The potential of genetically engineered crops is manifold. This occurs even in the midst of the dwindling effects it has on the resource base thus promising a significant increase in productivity hence promoting sustainability regarding food supply as well as the provision of raw materials for the rapidly growing population. Genetically modified crops give rise to environmental benefits that play a central role in alleviating poverty through income generation especially in developing countries. It is through genetically modified foods that there is a nutritional enhancement in the plants hence offering a new platform through which human health is enhanced.
In spite of the contributions that are realized through the introduction of GM crops, its development has aroused lots of opposition. This is particularly high in Europe, and the effect has spilled over to other parts of the globe. This is through such aspects as trade regulations, media coverage as well as the establishment of outreach groups that intend to lobby anti-biotechnology usage. The key driving forces for these issues is the concern over the environment, health risks as well as social implication effects. For example, there is fear that consumption of GM crops and foods derived from them having the potential to undermine traditional knowledge systems, especially in developing countries.
Regarding economics, the increase in privatization of crop improvement research has aroused possible monopolization of the seed market and thus causing adverse exploitation of the farmers in the region. This is because GM crops are associated with novel possibilities that have triggered research dealing with aspects of the economy and policy making. Through this article, there is a clear outline of the economic factors that relate to GM crops.
Status of GM crops
Commercialization of GM crops
The commercial application of the GM crops goes way back to the mid-1990s and has then spread across the globe. According to reports released in 2008, GM crops were grown in over 25 countries in over 120 ha of land. However, the US registered the highest share of GM crops accounting for 50 % of total ha across the globe. Despite the fact that there is a significant increase in approval of GM technologies in some countries in Europe, the commercialization of the GM crops is still negligible. This is because of a low level of public acceptance as well as other regulatory framework factors that are not favorable.
Today, there is a limited number of technologies that are commercialized including herbicide tolerance in soybeans among others. GM maize also has been introduced to confer herbicide tolerance as well as resistance against insects. The resistance against insects is based on a wide range of genes that spring from Bacillus thuringiensis bacterium. It is these Bt genes that play a central role in the control of corn rootworm, corn borers as well as other stem borers.
Micro-level impact of the first generation GM plants
Many of the studies that focus on the micro-level impact of GM plants are currently based on random sample surveys as well as a comparison of adopter performances with non-adopter GM crops. However, this kind of comparison is characterized by selectivity bias. Additionally, its adoption may give rise to an overestimation of technological impacts and underestimation of farmers’ impact under certain conditions. Bacillus thuringiensis technology is a promising platform for control of pests in the environment. Some of the approaches that are geared towards addressing selectivity bias using econometric means include;
Empirical evidence: Bt GMO plants do not entirely get rid of the need for sprays against insects. This is because there still crop damage that occurs. The reason for this is based on the fact that Bt toxins have a high specificity for certain species of pests while insect pests are not affected at all. There is evidence that insecticide-reducing effect, as well as yield increasing the effect, is observed on the international front with high scores reported in Argentina and India.
Conventional cotton farmers often use very low levels of insecticides and thus effectiveness in controlling pests is small. However, the use of pesticides in India is higher. This suggests that there is a yield effect of the Bt technology is influenced by the quantity and quality of insecticides used hence control of damage on cotton. Additionally, the resistance to insecticides, as well as the timing of spraying the GM crops, is also to be considered xxx.
Econometric estimates: using different models, this confirms the net effect on insecticide reduction and increasing effect on yield in using the Bt technology. This is evident through the demonstration that part of the impact variation that was seen in some countries like India was because of integration of the Bt gene in a few cotton varieties that did not suit the location. This is because the positive impact of this gene was undermined by the adverse effect of the germ-plasm.
This indicates that the full benefits of GM plants can be realized through the insertion of the target gene in a wide range of varieties that are locally adaptable. This is the approach that is used in reducing the occurrence of selectivity issues as well as problems associated with endogeneity.
Gross margin effect: farmers that have been shown to adopt Bt technologies have benefited from the economic advantage that is related to female entrepreneurs saving insecticides as well as high yields. This means that on average the gross margin gains are estimated to be very high in the case of such crops as GM Bt maize and GM Bt cotton. Additionally, the cost of seeds is much lower in developing countries as opposed to other regions of the world. This is attributed to the weak aspects that relate to intellectual property rights, seed production, subsidies as well as other price interventions that are set by the government. Additionally, other factors such as agricultural policies play a role in determining the gross margin effects.
Aspects that relate to economics play a pivotal role in determining novel ways through which social benefits can be maximized. This means that more effort is to be directed towards quantification of possible indirect effects of GM plants and the outcome it has on health and the surrounding environment. This is through a significant contribution made by economists in designing efficient regulations and innovative systems. This could finally lead to advanced levels of income generated from the sale of GM crops.