INFORMATION SYSTEMS FOR BIOTECHNOLOGY


October 2002
COVERING AGRICULTURAL AND ENVIRONMENTAL BIOTECHNOLOGY DEVELOPMENTS


.pdf version
IN THIS ISSUE:
Biotechnology and Genetically Modified Crops at the World Summit on Sustainable Development
Hypoallergenic Foods - Soybeans and Peanuts
Appellate Courts Find RoundUp-Resistant Patent Claims Irresistible
Bt Cotton in South Africa: Adoption and Impact on Farm Incomes Amongst Small- and Large-Scale Farmers
Farm Level Transgenic Crop Adoption Rates In South Dakota



BIOTECHNOLOGY AND GENETICALLY MODIFIED CROPS AT THE WORLD SUMMIT ON SUSTAINABLE DEVELOPMENT
Jennifer A. Thomson

Biotechnology and genetically modified (GM) crops were not listed as topics on the formal agenda of the World Summit on Sustainable Development (WSSD), however they received considerable attention, much of it contentious, from both sides of the biotech issue. Issues pertaining to GM crops were raised in many guises in discussions involving Food Aid, sustainable livelihoods, biopiracy, and biodiversity. In fact, the GM crop debate comprised a key unofficial discussion point of the Summit.

A number of stakeholders were involved in the biotechnology debate. They included AfricaBio, the African Biotechnology Stakeholders Forum (ABSF), the Agricultural Biotechnology Support Project (ABSP), A Harvest Biotech Foundation International (AHarvest), Foundation for Education, Science and Technology (FEST), International Plant Genetic Resources Institute (IPGRI), and the International Service for the Acquisition of Agri-biotech Applications (ISAAA). In addition, 57 participants from twelve African countries attended a workshop, held prior to the summit, on effective biotechnology communications. They developed position papers on key biotechnology issues including:

  • Genetic modification and biodiversity.
  • The impact of genetic modification on biosafety.
  • Multilateral trade and the World Trade Organization.
  • Bio-ethics.
  • Intellectual property rights and farmers' rights.
  • GMO labeling.
  • GM impacts on sustainable agriculture.

Brochures on these topics were developed and circulated throughout the Summit.

Various stakeholders occupied stands at both the Ubuntu Village and The Expo Centre (NASREC) venues—the latter receiving the most NGO participation. The South African Ubongwa Farmers Association's stand drew large crowds. The group had received wide media attention as an example of small-scale farmers who had used GE insect resistant cotton most successfully. The farmers spoke about their experiences with the technology and the positive impact it had made on their lives.

A Biotechnology and GMO Commission of the Civil Society forum took place on August 29th. The forum was attended by African biotechnology stakeholders, including developing country farmers from South Africa, Kenya, India, and the Philippines, as well as consumer groups, government officials, and parliamentarians. However, the participation of AfricaBio and other UN accredited NGOs such as ISAAA was denied. Science was either neglected or distorted during much of the forum.

A daylong workshop on the role of biotechnology and biodiversity in sustainable development was attended by more than 350 delegates. Dr. Ben Ngubane, Minister of Science and Technology for South Africa, gave the opening address. He announced his government's strong support for biotechnology and stated that GM crops could be part of the solution for sustainable agriculture in Africa. A number of recommendations were highlighted at the close of the meeting. These included the need to:

  • increase funding for science and infrastructure in developing countries.
  • foster public awareness, dialogue, communication, and understanding of biotechnology to ensure that end-users understand the issues and are given the opportunity to experience the benefits of biotechnology.
  • address concerns about environmental safety of the technology on an ongoing basis.
  • develop Africa's own scientific and technological solutions to African problems. This applies equally to other developing countries.
  • enhance opportunities for investment in biotechnology in developing countries, including partnerships between civil society and the private sector.
  • give immediate attention to the implementation of Chapter 16 of Agenda 21 of the Cartagena Protocol on Biosafety.

Acknowledgement

The author thanks AfricaBio for access to its draft report on the WSSD.

Jennifer A. Thomson
Department of Molecular and Cell Biology
University of Cape Town
JAT@science.uct.ac.za

Editor's note: Jennifer Thomson has been invited by United Nations secretary general Kofi Annan to address the United Nations in November on genetically modified foods. She will give an address on GM crops for developing nations.



HYPOALLERGENIC FOODS - SOYBEANS AND PEANUTS
Ricki M. Helm, A. Wesley Burks, and Eliot Herman

Food Allergen Risks
Food-induced anaphylaxis following the ingestion of "hidden allergen" sources is the most common reason for someone with food allergy to report to the emergency department with an anaphylactic reaction. Both peanuts and soybeans are often concealed in different foods because they are cheap, rich in protein, and frequently used to change the viscosity of other foods. For individuals with food allergy, strict avoidance of the specific food/protein is the only accepted treatment for food-induced allergic reactions. This is often an unrealistic therapeutic option, e.g., soybeans and peanuts as food sources/supplements can be found in approximately 6,000 foods and in most cases are not labeled on the commodity. As avoidance is difficult, investigations have been aimed to reduce or eliminate the allergen source from the two major food crops, soybeans and peanuts.

Soybean Allergy
Several investigators including Burks, Ogawa, and Helm have identified approximately 15 soybean proteins that could be recognized by sera from soybean-sensitive individuals. Gly m Bd 30K, identified as the major allergen in patients with soybean related atopic dermatitis in Japan, and its homolog, previously identified as P34 by Herman and coworkers, is a constituent of protein storage vacuoles in soybean seed cotyledons. Gly m Bd 30K/P34 is a unique member of the papain superfamily of cysteine proteases possessing a high level of homology to other members of the papain family of enzymes, differing only because it lacks the conserved catalytic cysteine. Two additional proteins, the beta subunit of conglycinin (Gly m Bd 60 K) and a vicilin-like glycoprotein (Gly m Bd 28 K), are considered to be major allergens in patients with atopic dermatitis, according to investigations conducted in Japan. Minor allergens include soybean trypsin inhibitor and members of the glycinin protein family.

Peanut Allergy
Peanut allergy, regarded as one of the most significant food allergies, is the focus of research investigations directed by Dr. A. Wesley Burks. Two major allergens, Ara h 1 and 2, and a minor peanut allergen, Ara h 3, have been identified as proteins belonging to the vicilin, conglutin, and glycinin family of seed storage proteins. These proteins have considerable amino acid homology to the soybean allergens. This homology can be significant for individuals with either soybean or peanut allergy. Investigations with peanut allergens by Burks' research team indicate that the epitope (short amino acid sequences that bind IgE) complexity of this natural food can be recreated using recombinant allergens, and allergen derivatives can be genetically engineered to be non-IgE binding. These modified proteins are being investigated in animal models (mice and swine) for use in current practices of specific immunotherapy.

Food Allergy Therapy
When considering a therapeutic intervention for the treatment and prevention of food allergies, the desired therapy option should be safe, relatively inexpensive, and easily administered. Several forms of immunomodulatory therapies are currently being investigated; gene silencing of the particular protein allergen in a food source, peptide immunotherapy, mutated allergen immunotherapy (all forms of hypoallergenic treatment regimens), allergen DNA immunization, vaccines, and anti-immunoglobulin E (anti-IgE) therapy. Research efforts in our combined laboratories have been directed toward: 1) altering soybean and peanut allergens to reduce their ability to initiate an allergic reaction through genetic modification; and 2) gene silencing (soybean allergens). The goal of these methods is to provide a hypoallergenic food source or a food source with little or no allergen that can be safely ingested by food allergic individuals.

Hypoallergenicity
Traditionally, hypoallergenicity in reference to food allergy has been related to amino acid-based infant formulas, e.g., cow's milk or soy formulations. However, these hydrolysate-based products can have small peptides that are still immunoreactive and can contribute to allergic reactions. Reduction of allergenicity of dietary products (hypoallergenicity) can be assessed by in vitro immunological methods (IgE-binding tests: radio- or enzyme-linked immunosorbent assays, known as RAST and ELISA, respectively; and SDS-PAGE/IgE-immunoblot analysis), and in vivo with skin tests, patch tests, and oral challenge tests. Similar standards should be required for any food considered to be hypoallergenic.

Genetically Modified Foods
As early as the 1990's, biotech companies were producing genetically modified foods. Genetically engineered crop plants that have traits including insect resistance, modified starch, herbicide tolerance (glyphosate-tolerant soybean), modified oils, disease resistance, male sterility, and delayed ripening (FlavrSavr tomato) have been introduced into the marketplace. In the case of glyphosate-tolerant soybean, Burks and Fuchs were able to demonstrate substantial equivalence, i.e., the tolerant soybean and native soybean seed extracts had the same IgE-binding pattern when analyzed with serum from soybean-sensitive individuals. Analysis of protein extracts prepared from glyphosate-tolerant soybeans showed that both the composition and quantity of proteins were qualitatively and quantitatively indistinguishable from results produced with the parental soybean variety, as well as other commercial soybean preparations. This study represented the successful introduction of the gene for 5-enol-pyruvylshikimate-3-phosphate synthase into the soybean without altering the allergenicity of seed components.

Progress in engineering genetic, hypoallergenic food includes techniques such as antisense technology (gene knockouts) and single site amino acid substitutions to disrupt epitopes with hypoallergenic potential. Transgenic and site-directed mutagenesis techniques have been applied successfully to produce variants of allergens with reduced IgE-binding reactivity. Matsuda's group in Japan developed an antisense RNA strategy to repress the allergen expression in maturing rice seeds. The allergen content of a non-transgenic rice was about 300 micrograms per seed, while that of a transgenic rice with antisense allergen genes for a 16 kDa allergen was about 60-70 micrograms/seed, indicating that the rice allergen content of the transgenic rice seeds was significantly lower than those of non-transgenic controls. Using a canine model for food allergy, Buchanan demonstrated that thioredoxin reduction of intermolecular disulfide bonds of wheat allergens statistically decreased the allergenicity of active proteins and further increased the allergen's susceptibility to proteolysis and heat and biochemical activity. However, concerns about the concentration necessary for sensitization and the induction of the allergenic response are not well known and await further investigation.

Soybean Hypoallergenic Sources
Ogawa's group was able to eliminate beta-conglycinin and Gly m Bd 28k allergens by developing a mutant line induced by chemical breeding techniques. Gly m Bd 30K, the strongest allergen, was almost completely eliminated using a salting out and centrifugation technique. In preliminary trials, about 80% of soybean-sensitive patients could ingest soybean products made with the combined hypoallergenic soybean source without adverse reaction. However this preparative procedure has not been adopted and has a limitation for utilization by the processed food industry.

All domesticated and wild relatives of accessioned soybeans contain Gly m Bd 30K/P34, as assayed by immunological cross-reactivity with a monoclonal antibody, which indicates that a line lacking this protein would need to be prepared using either genetic modification or mutation. Herman and Helm, collaborating with Drs. Kinney of DuPont and Jung of Pioneer HiBred, developed and characterized a Gly m Bd 30K/P34 soybean line by silencing seed-specific expression of the protein's cDNA. The isolated and expanded homozygous line lacked detectable Gly m Bd 30K/P34 protein, as assayed by both a specific monoclonal antibody and by cross-reactivity with IgE from soybean-sensitive persons. Gly m Bd 30K/P34 knockout plants grow and develop normally, and the seeds have the same structure and composition as those from control plants. The resulting soybeans represent the first null allergen source for the immuno-dominant allergen Gly m Bd 30K/P34.

Conclusion
The major focus of preparing hypoallergenic food sources is to provide a product that is safe and will not induce life-threatening allergic responses in highly sensitive individuals upon accidental ingestion. This does not necessarily imply complete elimination or modification of the allergen source—the product should be first tested for both allergenic activity by in vitro means and then clinically by challenging sensitive individuals, to arrive at a margin of safety based upon these criteria. Future studies on food allergens and hypoallergenic allergens will continue to establish standards by which measurements of hypoallergenic products produced by whatever means will be safe for accidental ingestion by the sensitive individual. Recommendations are being established and updated regularly by concerned scientists and agencies to provide safe genetically engineered food products (FAO/WHO Joint Consultation on Allergenicity of Foods Derived from Biotechnology;
http://www.who.int/fsf/GmFood/index.htm).

References

Bannon GA et al. 2001. Engineering, characterization and in vitro efficacy of the major peanut allergens for use in immunotherapy. International Archives of Allergy and Immunology 124: 70-2.

Buchanan BB et al. 1997. Thioredoxin-linked mitigation of allergic responses to wheat. Proceedings of the National Academy of Sciences, USA 94: 5372-7.

Helm RM et al. 2000. Peanut Allergy: From Allergens to Immunotherapy. In Recent Developments in Allergy and Clinical Immunology, ed. SG Pandalai, 11-21. Research Signpost.

Nakamura R and Matsuda T. 1996. Rice allergenic protein and molecular-genetic approach for hypoallergenic rice. Bioscience, Biotechnology, and Biochemistry 60: 1215-21.

Ogawa A et al. 2000. Soybean allergens and hypoallergenic soybean products. Journal of Nutritional Science and Vitaminology 46: 271-9.

Ricki M. Helm1; A. Wesley Burks1; Eliot Herman2

1UAMS/ACHRI
Little Rock, AR

2Plant Genetics Research Unit, USDA/ARS
Donald Danforth Plant Science Center
St Louis, MO



APPELLATE COURTS FIND ROUNDUP®-RESISTANT PATENT CLAIMS IRRESISTIBLE
Phillip B. C. Jones

In 1997 and 1998, Mississippi farmer Homan McFarling purchased Monsanto Company's RoundUp Ready ® soybean seeds. He also signed a Technology Agreement that required him to use the seeds for planting a commercial crop in a single season and that prohibited him from saving any seed for replanting or supplying saved seeds to anyone else for replanting. Yet McFarling did save 1500 bushels of patented soybeans from his harvest in one season and planted them the next season. He repeated this in the following year and declared that he would plant soybeans saved from the 2000 harvest in 2001.

Monsanto sued McFarling in the Eastern District of Missouri, alleging patent infringement and breach of contract and seeking a preliminary injunction. The company based its infringement allegation upon US Patent Nos. 5,633,435 and 5,352,605, which claim GM plants resistant to glyphosate herbicides such as RoundUp, the seeds for these plants, the modified genes, and methods for producing GM plants. The district court granted Monsanto's motion for preliminary injunction, prohibiting the farmer from using the seed obtained from crops grown from the patented soybean seed.

On appeal, McFarling argued that Monsanto's Technology Agreements violate antitrust law. In the farmer's view, the agreements create an illegal tying arrangement by requiring farmers to buy new RoundUp Ready seed each year, instead of allowing farmers to produce their own RoundUp Ready seed from the previous year's crop.

The Court of Appeals for the Federal Circuit did not buy this argument. In a decision published on August 23, the court noted that McFarling had no obligation to buy Monsanto seed in the future as a condition of buying seed in the present. The court could find no barriers to prevent McFarling from switching to other soybean seeds, including several other types of herbicide resistant soybeans. An inventor of a new technology does not violate antitrust laws merely because consumers favor the patented product, the court explained.

McFarling also argued that the agreements were unenforceable, because the prohibition against using the patented soybeans to produce additional seeds for planting violates the doctrines of patent exhaustion and first sale. Here, the principle is that an authorized sale of a patented product exhausts the patent monopoly as to that product. Therefore, a person who purchases a patented product from an authorized seller may use or resell the product free of conditions that the patent owner may wish to impose.

However, the court decided that the first sale doctrine of exhaustion of patent right is not implicated. This case involved Monsanto's restrictions on seed that McFarling had grown from the original purchased batch. Since the patentee had not sold the new seeds, they entailed no principle of patent exhaustion.

Taking another approach, McFarling contended that the contractual prohibition against using patented seeds to produce new seed for planting violates the Plant Variety Protection Act, which permits farmers to save seeds of registered plants. The court disagreed that this right under the PVPA imparts the right to save seeds patented under the Patent Act.

The court affirmed the district court's decision to grant the preliminary injunction. A copy of the decision can be found on the Federal Circuit's Web site (http://www.fedcir.gov).

Round Two in Canadian RoundUp Case
A Saskatchewan farmer also recently lost a case to Monsanto. The Canadian Federal Court of Appeal upheld a trial court's ruling that Percy Schmeiser was liable for infringing the company's patents. Briefly, Monsanto Canada, Inc. had sued Schmeiser for infringing its Canadian patent on a chimeric plant gene encoding 5-enolpyruvylshikimate-3-phosphate synthetase, an enzyme that confers resistance to glyphosate herbicide. (See, "Will the Oncomouse Squeak Through the Supreme Court of Canada?" ISB News Report, July 2002.) Canadian Letters Patent No. 1,313,830 also includes claims to plant cells that contain the chimeric plant gene. Monsanto Canada licenses Canadian commercial seed growers to grow Roundup Ready canola, a transgenic plant expressing the patented gene. Although Roundup Readycanola was discovered growing in Schmeiser's fields, the farmer did not have a license from Monsanto.

After the Federal Court of Canada decided against Schmeiser, the farmer filed 17 issues for reconsideration with the Federal Court of Appeal. However, the appellate court affirmed the trial court's verdict in a decision published on September 4.

In one of the grounds for appeal, Schmeiser asked how Monsanto's patent could be infringed if he had not used RoundUp? The court, however, did not find that the use of the herbicide is essential for patent infringement, because Monsanto's claims do not include the requirement of RoundUp use. Therefore, the claims can be infringed by someone who cultivates the herbicide tolerant plants, but does not spray the plants with the herbicide.

During the trial, Schmeiser argued that the RoundUp-resistant canola plants appeared on his farm by accident, perhaps the result of cross-field breeding by wind or insects. The Trial Judge decided that it did not matter how the canola arrived on the farm. The question was whether the defendant made, used, or sold Monsanto's patented invention.

The appellate court was sympathetic to the argument that it would be unfair to grant Monsanto a remedy if a farmer were unaware that RoundUp Ready canola grew in the farmer's fields. But the court believed that this was not the case here, where evidence presented at trial indicated that Schmeiser knew or should have known that his plants were glyphosate resistant. The court emphasized that, in these circumstances, Schmeiser was vulnerable to Monsanto's infringement claim.

Percy Schmeiser reportedly plans to appeal the verdict to the Supreme Court. A copy of the latest decision is available from the Federal Court of Canada Web site (http://decisions.fct-cf.gc.ca/fct/2002/2002fca309.html).

Other Biotech Law Bits to Round Things Out
August 2: The Office of Science and Technology Policy in the US announced its proposed federal actions to address regulatory issues arising from the expanding development and use of biotechnology-derived crops. According to the Office's Federal Register notice, the objective is to update field testing requirements for biotechnology-derived plants, and to establish early food safety assessments for new proteins produced by such plants that are intended for food or feed use. Implemented through the coordinated actions of the Food and Drug Administration, Department of Agriculture, and Environmental Protection Agency, the measures are intended to prevent the occurrence of low levels of biotechnology-derived genes, and proteins expressed from those genes, in commercial products until safety standards are met. A copy of the Federal Register notice is available from the Office of Science and Technology Web site (http://www.ostp.gov/html/redregbio.html).

August 21: In 1999, Brassica Protection Products LLC and Johns Hopkins University sued various defendants for infringing patents on the production and consumption of cruciferous seed sprouts to reduce the level of carcinogens. For example, US Patent No. 5,725,895 claims methods for preparing a glucosinolate-rich food product by germinating cruciferous seeds and harvesting sprouts prior to the two-leaf stage. Another patent (US Patent No. 5,968,567) includes claims to methods for preparing a human food product comprising cruciferous sprouts with high Phase 2 enzyme-inducing potential and indole glucosinolates. A Maryland district court, however, decided that these patents are invalid due to a lack of novelty. The plaintiffs appealed the decision to the Federal Circuit, which recently affirmed the lower court's decision.

On appeal, Brassica argued that the prior art discloses growing and eating sprouts without mention of any glucosinolates or Phase 2 enzyme-inducing potential and without specifying that particular sprouts with these characteristics should be assembled into a food product. Conceding that the inventors recognized certain beneficial characteristics of sprouts, the Federal Circuit nonetheless decided that "the glucosinolate content and Phase 2 enzyme-inducing potential of sprouts necessarily have existed as long as sprouts themselves," and that these inherent characteristics are novelty-destroying prior art. Regardless of whether one of ordinary skill in the art had recognized these characteristics, the court held, Brassica did not invent anything new.

August 14: The US EPA announced that two agbiotech companies are not following proper procedures for preventing the spread of GM corn in Hawaii. According to the agency, Pioneer Hi-Bred International, Inc. planted GM corn too close to other crops, and Dow AgroSciences planted the wrong type of corn in a buffer zone around the company's experimental crop. The companies face a $5,500 fine per violation.

September 6: The FDA released draft guidelines on the production of biological products with bioengineered plants or plant materials. According to the guidelines, plants used to produce drugs should be chosen so that they do not contain allergenic compounds and cannot spread easily. A copy of the guidelines is available from the FDA Web site (http://www.fda.gov/cber/gdlns/bioplant.htm).

Phillip B. C. Jones, PhD., J.D.
Seattle, Washington
phillipjones5939@msn.com



Bt COTTON IN SOUTH AFRICA: ADOPTION AND IMPACT ON FARM INCOMES AMONGST SMALL- AND LARGE-SCALE FARMERS
Johann Kirsten and Marnus Gouse

Introduction
South Africa is one of few developing countries, and the only one in Africa, that has adopted genetically modified crops for commercial production. Insect resistant cotton has been produced since the 1997/1998 season and insect resistant yellow maize since the 1998/1999 season. For the 2001/2002 season, herbicide tolerant cotton has been made available for commercial production and herbicide tolerant soybeans have been introduced on a small scale. Insect resistant white maize has also been released in limited quantities.

In the 2000/2001 season, an estimated 300 large-scale commercial farmers produced 95% of South Africa's cotton crop. The other 5% were produced by about 3,000 small-scale farmers on the Makhathini Flats (KwaZulu-Natal Province) and another 312 farmers in the Tonga area (Mpumalanga Province). A total of 157,515 bales (200kg each) were produced on 56,692 hectares, with smallholders contributing a total of 7,300 bales.

Reasons for adoption of Bt cotton
Farmers in the Makhathini Flats have increased their adoption of Bt cotton from 7% in 1997/1998 to 90% in 2001/2002. From looking at cotton seed sales (fig. 1), it is clear that cotton farmers have reacted positively to the introduction of GM cotton seed, with almost 80% of cotton seed used being genetically modified.


Figure 1: Adoption of new cotton seed varieties (* Estimation)
Source: Cotton SA, Journal to the Cotton Industry

Reasons for adoption: Large-scale farmers
In an analysis using our current large-scale farmer data set, factors such as area planted, age, education, and credit did not render significant results as reasons of adoption. Later studies will focus more on this aspect. For the purpose of this paper, we hypothesize that the perceived and real benefits, as indicated by seed agents and observed through our own cotton production experience, can be accepted as partial reasons for adoption of the new technology.

All the commercial farmers surveyed had planted insect resistant cotton in the current season or in the past. Of the 43 large-scale farmers interviewed, 39% indicated that the most important benefit of Bt cotton is the saving on pesticides and application cost. Peace of mind about bollworms was the second biggest reason for adoption, with 25% of farmers indicating the benefit as most important. When asked to indicate all the benefits of insect resistant cotton, 77% of farmers indicated peace of mind and 72% indicated better crop and risk management as a benefit. All the surveyed large-scale farmers were involved with other farming activities during the cotton season. Therefore, the large indication of peace of mind is not surprising. Using hired labor, scouting and spraying is especially difficult over the Christmas — New Year period, and this is a crucial time in the production cycle of cotton in South Africa. The very low labor saving perception can indicate that farmers feel that pesticide application is more capital than labor intensive.

Benefits of Bt cotton as indicated by large-scale cotton farmers

Benefits and reasons for adoption

Most important reason / benefit (% of farmers)

Specific benefit
(% of farmers)

Increased yield

7%

52%

Pesticide saving

39%

62%

Better crop and risk management

18%

72%

Better boll worm control

9%

55%

Peace of mind about bollworms

25%

77%

Labor saving

0%

2%

Better for environment

0%

37%

Other
 

9%

When asked about the disadvantages of Bt cotton, the prominent answer was the cost of seed and the technology fee. This is also the reason why some farmers have stopped planting Bt seed. Large-scale farmers try to stretch a 25kg bag of Bt seed as far as possible using precision planters. A 25kg bag of Bt seed costs around R210 ($21) with an additional R600 ($60) technology fee. An irrigation farmer planting 20kg of seed per hectare indirectly spends R 480 (US$ 48) on bollworm control. Some commercial farmers who have already invested in spraying machinery feel they can control bollworms for less. Most farmers don't spend R480/ha on the control of bollworms in a normal year, but, when worm pressure is high, chemical and application costs can easily exceed this additional fee. In the 2001/2002 season, Monsanto, in alliance with Delta Pine, implemented a possibly more acceptable technology fee payment system. Farmers can now pay a R400/ha ($40) technology fee for irrigation land and R120/ha ($12) for dryland, on the condition that they present a GPS map of the planned cotton field. The R600/bag ($60) technology fee system is also still available for farmers to use, so a farmer can decide which option is the most cost effective for him.

Reasons for adoption: Small-scale farmers
The impressive increase in adoption of Bt cotton by small-scale farmers from 7% in 1997/1998 to around 90% in the 2001/2002 season can mainly be attributed to the success of the farmers who first adopted the new technology (Ismael et al., 2001). Looking at the benefits indicated by the adopters and the perceived benefits indicated by the then non-adopters, it is very interesting to compare the before and after benefit perception. While 32% of non-adopters indicated that a yield increase is the most important benefit of Bt cotton, increased yield was only indicated as the most important benefit by 18% of adopters. Increased yield is still indicated as a reason by more than 58% of adopters, but it seems that the most important benefit of Bt cotton after adoption is pesticide saving. In rural areas where infrastructure, transport, and services are almost nonexistent, managing pest infestation in crops is a major problem.

Difference in adoption behaviour between large-scale and small-scale farmers

Compared to small-scale farmers, the increased yield benefit is not that important to large-scale farmers. Although more than 50% of large-scale farmers indicated increased yield as a benefit, it is seen more as a bonus. The big advantage for large-scale farmers is that insect-resistant cotton gives them the peace of mind and the managerial freedom to go on with other farming activities. As previously mentioned, the whole process of pesticide application is more capital and management intensive than labor intensive for large-scale farmers. Large-scale farmers have to hire an airplane or use their own tractors to apply pesticides. The difficulty lies in scheduling sprays between rain and irrigation events.

Benefits of Bt-cotton as indicated by small-scale farmers

Real and perceived benefits

Most important benefit (% of farmers)

Specific benefit
(% of farmers)

Non-adopters

Adopters

Non-adopters

Adopters

Increased yield

32%

18%

62%

58%

Better quality cotton

5%

3%

12%

30%

Higher price for cotton

0%

1%

12%

15%

Pesticide saving

35%

50%

77%

70%

Labor saving

10%

10%

42%

35%

Application saving

5%

3%

30%

18%

Other

10%

13%

27%

40%

The large percentage of small-scale farmers indicating that pesticide saving is the most important benefit is not really surprising. When one includes saving on application cost and labor along with pesticide saving, more than 63% of small-scale Bt-adopters agree on the entire bollworm control benefit of Bt cotton. Pesticide application implies huge difficulties for small-scale cotton farmers—with a low level of education amongst small-scale farmers, problems with mixing pesticides and calibrating knapsack sprayers for different pesticides cause concern about the real efficacy and effectiveness of pesticide application. Applying pesticides is very labor intensive for small-scale farmers. Walking with a knapsack sprayer on his back, a farmer has to cover a distance of between 10 and 20 kilometres per hectare. Water is a very scarce commodity (especially in the Tonga community) and has to be fetched from communal water points with water trucks or some other transport. By the time a farmer has noticed bollworms, bought pesticides, and started to spray, severe damage has already been done.

Large-scale cotton farmers indicated other indirect benefits of Bt cotton. Spraying less pesticide or none at all has caused predator insects to flourish. More than 46% of farmers noticed more beneficial insects on their Bt cotton fields.

Impact on farm income

The adoption of Bt cotton impacts farm income in three main ways:
  • Decreases input cost through savings on pesticide chemicals and application costs
  • Increases input cost through higher seed price and additional technology fee
  • Increases yield

Yield effects
The average cotton yield of adopters was significantly higher than that of non-adopters for both large-scale and small-scale farmers. There was also a yield difference between the cotton produced under pivot irrigation and flood irrigation.

Cost effects
It is normally argued that Bt technology would save costs mainly through decreased use of pesticides. The clear cost advantage of applying less pesticide is wiped out when the higher cost of Bt seed and the technology fee are taken into account.

Impact on net farm income
Despite a higher seed cost and the additional technology fee, both large-scale and small-scale farmers realize higher net incomes per hectare due to the higher yield and savings on pesticide chemicals. This income benefit will increase even more when cost of application is taken into account. The advantage of fewer chemical applications for small-scale farmers is both financial and health related—less labor and water transport needed, and there is less exposure to toxic chemicals. Large-scale farmers save on fuel, repairs, and maintenance or on flying costs. There is also less tractor traffic in the cotton fields, causing indirect benefits to soil quality.

Income effect of adoption of Bt-cotton

 

Small-scale farmer

Large-scale farmer
  Dryland
(R/ha)
Dryland
(R/ha)
Irrigation
(R/ha)

Mean yield benefit per hectare @ R2.75/kg

498.19

314.44

1740.75

Mean reduced pesticides benefit (chemicals)

32.17

113.83

292.91

Mean increased seed and technology fee detriment

(163.08)

(234.17)

(570.23)

Income advantage

367.28

194.10

1463.43

Conclusions
The very impressive adoption rate of insect resistant cotton in South Africa can be attributed to different benefits enjoyed by adopters. Both large-scale and small-scale farmers enjoy financial benefits due to higher yields and despite higher seed costs. It is encouraging to hear reports of cross-pest control improvements due to less spraying. Certainly, diverse analysis of the results from the various surveys are underway and promises to deliver interesting results on the various impacts Bt cotton is having on the South African cotton industry.

References

Anthony M. 2002. Department of Agriculture, Mpumalanga, Personal communication.

Bennett A. 2001. Monsanto South Africa, Personal communication.

Cotton SA Katoen. A Journal for the Cotton Industry. 2002. Vol 5 Nr. 2, May.

Cotton South Africa. 2002. 4th Cotton Crop Report for 2001/02 production year, May.

Ismaël Y, Beyers L, Piesse J, and Thirtle C. 2001. Smallholder adoption and economic impacts of Bt cotton in the Makhathini Flats, Republic of South Africa. Report for Dfid Natural Resources Policy Research Programme, Project R7946, April 2001.

Olivier D. 2002. Delta Pineland South Africa, Groblersdal, Personal communication.

Van Jaarsveld J. 2002. Delta Pineland South Africa, Makhathini Flats, Personal Communication.

Johann Kirsten and Marnus Gouse
Dept. of Ag. Economics, Extension and Rural Development
University of Pretoria, South Africa
mgouse@tuks.co.za


FARM LEVEL TRANSGENIC CROP ADOPTION RATES IN SOUTH DAKOTA
Evert Van der Sluis and Angella Van Scharrel

Use of transgenic crops has spread rapidly among agricultural producers in the United States. However, there are differences in adoption rates for varieties of the three major transgenic crops currently available (corn, cotton, and soybeans) between individual farmers, geographical areas, and climates. The study reported here provides an attempt to provide an empirical assessment of determinants of transgenic crop adoption rates at the farm level.

South Dakota, a predominantly agricultural state in the northwestern tier of the US Corn Belt, ranked first in the proportion of total cropland area devoted to transgenic corn and soybean varieties among the major US corn and soybean producing states in both 2001 and 2002. While the state is not representative of US agriculture in general, the widespread adoption of these transgenic crop varieties in the state begs the question of what the reasons for the high adoption rates are. Attempts to answer this question may also help provide insights into attitudes among US farmers in general.

To assess farmer attitudes towards transgenic varieties and to analyze factors contributing to the adoption of transgenic crops among agricultural producers, we conducted a survey among agricultural producers in South Dakota in spring 2002. The random sample consisted of 1,000 corn and soybean farmers in the state, yielding 367 usable surveys.

The respondents were evenly divided in their views about the benefits of agricultural biotechnology in general, but largely expected the technology to benefit local agriculture. Not surprisingly given the widespread adoption of the crops in the state, the majority of the respondents did not express principled objections against using GM crops. Fewer than one-tenth of the respondents stated that growing the crops is unethical. Most survey respondents indicated they expected that South Dakota farmers would benefit from agricultural biotechnology, but many had mixed views about biotechnology's benefits to agriculture in general.

There was an almost even split among those who agreed, were not sure, or disagreed that biotechnology will help solve farm surpluses by finding new uses for crops and livestock, and also that biotechnology will hurt American farmers by increasing farm surpluses. The respondents' opinions about the benefits of biotechnology for themselves were much more positive—nearly two-thirds indicated that biotechnology would provide benefits to most South Dakota farmers. Further, greater returns from biotechnology for large farm operations than for small ones were expected.

Many producers were concerned about a shift in power away from production agriculture and towards agricultural input firms, making farmers become more dependent upon large corporations. On the other hand, nearly half of the respondents indicated expecting that biotechnology will help enable farmers to become less dependent upon agricultural chemicals, but others were not convinced—over a quarter expected that biotechnology contributes to greater farmer dependence on agricultural chemicals.

Even though transgenic crops are widely used in the state, more than two-thirds of the respondents were particularly concerned about foreign—and slightly fewer about domestic—consumer acceptance of genetically modified crop products. Nearly half of the respondents expected biotechnology to increase foreign competition in US export markets. Nevertheless, most respondents stated that consumer concerns about food products made from transgenic crops are generally exaggerated. Over half stated that biotechnology would benefit consumers, but nearly one-third was uncertain about the benefits of agricultural biotechnology to consumers. Just over one-tenth stated consumer attitudes towards biotechnology would not affect their future planting decisions.

There was an even division between those expressing a need for, uncertainty about, and no need for the segregation of GM from non-GM crops. Similarly, those stating they were not intending to plant GM crops if they were required to segregate crops were similar in number to those expressing uncertainty about, and those favoring, the planting of transgenic varieties. Ironically, a majority of the respondents stated that GM food at the retail level should be labeled as such, but also indicated that segregating transgenic crops from conventional crops at the farm level is not practical.

Several factors influenced—sometimes in opposing ways—farmers' decisions about adopting transgenic crops. Over half of the respondents indicated that the costs involved with technology fees affect their planting decisions, whereas nearly one-third of the respondents stated that their transgenic crop planting decisions are not affected by these fees. The respondents were evenly split between those indicating that seed companies' restrictions on saving seed affect the next year's planting decisions and those stating that they were not influenced by these restrictions. The respondents were similarly divided between those indicating that lawsuits filed by seed companies against farmers affect, and those indicating that they do not affect, their choice of growing transgenic crops. Further, although the StarLink case had occurred long before the survey, nearly one-third of the respondents indicated that it had reduced their motivation to grow GM crops.

Even though transgenic crops are widely used by South Dakota farmers, fewer than half of the respondents indicated they were well informed, and more than one-fifth of the respondents stated they were not well informed about biotechnology. Less than one-third stated that farmers in general have sufficient knowledge, and another one-third suggested that farmers do not have sufficient relevant knowledge, of biotechnology. Nearly a third of the respondents attributed the lack of knowledge of agricultural biotechnology to the difficulty in gaining access to objective information.

Pronounced differences occur between the adoption patterns of Bt corn, herbicide tolerant (HT) corn, and HT soybeans, satisfaction with these varieties, and reasons for their adoption. The performance of Bt corn is generally viewed more favorably than that of HT corn and HT soybeans. Over half indicated that per acre profits increased as a result of growing Bt corn, while less than half of the respondents believed that profits had increased in comparison to their conventional counterparts as a result of using HT corn and HT soybeans. More than two-thirds stated that Bt corn yields were higher, but only one-third found higher yields for HT corn. Only one-fifth stated that HT soybeans provided higher yields than conventional varieties.

A large majority of respondents stated they incurred higher expenses associated with growing Bt corn over conventional corn, but the perceived expenditure increases were less pronounced among users of HT corn and HT soybeans. Nearly three-quarters experienced less pest damage with using Bt corn, while fewer than one-third and one-fifth, respectively, experienced less pest damage growing HT corn and HT soybeans. Pesticide usage associated with Bt corn and HT corn decreased for more than half of the respondents, and more than two-thirds used less pesticide due to growing HT soybeans, compared to conventional varieties.

Overall, the producers' bottom line experience with the three transgenic crops was positive. Nevertheless, approximately one-half of the respondents indicated that profits associated with each of the three transgenic crop varieties are no better or worse than those of conventional varieties. These results are similar to findings by Chen and Buttel (2000) and indicate that both market and performance factors contribute to the high adoption rates of these three transgenic varieties.

In general, improved pest control is the most important determinant of transgenic crops usage. Improved yields was also a major factor in deciding whether to grow Bt corn, but was not nearly as important for farmers in deciding to grow HT corn and HT soybeans. A reduction in herbicide application and a decrease in costs were cited as major factors contributing to the choice of transgenic over conventional soybeans.

The two main reasons for non-adoption or for reverting back to conventional crops are satisfaction with current varieties and dissatisfaction with the new varieties. In the case of HT soybeans, an important reason for not adopting the crop is dissatisfaction with crop yields. Other reasons for not adopting the crops are concerns about segregation, the ability to sell the crops, concerns about the environment, and the potential for receiving a lower price.

Frequency analyses indicate that the adoption of Bt corn varies by operator age (whether or not the operators engage in off-farm work), farm size (based on both acreage and receipts), and the presence of livestock on the respondents' farms. No statistically-different Bt corn adoption rates were found between the respondents' level of education and whether or not farms were organized as a sole proprietorship. Frequencies of HT corn adoption patterns suggest that only farm size is statistically positive related to the planting of HT corn. No statistically significant determinants were found in the adoption of HT soybeans.

Logistic regression results indicate that the odds of adopting Bt corn decrease in the presence of livestock, relative to farms without livestock, and the odds of adopting Bt corn increase for increasing levels of income. The odds of adopting Bt corn also decrease with the age of the respondents. Consistent with the results discussed above, the determinants of HT corn adoption are difficult to identify. Finally, the odds of adopting HT corn statistically decrease only due to an increase in off-farm income.

By representing Bt corn adoption rates as a continuous variable, preliminary analysis regressing the share of Bt corn acres out of the total corn area on a comprehensive set of independent variables indicates that profits per acre, improved insect control, reduced insecticide use, and improved yields are each statistically significant determinants of Bt corn adoption. On the other hand, the presence of livestock, increased farm receipts, and whether the respondents were seed dealers were statistically significant impediments of Bt corn adoption. For HT corn, only farm income receipts are a statistically significant negative determinant of adoption. Both technology fees and profits per acre are statistically significant impediments to adopting HT soybeans.

References

Chen L, Barham BL, and Buttel FH. 2001. Update on the Adoption and De-Adoption of GMO Crop Varieties in Wisconsin. Wisconsin Farm Research Summary No. 6, August. http://www.wisc.edu/pats/pdf%20documents/researchsummary6-3.pdf

Salant P and Dillman DA. How to Conduct Your Own Survey. New York: John Wiley & Sons, 1994.

Evert Van der Sluis
Economics Department, South Dakota State University
Brookings, SD
evert_vandersluis@sdstate.edu

Angella Van Scharrel
Bureau of Finance & Management, State of South Dakota
Pierre, SD
Angella.VanScharrel@state.sd.us





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