Who Is Commercializing Genetically Engineered Crops and What Is the Outcome?

Data regarding food and environmental safety, submitted by the developers of all GE crops, have undergone testing and regulatory scrutiny by federal regulatory agencies (Part I, see “Which U.S. Agencies Have Regulatory Authority Over Genetically Engineered and Classically Bred Crops?”). Costs of compliance with the biosafety regulations varies significantly depending on the crop, trait, type of regulatory approval, and in which and how many countries developers seek regulatory approval. Using data from interviews with scientists and regulatory personnel, submitted dossiers over a ten year period, and cost data provided by developers of GE crops, compliance costs for Bt maize were estimated at $7.1 to $15.4 million and for HT maize at $6.1 to $14.5 million (1). These costs are in addition to research and development, intellectual property, and technology transfer costs (see “Why Are Genetically Engineered Crops Patented? Does This Affect Farmers in the United States?”). Private and public sector developers face uncertainties in compliance costs and outcomes of biosafety regulatory decisions that result in an impact on the product stream submitted for regulatory review. The impact on public sector efforts is more limited because these developers often lack expertise and the physical and financial resources needed to complete the regulatory process.

With the magnitude of these expenses it is perhaps not surprising that an estimated 80% of all GE traits receiving regulatory approval worldwide are owned or co-owned by four major companies and their subsidiaries, Bayer Cropscience (Monheim am Rhein, Germany), Dupont (Wilmington, Delaware, United States), Monsanto (St. Louis, Missouri, United States), and Syngenta (Basel, Switzerland) (1). Despite a considerable trait pipeline from both public and private sector (2), to date most GE crops on the market harbor Bt and/or HT traits. A summation of public sector products created in or for developing countries also shows a sizeable pipeline of innovation, although most products have not reached commercialization (3). Furthermore, high regulatory costs are an impediment to academic and government research institutions and small businesses participating as major players in the commercialization of GE crops (4). This situation has discouraged the development of other GE traits and the introduction of these traits into crops with limited market size (5) and with further application in developing countries where GE crops could have significant impacts. A review of socioeconomic impact assessments of GE crops in developing countries showed that, on average, the impact has been positive although with significant variability across regions, countries, crops, and traits (6). Outcomes have been limited mostly by institutional, not technological, issues. As safe use continues to be demonstrated, further consideration should be given to controlling costs of biosafety regulation and to enabling technology transfer to developing countries.

References:

1. Kalaitzandonakes N, Alston JM, Bradford KJ. 2007. Compliance costs for regulatory approval of new biotech crops. Nat. Biotechnol. 25:509–11

2. Lemaux PG. 2006. Ag Biotech Pipeline. What’s in the Lineup? Eaglesham A, Hardy R. Agricultural Biotechnology: Economic Growth through New Products, Partnerships and Workforce Development. Natl. Agric. Biotechnol. Counc. Rep. 18, pp. 31–43. Ithaca, NY

3. Atanassov A, Bahieldin A, Brink J, Burachik M, Cohen JI, et al. 2004. To reach the poor: Results from the ISNAR-IFPRI Next Harvest study on genetically modified crops, public research, and policy implications. Environ. Prod. Technol. Div. Discuss. Pap. 116. Int. Food Policy Res. Inst., Washington, DC

4. Bradford KJ, van Deynze A, Gutterson N, Parrott W, Strauss SH. 2005. Regulating transgenic crops sensibly: lessons from plant breeding, biotechnology and genomics. Nat. Biotechnol. 23:439–44

5. McHughen A. 2006. Plant Genetic Engineering and Regulation in the U.S. Univ. Calif. Agric. Nat. Resourc. Agric. Biotechnol. Calif. Ser. Publ. 8179

6. Smale M, Zambrano P, Falck-Zepeda J, Gruere G. 2006. Parables: Applied economics literature about the impact of genetically engineered crop varieties in developing economies. EPT Discuss. Pap. 158. Int. Food Policy Res. Inst., Washington, DC

Updated 2/16/12