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Profiting from Science

The economics of biotech

From a simple math-equation point of view, biotech and genetically engineered (GE) crops make sense. Farmers can save on pesticide and weed applications, as well as other costs related to production, safety, and health.  But the studies, most of which look at aggregate economic benefits, show that net profitability with GE crops is based on many variables and not necessarily guaranteed.  

Following, we’ll look at some of the results from larger-scale studies and drill down into the considerations that might influence growers in the fresh produce industry (for more coverage of biotechnology, see our cover feature and Legal-Ease).

Only Four

Unfortunately, conventional media has hyped and confused the issue of GE produce to the point of misperception, leading many to believe there are a myriad of GE fruits and vegetables out there—a GE counterpart for every organic commodity.  Not so.  There are only four main GE commodities: corn, cotton, soybeans, and sugar beets. 

On average, more that 80 percent of corn and cotton and 90 percent of soybeans and beets currently grown in the United States are genetically modified.  New GE varieties, however, are on the rise—such as Arctic Apples, which do not brown when cut; a citrus greening-resistant orange; and a tomato that resists bacterial leaf blight by using a gene from peppers.  But adoption of these has been slow and met with resistance from many growers due to consumer concerns about GE crops.

Resistant Varieties

With few exceptions, the current selection of GE seeds and crops fall into two categories: insect resistance (IR) and herbicide tolerance (HT). The former, IR crops, express proteins that naturally repel specific pests, while HT crops can tolerate  herbicides, such as the well known and widely used Roundup brand of solutions.

From a broader perspective, IR and HT crops offer both economic and environmental benefits. Essentially, IR crops can save money by requiring less pesticide use; HT varieties allow growers to spray and kill weeds without affecting crops, potentially increasing yields. Environmentally, in developing countries like India which have low safety protocols, using less pesticide is a major health benefit as it limits human exposure to toxic chemicals.

In places like the United States, spraying fewer pesticides on IR crops and tilling fields less with HT crops translates into improved water quality, given that agricultural runoff is the largest water pollutant.

Real Economics

Any true cost-benefit calculation for growers must be done on home turf, and not with hypothetical savings in pesticides, field management, and water quality. For example, even with new GE seeds, many growers experience yield drag, or smaller harvests, in first or subsequent plantings.  Yield drag can result from the new gene not expressing the modified trait or exhibiting undesirable traits.  Also, certain seeds, such as Monsanto varieties, require growers to pay a technology fee and prohibit reseeding or replanting without subsequent fees (the subject of much legal wrangling—see our article in the Legal-Ease department).