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Global Impact of Biotech Crops: Income and Production Effects 1996-2007

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- Graham Brookes and Peter Barfoot, AgBioForum, 12(2), 184-208.  

This article updates the assessment of the impact of commercialized agricultural biotechnology on global agriculture from an economic perspective. It examines specific global economic impacts on farm income, indirect (non-pecuniary) farm-level income effects and impacts on the production base of the four main crops—soybeans, corn, cotton, and canola.

The analysis shows that there have been substantial net economic benefits at the farm level, amounting to $10.1 billion in 2007 and $44.1 billion for the 12-year period (in nominal terms). The non-pecuniary benefits associated with the use of the technology have also had a positive impact on adoption (in the US accounting for the equivalent of 25% of the total direct farm income benefit). Biotech crops have also made important contributions to increasing global production levels of the four main crops—adding, for example, 68 million tonnes and 62 million tonnes respectively to global production of soybeans and corn.

 Important non-pecuniary benefits have also been derived by many farmers, which in the case of US farmers added a further $5.1 billion to the farm income benefits derived from the technology. GM technology has also resulted in additional production of important crops, equal to an extra 68 million tonnes of soybeans and 62 million tonnes of corn (1996-2007).

The impacts identified are based on estimates of average impact, reflecting the limitations of the methodologies used and the limited availability of relevant data. Applying alternative assumptions that reflect the extremes of low weed and pest pressure in all years and high weed and pest pressure in all years suggests that the impact on farm income probably falls within a range of -15% to +20% around the cumulative estimate of $44.1 billion referred to above. Subsequent research at the trait-and country-level might usefully extend this analysis to incorporate more sophisticated consideration of dynamic economic impacts and broader (outside the United States) examination of the less tangible (non-pecuniary) economic impacts.