Posted: Thursday, February 21, 2013 12:00 PM
Mateusz Perkowski/Capital Press
Agricultural economist Nicholas Kalaitzandonakes of the University of Missouri delivers a lectured Feb. 13 sponsored by Oregon State University about the global distribution of the benefits of biotechnology.
Innovations create 'treadmill effect' for the world's farmers
By MATEUSZ PERKOWSKI
Biotech companies are often perceived as the financial beneficiaries of transgenic crops, but it's actually end users who gain the most, according to an economist.
"Consumers, in the form of savings, have benefited most from the technology," said Nicholas Kalaitzandonakes, agribusiness professor at the University of Missouri.
Kalaitzandonakes spoke about the "winners and losers" from genetic engineering in world agriculture at a Feb. 13 lecture sponsored by Oregon State University's Outreach in Biotechnology program.
Consumers have realized a net economic gain of roughly $130 billion from genetically engineered crops since their adoption began in mid-1990s, according to Kalaitzandonakes' "meta-analysis" of other studies.
Improved yields and other efficiencies associated with biotech crops have boosted production of major food and fiber commodities, thus driving down their costs, he said.
In the aggregate, the price decrease has resulted in a net economic loss to the world's farmers of about $30 billion, he estimated. He compared the price of nonbiotech commodities and their lower yields with biotech crops that produce higher yields at a lower price.
However, the actual impact on growers in different countries is more complex because yields of biotech crops increased dramatically, Kalaitzandonakes said.
Over the long term, all innovations in agriculture result in a "treadmill effect" for the world's farmers, he said. As the benefits of improved yields are transferred to consumers, growers must keep improving just to stay at the same economic level.
However, farmers who stay at the forefront of technological progress are able to reap the value before it ultimately shifts to consumers, Kalaitzandonakes said. "Adopters do gain as they go along."
Farmers in the U.S., for example, have seen a net economic gain from biotech crops while those in the European Union, which has prohibitions against such technology, have experienced a loss, he said. Overall, growers in countries that have embraced biotechnology have profited, but those net gains have been surpassed by the losses felt elsewhere around the globe.
However, the principle applies to other advances -- such as global positioning systems and precision agriculture -- which boost the productivity of some farmers to the detriment of others, Kalaitzandonakes said.
"They are going to do the same thing," he said.
The Center for Food Safety, an environmental group that's critical of biotechnology, doesn't believe staple crops have become more affordable due to genetic engineering.
"There aren't yield increases. That's a myth," said Bill Freese, science policy analyst for the group.
Biotech crops are often tolerant to herbicides, which does increase labor productivity but only temporarily until weeds become resistant to the chemicals, he said.
Improved labor productivity has prompted farms to grow larger, putting upward pressure on land rents, while costing growers more for seed, Freese said.
"I can't imagine how any of this would lead to crops being more affordable," he said.