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“Adoption Impacts and Access to Innovation in
Small Resource Poor Countries: Results from a
Second Round Survey and InstitutionalAssessment in Honduras”
José Falck Zepeda, Denise McLean, Patricia Zambrano, Arie Sanders, Maria Mercedes Roca, Cecilia Chi-Ham
Paper presented at the 17th ICABR meeting, Ravello Italy, June 21 2013
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Agriculture Value Added
Sub-Saharan AfricaWorldHondurasUnited States
% o
f G
DP
Honduras: High reliance on agriculture
Agricultural sector 13% of GDP1
Agribusiness and related sector 40-45%2 GDP
1 World Bank, 20112 http://www.hondurasopenforbusiness.com/SITEv2/files/pdf/Oportunidades_de_inversion_Agroindustria.pdf
Graphs: WorldBank Development Indicators (2013) Map: National System of Environmental Indicators, SINIA
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Arable Land
Sub-Saharan AfricaWorldHondurasUnited States
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Honduras: Limited resources for agricultural production especially land
87% of territory corresponds to hillsides susceptible to erosion
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Cereal Yield
Sub-Saharan AfricaWorldHondurasUnited States
Kilog
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Honduras: Low productivity of major staple crops
Honduras’ Productivity: 1/3 of world averages and
1/7 of US yields
Corn is an essential part of Honduran diet
1FAO Statistics Division, 2012, 2Ministry of Agriculture and Livestock, 2012
Top commodity available for consumption 739 kcal/person/day
Basic grains represent up to 60% of Honduran diet
48% of total demand is for human consumption
Production Value, Top Commodities (2011)
Value [1000 Int$]
Value [1000 Int$]
1 Coffee, green 303357 8 Tomatoes 56580
2Cow milk, whole
230723 9 Oranges 54126
3 Chicken Meat 222122 10 Beans, dry 51791
4 Bananas 204849 11 Pineapple 39416
5 Cattle Meat 165830 12 Eggs 36661
6 Sugar cane 164766 13 Melons 33139
7 Palm oil 139218 14 Corn 32068
Corn in Honduras is grown mostly for food/feed
Corn supply in Honduras increasingly dependent on imports
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Corn production Corn imports Corn exports
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Nearly 40% of corn is imported and thus high concerns for corn price
volatility in international markets
Honduras Agriculture Ministry Jacobo Regalado:
“From the million ton we need we are only producing 600 thousands. We are still importing 400 thousands(…) The idea is to accelerate the pace to substitute those 400 thousands with local production”.
Hondudiario, March 19, 2012
Honduras: The problem with production intensificationDamage by lepidopteran insects can be as
high as 40-70% Increasing issues with other pests and
diseasesHeavy damage due to aflatoxins / mycotoxinsNeed to explore new control alternatives
amenable to smallholder´s producersSmallholder producers:
Little access to technology, pest control alternatives and credit
Knowledge limitations: to determine damage and to make correct chemical applications….
GMOs in Honduras8th Latin American country adopting GMOs since
20021
1ISAAA, 2012
Only country in Central America cultivating GMOs for
food
-USA*
-Brazil*
-Argentina*
-South Africa*
-Canada*
-Uruguay x1.5
-Philippines x3
-Spain x5
-Chile x7
-Honduras-Portugal x.8
-Czech Republic x .7
-Poland x3
-Egypt x9
-Slovakia x0.4
-Romania x2
• By 2011, 72 thousand ha with hybrids and GM 15% area planted1
• GM estimated around 25-30 thousand ha
BT (MON810), RR (NK603), Herculex 1 , YGVTPro (MON89034) traits approved for commercialization
WHY GMOs adopted in Honduras?
Honduras: promotional environment favoring biotechnology adoption
Favorable policy, economic and social conditions facilitated
adoption
UN Statistics Division, 2011. WTO Statistics, Trade Profiles, 2012
Strategic interest in aligning agricultural policies with the major economic and trade partners
• Honduras trade is essentially tied to the United States
• Historically strong presence of agricultural multinationals interested in increased agricultural productivity
Established Biosafety Framework and Regulations Incorporated biotechnology in National Food Self Sufficiency
Strategy Coordinated a joint agricultural and environmental political
agenda
‘To facilitate the process to incorporate
hybrids and transgenic seeds in 25% of the
area planted at the national level by 2014’Honduras Agricultural and Livestock Ministry goal
Public Agricultural and Food Sector Strategy
1996/98: Biosecurity Regulation with Emphasis in Transgenic Plants1998: National Committee of Biotechnology and Biosecurity (NCBB) 2006: CAFTA-DR Phytozoosanitary Law modification2008: Cartagena Protocol Ratification2001/12: Law for the Protection of New Varieties of Plants
USAID GAIN Report 2012.
Honduran government specific policy support for easing a transition towards biotechnologies
Honduras: A case study to understand biotechnology adoption in small resource poor developing countries
Honduras in the Latin American innovation sphere
Small markets
Medium markets
Large markets
Non-selective importers of technology
El Salvador, Guatemala, Honduras, Nicaragua, Panamá
Bolivia, Ecuador
Selective importers of technology
Costa Rica, Uruguay
Paraguay, Peru
Venezuela
Tool users
- Colombia, Chile
Argentina, Mexico
Innovators
Brazil
Notes: 1) Source: Trigo, Falck-Zepeda and Falconi (2010), 2) Non-adopters are listed in italic text.
Which policies are important? Public
sector investments in biotechnology applications
Intellectual property management
Biosafety regulations
Food/feed safety and consumer protection
Support for public sector participation and tech transfer including seed systems
Non-adopters
Bolivia 0 0 - - 0Ecuador 0 0 - - 0Guatemala 0 - 0 0 -Perú 0 - - 0 0Venezuela + - - 0 0
Adopters
Argentina + 0 0 + +Brazil + - 0 0 +Costa Rica + - 0 0 +Honduras 0 - 0 0 -
Mexico + 0 0 0 +Uruguay + 0 0 0 +
Notes: 1) Source: selected countries from Trigo, Falck Zepeda and Falconi (2010), 2) + signifies promotional policies, 0 denotes neutral policies, - reflects preventive policies, 3) Brazil was categorized as having a preventive biosafety policy in the Trigo et al. paper, but is reclassified here as neutral based on recent developments in the country.
HOW HAS GM CORN WORKED IN HONDURAS?
GM maize provided excellent target pest control
Bt yield advantage 856-1781 Kg ha-1 yield
Bt maize yields preferred even by risk averse producers
100% higher seed cost than conventional hybrid
Institutional issues important
Photos credit: © Sanders and Trabanino 2008
Falck-Zepeda, J., A. Sanders, C. Rogelio Trabanino, & R. Batallas-Huacon. Caught Between Scylla and Charybdis: Impact Estimation Issues from the Early Adoption of GM Maize in Honduras. AgBioForum, 15(2), 138-151. Available on the World Wide Web: http://www.agbioforum.org.
2008 GM maize crop cycle in Honduras: Results from our first survey
The 2013 (second) survey to observe experiences of conventional & GM corn farmers
Economic, social and agronomic impacts
Farmers by corn typeSize
Total< 7 hectares > 7 hectares
Conventional only 58 25 83
GM only 39 57 96
Both types of corn 11 19 30
Total 108 101 209
We chose a representative sample of corn farmers
from the main corn producing state in Honduras
Major maize producing areas in Honduras
Olancho: The main corn producing state in Honduras
- 180,000 metric tons
- 35,000 planted hectares >30 % national corn production
- 12,000 hectares with GM >40% GM corn production
- 10,000 farmers
- A range of different corn production systems
We captured diversity within the commercial corn production chain
Number of applications Conventional GM
Both types, conventional
plot
Both types, GM plot
< 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha
Insecticides 1.7 1.9 1.6 1.3 1.9 2.0 1.0 1.1 S
Herbicides 2.6 2.7 1.7 1.5 2.7 2.1 1.7 1.6 S
Fungicides 1.0 1.5 1.2 1.5 1.0 1.3 1.0 1.0 NS
Fertilizers 2.2 2.3 2.4 2.3 1.9 2.6 2.3 2.6 NSS: Significant, NS: Not significant
Our findings: In average GM corn farmer seem to be using less pesticides
GM corn producers from sample made one insecticide and herbicide application
less
Environmental Impact
QuotientConventional GM
Both types, conventional
plot
Both types, GM plot
< 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha < 7 ha > 7 ha
Insecticides 5.2 6.3 4.3 11.0 4.6 8.2 3.1 6.1 NS
Herbicides 24.3 29.6 27.1 28.6 42.6 12.5 24.6 16.0 NS
Fungicides 3.0 3.7 14.5 10.4 7.1 7.1 7.1 9.4 NS
Fertilizers 23.7 27.4 36.6 41.6 36.2 16.9 25.5 22.6 NSS: Significant, NS: Not significant
GM and conventional corn farmers seem to have a similar environmental impact measured by the EIQ
EIQ: J. Kovach et al, IPM Program, Cornell University, New York State Agricultural Experiment Station Geneva, New York 14456
Cost structure in corn production Conventional GM
< 7 hectares
> 7 hectares
< 7 hectares
> 7 hectares
Total costs (US$/ha) 717.1 749.7 1209.1 1460.8 *Yield (ton/ha) 2.8 3.4 5.4 5.5 *Price (US$/ton) 273.7 294.4 352.3 394.5 *Income (US$/ha) 748.5 1018.6 1929.7 2189.1 *Profit (US$/ha) 32.1 269.9 722.5 730.4 *1
1 At small scale
GM corn farmers seem to be obtaining higher yields & profits
Of Cook’s D, the issue of outliers and sampling biases
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Observation ID Yield
Cook’s D
42 6.500 0.05384 5.200 0.38599 7.475 0.033
116 4.543 0.039120 9.100 0.020121 2.507 0.022129 2.839 0.021131 6.500 0.688132 3.250 0.054143 1.817 0.028152 5.200 1.230155 7.800 0.036169 1.083 0.020170 6.045 2.381173 0.975 0.030174 8.060 0.032182 0.195 0.060200 5.200 0.033212 7.800 0.032217 1.300 0.020222 9.100 0.022230 6.500 0.026
“The classical instrumental variables (IV) estimator is extremely sensitive to thepresence of outliers in the sample. This is a concern as outliers can strongly dis-tort the estimated effect of a given regressor on the dependent variable. Althoughoutlier diagnostics exist, they frequently fail to detect atypical observations sincethey are themselves based on non-robust (to outliers) estimators. Furthermore,they do not take into account the combined influence of outliers in the first andsecond stages of the IV estimator” Desbordes and Verardi, Stata Journal 2012
Production function approach
Robust Regression (MM-Regression 85% efficiency, ROBREG)
Robust Regression ( MSREGRESS)
Instrumental Variables ( IVREG2)
Variable Coef.Robust SE Coef. Robust SE Coef. SE
GM corn user (1=Yes) 1.254 0.319*** 1.157 0.387*** 1.453 0.329***Located in Juticalpa/Catacamas (1=Yes) 0.346 0.414n.s. 1.303 0.199*** 0.336 0.304n.s.Proportion of income from non-ag sources (%) -0.011 0.005** -0.006 0.007n.s. -0.009 0.004**
Number of members in the household -0.066 0.068n.s. -0.102 0.061* -0.096 0.051*
Time cultivating GM maize -0.014 0.007** -0.026 0.005*** -0.010 0.006n.s.
Total income 0.251 0.105** 0.189 0.075** 0.216 0.078***
Total area in production (ha) 0.002 0.001* -0.002 0.002n.s. 0.002 0.001n.s.
Total area cultivated with maize (ha) -0.004 0.006n.s. 0.004 0.002* -0.004 0.004n.s.
EIQ index -0.039 0.019** 0.013 0.016n.s. -0.020 0.014n.s.
Seed quantity planted (kg/ha) -0.002 0.016n.s. 0.117 0.020*** -0.005 0.015n.s.
AI insecticide (Kg/ha) 1.030 0.593* 2.156 1.139* 0.718 0.561n.s.
AI herbicide (Kg/ha) 0.070 0.064n.s. 0.084 0.114n.s. 0.158 0.070**
AI fertilizer used (Kg/ha) 0.009 0.004** 0.017 0.002*** 0.005 0.002**
AI other pesticides(Kg/ha) 3.268 1.758* 1.736 0.555*** 1.516 0.883*
Cost labor per day ($/ha) -0.008 0.006n.s. -0.006 0.006n.s. -0.004 0.006n.s.
Seed planted squared 0.000 0.000n.s. -0.002 0.000*** 0.000 0.000n.s.
AI insecticide squared -0.261 0.133** -2.090 0.736*** -0.167 0.143n.s.
AI herbicide squared -0.003 0.002n.s. 0.016 0.009* -0.006 0.003**
AI fertilizer squared 0.000 0.000** 0.000 0.000*** 0.000 0.000n.s.
AI other pesticides squared -3.978 2.040* -1.207 0.290*** -0.926 0.654n.s.
Irrigation (1=Yes) -0.463 0.387n.s. -0.217 0.180n.s. 0.196 0.305n.s.
Finance (1=Yes) 0.150 0.227n.s. -0.069 0.131n.s. -0.187 0.198n.s.
Technical assistance (1=Yes) -0.170 0.480n.s. -0.404 0.238* -0.174 0.262n.s.
Constant 4.822 1.365*** 3.592 0.846*** 2.665 0.603***
Second stage (2SLS net income) First stage, dependent variables is GM corn user)
Variable Coef. Std. Err. Coef. Std. Err.
GM corn user (1=Yes) 279.1 131.7 **
Located in Juticalpa/Catacamas (1=Yes) 166.3 123.9 n.s. 0.209 0.067 **
Proportion of income from non-ag (%) -1.0 1.7 n.s. 0.001 0.001 n.s.
Number of members in the household -32.5 18.7 * -0.002 0.012 n.s.
Time cultivating GM maize -7.1 2.7 *** 0.003 0.001 *
Total income 96.7 34.4 *** 0.002 0.018 n.s.
Total production area (ha) 1.1 0.3 *** 0.000 0.000 n.s.
Total maize area (ha) 0.0 1.2 n.s. 0.002 0.001 **
EIQ index -6.3 7.6 n.s. -0.003 0.003 n.s.
Seed planted (kg/ha) -4.5 4.7 n.s. 0.002 0.004 n.s.
AI insecticide (Kg/ha) 98.7 209.2 n.s. -0.183 0.130 n.s.
AI herbicide used (Kg/ha) 46.5 26.4 * 0.001 0.017 n.s.
AI fertilizer used (Kg/ha) -1.0 1.1 n.s. 0.000 0.001 n.s.
AI other pesticides (Kg/ha) 201.1 402.1 n.s. 0.002 0.209 n.s.
Cost labor per day ($/ha) -8.5 2.8 *** 0.000 0.001 n.s.
Seed planted squared 0.0 0.0 n.s. 0.000 0.000 n.s.
AI insecticide squared -60.1 49.4 n.s. 0.035 0.033 n.s.
AI herbicide squared -1.7 0.9 * 0.000 0.001 n.s.
AI fertilizer squared 0.0 0.0 n.s. 0.000 0.000 n.s.
AI other pesticides/fungicides used squared -205.6 240.3 n.s. 0.071 0.155 n.s.
Irrigation (1=Yes) -102.9 181.1 n.s. -0.044 0.072 n.s.
Finance (1=Yes) -74.3 97.5 n.s. -0.051 0.047 n.s.
Technical assistance (1=Yes) 56.3 122.4 n.s. 0.046 0.062 n.s.
Price GM seed 0.033 0.005 **
Year cultivating GM seed -0.275 0.032 **
Constant 659.2 214.6 *** 0.252 0.161 n.s.
Net income
THEN…WHY HAVE WE NOT OBSERVED FULL ADOPTION BY HONDURAN PRODUCERS?
Characteristic
• Monthly income >500 US$• Access to technical
assistance• Access to credit• Farmers applying
fungicides• Insecticide costs• Fertilizer costs• Cost of the use of
machinery
GM
• 82 to 98% of farmers
• 16 to 30% of farmers
• 24 to 56% of farmers
• 58 to 50% of farmers
• 28 to 62 US$/ha• 328 to 373
US$/ha• 192 to 275
US$/ha
Conventional
• 40 to 64% of farmers
• 11 to 0% of farmers
• 19 to 28% of farmers
• 4 to 8% of farmers
• 11 to 16 US$/ha• 213 to 237
US$/ha• 106 to 104
US$/ha
Access to inputs may restrict adoption
Farmers without information, credit or other inputs are less likely to adopt GM crops
Depending on plot size
Access to markets may limit profitability
Farmers with smaller plots or in remote areasare less likely to adopt biotechnology
Characteristic
• Closer to urban areas• Sell directly to industry• Transportation costs• Selling price • Agronomic cycle
GM
• 92 to 93% of farmers
• 45 to 80% of farmers
• 134 to 152 US$/ha
• 352 to 395 US$/ton
• 3-4 months
Conventional
• 12 to 16% of farmers
• 2 to 4% of farmers
• 17 to 40 US$/ha• 274 to 294
US$/ton• 4-5 months
Depending on plot size
Gender/seed typePreferred for production
Preferred for consumption
Conventional GM Conventional GMMale/Conventional 0 13 0 0Male/GM 0 18 5 1Female/Conventional 20 0 18 0Female/GM 0 12 8 0All 20 43 31 1
Farmers may prefer other traits
Local corn varieties make better tortillas
Preliminary data from exploratory panel, 2013. Unpublished.
Preferred traits for production by production size & locationLarge/valley Large/hills Small/valley Small/hills
Black spot resistance
Black spot resistance
Black spot resistance
Black spot resistance
High yield High yield High yield High yieldHeavy grain Heavy grain Heavy grainBT BT BTRR RRPrice PriceDrought resistance Drought resistance
% germinationFull cob
Farmers have greater preference
for protection against risk
ConclusionsGM maize continues to perform as expected
compared to a conventionalPositive yield advantageHigher net incomeReduction in pesticide applicationsUnclear environmental impact (need more work)
For expansion of area with GM maize in Honduras, issue is not a technical issue but seems to be an institutional
Additional work needed to examineProduction and financial riskDistribution of impact by sizeImpacts of institutional issues
Arie SandersMaria Mercedes RocaMiljian Villalta
Alan B. BennettCecilia Chi-HamDenisse McLean
Jose Falck-ZepedaPatricia Zambrano
Sandra Mendoza. Participatory research consultant
Research funded by: