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GMO Crops: To Grow or Not to Grow?. Marshall A. Martin Professor and Associate Head Department of Agricultural Economics Purdue University Crop Production Clinic Madison County, Indiana December 7, 2000. Organization of Today’s Presentation. GMO crops .

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gmo crops to grow or not to grow

GMO Crops: To Grow or Not to Grow?

Marshall A. Martin

Professor and Associate Head

Department of Agricultural Economics

Purdue University

Crop Production Clinic

Madison County, Indiana

December 7, 2000

organization of today s presentation3
Organization of Today’s Presentation
  • GMO crops
  • Public attitudes towards GMO crops
organization of today s presentation4
Organization of Today’s Presentation
  • GMO crops
  • Public attitudes towards GMO crops
  • Economics of transgenic corn adoption
organization of today s presentation5
Organization of Today’s Presentation
  • GMO crops
  • Public attitudes towards GMO crops
  • Economics of transgenic corn adoption
  • Crop segregation
organization of today s presentation6
Organization of Today’s Presentation
  • GMO crops
  • Public attitudes towards GMO crops
  • Economics of transgenic corn adoption
  • Crop segregation
  • The Starlink case
what is a gmo crop
What is a GMO crop?
  • Transfer of a gene from a soil bacteria that codes for a protein
what is a gmo crop8
What is a GMO crop?
  • Transfer of a gene from a soil bacteria that codes for a protein
  • Protein becomes a toxin and kills selected insects
insect control with biotechnology
Insect Control with Biotechnology
  • Insect resistant crops commercially available, e.g., Bt corn, cotton, and potatoes
insect control with biotechnology10
Insect Control with Biotechnology
  • Insect resistant crops commercially available, e.g., Bt corn, cotton, and potatoes
  • Transgenic corn for rootworm control under development
crop applications of biotechnology
Crop Applications of Biotechnology
  • Herbicide tolerant crops, e.g., Roundup Ready corn and soybeans
u s crop biotechnology adoption
U.S. Crop Biotechnology Adoption

(USDA Survey) 1999 2000 2000 US US IN

Corn 33% 25% 11%

Soybeans 57% 54% 63%

biotechnology critics

Biotechnology Critics

What are the public concerns?

monarch butterfly
Monarch Butterfly
  • Cornell and Iowa State University laboratory studies of adverse Bt corn pollen impact
monarch butterfly15
Monarch Butterfly
  • Cornell and Iowa State University laboratory studies of adverse Bt corn pollen impact
  • Recent field studies suggest minimal adverse impact
undesired gene flow
Undesired Gene Flow
  • Cross pollination
undesired gene flow17
Undesired Gene Flow
  • Cross pollination
  • Organic farmer concerns
slide19

Food Safety

Allergenicity

slide20

Food Safety

Allergenicity

Unknown diseases or

future health consequences

many europeans uneasy about biotechnology
Many Europeans uneasy about biotechnology
  • Strong environmental movement
many europeans uneasy about biotechnology24
Many Europeans uneasy about biotechnology
  • Strong environmental movement
  • No coherent regulatory system
many europeans uneasy about biotechnology25
Many Europeans uneasy about biotechnology
  • Strong environmental movement
  • No coherent regulatory system
  • Weak public trust in government since mad cow disease (BSE)
many europeans uneasy about biotechnology26
Many Europeans uneasy about biotechnology
  • Strong environmental movement
  • No coherent regulatory system
  • Weak public trust in government since mad cow disease (BSE)
  • EU consumers perceive no benefits with potential risk
many europeans uneasy about agricultural biotechnology
Many Europeans uneasy about agricultural biotechnology
  • Strong environmental movement
  • No coherent regulatory system
  • Weak public trust in government since mad cow disease (BSE)
  • EU consumers perceive no benefits with potential risk
  • Protectionist farm policies
many europeans uneasy about agricultural biotechnology28
Many Europeans uneasy about agricultural biotechnology
  • Strong environmental movement
  • No coherent regulatory system
  • Weak public trust in government since mad cow disease (BSE)
  • EU consumers perceive no benefits with potential risk
  • Protectionist farm policies
  • Strong support for labeling
u s consumer attitudes towards food biotechnology
U.S. Consumer Attitudes towards Food Biotechnology
  • About 3/4 Americans have heard of biotechnology
u s consumer attitudes towards food biotechnology30
U.S. Consumer Attitudes towards Food Biotechnology
  • About 3/4 Americans have heard of biotechnology
  • About 1 out of 3 consumers know that GMO foods are now in our supermarkets
u s consumer attitudes towards food biotechnology31
U.S. Consumer Attitudes towards Food Biotechnology
  • About 3/4 would buy a GMO food if less pesticide use
u s consumer attitudes towards food biotechnology32
U.S. Consumer Attitudes towards Food Biotechnology
  • About 3/4 would buy a GMO food if less pesticide use
  • About 3/4 support FDA labeling of biotechnology foods with health and nutrition information
my biotechnology research
My Biotechnology Research
  • Economics of Corn Insect Control
    • graduate student research
    • ID-219 (extension pub)
    • Review of Agricultural Economics 21(2):1999
    • AgBioForum, 3(1):2000
    • 1998, 1999, & 2000 AAEA Selected Papers
european corn borer
European Corn Borer
  • $1 billion annual damage in U.S.
european corn borer35
European Corn Borer
  • $1 billion annual damage in U.S.
  • Physiological damage
european corn borer36
European Corn Borer
  • $1 billion annual damage in U.S.
  • Physiological damage
  • Mechanical damage
multi state study
Multi-State Study
  • Indiana
  • Illinois
  • Iowa
  • Kansas
slide40
Data
  • Collaborative arrangements
    • Indiana: Bledsoe and Obermeyer
    • Illinois: Steffey
    • Iowa: Hellmich
    • Kansas: Buschman and Higgins
slide41
Data
  • Scouting and spraying costs
slide42
Data
  • Scouting and spraying costs
  • Spraying efficacy
slide43
Data
  • Scouting and spraying costs
  • Spraying efficacy
  • Corn planting dates
    • Probability distribution
    • Yield losses for late planting
slide44
Data
  • Scouting and spraying costs
  • Spraying efficacy
  • Corn planting dates
    • Probability distribution
    • Yield losses for late planting
  • ECB yield damage by planting date
slide45
Data
  • Probability of number of ECB given plant date and infestation
slide46
Data
  • Probability of number of ECB given plant date and infestation
  • Probability of number of ECB per plant given infestation
slide47
Data
  • Probability of number of ECB given plant date and infestation
  • Probability of number of ECB per plant given infestation
  • Overall probability of infestation
results indiana and iowa
Results – Indiana and Iowa
  • Returns to spraying less than per acre scouting costs
results indiana and iowa49
Results – Indiana and Iowa
  • Returns to spraying less than per acre scouting costs
  • Compare Bt corn to non-Bt without a spraying program
results indiana51
Results - Indiana
  • Risk Neutral
results iowa54
Results - Iowa
  • Risk Neutral
results iowa55
Results - Iowa
  • Risk Averse
conclusions
Conclusions
  • Value of Bt corn increases from east to west in Corn Belt
conclusions57
Conclusions
  • Value of Bt corn increases from east to west in Corn Belt
  • Very valuable where SWCB are present
conclusions58
Conclusions
  • Value of Bt corn increases from east to west in Corn Belt
  • Very valuable where SWCB are present
  • Resistance may occur if farmers do not comply with EPA 20% refuge requirement
soil insecticides
Soil Insecticides
  • One-time proactive application to protect roots

BenefitsLimitations

•Simplicity • Efficacy variability

• Known cost • No adult control

($13-$17/acre) • Environmental concerns?

•Secondary pests • Grower exposure to

chemicals

transgenics
Transgenics
  • Insertion of Cry gene from Bacillusthuringiensis into corn genome-root expression leads to root protection

BenefitsLimitations

•Simplicity • Resistance development

• Consistency/efficacy • Refuge requirements

• Reduced insecticide use • GMO marketing concerns

and chemical exposure

indiana research sites http www aes purdue edu agresearch agcenters html
Indiana Research Siteshttp://www.aes.purdue.edu/AgResearch/AgCenters.html
conclusions67
Conclusions
  • Based on cost to the producer, yield benefits, efficacy/consistency, simplicity, and environmental implications, transgenics potentially hold the most economic value for producers
conclusions68
Conclusions
  • Based on cost to the producer, yield benefits, efficacy/consistency, simplicity, and environmental implications, transgenics potentially hold the most economic value for producers
  • But must have a refuge management plan
adopting a transgenic crop production considerations71
Adopting a Transgenic Crop:Production Considerations
  • Technology fee
  • Pest infestation probabilities
adopting a transgenic crop production considerations72
Adopting a Transgenic Crop:Production Considerations
  • Technology fee
  • Pest infestation probabilities
  • Yield drag
adopting a transgenic crop production considerations73
Adopting a Transgenic Crop:Production Considerations
  • Technology fee
  • Pest infestation probabilities
  • Yield drag
  • Reduction in pesticide costs
adopting a transgenic crop environmental considerations75
Adopting a Transgenic Crop:Environmental Considerations
  • Refuge requirements
  • Impacts on beneficial insects
adopting a transgenic crop environmental considerations76
Adopting a Transgenic Crop:Environmental Considerations
  • Refuge requirements
  • Impacts on beneficial insects
  • Tillage system adjustments
adopting a transgenic crop marketing considerations78
Adopting a Transgenic Crop:Marketing Considerations
  • Potential premiums or discounts
  • Market segregation costs
adopting a transgenic crop marketing considerations79
Adopting a Transgenic Crop:Marketing Considerations
  • Potential premiums or discounts
  • Market segregation costs
  • How much premium?
how much premium needed to segregate
How much premium needed to segregate?
  • Recent Midwest commercial farmer survey (Norm Larson of AFS Services)

Premium per Bushel

  • < $0.10 2%
  • $0.10 - $0.20 22%
  • $.020 - $0.30 28%
  • $0.30 - $0.40 26%
  • $0.40 - $0.50 11%
  • >$0.50 12%
what does it take to segregate your crop82
What does it take to segregate your crop?
  • Seed source
  • Planting considerations
what does it take to segregate your crop83
What does it take to segregate your crop?
  • Seed source
  • Planting considerations
  • Harvesting considerations
what does it take to segregate your crop84
What does it take to segregate your crop?
  • Seed source
  • Planting considerations
  • Harvesting considerations
  • Storage challenges
what does it take to segregate your crop85
What does it take to segregate your crop?
  • Seed source
  • Planting considerations
  • Harvesting considerations
  • Storage challenges
  • Hauling and shipping
what does it take to segregate your crop86
What does it take to segregate your crop?
  • Seed source
  • Planting considerations
  • Harvesting considerations
  • Storage challenges
  • Hauling and shipping
  • Beyond the farm gate
the starlink case
The Starlink Case
  • Aventis request to EPA- April ’97
the starlink case88
The Starlink Case
  • Aventis request to EPA- April ’97
  • EPA approved- May ’98 for domestic feed and industrial use only
the starlink case89
The Starlink Case
  • Aventis request to EPA- April ’97
  • EPA approved- May ’98 for domestic feed and industrial use only
  • Grower agreements required
the starlink case90
The Starlink Case
  • Aventis request to EPA- April ’97
  • EPA approved- May ’98 for domestic feed and industrial use only
  • Grower agreements required
  • Acres planted
    • 2,000 in ’98
    • 248,000 in ’99
    • 340,908 in ‘00
u s starlink corn acres 2000
U.S. Starlink Corn Acres: 2000
  • Iowa 134,910
  • Nebraska 41,529
  • Minnesota 35,691
  • S.Dakota 34,290
  • Kansas 21,390
  • Illinois 17,466
  • INDIANA 3,564
  • U.S. 340,908
indiana starlink corn acres 2000
Indiana Starlink Corn Acres: 2000
  • La Porte 594
  • Starke 507
  • Marshall 339
  • Knox 288
  • Jasper 279
  • Delaware 189
  • Lake 180
  • Bartholomew 171
  • Owen 141
  • Randolph 108
the starlink case93
The Starlink Case
  • Sept ’00 found in taco shells and recalls initiated
the starlink case94
The Starlink Case
  • Sept ’00 found in taco shells and recalls initiated
  • Oct ’00 processors stop using Cry9c corn
the starlink case95
The Starlink Case
  • Sept ’00 found in taco shells and recalls initiated
  • Oct ’00 processors stop using Cry9c corn
  • Nov ’00 disruption in grain industry
the starlink case96
The Starlink Case
  • Sept ’00 found in taco shells and recalls initiated
  • Oct ’00 processors stop using Cry9c corn
  • Nov ‘00 disruption in grain industry
  • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn
the starlink case97
The Starlink Case
  • Sept ’00 found in taco shells and recalls initiated
  • Oct ’00 processors stop using Cry9c corn
  • Nov ’00 disruption in grain industry
  • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn
  • Nov ’00 new data submitted to EPA
the starlink case98
The Starlink Case
  • Sept ’00 found in taco shells and recall s initiated
  • Oct ’00 processors stop using Cry9c corn
  • Nov ‘00 disruption in grain industry
  • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn
  • Nov ’00 new data submitted to EPA
  • Dec ’00 report from SAP says “medium risk” with Cry9c and “low probability” of risk to consumers
the starlink case99
The Starlink Case
  • Sept ’00 found in taco shells and recall starts
  • Oct ’00 processors stop using Cry9c corn
  • Nov ‘00 disruption in grain industry
  • Nov ’00 USDA/Aventis agreement to locate and purchase Starlink corn
  • Nov ’00 new data submitted to EPA
  • Dec ’00 report from SAP says “medium risk” with Cry9c and low probability of risk to consumers
  • EPA action expected in a few weeks