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GMO Myths and Truths

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5.9 Myth: GM crops bring economic benefits to farmers<br />

Truth: Economic impacts of GM crops on farmers are variable<br />

“Perhaps the biggest issue raised by<br />

these results is how to explain the rapid<br />

adoption of GE crops when farm financial<br />

impacts appear to be mixed or even<br />

negative.”<br />

– J. Fern<strong>and</strong>ez-Cornejo, W. D. McBride,<br />

The adoption of bioengineered crops, US<br />

Department of Agriculture 6<br />

The question of economic impacts of GM crops on<br />

farmers is complex <strong>and</strong> a thorough examination is<br />

beyond the scope of this report. Results vary <strong>and</strong><br />

depend on many factors, including:<br />

● Suitability of the crop for local conditions<br />

● Climate<br />

● Pest <strong>and</strong> disease prevalence<br />

● Cost of weed management<br />

● Subsidies <strong>and</strong> incentives offered by<br />

governments or corporations<br />

● Cost of seed<br />

● Availability of markets for the crop.<br />

The following studies give an overview of the<br />

issue.<br />

Fern<strong>and</strong>ez-Cornejo (2002)<br />

This report on farm-level economic impacts of<br />

adopting GM crops found that they were “mixed<br />

or even negative”. The report, mostly based on<br />

data from USDA surveys, found that adoption<br />

of herbicide-tolerant maize had a positive effect<br />

on net returns, but the effect was negative for Bt<br />

maize. GM soybeans had no effect either way. 6<br />

Gómez-Barbero (2006)<br />

This review for the European Commission of the<br />

economic impact of the main GM crops worldwide<br />

found that herbicide-tolerant soybeans had a<br />

negative effect on US farmers’ income. But the<br />

same crop brought income gains to Argentine<br />

farmers, due to lower prices for GM seed in that<br />

country. 124<br />

Why do US farmers adopt GM soy if it brings<br />

no financial gain? The authors suggested that the<br />

reason may be simpler weed control, 124 though<br />

the data cited to back up this claim pre-date the<br />

explosion of herbicide-resistant superweeds that<br />

has caused the cost of GM soy production to rise<br />

(see 5.2).<br />

The review found that Bt cotton in China had<br />

produced economic gains for farmers, mostly<br />

because of reduced expenditure on pesticide<br />

sprays. Bt cotton in India was claimed to provide<br />

economic benefits, though with considerable “local<br />

variability”. 124 These studies were also carried<br />

out before the full impact of pest resistance <strong>and</strong><br />

emergence of secondary pests was experienced by<br />

Chinese <strong>and</strong> Indian farmers.<br />

Morse (2005)<br />

This study found that Bt cotton in India produced<br />

better profit margins for farmers than non-GM<br />

cotton. However, the authors pointed out that these<br />

benefits will only be sustained if pests do not evolve<br />

resistance to Bt cotton. 125 Recent studies suggest<br />

that they are already evolving resistance (see 5.4).<br />

These findings are confirmed by a leaked<br />

advisory from the Indian government which<br />

blamed Bt cotton for the spate of farmer suicides<br />

across the subcontinent. The advisory stated,<br />

“Cotton farmers are in a deep crisis since shifting<br />

to Bt cotton. The spate of farmer suicides in 2011–<br />

12 has been particularly severe among Bt cotton<br />

farmers.” The advisory added that Bt cotton’s<br />

success had only lasted five years. Since then,<br />

yields had fallen <strong>and</strong> pest attacks had increased:<br />

“In fact cost of cotton cultivation has jumped…<br />

due to rising costs of pesticides. Total Bt cotton<br />

production in the last five years has reduced.” 126<br />

5.9.1. The rising cost of GM seed<br />

An important factor in assessing the economic<br />

impact of GM crops is the cost of seed. In the<br />

United States, where GM firms dominate the seed<br />

market, a 2009 report documents that prices for<br />

GM seeds have increased dramatically compared<br />

with prices for non-GM <strong>and</strong> organic seeds. This cut<br />

average farm incomes for US farmers growing GM<br />

crops. The $70 per bag price set for RR2 soybeans<br />

<strong>GMO</strong> <strong>Myths</strong> <strong>and</strong> <strong>Truths</strong> 85

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