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Biotechnology and Pro-Poor Agricultural Development

Until now the debate on agricultural biotechnology mainly focused on the environmental impact, biosafety issues and intellectual property rights. This paper looks at the nature of commercialised biotech products, the changing locus of agricultural research, the emerging market failures in biotech product development, and the likely impact on poverty and employment. The evidence shows that Bt cotton is scale neutral and profitable to all groups of farmers. But research in biotechnology is mainly in the hands of a few large multinational companies which focus on crops and traits that are significant to the developed countries and not the resource-poor farmers. The public sector, therefore, must step in to pursue basic research that will benefit the poorer farmers.


Biotechnology and Pro-Poor Agricultural Development

N Chandrasekhara Rao, S Mahendra Dev

Until now the debate on agricultural biotechnology mainly focused on the environmental impact, biosafety issues and intellectual property rights. This paper looks at the nature of commercialised biotech products, the changing locus of agricultural research, the emerging market failures in biotech product development, and the likely impact on poverty and employment. The evidence shows that Bt cotton is scale neutral and profitable to all groups of farmers. But research in biotechnology is mainly in the hands of a few large multinational companies which focus on crops and traits that are significant to the developed countries and not the resource-poor farmers. The public sector, therefore, must step in to pursue basic research that will benefit the poorer farmers.

An earlier version of this paper was presented at the UGC-SAP National Seminar on “Technology, Public Policy and Development: Shifting Contexts, Transforming Agendas” on 22-24 January 2009 at the University of Hyderabad. The comments by E Haribabu and others at the conference are gratefully acknowledged. The authors are also thankful to Ramesh Chand for insightful comments. Usual disclaimer applies.

N Chandrasekhara Rao ( is at the Centre for Economic and Social Studies, Hyderabad. S Mahendra Dev ( is with the Commission for Agricultural Costs and Prices, New Delhi.

1 Introduction

he tools of modern biotechnology provide an opportunity to infuse a new round of technology into Indian agriculture almost four decades after the introduction of the green revolution technologies and at a time when they have lost steam. The green revolution technologies have helped in the reduction of poverty but have resulted in widespread regional disparities as dry lands are not covered. It took a long time for the technology to spread to these areas and even then rainfed farmers did not benefit to the same extent as those in well-endowed regions. This is because of the exclusive emphasis on increasing production without keeping the objective of equity in view. Therefore, a new round of technology infusion needs to be planned keeping this experience in mind. There is an urgent need to raise agricultural growth in view of the dismal scenario in the past decade. However, this should not prevent us from trying to make it more inclusive.

The debate on agricultural biotechnology is focused mainly on the environmental impact, biosafety issues, and intellectual property rights. The crucial issues – of harnessing the technology to make a dent in poverty, create employment, achieve nutritional security and address issues of inequality between developed and developing countries, well-endowed and ecologically fragile regions, and large and smallholder cultivators – are almost neglected. The major discussion on it does not go beyond biotechnology (Bt) cotton, apart from environmental and biosafety issues in India. Though this may be understandable as it is the only commercial biotech product in agriculture, it is now time to move ahead and look beyond to a broader picture for addressing larger issues of growth and equity that can emerge from the applications of biotechnology. Unless this is done and necessary correctives applied in the policy for development and commercialisation of the technology, the result can be disastrous. The country cannot bear this cost at a time when the liberalisation experience clearly shows that the pace of poverty reduction slackened since the early 1990s.1

A few scholars have analysed these issues. Ismael Serageldin, the former chairperson of the Consultative Group on International Agricultural Research (CGIAR) apprehended that a sort of “scientifi c apartheid” can well develop with biotechnology in which cutting edge science becomes completely oriented towards industrial countries and large-scale farming (Serageldin 2001). While endorsing his apprehension, Pinstrup-Andersen and Cohen (2000) consider the bypassing of the poor as the biggest risk of modern biotechnology for developing countries. Scoones (2002)

december 26, 2009 vol xliv no 52

examined this proposition and concluded that this technology may not lead to pro-poor agricultural development in India. The report on State of Food and Agriculture 2004 of FAO (2004), the World Development Report 2008 of the World Bank (2007) and some other scholars like Herdt et al (2007) and Spielman (2007) also concluded that these fears may be realised if governments of developing countries do not address this issue.

This paper examines this hypothesis in a macro-perspective in the light of the commercialisation experience of the last 12 years and with particular reference to solving the technological needs of millions of small farmers in the country. The discussion in the paper limits itself to genetically modified crops and makes no reference to the emerging applications in livestock, fi shing and f orestry. Also, other promising tools of modern biotechnology like marker assisted selection are not examined here as they are yet to be commercialised in a big way.

The paper is organised as follows. Having explained the nature of the debate and mentioned the hypothesis on equity from the utilisation of this technology in the first section, the second section examines the experiences of smallholder cultivators with a biotech product, Bt cotton in this case. The third section traces the changing locus of agricultural research and the fourth section brings out the problems that arise in the commercialisation pattern driven primarily by the profit motive. The likely impact on poverty reduction with the help of this technology is given in the fi fth section and the last section suggests measures to move forward.

2 Smallholder Cultivators of Bt Cotton

The diffusion of transgenic crops has been rapid. It reached 125 million hectares in 2008 from a very small base in 1996. It is estimated that 13.3 millions of cultivators adopted them, many of them small cultivators and this is especially so in developing

Figure 1: Area under Biotech Cotton in India (in Lakh Hectares)



0.5 1.0 5.0 13.0 62.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Source: James (2008). 38.0

countries like India (James 2008). The adoption rates in India are unprecedented for any agricultural technology and reached 82% of the total cotton area in just eight years of commercialisation since 2002-03 by occupying 76 lakh hectares in 2008 (Figure 1). The majority of the five million adopters in the country are smallholders. All this shows that the farmers in general and the resource poor in particular everywhere have accepted these crops.

Profitability of Transgenic Cotton

Several studies on the performance of the first biotech product viz, Bt cotton show that these hybrids have increased yield and thereby increased profit by reducing the spending on plant protection (Table 1). In different studies, the positive yield effect varied from 26% to 80%. In general, the yield increase can be higher in case of severe pest infestation and vice versa.

We also present here in brief the results of our fi eld surveys. The first survey was conducted in 2005 with a sample of 623 farmers in all the cotton-growing agro-climatic zones of Andhra Pradesh with the adopters and non-adopters in the proportion of 70% and 30%, respectively. The same farmers were resurveyed in 2007 and it was found that all the non-adopters switched to the new technology. Therefore, another 200 non-Bt cotton farmers served as the control group.

Our longitudinal studies showed more than 30% of increase in yield (Table 1). This increase is significantly higher compared to countries like the US or China, where the yield i ncrease does not exceed 10% in the temperate climate. The yield increase in this country is due to the tropical and subtropical conditions here.

The results of multiple linear regressions using data from fi eld surveys show that there is significant impact of Bt cotton hybrid on the yield that the farmers got (Table 2, p 58). The coeffi cient for Bt dummy turned out to be significant at 1% level in both “with and without” Bt cotton scenarios in 2004-05 and 2006-07 as well as “before and after” adoption scenarios. All the other variables contributed positively to the yield and the signs of the coefficients are in line with the economic logic.

When nearly 70% of the cotton area is covered with transgenics, it is expected to have some impact on productivity and production in the country as a whole. A look at the data shows that the yield per hectare doubled from a fi ve-year average ending 2002-03 of 203 kilograms per hectare to 470 kilograms per hectare in 2007-08 (Figure 2, p 59). There is a turnaround in cotton production during the same period from 104 lakh bales to 258 lakh bales, at a time when most other crops showed

Table 1: Percentage Changes wrt Yield, Pesticides and Profit in Bt Cotton vis-à-vis Conventional Hybrids in India

Authors Survey Year Geographic Coverage Sample Size Percentage Increase in
Yield Pesticides Profit Cost
Qaim (2003) 2001-02 (Field trials) Maharashtra, MP and TN 157 80 -60 500 NA
Naik et al (2005) 2002-03 Maharashtra, Karnataka, AP and TN 341 34 -41 69 17
Nielson - ORG Marg (2004) 2003-04 Maharashtra, MP, AP, Karnataka and Gujarat 3,063 29 -60 78 NA
Narayanamoorthy and Kalamkar (2006) 2003-04 Maharashtra 150 52 -5 79 34
Gandhi and Namboodiri (2006) 2004-05 AP, Gujarat, Maharashtra and T.N 694 31 -24 88 7
Rao and Dev (2008)
2004-05 (with and without) 2004-05 AP 623 32 -18 83 17
2006-07 (after adoption) 2006-07 AP 814 42 -56 251 -1
NA – Not available.
Economic & Political Weekly december 26, 2009 vol xliv no 52 57

stagnancy in production and productivity.2 Though there are several p romotional efforts by the centre and state governments during this period, more than 50% of this growth in yield is attributed to the introduction of biotechnology (GoI 2008). Similar economic and environmental effects are seen across countries, according to the information presented in the World Development Report 2008.3

Gains from Technology to Farmers from Resource-Poor Category and Rain-fed Farming

The study of benefits to farmers of different social and size categories, agro-climatic zones, and both irrigated and rain-fed conditions reveals that all of them could get significant increase in

Table 2: Estimated Production Functions for Yield in Andhra Pradesh

rain-fed farmers do not seem to be getting significant increase in net income in 2004-05 and also after adoption of the technology in 2006-07.

The regression results in Table 2 also confirm these fi ndings. The small farmer dummy turned out to be signifi cant and negative implying that these farmers are getting 5% lower yields as compared to the other farmers in 2004. By 2006, the small f armers were also getting similar yields on par with other farmers and there was no significant difference. This is because the small farmers take some time to adjust to the new technology. The scanty rainfall zone represented by Kurnool was found to be getting significantly lower yields compared to other districts. This means that developing drought resistant varieties is still

very important. On the whole, this technology

Item With and Without Bt in 2004 Before and After Bt With and Without Bt in 2006 proved to be scale neutral and profitable to all
(n = 623) (n = 367) (n = 814) groups of farmers.
Coefficient S E Coefficient S E Coefficient S E
Constant 5.514* 0.433082 3.441* 0.634988 3.968* 0.382053 Sharing of Gains from Technology
Bt dummy EducationFYM (Rs/ac) Fertilisers (Rs/ac) 2.826* 0.08297* 0.00008 0.00065* 0.249625 0.026825 0.000174 0.000169 3.915* 0.0808** 0.00216** 0.00397* 0.400266 0.033836 0.000944 0.00082 4.234* 0.04337 0.00056* 0.00081* 0.409716 0.024797 0.00019 0.000125 The major concern regarding biotechnological applications by private companies is that the seed developer will appropriate all the benefi ts. There-
Pesticides (Rs/ac) 0.00023** 9.15E-05 0.00141* 0.000506 0.00031* 7.57E-05 fore, we tried to see the farmers’ share of addi-
Irrigation (Rs/ac) 0.00052** 0.000259 0.00408* 0.001566 0.00235** 0.001187 tional benefits across different countries. As can
Kurnool dummy -3.850* 0.369375 -1.320* 0.508671 -0.04295 0.401402 be seen from Figure 3 (p 60), the faster adoption
Small farmer dummy -0.631* 0.228292 -0.485 0.314527 -0.330 0.25076 rates depend on the farmers’ share. Wherever
F 45.390 26.462 49.144 their share is less as in the case of Argentina, the
Adjusted R2 0.363 0.358 0.321 diffusion is slow. Our field studies in Andhra

* and ** indicate significance at 1% and 5%, respectively. Source: Field surveys.

yield and net income (Table 3). The participation of small farmers and farmers from dry land areas is significant, unlike the green revolution technologies, which took some time to reach these groups of farmers. The net income considered here is after accounting for both direct and indirect costs like imputed value of family labour, rental value of owned land, etc. Even after accounting for all these, the small farmers are shown to be getting higher and more positive incomes compared to that from conventional technology. Therefore, it can be concluded that this new technology helped in improving the viability of small farmers and herein lies the significance of the technology. However, the

Table 3: Percentage Changes in Yield and Net Income in Bt Cotton vis-à-vis Non-Bt Cotton

Category Yield Net Income
With and After With and With and After With and
Without Bt Adoption Without Bt Without Bt Adoption Without Bt
in 2004 in 2006 in 2004 in 2006
Small farmers 10.09* 39* 49* 69 214* 221*
Medium farmers 20.56* 33* 136* 90* 212* 730*
Large farmers 83.04* 93* 244* 120* 460* 211*
Irrigated farmers 34.86* 34* 67* 149* 294* 306*
Rain-fed farmers 28.08 * 32* 100* 46 185 180*
Warangal 40.05* 41* 82* 139** 430* 249*
Nalgonda 30.21* 16 101* 44** 92* 141*
Guntur 18.85 * 49* 62* 19* 359* 884*
Kurnool 85.85* 213* 62* 82 222* 200* times#
Total sample 31.62* 42* 80* 83* 251* 263*

* and ** indicate significance at 1% and 5%, respectively; # indicates the net income increased from Rs 25 to Rs 4,480 per acre. Source: Field surveys.

Pradesh also showed that the farming commu

nity could get a major share of 74% in 2004-05 ( Figure 4, p 60). Later, as the cost of seed went down consequent to the intervention of the state, their share went up to more than 90% in 2006-07, like in China.

From the experience of the first biotech product in the country it can be concluded that biotechnology helped in reducing the yield gap between the actual and the potential by resisting the dreaded American bollworm. Though Bt cotton has been developed for use in industrialised countries, it is also useful in developing countries. Smallholder cultivators benefited from its adoption and it proves that proper application of technology in product development can have positive impact on equity. Further, the major benefits from private research are not necessarily appropriated by seed developers. Our field studies indicate that farmers perceived research on drought tolerance and open pollinated varieties to be very important. The issues of biosafety and environmental impact continue to be critical and are to be monitored in the medium term.

3 Changing Locus of Agricultural Research

The locus of agricultural research has changed to the domain of the private sector compared to the predominantly public sector efforts in the 1960s during the days of the green revolution. Though the seed industry developed with the popularisation of hybrids by the early 1990s, the private seed companies continued to depend on the public sector research institutions for help in development of hybrids. The advent of biotechnology facilitated by the intellectual property rights changed the scenario

december 26, 2009 vol xliv no 52

Figure 2: Cotton Yields Before and After Bt Cotton in India


Yield in kgs/ha

500 421

450 354

400 321 306 350

270 300

225 250

224 208

190 186 191 200




0 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 97 98 99 2000 01 02 03 04 05 06 07 08

Source: Directorate of Economics and Statistics, Ministry of Agriculture, GoI.

c ompletely and now it is the private sector which is undertaking basic research. The research spillovers from developed countries could be used by public research institutions in Asia, Africa and Latin America during the green revolution days. However, this may not be possible now in view of the proprietary rights.4

There is also a wide asymmetry in the research expenditures apart from privatisation. A look at the crop biotechnology research expenditure brings this out very clearly. The share of developing countries is a mere 8-9% in biotechnology research and the private sector in the developed countries is the major player

Table 4: Estimated Crop Biotechnology Research Expenditures (Million $)

Biotech R & D % Share in Biotech as Share of
Million $/Year Total Expenditure Sector R & D
Industrialised countries 1,900-2,500 90.91 - 92.01
Private sector* 1,000-1,500 48.43 - 54.55 40
Public sector 900-1,000 36.36 - 43.58 16
Developing countries 165-250 7.99 - 9.09
Public (own resources) 100-150 4.84 - 5.45 5-10
Public (foreign aid) 40-50 1.82 - 1.94 NA
CGIAR centres 25-50 1.21 - 1.82 8
Private sector NA NA
World total 2,065-2,750

* Includes an undisclosed amount of R&D for developing countries. Source: Pingali and Raney (2005).

in biotechnology research expenditures (Table 4). On the other hand, the role of seed companies in developing countries is mainly at the low end research. Pingali and Traxler (2002) have shown how the division of labour takes place in the collaboration between a multinational company of a developed country and a typical local seed company of a developing country. In fact, many of the seed companies in the country resort to purchase of seed licence rather than any innovative research and discovery. This can perpetuate the dependency syndrome for a long time to

come, unless the public sector steps in to undertake the basic research in this fi eld. These crucial changes in the way research is organised at the global level have implications for the application of the tools of the modern biotechnology and also for how research is carried out at the higher end.

Another way of looking at the investments in agricultural biotechnology is through the number of field trials. The developing countries account for only 16% of the total field trials in mid-2003 (Table 8). Latin America had far more field trials than other regions in the least developed countries (LDCs) and Asia’s position is the last in the list.

There are some more concerns regarding the privatisation of biotechnology research in India. The role of governmental agencies in advising the best practices has become minimal in the case of transgenic hybrids in view of their proprietary nature. Therefore, the farmers are left without any means of verifying the claims of different companies (Chaturvedi et al 2007). The availability of the tools of biotechnology it is feared will lead to continuation of faulty paradigm of crop-specific research instead of addressing the issues of farming systems as a whole.

Political Economy Issues

The political economy issues in the case of biotechnological research organisation and product development resemble the green revolution technologies, albeit in a slightly different manner. Transgenic technology has been in the laboratory for a long time, more than 20 years without any significant returns on the huge investment. The agrochemical companies specialising in biotechnology research are faced with a declining demand and profi t from the agrochemical business. Therefore, they acquired seed companies aggressively and used their proprietary rights over the technology to improve profitability by resorting to complementary product development (Rao 2004). This is done to improve the sales of the agrochemicals they make. The herbicide tolerant soybean, maize and canola came about in this manner. This is akin to the situation in the green revolution days, when the declining profitability of the fertiliser companies brought about new technology where seeds were concerned and which depends on use of fertilisers.5 Further, the acquisition of seed companies by biotech companies across the globe has been responsible for concentration in the seed market, where a few multinationals dominate the market (Shiva and Crompton 1998; Spielman 2007).

In addition to privatisation, this unprecedented concentration in the seed market arose primarily as a result of developments in biotechnology. The spending on research by a few multinational companies far exceeds the spending by CGIAR institutes or even many of the developing countries (Table 5). For example, the spending in India on total agricultural research per annum is around $500 million and biotech research may

Table 5: R&D Spending and Sales of Leading Multinational Firms

Subsidiary/Parent, Country of Headquarters Crop Protection Seed/Biotechnology Total R&D Sales R&D as a R&D Sales R&D as a R&D Sales R&D as a Expenditure (US$ m) % of Sales Expenditure (US$ m) % of Sales Expenditure (US$ m) % of Sales (US$ m) (US$ m) (US$ m)

Syngenta, Switzerland 500 6,030 8 310 1,240 25 810 7,270

Monsanto, US 40 2,870 1 490 2,350 21 530 5,220 10

BASF, Germany 340 4,170 8 93 NA NA 433 4,170

Pioneer Hi-bred/Dupont, US 215 2,210 10 312 2620 12 527 4,830

Bayer CropScience/Bayer, Germany 730 7,000 10 110 390 28 840 7,390

Dow AgroScience/Dow, US 250 3,140 8 90 230 39 340 3,370

Economic & Political Weekly

december 26, 2009 vol xliv no 52

not account for more than $50 million. The international public countries are promoted ahead of others. The crops improved agricultural research represented by the CGIAR network is also through the biotech route are also too few and in keeping with the on the decline and the spending on biotechnology is around $35 demands of the industrialised countries. million comprising 7% of the total research expenditure per The commercialised transgenics are limited to only four

Figure 3: Per Cent Share of Benefit to Bt Famers

21 94 66 84 58

100 90 80 70 60 50 40 30 20 10

0 Argentina China India

Source: Qaim and Matuschke (2004).

Farmers 74%

Mexico South Asia

Source: Field surveys.

annum. On the other hand, the largest agbiotech multinational company invests $490 million in biotechnological research per annum (Table 7). This asymmetry in investments is likely to lead to unfavourable outcomes for the resource-poor farmers and for the poor in g eneral.

Table 6: Number of Field Trials of Genetically Modified Crops through Mid-2003

(by region)

Crop Latin America Africa Asia Transitional Total LDC Total Field LDC Share of
Economies Countries Trials – All Countries Total (%)
Corn 603 263 22 98 986 5,564 18
Canola 22 8 3 12 45 1,358 3
Potato 36 25 16 28 105 1,169 9
Soybean 192 61 3 7 263 954 8
Cotton 147 116 56 0 319 985 32
Tomato 38 6 23 0 67 686 10
Sugar beet 7 1 0 29 37 397 9
Tobacco 16 1 36 11 64 371 17
Wheat 19 5 1 6 31 367 8
Rice 14 0 42 0 56 252 22
Other 141 39 41 10 231 1,989 12
Total 1,235 525 243 201 2,204 14,127 16

Source: Pray et al (2007).

The debates and controversies on biotechnology in a developing country like India also emanate from the divergent regulatory approaches in the US and the European Union (EU). Whereas the regulation in the former is gradually becoming permissive, it has been very restrictive in the latter. The effects of this polarisation and power plays of interest groups supporting each side have their echoes in these debates (Pehu and Ragasa 2007).

4 Market Failures and Neglect of Agricultural Common Goods

The pattern of commercialisation in the last 12 years shows that there are market failures in addressing the improvement of crops and traits of importance to resource-poor farmers, often called agri cultural common goods. While a wide range of traits in all the crops can be developed by means of modern bio technology, the profit motive limits it to those that can be lucratively marketed. The traits of importance to the developing countries like drought tolerance, and higher genetic potential are not deve loped, though that is possible. Traits like cold resistance needed for the indutrialised


crops, viz, soybean, maize, cotton and mus-

Figure 4: Per Cent Share of Benefit in India

tard accounting for 53%, 30%, 12% and 5% of

the total area covered under transgenics, re

spectively. On the other hand, herbicide toler-

Seed companies 26% ant soybean, maize and mustard account for

85% of the total commercialised biotech prod

ucts in the world today (Figure 5, p 61). Who

does this suit? Needless to say, this is suited to

the large mechanised farms of developed

countries where employment is not an issue.

This undue emphasis on herbicide tolerance

can, in fact, i ncrease the overall chemical use

and reduce employment.

The technologies in the pipeline also suggest that 63% of all the field trial research is on these crops. Only 4% of total fi eld trials are meant for crop development in each of the two major staples of the world, viz, wheat and rice (Table 6). What is more worrying is the fact that not even a single research experiment is being carried out on “orphan crops” like minor millets, pulses and oilseeds.

The tools of genetic modifi cation have so far attempted only to close the yield gap by developing technologies for resisting some biotic stresses like insects and virus. As the yield levels in developed countries have already reached a very high level, the multinational biotech companies of the developed countries do not target this particular trait (Ruttan 2002). If this pattern of commercialisation continues neglecting staple crops like paddy, wheat, minor millets, pulses and oilseeds, there can be serious problems by way of distortion in the crop-mix of the country. It is well known that the availability of the green revolution t echnologies is responsible for the diversification in favour of

paddy and wheat and away from crops like coarse cereals, which provide food with higher calorifi c value (Chand and Chauhan 2002). Though this has helped in achieving self-suffi ciency in food production, several problems of sustainability and environmental degradation have arisen due to the way in which those technologies are applied. If better varieties with higher productivity and profi tability are applied to only commercial crops, then the

december 26, 2009

Table 7: Poverty among All Rural Persons and Farmers

India/States 2003 2003 Poverty Line All Rural Farmers Consumption Rs/Month 2003

Andhra Pradesh 11.14 11.08 286.27

Assam 21.64 31.05 381.76

Bihar 37.56 39.90 337.69

Gujarat 14.62 22.47 346.76

Haryana 5.81 10.46 386.37

Himachal Pradesh 6.39 12.45 393.24

Jammu and Kashmir 7.06 6.15 393.24

Karnataka 11.04 19.21 326.72

Kerala 9.10 10.20 403.99

Madhya Pradesh 24.48 35.30 316.65

Maharashtra 18.11 21.45 344.42

Orissa 43.24 53.51 315.62

Punjab 6.21 6.31 386.05

Rajasthan 19.08 21.89 359.94

Tamil Nadu 21.67 26.64 361.84

Uttar Pradesh 29.98 37.39 357.75

West Bengal 20.97 27.17 360.66

All-India 23.99 30.73 347.96

Source: Bhalla (2006).

vol xliv no 52

cropping pattern may shift in their favour and food security may suffer. Therefore, the present pattern of product development driven primarily by the profit motive of the multinational companies can wreak havoc with the country’s agriculture. Proper correctives with suitable priorities and the intervention of the State are needed immediately to ensure that this does not happen.

5 Impact on Poverty Reduction

Many critics of biotechnology argue correctly that the root cause of hunger is poverty and not the non-availability of food. They imply from this that there is neither a need to produce more nor to increase productivity to feed the starving millions. However, the question that remains is how to solve the problem of poverty in a country where large numbers of people rely either directly or indirectly on agriculture. The experience of poverty reduction in poor agrarian societies reveals that raising the p roductivity of small-scale farming is a key requirement to overcome poverty, because poor people are concentrated in the rural sector and their livelihoods are based on agriculture (Herdt et al 2007; Lewis 1954; Mellor 1966; Pinstrup-Andersen 2002; R avallion and Datt 1998). In India too, poverty is concentrated in rural areas6 and the livelihoods of majority of the people in the rural areas depend on agriculture. The rural poverty in 2004-05 was 28.3 and higher7 compared to urban poverty, which was 25.7 (Dev 2008). The unique feature of Indian agriculture is that the small and marginal farmers dominate the

Table 8: Employment Impact of Bt Cotton vis-à-vis farming commu-Conventional Cotton

nity. The poverty

Bt Cotton Non-Bt Cotton

among the farmers

2004-05 Male (days) 21.49* 18.82is higher compared

Female (days) 62.92* 51.33 to the general rural
Children (days) 5.71** 3.82 population in India
Total man-days equivalent 66.29* 54.95 (Table 7). There-
With and without in 2006-07 Male (days) Female (days) Children (days) 18.34* 53.99 0.74 21.8150.361.97 fore, raising agricultural productivity through new
Total man-days equivalent 55 56 technologies like bi-

After Adoption in 2006-07otechnology would Male (days) 18.20 18.82

be crucial for pov

Female (days) 53.45 51.33

erty reduction at

Children (days) 0.67 3.82

this juncture of de-

Total man-days equivalent 54.16 54.95

* indicates significance below 5% level compared to non-Bt. velopment. Several Source: Field surveys.

studies also show that raising agricultural productivity can enhance growth and employment in the rural non-farm sector and thereby contribute to poverty reduction (Dev 1990). This, in turn, can push wages upward. There is a consensus in the literature that agricultural growth is crucial for poverty reduction (Ahluwalia 1978; Mellor 2006) and this can be promoted with the same level of input use by new technology like biotechnology. However, this is not without a caveat. The nature of agricultural growth matters for poverty reduction. It can have a higher positive impact with cerealbased growth, as large numbers of people still depend on staples for their energy requirements.8

The poverty reduction mechanism for any agricultural technology can work in one of the following ways.9 It can result in

Economic & Political Weekly

december 26, 2009 vol xliv no 52

Figure 5: Traits Covered under Transgenic Crops in 2008

Herbicide tolerance/insect resistance 22%

Herbicide tolerance 63% Insect resistance 15%

Source: James (2008).

higher income and provide productive and regular employment. It can lower food prices by increasing the productivity of the food crops.10 It can also target crops grown by the poor and increase their uses. If these tools are used to develop crops resistant to drought, which is the major co-variate risk in the rural areas, then it can help reduce income variability. Is this likely to happen given the way agricultural biotechnology is presently used for product development? Unfortunately for the starving masses of India, it is unlikely to happen if the experience of the past 12 years is anything to go by. So far, it has focused on crops and traits of importance to developed countries. The commercialisation pattern and the technologies in the pipeline discussed above clearly show evidence of market failures and neglect of agricultural common goods.

There are no initiatives as far as oilseeds, pulses and minor millets are concerned. The country’s agriculture is dominated by the rain-fed method of agriculture. Even if the potential of irrigation is achieved by completing all the feasible projects, more than 50% of the cultivable area would be at the mercy of the rain gods. The majority of the small and marginal farmers in the country cultivate the so-called orphan crops. Unless efforts are made to develop varieties that can increase the genetic potential of these crops in dry land conditions, poverty reduction cannot be achieved. However, this should not make us blind to the potential of biotechnology to help develop products to suit the dry lands and resource-poor farmers, unlike the green revolution technologies, which by their very nature are biased in favour of well-endowed regions and big farmers.

It is known that improvements in the nutritional status have not kept pace with the reduction in poverty and the current level of malnutrition is unacceptably high in the country (Radhakrishna and Ravi 2004). In fact, nutritional security is the major concern now, apart from poverty. Therefore, if biotechnology is harnessed to address this problem, it would be of great help in reaching the Millennium Development Goals. Some of the applications like Golden Rice and Protein rich potato (Protato) show how defi ciency of vitamin A and protein respectively can be alleviated. Food fortification through the transgenic route is diffi cult because it depends on the availability of vitamin A, protein, etc, and on the availability of other elements. Thus, it should be viewed only as a complement to existing interventions.

A strong public research network and vibrant seed market in the private sector are the two advantages for India in the fi eld of modern biotechnology. The National Agricultural Research System (NARS) in India is widely considered to be one of the strongest in developing countries (along with China and Brazil) and is capable of upstream research. Public sector research can bestow more social benefits than that undertaken by the private sector. However, the public sector research in the country is not only limited, it also does not seem to integrate the tools of biotechnology and is mostly imitative of the private sector.11 There is no policy to prioritise the technology development efforts. The r ecent Biotech Policy 2008 shows proof of this.

The main assumption of the present policy formulation is that creating incentives and enabling environment for private players can take care of all aspects. As the above analysis clearly shows market forces fail to bring equity through this technology. A vision for making the growth of this sector subservient to the overall goal of pro-poor agricultural development that a ccelerates poverty reduction and employment creation is essential.

The vibrant seed market in the private sector in the country can encourage research by multinationals targeting the local needs of India’s farming community. In fact, several of these companies have openly acknowledged that the response of farmers in India, China and South Africa drives them to work on issues of interest to developing countries.

Achieving pro-poor agricultural development through this technology depends on how the policymakers utilise these strengths by undertaking prioritised research and tap the p otential of private sector by creating an enabling environment. In fact, these two are the legs on which pro-poor agricultural development can move ahead, subject to the provision of other interventions.

Finally, it is necessary to mention and emphasise here that biotechnology can only be a technological option and not a substitute for the State’s role in terms of infrastructure creation, marketing avenues, etc, as Figure 6 clearly brings out. It is not a p anacea for poverty reduction. The State should actively i ntervene in other areas like higher investment in public a gricultural research, extension, irrigation, credit, marketing and input provision.

Impact on Employment

The impact of the commercialised biotech crop hybrids/varieties on employment generation does not seem to be very encouraging. The labour utilisation in Bt cotton in different countries reveals that it has reduced the need for labour by virtue of reduced pesticide sprayings. In places where cotton is picked manually, the net labour effect is ambiguous (Qaim and M atuschke 2004). However, a few studies in India reported higher labour requirements (Qaim 2003; Qaim et al 2006). Our longitudinal field studies showed mixed results. The fi rst survey revealed a positive and significant increase of 21% in 2004-05 because of the increased labour use for harvesting (Table 8, p 61). But in 2006-07, there was no signifi cant difference in Bt cotton compared to the conventional hybrids. This is due to the fact that the positive labour use for harvesting is compensated by the decline in pesticidal sprayings.

The labour requirement in herbicide tolerant soybean, corn, canola and cotton, accounting for 85% of all the area under transgenics in the world, is obviously lower than their c ounterparts. It was found in Argentina that herbicide tolerant

Figure 6: How Agricultural R&D Affects the Poor

Agricultural R&D

Agricultural production Other factors: • Infrastructure • Human capital • Policies • Asset distribution Farm income and own food supply Technology Urban non-farm wages and employment Food prices Rural non-farm wages and employment Agricultural wages and employment Other socio-economic factors Rural poor Urban poor Other socio-economic factors

Source: Adato et al 2007, p 21.

soybean required 16% lower labour time and 20% lower machinery time (Qaim and Traxler 2005). It is worthwhile to mention here that the impact of seed-fertiliser technologies of the 1960s on employment is also not very signifi cant.12 The experience of the commercialisation of biotech crops in the last 12 years suggests that it may not increase the labour use and in fact, may reduce labour use if the present pattern of product development continues. Therefore, it would be of the foremost importance to keep the objective of employment in view in future product development. It would be of great help if efforts are made to not reduce employment especially for women as more and more women depend on agriculture. Men, on the other hand, are increasingly going into the service and manufacturing sectors.

6 Conclusions and the Way Forward

The tools of modern biotechnology provide an opportunity to meet the challenges of Indian agriculture. Biotechnology can break production constraints, especially in marginal environments, something that the green revolution technologies were not very successful at. However, the nature of ownership,

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december 26, 2009 vol xliv no 52

property rights, asymmetries in research expenditure, liberalisation in input and output markets and degradation of the environments compared to the 1960s all necessitate the increased role of the State if the resource-poor farmers are to access and benefit from these technologies. Market failures are endemic to product d evelopment in biotechnology and the evidence reviewed in this paper shows that the agricultural common goods are neglected because of the proprietary nature of technology and the profi t motive.

While this is the overall picture, there are also some bright spots like Bt cotton. The results presented in this paper show that this technology is scale-neutral and profitable to all groups of farmers and widely adopted by all groups. It proves that there can be some spin-offs from research done for developed countries. In the changed circumstances of shifting the locus of research, the private sector can play a crucial role in commercial crops, fruits and vegetables in view of the huge market for them and also because the evidence presented here shows that major share of the additional benefits from the technology goes to the farmers and not seed developers. On the whole, achieving pro-poor agricultural development through the tools of modern b iotechnology may be difficult, if the pattern of research and product development continues in the same way and the state does not take up a proactive role to reverse this.

The Way Forward

In view of the above danger, the debate on biotechnology needs a new focus, which can bring issues of unequal access, market failures, and addressing agricultural common goods into sharp f ocus. Enlarging the debate with the active involvement of social scientists from the point of view of the starving masses is all the more important, as the rapid pace of biological research makes new opportunities available.

The public sector has to increase its efforts in fundamental and applied biotech research and at the same time redefi ne priorities


1 See Sen and Himanshu (2004) and Dev (2008) for a detailed exposition.

2 The growth in output of cereal crops, nonhorticultural crops and crops sector as a whole was only 0.02, 0.05 and 0.79% per annum respectively between 1996-97 and 2004-05 (Chand et al 2007). The yields of several crops like rice, wheat, sorghum, gram, groundnut, cotton, rapeseed-mustard and sunflower stagnated in the same period.

3 See World Bank (2007) for details. 4 The World Development Report 2008 of the World Bank (2007) also echoed similar apprehensions. Similar conclusions are given in Byerlee and Fisher (2001), Dalrymple (2008), Lipton (2001), and Spielman (2007).

5 See C H Rao (1994), pp 66-67.

6 Out of the total poor people of 315 million in 2004-05, 74% live in rural areas in India. 7 This is based on uniform reference period. 8 Lipton (2001) shows how increasing the produc

tion and productivity of staples is still essential for poverty reduction in developing countries.

9 See Otsuka (2000) for a review of the Asian

in view of these opportunities and formulate a strategy to plan its research instead of duplicating the work being carried out by the private sector. The immediate task is to integrate the tools of biotechnology in a comprehensive agricultural research and development programme. Biotechnologies are not standalone technologies and have more to do with the knowledge created in related fields. Therefore, the collaborative efforts between agricultural institutes and other research institutes have to be stepped up so that complementarities and economies of scale can be exploited.

It is essential to create an enabling environment for private enterprise to continue and expand research in the country. Strengthening the regulatory framework to properly assess the agronomical, economic, social, environmental and biosafety i ssues arising from the products of biotechnology vis-à-vis conventional products are important to allay the fears of consumers on the one hand and quickly commercialise the products without discouraging private investment. The State will have to play a proactive role in priority setting for pro-poor agricultural development and accessing tools and technologies from the private sector by forging creative public-private partnerships to focus on crops and problems of importance to small farmers.

The participation of the end-users in technology development needs to be encouraged by taking lessons from the experiences of some of the grassroots organisations. Though several new institutions are set up to offer biotechnology courses at graduate level and beyond, the efforts for education and capacity building of the general public are very minimal. These have to be stepped up so that unwarranted fears and opposition to the development of technology recede. If these fears and uncertainties continue, prospective investors may move away from agricultural biotechnology to others like pharma or industrial bio technologies. That will mean an opportunity lost for

India’s agriculture.

experience with green revolution rice technologies.

10 In a liberalised context, exports can take away the gains from higher productivity and production in an early adopting country (Adato and Meinzen-Dick 2007). Of course, the diffusion of the same technologies all through the world can again lower the prices.

11 It can be observed that more than 50% of the total research in biotechnology in the country is f ocused on cotton hybrids and the public sector institutions also are focusing mostly on cotton, mustard, brinjal, okra, etc, which are being done in the private sector.

12 See C H Rao (1994) for a detailed analysis.


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