Adoption of genetically modified crops in South Africa: Effects on wholesale maize prices

Abstract

The ability of genetically modified (GM) crops to increase yields and reduce use of pesticides is well established. Based on food security needs and the central role of agriculture, Africa may stand to benefit from green biotechnology given the low agricultural productivity and the looming food crises in most urban areas. However, the adoption of GM crops in Africa has been slow and limited to a handful of countries. The primary objective of this paper is to evaluate the impact of GM maize adoption in South Africa by looking at wholesale spot prices. We apply a threshold autoregressive model to time series data on the price of maize and GM adoption rates in South Africa to address the following questions: (1) Does the adoption of GM maize excite the growth rate of price of maize in South Africa; (2) Does the error variance of the maize price growth rate exhibit regime-switching behaviour to impact the volatility? The results show evidence that the adoption of GM maize influences the dynamics of the maize price growth rate in South Africa. Further, there is strong evidence that the error variance exhibits regime-switching behaviour with the posterior mean for the error variance in the first regime about twice as large as that of the second regime.

Determinants of genetically modified (GM) maize adoption and the intensity of adoption in OR Tambo District Municipality, Eastern Cape Province, South Africa

“…The results for the intensity of adoption further shows that there exist three main factors that have dualistic influence on adoption and intensity of use of GM maize in the study area, namely membership to a farmer group, access to extension services and farm size. These findings corroborate Abidoye and Mabaya 6 who also identified farm size dualistically influencing adoption decision and intensity of adoption. Extension agent acts as a link between the innovators (researchers) of the technology and users of that technology.…”

“…Commercialization of GM maize in South Africa was initiated in 1998, 5 through the introduction of B t maize (Monsanto 810) and insect resistant B t11 in 2003. 6 The first herbicide tolerant maize in South Africa was planted in 2003, while the first insect resistant maize planted in 2000 (ISAAA, 2016). Adoption of GM maize has been significant among the commercial farmers in South Africa, with a 2009 adoption rate of 26% B t , 15% H t and 20% stacked B t /H t yellow varieties.…”

“…For white maize varieties, adoption rates were 60% B t , 5% H t and 8% stacked B t /H t . 6,7 In 2013, 86% of maize cultivated in South Africa was GM, with 49% stacked B t /H t , 35% B t and 16% H t . 5 Ninety percent of the total maize area in 2015 was under GM maize, with 52.2% of this being stacked B t /H t .…”

Factors influencing adoption of genetically modified crops in Africa

“…With about 90% of GM crop adopters being small-scale farmers, adoption has not been limited to large-scale commercial farmers as previously speculated. Despite these global trends, adoption of GM crops in Africa has been slow and marred with controversy (Abidoye & Mabaya, 2014). As of 2012, Africa grew a combined 2.9 million of the global 170.3 million hectares of GM crops that were grown worldwide (James, 2012).…”

Assessment of Seed Maize Systems and Potential Demand for Climate-Smart Hybrid Maize Seed in Africa

“…The South African seed system has a dual character in tandem with the existing agricultural system that consists of large-scale commercial and small-scale resource-poor sectors. The large-scale sector is characterized by intensive use of hybrid and genetically modified (GM) seed, separation of seed ownership from agricultural production, use of complementary inputs such as mineral fertilizers, pesticides and commercial marketing institutions (Gouse, 2012;Abidoye & Mabaya, 2014). Smallholder farmers in South Africa plant maize on roughly 0.5 to 1 hectare (Gouse, 2012).…”