Modelling Possible Impacts of GM Crops on Australian Trade

Abstract

The Productivity Commission The Productivity Commission, an independent Commonwealth agency, is the Government's principal review and advisory body on microeconomic policy and regulation. It conducts public inquiries and research into a broad range of economic and social issues affecting the welfare of Australians. The Commission's independence is underpinned by an Act of Parliament. Its processes and outputs are open to public scrutiny and are driven by concern for the wellbeing of the community as a whole. Information on the Productivity Commission, its publications and its current work program can be found on the World Wide Web at www.pc.gov.au or by contacting Media and Publications on (03) 9653 2244.

Global capture of crop biotechnology in developing world over a decade

“…In contrast, Glover [111] argues that benefits of GM crops are not uniform and inconsistent due to obvious variability in farmer income in India; for example, his report suggests that only few small-scale farmers benefited from Bt cotton as reflected in their incomes. Also, a two years survey of smallholder farmer in South Africa by Thirstle et al [112] claim that the amount of labour required to grow Bt cotton is exaggerated and that time and labour to grow Bt cotton did not change.…”

“…For example, Bt cotton, yield increase is reported as follows; 0% in Australia [31], 7-15% in China [49], 9-11% in USA [11], 20% in Mexico [113], 32-34% in Argentina [95], 40-70% in South Africa [53,80] and 43-87% in India [98]. The United States, South Africa and Spain represent 5-8% [111], 11% [37] and 4.7% [36], respectively, for yield increase in Bt maize. In USA, Argentina and Romania, the yield increase for Bt soybean represent À2% to 2% [7,11], 0% [97] and 31% [9], respectively.…”

GM crop technology and trade restraints: economic implications for Australia and New Zealand*

“…Building on a Productivity Commission study (Stone et al 2002), our modification of the GTAP model captures the effects of productivity differences between GM and non-GM crop varieties, household aversion to consuming GM products and substitutability of GM and non-GM products as intermediate inputs into final consumable food.…”

“…Marra et al (2002) present empirical evidence on the positive impacts on yields and profits from adopting GM crop varieties. Following Stone et al (2002), our model simulations assume that total factor productivity is higher for GM than for non-GM varieties by 6 per cent for oilseeds and 7.5 per cent for coarse grains; in the prospective cases of rice and wheat, a conservative 5 per cent difference is assumed. However, because our sensitivity analysis shows that it makes little difference to the results (see appendix to Anderson and Jackson 2005b), we follow Nielsen and Anderson (2001) and Anderson et al (2002) in assuming that GM technology uniformly reduces the level of primary factors needed per unit of output.…”

“…Partial equilibrium studies of adoption at home have been undertaken by Foster (2001) for GM canola and wheat in Australia and by Saunders and Cagatay (2003) for four products in New Zealand, and Stone et al (2002) provide a general equilibrium analysis (using the GTAP model) for GM coarse grains and oilseeds adoption in Australia. The present study builds on those earlier studies in several respects: among other things, it uses the same general equilibrium GTAP model as Stone et al (2002) but a more recent version of the GTAP database, and it examines a wider range of GM-adopting countries and of policy responses; it examines not just coarse grains and oilseeds but also prospective GM versions of wheat and rice (to provide a partial estimate of the opportunity cost of not approving their commercial release); and it examines within the same modelling framework the effects on both Australia and New Zealand without and then with them adopting GM crop varieties.…”