Trabanino 2008

Small Resource-Poor Countries Taking Advantage of the New Bioeconomyand Innovation: The Case of Insect Protected/Herbicide Tolerant Maize inHonduras. Jose Falck Zepeda, Arie Sanders, Rogelio Trabanino, Oswaldo

Medina and Rolando Batallas-Huacon. Paper presented at the 13th ICABRConference The Emerging Bio-Economy, Ravello, Italy June 17-20, 2009.


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Institutional and productive issues thatcan define adoption and its impact

Information about the technology Information about marketing and other consumer

issues

Extension services

Credit Productive inputs (fertilizer, pesticides,

herbicides..)

Technology fees and seed prices

Intellectual property issues Seed systems and competition

IFPRI/PBS socio economic research


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IFPRI/PBS socio-economic researchand policy making

Uganda oBt cotton studyo

Presentation of synthesis of cotton impactstudies globally

Philippines o Bt maize studieso Cost of compliance and discussions on thesystems efficiency

Kenya and Malawi o Ongoing/planned Bt cotton studies

o Planned synthesis presentations/seminars

ECOWAS/WAEMU oPlanned study on impact of harmonizationefforts in COMESAo Potential impact of Bt cotton introduction inWest Africa (WB discussions)

APEC/ASEAN Trade studies rice

India o Labeling and trade worko Farmer suicides discussion paper

Protocol level o Mexico expert meeting to discuss socio-economics in 2008..o Supported survey


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Socio-economic considerations and theCartagena Protocol on Biosafety (Article 26.1)

especially with regard to the valueof biological diversity toindigenous and local communities.

socio-economic considerationsarising from the impact of livingmodified organisms on theconservation and sustainableuse of biological diversity,

Voluntary it is

notmandatory

Strictly anarrow scope

may take into account,

consistent with their internationalobligations,

1. The Parties, in reaching adecision on import under thisProtocol or under its domesticmeasures implementing theProtocol,

SOCIOECONOMIC CONSIDERATIONS

Especially WTO

Impactparameter??Focus??

Relate to importdecisions Domestic lawsand regulations


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Another important distinction

Article 26.1 of theCartagenaProtocol and

(future) derivedagreements

National laws,regulations, policiesand implementing

regulations

Relatively fewlimitation except

bindinginternationalagreements (WTO)and existing laws,regulations, policies

Limitation is the textof Article 26.1, other

international bindinginternationalagreements (WTO)

P i l l d d i i f


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Practical structural and governance decision forsocio-economic inclusion in the decision makingprocesses

Issues OptionsType of inclusion No inclusion vs. Mandatory vs. Voluntary

Scope Narrow interpretation article 26.1 Narrow set of socio-economic issues Broader set of assessments (SIA or SL)

Approach Concurrent but separate vs. Sequential vs. Embedded Implementation entity

Assessment trigger Each submission vs. Event-by-event

When Laboratory/greenhouse vs. CFTs vs. Commercialization For post release monitoring At all stages?

How? Choice of methods for ex anteassessments is much more limited than forex post

Decision making rules and standards Method integration, standards, tolerance to errors


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Potential implications from the inclusion ofsocio-economic considerations into decisionmaking

Regulatory costs will increase

Potential regulatory delays can reduce Number of technologies

Number of technologies released by the public sector -> cropsand traits of a public good nature

Potentially introduce more uncertainty to the process

May lead to an unworkable system if rules andstandards are not clear

Society gains information on technology impacts

What will society do with this information?

Wh t d i i k d ith


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What can a decision maker do withthe results a socio-economic

assessment?

What is the decision making rule and the standard by which toguide such decision?

Who is the best person to make this decision? Is it a regulator,decision makers, or the persons who will endure the risk and the

benefits of the technologyfarmers?

Negative SocioEconomic

Assessment+

Biosafetyassessmentrenders product

as safe

Not approval

Require moreinformation

SEA

BA


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What can a decision maker do with the resultsa socio-economic assessment?...continued

Considering that.

Socio-economic assessment include quite a bit of art in a process thatuses science and scientific tools

Lots of uncertainties and subjectivities

Negative SocioEconomic

Assessment dueto institutional

issues

+Biosafetyassessment

renders productas safe

Not approve

Require moreinformation

SEA

Approve afterresolving

institutional issues

BA


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Key Messages

Robust evidence based priority setting and R&Dcapacity analysis are critical for decision making

Adoption of GE biotechnologies has been overallpositive, but results are variableno different than anyother past technology release

Benefit variability significantly influenced by market,management and institutional issues

Systematic understanding of all potential implications ofissues impacting GM crop adoption and diffusion inSSA is critical

Prudent to judge technology by its own merits

Think about crops and traits of interest to developingcountries


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Key messages Article 26.1 of the Cartagena Protocol

is not mandatory

has a very specific scope, target and objectives focused onbiodiversity

National laws and regulations may incorporate socio-economics

If decision is inclusion then need to focus on Implementing regulations and consequences from inclusion of

socio-economic

Addressing transparency, feasibility, decision makingstandards

Ensure capacity to conduct feasible socio-economicstudies in a cost efficient and timely manner

Falck Zepeda Overview of Policy Issues SSA for the AfDB April 2011

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