do they keep food affordable

Expert response from Graham Brookes

Agricultural Economist, PG Economics Ltd, UK

Monday, 04/04/2016 18:52

On the assumption that this question is asking if GMO crops keep food affordable, the answer is yes, they do contribute to keeping food affordable. This arises from the cost reducing and yield enhancing impacts of using GM technology in crops like corn, soybeans, cotton and canola over the last 20 years. As a result of yield gains, between 1996 and 2013, crop biotechnology has been responsible for additional global production of 138 million tonnes of soybeans and 274 million tonnes of corn. The technology has also contributed an extra 21.7 million tonnes of cotton lint and 8 million tonnes of canola. This extra production has contributed extra supplies of food and feed across the world and therefore helped to keep prices lower than they might otherwise have been.

 

In addition, many farmers using GM crop technology have made savings to their costs of production, for example by reducing the amount of money they spend on pest or weed control. The combined effects of extra production and lower costs of production will have contributed to keeping the prices of important crops such as corn and soybeans, and their derivative products such as corn and soybean oils at levels that are lower today than the prices would have been if this technology had not been used.

 

However, assessing the precise impact of GM crop technology on the prices of crops like soybeans, corn, cotton and canola (and derivatives) is difficult. Current and past prices reflect a multitude of factors of which the introduction and adoption of new, cost saving technologies is one. This means that identifying the effect of different factors of influence on prices is far from easy.

 

Also, in general terms, it is important to recognize that the real price of food and feed products has fallen consistently over the last 50 years. This has not come about ‘out of the blue’ but from enormous improvements in productivity by farmers. These productivity improvements have arisen from the adoption of new technologies and techniques. Some economic analysis has been undertaken to estimate the impact of GM crop technology on global prices of crops and their derivatives. All of this analysis estimates that world prices of these commodities would have been higher if this technology had not been used.

 

Examples of such work include:

 

• Moschini et al (2000) estimated that by 2000 the influence of biotech soybean technology on world prices of soybeans had been between -0.5% and -1% (in other words, world prices would have been 0.5-1% higher if GM technology had not been used in soybeans between 1996 and 2001);
• Brookes et al (2010) quantified the impact of biotech traits on production, usage, trade and prices in the corn, soybean and canola sectors. This analysis estimated that if GM crop technology was no longer allowed in world agriculture, that the world prices of corn, soybeans and canola would probably be respectively +5.8%, +9.6% and +3.8% higher than current levels. Prices of key derivatives of soybeans (meal and oil) would also be between +5% (oil) and +9% (meal) higher than current levels, with rapeseed meal and oil prices being about 4% higher than current levels. World prices of related cereals and oilseeds would also be expected to rise by +3% to +4%.

References

 

Brookes G et al (2010) The production and price impact of biotech crops. Agbioforum 13 (1) 2010. www.agbioforum.org

Brookes G and Barfoot P (2015) Global income and production impacts of using GM crop technology 1996-2014, GM Crops Journal 2015. 6: 13-46

Moschini G, Lapan H & Sobolevsky A (2000) Roundup ready soybeans and welfare effects in the soybean complex, Iowa State University, Agribusiness vol 16: 33-55 Graham Brookes: Agricultural Economist at PG Economics Ltd, UK who has been analysing the impact of GM crop technology around the world for 18 years and is the author of 21 peer reviewed papers on the economic and environmental impact of GM technology