Agricultural Biotechnology Marshall A. Martin Professor and Associate Head Department of Agricultural Economics Purdue University March 2000

What is biotechnology? New name for an old tool Molecular biology Genetic engineering Techniques of rDNA

Medical applications of biotechnology Control of diabetes with Humalin  or Humalog 

What are the new products of biotechnology? Food ingredients, e.g., chymosin

What are the new products of agricultural biotechnology? Animal growth hormones, e.g., bST

What are the new products of agricultural biotechnology? Herbicide tolerant crops, e.g., Roundup Ready soybeans and corn and Liberty Link corn

What are the new products of agricultural biotechnology? Insect resistant crops commercially available, e.g., Bt corn, cotton, and potatoes Corn rootworm resistance in 2001?

Biotechnology Adoption: 1999 Chymosin 80% Bst –Farmers 15% –Herds 30% Crops –Corn 30% –Cotton 50% –soybeans 57%

What are the new products of agricultural biotechnology? Identity-preserved or specific-attribute crops (vaccines, higher oil or starch content, additional amino acids)

Who are the stakeholders? Farmers

Who are the stakeholders? Agribusiness

Who are the stakeholders? Consumers

Who are the stakeholders? Environmentalists

Who are the stakeholders? International traders

Who are the stakeholders? Policy makers

Who are the stakeholders? Ethicists

Biotechnology Critics What are their concerns?

Who regulates agricultural biotechnology? U.S. Department of Agriculture’s Animal and Plant Health Inspection Service

Who regulates agricultural biotechnology? Environmental Protection Agency

Who regulates agricultural biotechnology? Food and Drug Administration

The International Trade Controversy over GMOs Who are our customers for agricultural commodities?

U.S. Corn Use 1999 Exports 21% Feed59% Food, Seed,& Industrial20%

U.S. Shelled Corn Exports 1999 Canada 2% Mexico11% South America 8% EU-15<1% Asia60% (Japan) (30%)

U.S. Corn By-Products Exports 1999 Canada 1% Mexico 3% South America 1% EU-1588% Asia 6% (Japan) (2%)

U.S. Soybean Use 1999 Exports 31% Crush61% Seed & Residual 8%

U.S. Soybean Exports 1999 Canada 1% Mexico15% South America 1% EU-1526% Asia52% (Japan) (16%)

U.S. Soybean Meal Exports 1999 Canada13% Mexico 2% South America15% EU-15 7% Asia33% (Japan) (4%)

Many Europeans uneasy about biotechnology Strong environmental movement

Many Europeans uneasy about biotechnology Strong environmental movement No coherent regulatory system

Many Europeans uneasy about biotechnology Strong environmental movement No coherent regulatory system Weak public trust in government since mad cow disease

Many Europeans uneasy about biotechnology Strong environmental movement No coherent regulatory system Weak public trust in government since mad cow disease EU consumers perceive no benefits with potential risk

Many Europeans uneasy about agricultural biotechnology Strong environmental movement No coherent regulatory system Weak public trust in government since mad cow disease EU consumers perceive no benefits with potential risk Protectionist farm policies

Many Europeans uneasy about agricultural biotechnology Strong environmental movement No coherent regulatory system Weak public trust in government since mad cow disease EU consumers perceive no benefits with potential risk Protectionist farm policies Strong support for labeling

Geographic diversity in views Least support in Austria, Germany, Denmark, Sweden, and Luxembourg

Geographic diversity in views Least support in Austria, Germany, Denmark, Sweden, and Luxembourg More support in Portugal, Spain, Belgium, Finland, and Greece

U.S. Consumer Attitudes towards Food Biotechnology About 3/4 Americans have heard of biotechnology

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 Biotechnology About 3/4 would buy a GMO food if less pesticide use

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

Montreal Agreement “Precautionary principle”- allows refusal of import without scientific basis

Montreal Agreement “Precautionary principle”- allows refusal of import without scientific basis Establishes Clearing House for GMO seeds

Montreal Agreement “Precautionary principle”- allows refusal of import without scientific basis Establishes Clearing House for GMO seeds Label “may contain” GMOs for food and feed

Montreal Agreement “Precautionary principle”-allows refusal of import without scientific basis Establishes Clearing House for GMO seeds Label “may contain” GMOs for food and feed Segregation still likely until 2002 when negotiators must meet again

What should I consider before adopting GMO crops? Technology fee

What should I consider before adopting GMO crops? Technology fee Probability of a pest problem

What should I consider before adopting GMO crops? Technology fee Probability of a pest problem Per acre return of GMO vs non-GMO

What should I consider before adopting GMO crops? Technology fee Probability of a pest problem Per acre return of GMO vs non-GMO Is there a market?

What should I consider before adopting GMO crops? Technology fee Probability of a pest problem Per acre return of GMO vs non-GMO Is there a market? Will I need to segregate the crop?

Should I adopt GMO crops in Indiana in 2000? Bt corn? –No in most Indiana locations due to low probability of ECB infestation ID-219 “Economics of Bt Corn”

Should I adopt GMO crops in Indiana in 2000? Roundup soybeans? –Maybe, depending on weed pressure, soil erosion concerns, input costs, and expected markets

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