GM Crops: The First Ten Years - International Service for the ...

GM Crops: The First Ten Years
Figure 14.National farm income impact of using GM IR cotton in South Africa 1998-2005
6,000
5,000
4,000
'000 $ 3,000
2,000
1,000
0
1998 1999 2000 2001 2002 2003 2004 2005
Sources and notes:
1. Impact data based on Ismael et al (2002)
2. Yield impact +24%, cost of technology $14/ha-$24/ha, cost savings (reduced insecticide use) $12/ha-$23/ha
3. All values for prices and costs denominated in South African Rand have been converted to US dollars at the annual average
exchange rate in each year
4. The decline in the total farm income benefit 2004 and 2005 relative to earlier years reflects the decline in total cotton plantings.
This was caused by relatively low farm level prices for cotton in 2004 and 2005 (reflecting a combination of relatively low world
prices and a strong South African currency)
The main impact of using GM IR cotton has been major increases in yield 41 . With respect to cost of
production, the average cost of the technology (about $54/ha) has been greater than the average
insecticide cost savings of $31/ha-$42/ha resulting in a net increase in costs of production. However,
the yield gains have resulted in important net gains to levels of profitability of $139/ha, $324/ha,
$171/ha and $260/ha respectively in 2002, 2003, 2004 and 2005. At the national level, the farm
income gain in 2005 was $339 million and cumulatively since 2002 the farm income gains have
been $463 million.
The impact on total cotton production was an increase of 10% in 2005 and in added value terms,
the combined effect of the yield increases and higher costs of production on farm income in 2005
was equivalent to an annual increase in production of 6.5% (based on the 2005 production level
that is inclusive of the GM IR related yield gains).
41 Bennett et al (2004) found average yield increases of 45% in 2002 and 63% in 2003 (average over the two years of 54%) relative
to conventionally produced cotton. More recent survey data from Monsanto (2005) confirms this high yield impact (+58%
reported in 2004) and from IMRB (2006) which found an average yield increase of 64% in 2005
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