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Genetically Modified Crops in Africa Economic and Policy Lessons from Countries South of the Sahara Edited by José Falck-Zepeda, Guillaume Gruère, and Idah Sithole-Niang A Peer-Reviewed Publication International Food Policy Research Institute Washington, DC Copyright © 2013 International Food Policy Research Institute. All rights reserved. Sections of this material may be reproduced for personal and not-for-profit use without the express written permission of but with acknowledgment to IFPRI. To reproduce material contained herein for profit or commercial use requires express written permission. To obtain permission, contact the Communications Division at ifpri-copyright@cgiar.org. The opinions expressed in this book are those of the authors and do not necessarily reflect the policies of their host institutions. International Food Policy Research Institute 2033 K Street, NW Washington, DC 20006-1002, USA Telephone: +1-202-862-5600 www.ifpri.org DOI: http://dx.doi.org/10.2499/9780896297951 Library of Congress Cataloging-in-Publication Data Genetically modified crops in Africa : economic and policy lessons from countries south of the Sahara / edited by José Falck-Zepeda, Guillaume Gruère, and Idah Sithole-Niang. p. cm. ISBN (10 digit): 0-89629-795-0 ISBN (13 digit): 978-0-89629-795-1 (alk. paper) 1. Transgenic plants—Africa, Sub-Saharan. 2. Transgenic plants— Economic aspects—Africa, Sub-Saharan. 3. Crops—Genetic engineering—Africa, Sub-Saharan. 4. Crops—Genetic engineering— Economic aspects—Africa, Sub-Saharan. I. Falck-Zepeda, José Benjamin. II. Gruère, Guillaume P. III. Sithole-Niang, Idah. IV. International Food Policy Research Institute. SB123.57.G47815 2013 338.1 867—dc23 2013003854 Cover design: Carolyn Hallowell, Designer Book layout: Princeton Editorial Associates Inc., Scottsdale, Arizona Contents Tables, Figures, and Boxes vii Abbreviations and Acronyms xi Foreword xiii Acknowledgments xv Introduction and Background 1 José Falck-Zepeda, Guillaume Gruère, and Idah Sithole-Niang Chapter 1 Socioeconomic and Farm-Level Effects of Genetically Modified Crops: The Case of Bt Crops in South Africa 25 Marnus Gouse Chapter 2 Bt Maize and Fumonisin Reduction in South Africa: Potential Health Impacts 43 Carl E. Pray, John P. Rheeder, Marnus Gouse, Yvette Volkwyn, Liana van der Westhuizen, and Gordon S. Shephard Chapter 3 Genetically Modified Cotton in Uganda: An Ex Ante Evaluation 61 Daniela Horna, Patricia Zambrano, José Falck-Zepeda, Theresa Sengooba, and Miriam Kyotalimye Chapter 4 Benefits, Costs, and Consumer Perceptions of the Potential Introduction of a Fungus-Resistant Banana in Uganda and Policy Implications 99 Enoch M. Kikulwe, Ekin Birol, Justus Wesseler, and José Falck-Zepeda Chapter 5 Genetically Modified Organisms, Exports, and Regional Integration in Africa 143 David Wafula and Guillaume Gruère Chapter 6 Estimates and Implications of the Costs of Compliance with Biosafety Regulations for African Agriculture 159 José Falck-Zepeda and Patricia Zambrano Chapter 7 Policy, Investment, and Partnerships for Agricultural Biotechnology Research in Africa: Emerging Evidence 183 David J. Spielman and Patricia Zambrano Chapter 8 Genetically Modified Foods and Crops: Africa’s Choice 207 Robert Paarlberg Conclusion 219 Guillaume Gruère, Idah Sithole-Niang, and José Falck-Zepeda Contributors 229 Index 235 vi Tables, Figures, and Boxes Tables I.1 Regulatory status of genetically engineered crops in the regulatory and development pipeline, 2009 11 1.1 Estimated area and share of total area planted to transgenic cotton in South Africa, 2000/2001–2007/08 28 1.2 Summary of findings of main published studies 30 1.3 Estimated area and share of total area planted to genetically modified maize in South Africa, 2000/2001–2009/10 35 2.1 Maize and beer consumption and fumonisin exposure (probable daily intake) 46 2.2 Fumonisin (FB1) levels in maize and maize products in South Africa 47 2.3 Possible government interventions and their potential impact 49 2.4 Percentage of smallholder farmers using purchased seed, by region, 2001 50 2.5 Comparison of total fumonisin levels in maize in rural KwaZulu-Natal, 2004–2007 (mg/kg = ppb) 52 2.6 Fumonisin exposure in the Eastern Cape with Bt maize adoption 53 3.1 Organic cotton production, 1999–2008 70 3.2 Assumptions for variables and distributions used for partial budget simulations 71 3.3 Descriptive statistics 75 3.4 Descriptive statistics of main variables, control of plot 77 3.5 Cotton profitability for low- and high-input systems, season 2007/08 78 3.6 Cotton profitability for conventional and organic cotton producers, 2007/08 season 80 3.7 Partial budgets for scenarios using genetically modified seed 83 3A.1 All sample (N = 151) 88 3A.2 Low-input producer (N = 124) 89 3A.3 High-input producer (N = 27) 89 3A.4 Conventional producer (N = 139) 90 3A.5 Organic producer (N = 12) 90 4.1 Hurdle rates and average annual MISTICs per hectare of genetically modified bananas, per household, and per banana- growing farm household at different risk-free rates of return and risk-adjusted rates of return 111 4.2 Comparison of KAP scores with consumer characteristics 113 4.3 Random-parameter logit model with interactions 116 4.4 Segment-specific valuation of banana bunch attributes (percentage change in price per banana bunch) 118 4.5 Compensating surplus and 95 percent confidence intervals for four bunch optionsa 120 5.1 GM (genetically modified) crops and products included in the Regional Approach to Biotechnology and Biosafety Policy in Eastern and Southern Africa project 148 5.2 Immediate export losses if all European importers shunned all “possibly GM” or “possibly GM-tainted” products 149 6.1 Social costs of biosafety regulations 164 6.2 Estimates of cost of applications over time (US dollars) and processing time (months) for the Insect-Resistant Maize for Africa project in Kenya 166 6.3 Estimates of the cost of regulation for the containment stage of the Insect-Resistant Maize for Africa (IRMA) project in Kenya, 2005 (2005 US dollars) 166 viii 6.4 Estimates of the cost of regulations of Bt cotton in Kenya, 2005 (2005 US dollars) 167 6.5 Estimates of the cost of compliance with biosafety regulations for fungus- and nematode-resistant banana in Uganda, 2006– 09 (2005 US dollars) 168 6.6 Cost of compliance with biosafety regulations 169 6.7 Estimated costs for biosafety activities for India, China, and the United States (US dollars) 170 6.8 Estimates of cost of compliance with biosafety regulations for selected technologies in the Philippines and Indonesia 171 7.1 Number of genetically modified products in Africa south of the Sahara, 2011 185 7.2 Number of genetically modified crops under development in Africa, 2003 and 2009 191 7.3 Distribution of public–private partnerships in the CGIAR, by center, as of 2004 192 7.4 Number of institutional arrangements used in public genetically modified products under development, by region and type of arrangement 194 Figures I.1 Area cultivated with genetically engineered crops, by country 7 I.2 Share of genetically modified crop acreage, by country 8 I.3 Status of National Biosafety Frameworks (NBFs) in Africa 9 3.1 Cotton-growing regions in Uganda 64 3.2 Cotton value chain in Uganda 65 3.3 Graphical analysis of marginal benefits. (a) low-input producer; (b) high-input producer; (c) conventional producer; (d) organic producer; (e) insect-resistant cotton producer; (f ) herbicide- tolerant cotton producer. 84 4.1 Location of study sites 109 4.2 Value of welfare and maximum incremental socially tolerable irreversible costs (MISTICs) per bunch at different risk- adjusted discount rates 121 ix 6.1 Biosafety regulatory phases and regulatory decision points in a functional biosafety system 162 6.2 (a) Increase in the cost of compliance (b) Compliance cost with increases in the time of approval 175 Boxes 6.1 Other Definitions of Biosafety 161 x Abbreviations and Acronyms agbiotech agricultural biotechnology AGRA Alliance for a Green Revolution in Africa ARC Agricultural Research Council AU African Union Bt insect-resistant trait conferred on crops, allowing them to synthesize crystalline proteins that are lethal to specific insects (originates from the bacteria Bacillus thuringiensis) CDO Cotton Development Organisation CERA Center for Environmental Risk Assessment CIMMYT International Maize and Wheat Improvement Center COMESA Common Market for Eastern and Southern Africa D&PL Delta and Pineland EAC East African Community EC esophageal cancer FAO Food and Agriculture Organization of the United Nations FAO-BioDeC Food and Agricultural Organization of the United Nations online Database of Biotechnologies in Use in Developing Countries FB1 fumonisin B1 FY fiscal year GE genetically engineered GEF Global Environment Facility GM genetically modified GMO genetically modified organism HT herbicide tolerant IFPRI International Food Policy Research Institute IRMA Insect-Resistant Maize for Africa ISAAA International Service for the Acquisition of Agri-biotech Applications JECFA Joint FAO/WHO Expert Committee on Food Additives KAP knowledge, attitudes, and perceptions MISTIC maximum incremental socially tolerable irreversible cost MRC Medical Research Council NARO National Agricultural Research Organisation (of Uganda) NBC National Biosafety Committee NBF National Biosafety Framework NEPAD New Partnership for Africa’s Development NTD neural tube defect PPP public–private partnership PROMEC Programme on Mycotoxins and Experimental Carcinogenesis R&D research and development SAGENE South African Committee for Genetic Experimentation SIRB social incremental reversible benefits SSA Africa south of the Sahara UNCST Uganda National Council of Science and Technology UNEP United Nations Environment Programme WEMA Water-Efficient Maize for Africa WHO World Health Organization WTP willingness to pay ZAR South African rand xii Foreword The problems and constraints of finding sustainable solutions to end hun- ger and poverty in Africa are well documented. Agriculture is a criti- cal sector in that quest, as it contributes approximately 35 percent of the continent’s GDP while accounting for 70 percent of its labor force. The sec- tor is also considered significant in the deployment of overall economic devel- opment strategies in the majority of African countries. While there has been some progress in improving African agriculture, productivity improvements are being overshadowed by new and in some cases increased challenges, such as population growth, a changing climate, and the fact that fewer than 30 percent of farmers have access to or use of improved seeds. In addition, technological innovations in use in other developing regions are proving difficult to institute or become accepted practice and policy in Africa—and policies for technolog- ical innovation will be essential to feeding Africa’s population in the future. One promising, yet controversial, technological innovation is biotech- nology. Biotechnology tools, including genetically modified crops and other organisms, have produced valuable products that have been adopted by a large number of farmers globally, including those in Argentina, Brazil, China, and India. Genetically modified (GM) crops have been approved for commercial release in Burkina Faso, Egypt, and South Africa, while contained and con- fined testing of them has been performed in Kenya, Nigeria, Uganda, and other countries. Despite the documented benefits to farmers in developing countries, including those in Africa, many policymakers and farmers in Africa south of the Sahara remain hesitant about the use of GM crops, and they need more information about their potential, benefits, costs, and safety in the African context. Calls to increase agricultural productivity, such as those found in the Maputo Declaration of 2003 and the statement from the African Union Summit of 2009, have not had an impact on the biotechnology debate, in spite of perceptions that biotechnology innovation has largely bypassed the region. While panels convened by the African Union to facilitate multi- stakeholder dialogue have recommended more policy research on economic, social, ethical, environmental, intellectual property, and trade issues relevant to Africa, only limited progress has been made. The International Food Policy Research Institute organized the conference “Bringing Economic Analysis to Inform Biotechnology and Biosafety Policies in Africa” in Entebbe, Uganda, in May 2009 to take stock of economic and policy research focused on biotechnology in Africa and to identify relevant issues to help guide future research. This book brings together the papers writ- ten for, and presentations made at, that conference. The agricultural productivity challenges facing Africa will require a pro- active response and vigilant evaluation of biotechnology and its many tools. Genetically Modified Crops in Africa is meant to help policymakers assess whether and how biotechnology can contribute sustainable solutions to end- ing hunger and poverty in Africa. Shenggen Fan Director General, IFPRI xiv Acknowledgments The 2009 conference organized by the International Food Policy Research Institute (IFPRI) in Entebbe, Uganda, was made possible through sup- port from the U.S. Agency for International Development (USAID). We acknowledge the support of Dr. Theresa Sengooba and Ms. Christina Lakatos, who actively helped organize the conference. We thank the partici- pants in the conference for their valuable contributions to the successful com- pletion of the event. We acknowledge further support from the International Development Research Centre –Canada (IDRC-Canada) and the Program for Biosafety Systems (PBS), which helped in the preparation of this book. PBS is funded by the Office of the Administrator, Bureau for Economic Growth, Agriculture and Trade/Environment and Science Policy, USAID, under the terms of award EEM-A-00-03-00001-00. The opinions expressed herein are those of the co-editors and authors and do not necessarily reflect the views of IDRC-Canada or USAID or its mis- sions worldwide. Introduction and Background José Falck-Zepeda, Guillaume Gruère, and Idah Sithole-Niang Despite multiple internal and external investment efforts, Africa south of the Sahara (SSA) has not been completely successful in facing its agri- cultural and development constraints. This state of affairs has been complicated with the rise of increasingly complex constraints on the conti- nent. The convergence of population growth, increased food production vul- nerability, rising climatic variability, governance and political instability, and delayed investments to overcome environmental and agricultural productiv- ity constraints appears to have thwarted agricultural development efforts. The region’s vulnerability to these binding constraints on food security, as well as on economic growth and prosperity, can be seen in the fact that SSA is still enduring the impacts of the global food and financial crises that occurred in 2008 (IMF 2009; Arieff, Weiss, and Jones 2010; Brambila-Macias and Massa 2010). Africa at the Crossroads Indeed, the persistent impact of the global food and financial crises on SSA highlights the need for increased investments in the development of robust and resilient agricultural, food, fiber, and energy production systems. Increased investments focused on improving such systems can help address these coun- tries’ development challenges. Yet the historical record of investments in this area is littered with ambitious—and in many cases, failed—development plans, policies, and interventions. Easterly (2009) suggests that SSA focus on fea- sible, but homegrown, development interventions that seek solutions to spe- cific problems. Raising agricultural productivity is considered one of the most impor- tant ways to help develop a robust and resilient agriculture and to increase rural income (World Bank 2007). Many examples exist of successful inter- ventions supporting agricultural development that have been built upon sci- ence, innovation, and the use of productivity-raising technologies (Spielman and Pandya-Lorch 2009). Among the broad set of available science and 1 technology interventions, genetically engineered (GE) crops1 present an option that could help increase agricultural productivity, improve income, and contribute to achieving the goals of broader poverty alleviation and national development policies (FAO 2004). The potential role of GE crops in addressing the continent’s constraints has been recognized in Africa ( Juma and Serageldin 2007). Accumulated expe- rience and knowledge in Africa and other developing countries (see Qaim 2009; Smale et al. 2009; Pontifical Academy of Sciences 2010; Potrykus and Ammann 2010; Areal, Riesgo, and Rodriguez-Cerezo 2012) suggest that avail- able GE crops in the short and medium term may have significant value for African agriculture. Yet their development and use remain controversial in many countries in SSA and in other developing countries. This is partly due to an incomplete understanding of the appropriate development role for GE crops and other biotechnologies that are products of nascent innovation sys- tems in the subregion. Valuing the development potential for the introduction of GE crops in SSA must account for their potential development interven- tions within the scope of broader poverty alleviation efforts and national development policies, taking into account the economic and political contexts. Like most technological interventions, GE crops will not solve all SSA devel- opment problems, nor will all available GE crops be useful—or appropriate— in the African context. Instead, African decisionmakers will need to evaluate the specific value of each GE crop as a tool in the portfolio of potential inter- ventions that may be made available to farmers in the region. GE crops may be particularly important if they help solve specific crop productivity constraints in Africa. This is true especially of those productivity constraints that have not been resolved by conventional means, including conventional plant breed- ing, integrated pest management, and in those situations where other control/ productivity enhancement approaches may not be accessible to farmers. To identify potential beneficial technologies, an assessment of economic impacts is called for, which includes analyses at the farm, national, and inter- national levels. In any such priority-setting exercise, the institutional setting needs to be accounted for, as it may have an impact on adoption, technology use, and output marketing by farmers in developing countries (see, for example, 1 Here we use the label “GE” for transgenic crops or products derived thereof, because it is one of the most commonly employed term used in the literature and public media. Other equally im- precise terms (such as genetically modified (GM) crops derived from modern biotechnology) could be used instead, and may be used interchangeably in the book. In this book we focus on GE crops, yet many of the issues discussed here apply to animals, arthropods and other insects, and microorganisms, which may become available in SSA. 2 INTRODUCTION AND BACKGROUND Tripp 2009). So far, there are only limited examples of GE crop impact assess- ment. Smale et al. (2009) review the economic literature assessing GE crops in African and other developing countries’ agriculture, including their impact on farmers, households, communities, and trade, and the institutional context in which these technologies may be deployed for potential use by farmers. They draw the four following lessons. • On average, adoption has been profitable to users—but averages mask vari- ability in agroclimates, host cultivars, and farming practices. • There are too few traits under study, and too few cases and authors— generalizations should not be drawn. More time is needed to describe the effects of adoption. • During the next decade, practitioners will need to address cross- cutting issues for further study, such as impacts on poverty, gender, and public health. • To address broader issues, impact assessment practitioners need to develop improved methods and draw from multidisciplinary collaborations. Similar lessons have been reported in Qaim (2009, 2010); in recent meta- analyses of impact assessment studies of insect-resistant cotton by Finger et al. (2011); and for all GE crops in Areal, Riesgo, and Rodriguez-Cerezo et al. (2012). The relatively limited research on the impact of GE crops implies that its contribution to the policy debate on GE crops and biotechnology in the con- tinent has also been limited. Moreover, the policy debate is being undermined because much of the discussion in Africa has yielded to external (and in some cases to internal) pressures to move away from science and rational debate and discussion, toward either antagonistic or unconditionally supportive views on GE crops (Novy et al. 2011; Takeshima and Gruère 2011). These polarized views generally lack robust data and evidence-based policy analysis, contribut- ing to confusion about the real or potential value of GE crops for Africa’s agri- culture, especially in African policy debates. This book is an attempt to move the discussion away from polarized posi- tions. It aims to contribute to a rational debate on the actual benefits, costs, and risks of existing and future GE crops and technologies for Africa. To accomplish this goal, we introduce a broad set of contributions documenting issues relevant to the current African policy debate. These contributions are representative of the state-of-the-art knowledge about GE biotechnologies in INTRODUCTION AND BACKGROUND 3 Africa. We also include references to other papers and materials relevant to the debate when appropriate, which may help elucidate important questions for the proper assessment of GE crops and similar technologies in Africa. The following sections aim at setting the stage for the policy debate on GE crops. We briefly present the status of GE crop adoption and capacity in Africa. We then list a number of key potential constraints and describe some of the internal positions on biotechnology. GE Crops: “Miracle Crops” or “Frankenfoods”? GE crops have been portrayed unequivocally by those opposing or promot- ing the technology as either the solution for feeding the world, or in some instances, as crops that would bring environmental and social catastrophes of incalculable consequences (Brac de la PerriFre and Seuret 2000; GRAIN 2004). Stone (2002) documents that such contrasting positions can and do obscure many of the complexities involved in GE crop adoption and their use in developing countries. A more balanced position would consider GE crops neither as Frankenfoods nor as Miracle Crops per se, but rather as a set of tech- nologies with unique attributes, different from past innovations, such as the Green Revolution’s maize and wheat varieties. In particular, many of these technologies have been produced using research and development (R&D) inputs that are protected intellectual property, and most technologies now available commercially have been developed by the private sector. These attributes need to be characterized, discussed, and in some cases addressed to ensure their compatibility with and support of poverty allevia- tion efforts, especially in the agricultural context of SSA. Furthermore, there is a need to clearly separate the intrinsic production, productivity, and socio- economic impacts of GE crops from more general concerns expressed by some stakeholders over forced industrialization, corporate control of agriculture, and the impact of technology on traditional farmers and agricultural prac- tices and communities. The latter implies the need to conduct in-depth social and institutional context analysis in which these varieties may be or have been released to farmers to ensure that society can determine the potential role of GE crops in development and poverty alleviation efforts (Stone 2011). This is especially important in the African context. Stakeholder Support for GE Crops GE crop supporters present these technologies as a distinct option to pro- mote food security and sustainable agriculture for developing countries. GE 4 INTRODUCTION AND BACKGROUND crops open the possibility of addressing biotic and abiotic constraints to food, feed, and fiber production. GE crops may, for example, enhance pro- ductivity, improve pest and weed control, and increase tolerance to drought and salinity. These crops may also improve public health through reductions in pesticide applications and through enhanced nutrition, such as vitamin A–enhanced rice that is currently being evaluated in a number of develop- ing countries. Yet different stakeholders have contrasting positions toward these technologies. Stakeholder Criticisms of GE Crops Some stakeholders often cite the fact that existing GE crops were largely devel- oped by the private sector for use in industrialized countries in an intensive and commercially focused agriculture. The consequence of this approach, in their view, is that existing GE crops are inappropriate for traditional agricul- ture as practiced in Africa and other developing countries. They believe that this approach empowers private firms to exercise monopoly power and thus price the technology at a higher level than in a competitive market (Moschini and Lapan 1997; Falck-Zepeda, Traxler, and Nelson 2000). Private sector–led agricultural R&D is a different pathway than that taken by previous agricul- tural innovation processes, which have been driven mostly by the public sec- tor. The private sector–led R&D investments and continued control over GE crops is seen by some commentators as one more example of corporate control of agriculture and its activities. Other issues have been raised, such as the “contamination” of traditional varieties due to pollen flow, uncontrolled gene dispersion, impacts on trade, disruption of traditional communities and livelihoods, dependency on pri- vate sector, production risk increasing due to the rise of monocultures, and the decline of smallholder crop diversification.2 These concerns may or may not be unique to GE crops. They may also belong to a larger set of general con- cerns over the role of science and technology in contributing to poverty alle- viation and development. Furthermore, it is not always clear whether these 2 For a summary of the biological and environmental issues, see Conner, Glare, and Nap (2003). For a broader discussion that also includes social issues, see Uzogara (2000) and Stone (2002). In some cases and under a relatively complex set of conditions, the introduction of modern varieties—including GE crops—can introduce the potential for private firms exercising monop- oly power over resource-poor households and farmers in developing countries. This outcome is valid but dependent on a set of conditions that determine its likelihood. In particular, it is a pos- sible scenario where market conditions are such that they force farmers in developing countries to become members of captive markets with little or no choice for a diversity of crop varieties or other production alternatives. Therefore conventional or traditional varieties preserved by farm- ers could disappear over time (Munro 2003; Knezevic 2007). INTRODUCTION AND BACKGROUND 5 concerns apply to existing technologies or to proposed technologies in the development pipeline for the African context. Toward a More Balanced Approach Certainly, some of these stakeholder concerns and issues may be valid for some crops or incorporated traits through genetic engineering in some locations. In our view, each concern is an empirical issue that has to be identified and ana- lyzed as part of an ex ante assessment of GE crops before deliberate release into the environment. A prudent approach would consider the relevant facts and then render a robust and complete analysis of the appropriateness of a specific technology for its intended target country or region. One cannot generalize that GE crops are either unequivocally Frankenfoods or Miracle Crops. A rational approach would require judging GE crops on a case-by-case basis while considering all the costs, benefits, and risks estimated through robust assessments. Still, following Norman Borlaug’s and Jimmy Carter’s opinions (Paarlberg 2008), we believe that the GE crop assessment process, as it stands now, needs to concentrate less on their potential risk (especially in the case of well- studied technologies where there is an established record of safety and use in other countries) and more on their actual impact and on their access by poor farmers. A redirected focus on development efforts is needed to ensure that poor farmers could benefit from the assessed, safe, relevant, and beneficial GE crops in their context. Separating generalized issues from the facts germane to useful GE crop development, deployment, access, and performance is one of the motivating factors behind this book. GE Crop Adoption: The Reality behind the Numbers The area planted to GE crops has increased at a rapid pace since the release of the first commercial crops in the United States and China. As of 2011, there were approximately 160 million hectares worldwide cultivated with the crops ( James 2011). Yet the growth in area planted continues to be focused mainly on four crops (soybeans, maize, cotton, and canola) and two traits (herbicide tolerance and insect resistance). Small areas in several countries have been planted with other crops, including alfalfa, beans, tomatoes, petunias, papayas, potatoes, sweet peppers, squash, carnations, and sugar beets. Developing countries cultivate approximately 50 percent of the global area devoted to GE crops, totaling close to 80 million hectares. Importantly, 6 INTRODUCTION AND BACKGROUND the share planted by developing countries has been increasing over time and may even become higher than that of developed countries ( James 2011). As shown in Figure I.1, developing countries with the highest area planted in 2011 included Brazil (30.3 million hectares), Argentina (23.7 million), India (10.6 million), China (3.9 million), Paraguay (2.8 million), and Pakistan (2.6 million). In 2011, the share of GE crops planted in Africa was small. Africa’s share was less than 1.6 percent of the total area planted to GE crops (see Figure I.2). Similar to the evolution across all developing countries, the area planted by African countries has been increasing over time. Furthermore, the number of crops in the product development and the biosafety regulatory pipeline and those that have been commercialized have also been increasing over time in the continent. The need then exists to examine the current status of GE crops in the product development and regulatory pipelines as a necessary background to understand the issues discussed in this book. The next section addresses these issues in some detail. FIGURE I.1 Area cultivated with genetically engineered crops, by country All other countries Burkina Faso Bolivia Uruguay South Africa Pakistan Paraguay China Canada India Argentina Brazil United States 2.2 0.3 0.9 1.3 2.3 2.6 2.8 3.9 10.4 10.6 Million hectares 23.7 30.3 69 Source: Data extracted by Patricia Zambrano and Jose Falck-Zepeda from James (2011). INTRODUCTION AND BACKGROUND 7 Africa’s Biotechnology Capacity, Biosafety Status, and Adoption Impact The status of biosafety regulatory frameworks and of GE crop technologies play a role in the observed low level of GE crop adoption in Africa. Currently, there are no completely indigenous GE crop technologies generated in Africa that we are aware of, except possibly in Egypt. Most technologies under devel- opment for SSA use genetic constructs or transformation procedures devel- oped elsewhere, and plant germplasm materials are usually selected and developed internally in the country of interest. Biosafety Regulatory Framework Status The foundation of biosafety regulatory systems, the national biosafety framework (NBF), includes policies, laws, and implementation regula- tions. Countries implement their national biosafety framework by mobiliz- ing human, financial, and technical capacities in the country, which permits agents to conduct a biosafety assessment and then submit a recommendation, or in some cases, a decision. Figure I.3 presents a map of the status of NBFs in Africa as of 2009. Their status in this figure is described as functional, interim, work in FIGURE I.2 Share of genetically modified crop acreage, by country All other countries (20) 6.3 African countries (3) 1.5 China 2.4 Canada 6.5 India 6.6 Argentina 14.8 Brazil 18.8 United States 43.1 Percent Source: Extracted by Patricia Zambrano from James (2011). 8 INTRODUCTION AND BACKGROUND progress, and nonexistent, depending on the degree of evolution shown by countries at that particular point in time. It should be noted that in this fig- ure, even if an NBF has been described as “functional,” it does not neces- sarily mean that the country has approved a GE crop for deliberate release. Country statuses have not changed much since this figure was developed. There were two relevant developments: Uganda has approved several con- fined field trials and is developing a formal policy, and Nigeria has approved a policy and is in the process of developing implementation regulations and approving confined field trials. At the same time, the biosafety regulatory development process has evolved sufficiently to permit confined field trials in Burkina Faso, Egypt, Kenya, Nigeria, Uganda, and Zimbabwe, and commercialization release in Burkina Faso, Egypt, and South Africa. The ability to conduct confined field tri- als is a parameter that helps document biosafety assessment capacity as it is FIGURE I.3 Status of National Biosafety Frameworks (NBFs) in Africa Sierra Leone Liberia Côte d’Ivoire Cape Verde Senegal Mauritania The Gambia Guinea Bissau Sao Tomé Réunion Mauritius Benin Cameroon Equatorial Guinea Central African Republic Tanzania Kenya Rwanda Burundi Uganda Comoros Mayotte (France) Seychelles Botswana South Africa Functional NBFs 0 5 10 15 20 25 30 35 Swaziland Malawi Mozambique Lesotho Zimbabwe Madagascar Ethiopia Somalia Eritrea Djbouti Togo and Príncipe Gabon Congo Cabinda (Province) ~ Ghana Burkina Faso Morocco Western Sahara Tunisia Mali Algeria Angola Namibia Countries with commercial biotech crops Zambia Libya Egypt Sudan Democratic Republic of the Congo Niger Nigeria Chad Guinea Interim NBFs NBFs are work in progress No NBFs Source: Karembu, Nguthi, and Ismail (2009). INTRODUCTION AND BACKGROUND 9 usually, but not always, a first step before the process of assessment for com- mercial release. Applications for confined field trials are pending in many more countries. Biotechnology Product Development/Regulatory Pipeline Table I.1 lists GE crop technologies under product development or biosafety regulatory assessment. The number of GE crops is expanding beyond the four crops with two traits planted as the dominant share of global GE crop area; the number of countries testing and approving them is also expanding. A note- worthy development is the rise of crops of special interest to some countries in Africa, including bananas, sweet potatoes, cowpeas, and cassava. Furthermore, the number of traits in development is also increasing. These include resis- tance to fungal and viral diseases and tolerance to drought conditions. GE Cotton and Maize Adoption and Socioeconomic Impact in Africa According to the estimates of James (2011), in 2011, South Africa cultivated approximately 2.3 million hectares, Burkina Faso 0.3 million hectares, and Egypt less than 0.05 million hectares of GE crops. Maize and cotton account for most of the area planted to GE crops in Africa. More specifically, South Africa planted 2.3 million hectares of GE maize, cotton, and soybeans. Burkina Faso cultivated 300,000 hectares of insect- protected cotton (Bt) representing approximately 70 percent of total cotton area, which represents a significant increase from 2009, when roughly 25 percent of the area was planted to Bt cotton (James 2011). In Egypt, the actual area planted has been quite small since the commercialization approval granted by the com- petent authority in 2008. Much of the area planted has been for seed reproduc- tion purposes, although there are some reports that the expectation in Egypt is that area planted to GE maize will increase rapidly in the near future (Adenle 2011; James 2011). The socioeconomic impact assessment literature on the effects of GE crops in SSA is relatively thin. As shown in Smale et al. (2009), much of the ex post assessment work has been done on measuring producer impacts from the adoption of GE crops, mostly focused on insect-resistant cotton in South Africa, with a handful of reports from Burkina Faso. There is a small, but grow- ing, ex ante assessment body of literature for proposed technologies in Africa. Reports from South Africa and other developing countries that have adopted GE crops show that considerable spatial, temporal, and user variabilities exist and have an impact on results. These conclusions have been validated in a for- mal meta-analysis done by Finger et al. (2011). 10 INTRODUCTION AND BACKGROUND TABLE I.1 Regulatory status of genetically engineered crops in the regulatory and development pipeline, 2009 Country Crop Trait Genetic event Institution Regulatory status Kenya Maize (Zea mays L.) Insect resistance Mon 810, Cry1Ab 216, Cry1Ba KARI, CIMMYT, Monsanto, University of Ottawa, Syngenta Foundation, Rockefeller Foundation Confined field trials Cotton (Gossypium hirsutum L.) Insect resistance Bollgard II KARI, Monsanto Confined field trials Cassava (Manihot esculenta) Cassava mosaic disease resistance AC1-B KARI, Danforth Plant Science Center Confined field trials Sweet potato (Ipomoea batatas) Viral disease resistance CPT 560 KARI, Monsanto Confined field trials Uganda Cotton (Gossypium barbadense) Insect resis- tance, herbicide tolerance Bollgard IR/HT NARO, Monsanto, ABSPII, USAID, Cornell University Confined field trials approved Banana (Musa sp.) Black sigatoka resistance Chitinase gene NARO, University of Leuven Confined field trials IITA,USAID Confined field trials Cassava (Manihot esculenta) CMD and cassava brown streak disease (CBSD) NaCRRI, International Potato Center, Danforth Plant Science Center Application for confined field trials approved by the NBC Nigeria, Burkina Faso, Ghana Cowpea (Vigna unguiculata) Insect resis- tance Cry1Ab and nptII genes AATF, NGICA, IITA, Purdue University, Monsanto, Rockefeller Foundation, USAID, Department for International Develop- ment, CSIRO, Institut de l’Environnement et de Recherches agricoles (Burkina Faso), Institute of Agricultural Research (Ghana), Kirkhouse Trust Confined field trials approved in Nigeria Kenya, Tanzania, Uganda, South Africa, Mozambique Maize (Zea mays L.) Drought tolerance CspB-Zm event 1 AATF, National Agricultural Research Institutes in the five countries, CIMMYT, Monsanto, Bill & Melinda Gates Foundation, Howard G. Buffett Foundation Confined field trials pending regulatory approval in Kenya; confined field trials in South Africa ongoing INTRODUCTION AND BACKGROUND 11 Country Crop Trait Genetic event Institution Regulatory status South Africa, Burkina Faso, Kenya Sorghum (Sorghum bicolor) Nutrition enhancement Consortium of nine institutions led by the Africa Harvest Biotech Foundation International and funded by the Bill & Melinda Gates Foundation Contained greenhouse trials in Kenya and South Africa South Africa Maize (Zea mays L.) Drought tolerance MON 89034, MON 87460 Monsanto Confined field trials Herbicide tolerance Syngenta GA21 Syngenta Field trial release Insect resistance Syngenta MIR162 Field trial release Insect/herbicide tolerance Syngenta BT11 × GA21 Field trial release BT11 × MIR162 Field trial release Pioneer 98140 Pioneer Confined field trials Pioneer 98140 × Mon 810 Pioneer Confined field trials Cassava (Manihot esculenta) Starch enhancement TMS60444 Agricultural Research Council in South Africa– Institute for Industrial Crops Contained trial Cotton (Gossypium hirsutum L.) Insect/herbicide tolerance Bayer BG11 × RR FLEX Bayer Trial release GHB119 Trial release BG11 × LLCotton25 Trial release CottonT304-40 Trial release Herbicide tolerance CottonGHB614 Trial release CottonGHB614 × LLCotton25 Trial release Potato (Solanum tuberosum L.) Insect resistance G2 Spunta Agricultural Research Council in South Africa– Onderstepoort Veterinary Institute Field trials Sugarcane (Saccharum officinarum) Alternative sugar NCo310 South African Sugarcane Research Institute Field trials TABLE I.1 (continued) 12 INTRODUCTION AND BACKGROUND Country Crop Trait Genetic event Institution Regulatory status Egypt Maize (Zea mays L.) Insect resis- tance Mon 810 Monsanto Approved for commer- cialization n.a. Pioneer Field trials Cotton (Gossypium barbadense) Salt tolerance MTLd Agricultural Genetic Engineering Research Institute Contained greenhouse trials Wheat (Triticum durum L.) Drought toler- ance HVA1 Agricultural Genetic Engineering Research Institute Field trials Fungal resis- tance Chitinase Contained greenhouse trials Salt tolerance MTLd Contained trial Potato (Solanum tuberosum L.) Viral resistance Cry V Agricultural Genetic Engineering Research Institute Field trials Viral resistance CP-PVY Field trials Banana (Musa sp.) Viral resistance CP-Banana CMV Contained trial Cucumber (Cucumis sativus) Viral resistance Cp-ZYMV Field trial Melon (Cucumis melo) Viral resistance Cp-ZYMV Field trial Squash (Cucurbita pepo) Viral resistance Cp-ZYMV Contained trial Tomato (Lycopersicon esculentum) Viral resistance CP- REP-TYLCV Contained trials Source: Karembu, Nguthi, and Ismail (2009). Note: AATF = African Agricultural Technology Foundation; ABSPII = Agricultural Biotechnology Support Project II; CIMMYT = International Maize and Wheat Improvement Center; CSIRO = Commonwealth Scientific and Industrial Research Organisa- tion; IITA = International Institute of Tropical Agriculture; KARI = Kenyan Agricultural Research Institute; n.a. = not available; NaCRRI = National Crops Resources Research Institute; NARO = National Agricultural Research Organisation; NGICA = Network for the Genetic Improvement of Cowpea for Africa; USAID = United States Agency for International Development. TABLE I.1 (continued) INTRODUCTION AND BACKGROUND 13 From Concept to Farmers: Issues for GE Crops in the African Context This rapid review of the situation in SSA triggers a number of questions. Why aren’t more GE crops being deployed in Africa? Should we be seeing more GE crops being deployed in Africa? What are the appropriate crops and traits that may support smallholder agriculture in Africa? Will these technologies con- tribute to poverty alleviation efforts? The answers proposed to these questions vary significantly in the literature. Current and future GE crops clearly face a number of deployment challenges. Some challenges are common to the dissemination of all new technologies in SSA. Other challenges are unique to GE crops and may require innovative approaches for addressing these constraints in a meaningful way. In the next section, some of these issues are discussed in a technology framework chain with the intention of properly situating the issues, constraints, benefits, and other relevant issues to a decisionmaker in Africa. Technology Development, Adaptation, and Dissemination Issues SSA faces a situation where there is a growing but still insufficient level of investment in R&D, especially in a select group of countries (Beintema and Stads 2010). The generalized level of R&D investments in SSA translates into a relatively poor biotechnology innovative capacity. This in turn affects the capacity for conducting GE adaptive and targeted R&D in the continent. The low availability of human and financial resources in the region limits the overall innovative capacity to conduct R&D and to develop indigenous GE crops. Unlike other crops, GE crops have to comply with biosafety regulations and be subject to risk assessments. To do so, countries have to sustain a suffi- cient decisionmaking capacity. Although many SSA countries are still lacking a regulatory framework or a scientific and regulatory capacity to implement such regulations, some notable efforts are underway to develop robust bio- safety systems. National innovative capacity that can develop those GE traits of interest to national priorities has to be weighed against the possibility of accessing such technologies developed elsewhere. From a science and technology standpoint, African decisionmakers can opt for different innovative capacity systems to deliver products to farmers. Some countries in Africa, though, lack even the minimal investments in R&D capacity necessary to conduct adaptive R&D in their own national research systems. Furthermore, some countries in the region have expressed a concern over the potential risks of these technologies to their farmers. Such concerns are not insurmountable hurdles, as there are 14 INTRODUCTION AND BACKGROUND practical and feasible approaches that can empower countries to ensure an acceptable level of safety after a scientific assessment, while ensuring innova- tion and technology transfer to their farmers. African seed systems and germplasm delivery mechanisms face a number of constraints that have been described in the literature. Technology delivery and dissemination are limited by institutional weaknesses and the in sufficient development of national seed systems in Africa. These constraints are not unique to GE crop seeds. Yet they can be magnified as the need arises to ensure a working system that facilitates knowledge and information exchange about the use of the technology, and market signal transmissions, including price premiums or value-added paid for competing commodities in markets. Developing an appropriate science and technology strategy that directs investments in R&D capacity and strategy toward identified GE crops is criti- cal. To do so, the costs, benefits, and risks that GE technologies may pose to farmers need to be thoroughly examined, in order to select “best bet” strate- gies to address specific productivity constraints in Africa. Obstacles Related to Adoption Farmers considering the adoption of GE crops face many institutional chal- lenges. Access to credit and complementary inputs, their ability to manage production risk, and other binding institutional constraints play determinant roles in their decisions. A very important issue identified in a growing number of studies is farmers’ access to knowledge and information about the use of the technology and its market potential. Many of the GE crops available for adop- tion in and outside Africa have demonstrated their technical capability to pro- vide benefits to farmers. However, a farmer’s ability to tap into those potential benefits can be limited by institutional issues. This calls for policymakers to consider supporting the policy and institu- tional environment to maximize the benefits and minimize the risks of GE crop adoption in Africa. In this sense, the policy environment will strive to avoid potential cases of “technological triumphs but institutional failures” observed (Gouse et al. 2005, 1). Marketing/Trade in Local and External Markets and Related Issues of Consumer Acceptance The introduction and use of a GE crop in any country can potentially result in loss in export markets to trade-sensitive countries for the specific crop being considered. In some situations, African countries have argued that the potential approval and use of GE crops can even lead to the potential loss to unrelated INTRODUCTION AND BACKGROUND 15 export markets. Although such perceptions may be misplaced, African coun- tries may face pressures by private buyers and consumer demand in trade- sensitive countries (Gruère and Sengupta 2009; Gruère and Takeshima 2012). Market risks associated with potential external trade losses due to the adop- tion of GE crops are magnified by the growing trend in consumer concerns in African countries, especially among urban consumers, and by labeling and related marketing requirements in some consumer-sensitive countries around the world, especially Europe, some countries in Asia, and the Middle East. An additional issue is the increased possible trade losses associated with asyn- chronous or asymmetric approvals of GE crops. GE crops that are approved in one country but not in other trading partners can result in significant trade dis- ruptions. Because borders in Africa can be porous, and as regional trade increases within Africa, this issue may grow in importance. This calls for policies exam- ining potential export losses with trade-sensitive countries and across regions in Africa to search for an adequate management strategy. The trend toward a regionalization of biosafety assessment procedures and the capacity to establish a regulatory decisionmaking process also require sup- port. Efforts such as those in the Common Market for Eastern and Southern Africa (COMESA) and the West African Economic and Monetary Union, which seek regional approaches to biosafety assessments and in some cases to decisionmaking, will become more important with increasing trade activity at the subregional level. Contrasting Stakeholder Positions in Africa Although the problems can be identified, the complexity of the African politi- cal debate around GE products has to be accounted for. In particular, there are many contrasting positions with regard to GE crops in SSA. For example, the High-Level Panel on Biotechnology report commissioned by the African Union (AU) and the New Partnership for Africa’s Development (NEPAD) states that Africa needs to take strategic measures aimed at promoting the appli- cation of modern biotechnology to regional economic integration and trade. Such measures include fostering the emergence of regional inno- vation systems in which biotechnology-related Local Innovation Areas play a key role. [ Juma and Serageldin 2007, xix] The AU/NEPAD Panel laid out some of the preconditions for taking advan- tage of GE crops to support economic development efforts, especially with 16 INTRODUCTION AND BACKGROUND regard to regional economic coordination efforts to ensure proper and effi- cient regulatory assessment processes. Suggested by the AU/NEPAD Panel, a regional approach to biotechnology and biosafety regulations is being pur- sued independently by COMESA and by the Economic Community of West African States. These efforts are examining different modalities for devel- oping regional approaches to biosafety regulations that seek to address risk- assessment procedures combined with national or regional decisionmaking. They do not represent an explicit endorsement of biotechnology or GE crops per se; rather, they open the possibility of examining these technologies on a case-by-case basis. In turn, in its official “Statement on Plant Breeding and Genetic Engineering,” the Alliance for a Green Revolution in Africa (AGRA) has this position with regard to GE crops and other organisms: Our mission is not to advocate for or against the use of genetic engi- neering. We believe it is up to governments, in partnership with their citizens, to use the best knowledge available to put in place policies and regulations that will guide the safe development and acceptable use of new technologies, as several African countries are in the process of doing. We will consider funding the development and deployment of such new technologies only after African governments have endorsed and provided for their safe use. Our mission is to use the wide variety of tools and techniques available now to make a dramatic difference for Africa’s smallholder farmers as quickly as possible. [AGRA 2010] AGRA’s position is basically neutral; it leaves any decision in terms of future investments pending on decisions taken at the national level. This decision contrasts with national developments. Burkina Faso, Egypt, and South Africa have allowed the commercial cultivation of these crops by authorizing their deliberate release into the environment. More countries have approved con- fined field trials or have invested in the development of GE crops developed by the public sector for those issues of interest to African countries. This posi- tion also contrasts with that of countries that have explicit restrictive policies with regard to the importation of GE foods ranging from a complete ban on all imports (Zambia) to a ban on imports unless processed or milled (Angola, Lesotho, Malawi, and Zimbabwe). Positions for or against the technology are not limited to the national level. Some organizations with stated missions that include social justice, biodiver- sity protection, small farmer livelihood assurance, and food security (such as the Third World Network, Via Campesina, Greenpeace, Oxfam, GRAIN, or INTRODUCTION AND BACKGROUND 17 Friends of the Earth International) have argued and conducted campaigns against the deployment of GE technologies in developing countries, including those in Africa. It is not always clear whether these organizations’ positions are against GE crops per se, an opposition to existing GE crops being deployed in developing countries, or a reaction to industrialization, multinational corpora- tion development, or privatization of agricultural research, but they are vocally opposed to GE crops. Although some of these groups continue to push their own agendas, they may not have addressed the complex issues surrounding the potential intro- duction and dissemination of GE crops, including consideration of the poten- tial benefits from adoption and the reality that not adopting a GE crop could also have consequences (Pew Initiative on Biotechnology 2004). Although there may be some risks associated with the use of GE crops, the status quo in terms of conventional crops is not riskless either. The influence of donor and partner countries plays a key role in this area. So do trade relationships and various international pressure groups. In fact, decisionmakers in SSA are bombarded with multiple, mostly con- flicting positions and messages about the appropriateness of GE crops in the African context. The policy debate milieu grew to such a chaotic state that the AU’s declaration after its 2006 Ministerial Meeting included text that described the situation poignantly: The two extreme positions have tended to confuse many African policy- makers and sections of the public because of the lack of reliable infor- mation and guidance available to these groups. There is uncertainty and confusion in many of the African governments’ responses to a wide range of social, ethical, environmental, trade and economic issues associ- ated with the development and application of modern genetic engineer- ing. The absence of an African consensus and strategic approaches to address these emerging biotechnology issues has allowed different inter- est groups to exploit uncertainty in policymaking, regardless of what may be the objective situation for Africa. [African Union 2006, 1] In this setting, policy research has a role to play in examining the potential and actual use of GE crops and related issues to its deployment. As an impor- tant African policymaker said at the 5th Conference of Parties of the Biosafety Protocol in Nagoya, Japan: Given the lack of consensus amongst countries and the conflictive con- text, it is therefore imperative that any GE crop assessment work be 18 INTRODUCTION AND BACKGROUND buttressed by proper science (natural or social), otherwise it will be crit- icized by those opposing or promoting this technology. It is a mammoth task, yes, but somebody has to start the ball rolling. It’s a challenge that we must embrace. [A. Mafa, pers. comm., 2010] This book is a first step in this direction. In this complex and competitive setting, information is critical for multiple purposes. When writing a policy, drafting regulations, or making discrete decisions on GE crops, policy makers in SSA have to use selected information to advance their goals. Yet credible objective information on the impacts of GE crops and products based on their cost, risks, and benefits is not always easy to find and to digest, given the complexity of some of the issues at stake. Furthermore, even policy ana- lysts, researchers, and academics involved in agriculture policy may find it hard to find, access, and synthesize peer-reviewed studies on GE crops in the African context. This is particularly true when gauging the economic effects of GE crops. Why This Book? Several countries in SSA have expressed concerns related to the farm- level impacts, consumer concerns, trade impacts, and the biosafety and other regulatory issues related to GE crops and are considering inclusion of socio- economic assessments in their technology approval processes.3 For example, discussions during the approval process and subsequent adop- tion of GE crops in Burkina Faso and South Africa have generated significant internal controversies related to the potential socioeconomic, institutional, political, and environmental effects of technology adoption. Controversies and sometimes acrimonious discussions included socioeconomic concerns about the potential market effects of local adoption of Bt cotton, impacts on resource- poor farmers, farmers’ dependence on a continuous flow of innovations, as well as external impacts that may affect local farmers (such as the potentially adverse reaction in some European markets). Other important concerns raised by opponents of the technology are the potential environmental and ecologi- cal implications of GM technologies, all of which bring additional uncertainty to the likelihood of farmer adoption. Examples of these discussions and debates include Pschorn-Strauss (2005) and Moola and Munnik (2007). 3 Example of countries considering such policies can be found in Mulenga and Shumba-Mnyulwa (2010) and Falck-Zepeda (2009). INTRODUCTION AND BACKGROUND 19 These questions have also been raised in national and international forums in the context of biosafety regulatory and technology decisionmaking pro- cesses. African decisionmakers and all stakeholders involved in the process raise these questions, as they aim at identifying potential interventions to address specific productivity issues that impinge directly on farmer livelihoods. A better understanding of the development, delivery, and downstream impact of GE crop innovations is required to comprehend their potential role in the African context. This will ensure that the right crops, traits, and deliv- ery methods are identified and used. Furthermore, understanding knowledge processes and the institutional framework in which GE crops may be deployed can help ensure maximization of the potential benefits while minimizing the risk to African farmers and communities. The overall objective of this book is to contribute to reducing the knowl- edge gap about the potential role and impact of GE crops in SSA. The volume gathers a set of policy and economic studies recently completed on the current or potential effects of GE products in the countries of this region. Although the collection does not claim to be exhaustive in any way, it provides a discus- sion of relevant issues discussed in SSA and other policy forums, as well as some new and emerging themes. This book addresses some of the key policy questions in the debate on the role of GE crops in the region. The targeted audience includes policy analysts, policymakers, scientists, researchers, uni- versity students, and other stakeholders working on policy issues related to agricultural biotechnology in Africa and who are interested in an accessible volume on policy analysis. The collection of studies is based on updated contributions that were ini- tially presented at a conference organized by the International Food Policy Research Institute (IFPRI) in Entebbe, Uganda, in May 2009. Chapters are organized thematically in three parts. Part I consists of three chapters on the economic effects of GE crops, with a focus on specific technologies. Part II presents two chapters on market acceptance, including one on consumer acceptance of GE food in Uganda and another discussing potential trade risk and regional integration. Part III focuses on research, regulatory, and tech- nology delivery issues. Although each chapter addresses one specific question, it also provides general lessons for policymakers. The book ends with a conclu- sion section that collects lessons and issues for policy and decisionmaking and identifies areas for future research. Throughout the book, care has been taken to consider the distinct opin- ions and positions in the debate. IFPRI’s policy toward biotechnology is that even though some of these technologies are controversial and alone cannot 20 INTRODUCTION AND BACKGROUND solve complex poverty and food insecurity issues, some of them have the potential to address specific issues related to hunger and malnutrition in devel- oping countries. Because of these considerations IFPRI believes it would be irresponsible not to assess the potential of genetically modified crops such as nutrient-enriched or drought- tolerant and disease-resistant crop varieties. At the same time, the Institute fully supports appropriate biosafety regulatory systems that are able to assess the risks. [IFPRI 2013] We hope that this contribution will help inform the debates, in Africa and elsewhere, about the current and potential economic role of these crops in the agriculture of SSA. Furthermore, we expect that this book will help iden- tify current knowledge gaps and engage the innovation, product delivery, and downstream impacts related to GE crops in Africa in a more systematic man- ner, while at the same time providing relevant and timely information to the ongoing discussions related to the potential adoption and use of GE crops. References Adenle, A. A. 2011. “Adoption of Commercial Biotech Crops in Africa.” International Proceedings of Chemical, Biological and Environmental Engineering 7: 176–180. Accessed January 31, 2013. http://www.ipcbee.com/vol7.htm. 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Washington, DC: International Bank for Reconstruction and Development/World Bank. 24 INTRODUCTION AND BACKGROUND Socioeconomic and Farm-Level Effects of Genetically Modified Crops: The Case of Bt Crops in South Africa Marnus Gouse The year 2011 was the 14th since the first commercial release of a genetically modified (GM) crop in South Africa. In 1997/98, insect- resistant (Bt) cotton was released for production, and South Africa became the first country in Africa where a GM crop was produced on a com- mercial level. Bt maize was approved for commercial production in 1998/99, and Bt yellow maize was planted in the same season. The first plantings of Bt white maize in 2001/02 established South Africa as the first GM subsis- tence crop producer in the world. Herbicide-tolerant (HT) cotton was made available for commercial production in the 2001/02 season along with HT soybeans. Commercialization of HT maize seeds followed in 2003/04. GM cotton containing the combined or “stacked” trait (Bt and HT) was released for the 2005/06 season, and Bt/HT maize was released for the 2007/08 pro- duction season. This chapter supplies a brief summary of the performance, socioeconomic impacts, and main issues surrounding Bt cotton and GM maize in South Africa. A substantial number of peer reviewed papers on GM crops in South Africa have been published, and it is recommended that interested readers refer to these publications for more in-depth information and discussion on the studies and findings. South African Biosafety Framework In 1989 a US seed company approached the South African Department of Agriculture for permission to perform contained field trials with Bt cotton. This set in motion the South African biosafety regulatory process and ini- tiated the first trials with GM crops on the African continent. The South African Committee for Genetic Experimentation (SAGENE) had been formed in 1979 by public and private scientists to monitor and advise the National Department of Agriculture and industry on the responsible development of Chapter 1 25 genetically modified organisms (GMOs) through the provision of guidelines and the approval of research centers and projects. SAGENE gained statutory sta- tus in 1992 as the national advisory committee on modern GM biotechnology. The approval for the commercial release of Bt cotton and maize was done under the guidelines of SAGENE for the 1997/98 and 1998/99 seasons. These guide- lines and procedures remained the biosafety framework cornerstone until South Africa’s GMO Act 15 of 1997 was approved by Parliament in June 1997 and entered into force in November 1999, when the regulations were published. In 1999 SAGENE was replaced by the scientific Advisory Committee that was established under the GMO Act (Wolson and Gouse 2005). The South African GMO Act 15/1997, as amended in 2006, provides a comprehensive biosafety framework to manage research, development, application, production, and trade in GMOs. The GMO Secretariat is housed in the Department of Agriculture, and decisionmaking is vested in the GMO Executive Council that represents eight government departments. The Council is advised by a national Advisory Committee of scientific experts. Since implementation, the GMO legislation has served the country well in its balanced approach to modern biotechnology and its applications. However, more recently there have been some unclear delays in the decisionmaking pro- cess, and the scientific community and academia have expressed concern that decisionmaking has become less scientific and a lack of transparency in the process could lead to an increase in the cost of regulation and in the opportu- nity cost for research institutions, innovators, and in reality, consumers. Bt Cotton In 2007 GM cotton globally covered 15 million hectares (43 percent of total world cotton), of which Bt varieties accounted for 10.8 million hectares and a further 3.2 million hectares as Bt combined with a second Bt or with an herbicide-tolerance trait ( James 2007). In 2009 the global GM cotton area increased to 16.2 million hectares and in 2011 to 25 million or 68 percent of global cotton plantings ( James 2009, 2011). Historically, cotton has been responsible for about 25 percent of global chemical insecticides used in agri- culture due to attacks by a range of insect pests (Woodburn 1995), with cot- ton bollworm being the main pest. In an effort to reduce insecticide use and with insect resistance build-up against chemicals, Bt technology has offered a cost-saving and environmentally friendlier alternative. Cotton planting in South Africa declined from its peak of 180,000 hect- ares in 1988 (under tariff protection) to just over 5,000 hectares in 2010 due 26 CHAPTER 1 to a combination of market liberalization, low world cotton prices, and rela- tively better prices for competing crops like maize, sunflower seed, and sugar cane. South Africa has been a net importer of cotton for the past couple of decades. In 1997/98 South Africa became the first country in Africa to com- mercially produce GM crops with the release of Bt cotton. The initial uptake of the first Bt cotton varieties of the US cotton seed company, Delta and Pineland (D&PL), was less than spectacular, as the conventional varieties of local ginning companies were more popular. Some commercial farmers were also cautious during the first seasons and wanted to test the new technology and see how ginners and the rest of the industry reacted. However, when the Bt gene was introduced into D&PL’s popular OPAL variety (originally from Australia), adoption increased dramatically. NuOPAL (Bt), DeltaOPAL RR (HT), and NuOPAL RR (Stacked Bt/HT), which are currently planted in South Africa, are all based on the Delta OPAL germplasm (Gouse 2009). As clearly shown in Table 1.1, Bt cotton has been very popular, reaching 70 percent of total cotton area in 2003. The share decreased somewhat with the introduction of HT cotton, but Bt cotton remained the more popular of the two. With the introduction of stacked cotton (with both the Bt and HT events), Bt’s share dropped considerably as farmers opted for cotton with both traits. By the 2005/06 season 92 percent of the cotton plantings in South Africa were GM. A large share of the conventional cotton being planted is mandatory refugia that are planted alongside Bt fields to prevent insect-resistance development. Farmers tend to plant HT cotton as refugia for stacked Bt/HT plantings. Despite various land reform and development projects attempting to set- tle small-scale farmers in established and potential cotton production areas, the traditional areas of Tonga (in Kangwane Mpumalanga) and Makhathini Flats (KwaZulu-Natal) remain the major contributors to smallholder cotton production. The total number of smallholder cotton producers has varied but generally amounts to a few thousand farmers with the vast majority of them situated on the Makhathini Flats. As large-scale farmers produce the bulk of the South African cotton crop, it would not be totally correct to suggest that the adoption figures in Table 1.1 apply to smallholders as well, though Bt cot- ton adoption by smallholders has not been less impressive. In the first com- mercialization season of 1997, only 4 farmers planted demonstration Bt plots under the guidance of Monsanto (the technology owner). In 1998, 75 farm- ers, or 3.4 percent of the cotton farmers on Makhathini, planted Bt cotton; in 1999, 411 farmers, or 13.7 percent, planted Bt. In 2000, 1,184 cotton farm- ers (39.5 percent) on the Makhathini Flats planted Bt cotton. In 2001 it was SOCIOECONOMIC AND FARM-LEVEL EFFECTS OF GENETICALLY MODIFIED CROPS 27 T A B L E 1 .1 Es tim at ed a re a an d sh ar e of to ta l a re a pl an te d to tr an sg en ic c ot to n in S ou th A fr ic a, 2 00 0/ 20 01 –2 00 7/ 08 Ev en t 20 00 /2 00 1 20 01 /0 2 20 02 /0 3 20 03 /0 4 20 04 /0 5 20 05 /0 6 20 06 /0 7 20 07 /0 8 Bt c ot to n (h ec ta re s) 1 2, 47 0 14 ,7 00 15 ,8 00 20 ,7 00 12 ,7 19 7, 06 0 2, 50 0 78 0 Bt c ot to n (% ) 22 38 70 58 60 39 22 6 Co tto n (h ec ta re s) 0 3, 86 8 3, 38 6 9, 28 0 6, 36 0 2, 35 0 11 3 52 0 HT c ot to n (% ) 0 10 15 26 30 13 10 4 St ac ke d (B t/H T) c ot to n (h ec ta re s) 0 0 0 0 0 7, 24 0 6, 82 0 10 ,6 60 St ac ke d co tto n (B t/H T) (% ) 0 0 0 0 0 40 60 82 To ta l s ha re p la nt ed to tr an sg en ic c ot to n (% ) 22 48 85 84 90 92 92 92 So ur ce : G ou se , K irs te n, a nd V an d er W al t ( 20 08 ). No te s: F ig ur es in p re vi ou s pu bl ic at io ns h av e be en u pd at ed w ith a dd iti on al a nd re vi se d fig ur es . O ffi ci al fi gu re s fo r t he m os t r ec en t y ea rs w er e no t a va ila bl e at ti m e of w rit in g. U no ffi ci al in di ca tio ns s ug ge st th at in 2 01 2 ne ar ly 1 00 % o f c ot to n pr od uc ed in S ou th A fri ca w as G M , w ith s ta ck ed c ot to n m ak in g up th e m aj or s ha re a nd fa rm er s pl an tin g HT c ot to n as m an da to ry re fu gi a. B t = in se ct re si st an t; HT = he rb ic id e to le ra nt . 28 CHAPTER 1 estimated that close to 3,000 of the 3,229 farmers on the Flats planted Bt, reaching close to 90 percent adoption in five years (Gouse 2009). This remarkable adoption rate was explained partly by the impressive performance of Bt cotton as planted by the first adopting Makhathini farm- ers. However, the other major explanation was that the sole credit and input supplier and cotton buyer on the Flats, Vunisa, also noticed the performance of Bt cotton and started to recommend the seed to its clients/farmers. As the main objective of a cotton gin is to gin as much cotton as possible, Vunisa wanted to increase the cotton crop on the Flats but not at the expense of their credit book. After monitoring the performance of Bt cotton for the first couple of seasons, Vunisa decided that it could increase the ginable cot- ton crop, and decrease the risk of crop failure (due to bollworm damage) and thus their credit risk by recommending Bt cotton to farmers. It can be argued that even though Vunisa was making inputs available to farm- ers under credit long before Bt was introduced, the availability of credit and the role Vunisa’s extension officers had in recommending Bt seed played a large role in smallholders’ ability and decision to adopt the new technology (Gouse 2009). All the peer reviewed publications on Bt cotton in South Africa (mainly focusing on smallholder farmers) report yield increases with the use of Bt cotton compared to conventional varieties (Table 1.2). Almost all studies also showed savings in insecticide expenditure; with the exception of results from the one-year, 20-farmer study by Hofs, Fok, and Vaissayre (2006). Even though most of the yield differences were substantial, some were found not to be statistically significant, mainly due to small sample sizes and large vari- ability in the data. Compared to study results in countries like Australia, China, India, and Mexico, the relative yield gain from the use of Bt cotton in South Africa is higher. One of the reasons for this is that the base yield (non- Bt cotton) of smallholders is very low, and a small change in yield is exag- gerated when expressed relative to a low conventional variety yield. In fact, in some other countries, the yield advantage of Bt cotton was more than the total seed cotton yield attained per hectare in South Africa (Fok et al. 2007). Gouse, Kirsten, and Jenkins (2003) found an 18.5 percent yield increase for South African large-scale irrigation farmers for the 2000/2001 sea- son, which compares well with a 16.8 percent increase measured on field trials at a Clark Cotton (a ginning company) experimental farm in Mpuma- langa. Large-scale dryland farmers enjoyed a 14 percent yield increase, while some studies found that small-scale dryland farmers enjoyed an increase of between 23 and 85 percent over a number of seasons (Table 1.2). SOCIOECONOMIC AND FARM-LEVEL EFFECTS OF GENETICALLY MODIFIED CROPS 29 T A B L E 1 .2 Su m m ar y of fi nd in gs o f m ai n pu bl is he d st ud ie s Ty pe o f f ar m a nd y ea r Yi el d (M T/ ha ) Di ffe re nc e (% ) Co st o f s ee d (U S$ /h a) Di ffe re nc e (U S$ /h a) Co st o f i ns ec tic id e (U S$ /h a) Di ffe re nc e  (U S$ /h a) Di ffe re nc e in gr os s m ar gi n (U S$ /h a) No n Bt Bt No n Bt Bt No n Bt Bt Sm al lh ol de r 19 99 /2 00 0a 39 5 57 6 46 n. a. n. a. –2 6 20 15 5 58 19 98 /9 9b 45 2 73 8 63 23 46 –2 3 25 12 13 88 19 99 /2 00 0 26 4 48 9 85 30 65 –3 5 35 16 19 61 20 00 /2 00 1 50 1 78 3 56 23 34 –1 1 40 15 25 96 20 02 /0 3c 42 3 52 2 23 23 44 –2 1 32 23 9 23 La rg e- sc al e Dr yl an d 20 00 /2 00 1a 83 2 94 7 14 n. a. n. a. –3 0 25 10 15 25 Irr ig at io n 20 00 /2 00 1 3, 41 3 4, 04 6 19 n. a. n. a. –5 4 67 29 38 20 9 So ur ce : A dj us te d fro m G ou se (2 00 9) . No te s: U S$ c al cu la te d us in g av er ag e So ut h Af ric an ra nd /U S$ e xc ha ng e ra te fo r S ep te m be r– M ay fo r a pp lic ab le y ea rs . M T = m et ric to ns ; n .a . = n ot a va ila bl e; U S$ = U S do lla rs . a G ou se , K irs te n, a nd J en ki ns (2 00 3) . b B en ne tt, M or se , a nd Is m ae l ( 20 06 ). c F ok e t a l. (2 00 7) . 30 CHAPTER 1 These trends are consistent with findings elsewhere, such as in Argentina (Qaim, Cap, and De Janvry 2003), where large-scale commercial farmers were reported to enjoy 19 percent yield increases and smallholder farmers reported 41 percent yield increases. Like Qaim, Cap, and De Janvry (2003), South African researchers attribute the difference between the Bt yield advantages of small- and large-scale farmers to the financial and human capital constraints that cause smallholders to invest in chemical pest control. Shankar and Thirtle (2005) showed that the average insecticide application level of smallholder farmers on the Makhathini Flats is lower than 50 percent of the optimal level; it is thus not surprising that Bt cotton is able to substantially reduce the yield loss caused by bollworms. With low control-group yields and limited (and in many cases in- effective) chemical insecticide applications, exaggerated yield increases in excess of 50, 60, and 80 percent as reported by Bennett, Morse, and Ismael (2006) do not seem so mind-boggling. But these results have to be seen in context, and as the authors caution, the figures might also be inflated due to selection bias. The yield increase with Bt cotton, compared to conventional cotton, depends on the bollworm infestation level in the particular season and the effectiveness of chemical bollworm control by the farmer. It can be expected that the yield advantage will differ across farmers, farms, regions, and seasons (Fok et al. 2007). Both large-scale and smallholder farmers enjoyed significant savings on insecticides (generally 3/4/5 pyrethroid sprays), and despite higher expenditure on seed (as a result of the additional technology fee), they enjoyed a higher gross margin. However, it is important to stress that Bt does not kill all insects, and chemical spraying is still required to prevent damage by sucking insects, which in the past have been killed in the cross-fire aimed at bollworms. The Bt technology fee was adjusted downward by about 24 percent after the introduction season, following farmer concerns that the technol- ogy was not affordable. The fee was then held constant at South African rand (ZAR) 600 per 25 kilograms of seed (between about $50 and $75 according to the fluctuating local currency)1 for 1999/2000–2002/03, at ZAR700 for 2003/04–2004/05, and then at ZAR785 from 2005/06 to the 2008/09 season. Between 1999 and 2008 a 25 kilogram bag of conventional cotton sold for between ZAR150 and ZAR430. This means that the extra Bt technology fee per 25 kilogram bag was between 1.8 and 4.0 times the price of the bag of seeds (Gouse 2009). Analysis of “who gains?” from Bt technology showed that despite the high technology fee, farmers captured the lion’s share of the additional benefits 1 All dollar amounts are US dollars. SOCIOECONOMIC AND FARM-LEVEL EFFECTS OF GENETICALLY MODIFIED CROPS 31 generated by the introduction of this new technology (Gouse, Pray, and Schimmelpfennig 2004). Basing their calculations on the abovementioned studies, Brookes and Barfoot (2010) estimated that in the 11 years from 1998 to 2008, the use of Bt cotton contributed an additional $21 million to farm income in South Africa. The Makhathini Flats smallholder experience with Bt cotton has been hailed internationally as the first example of how modern biotechnology can benefit resource-poor farmers in Africa. There can be no doubt that the major- ity of Makhathini Flats farmers did indeed benefit from the introduction of Bt cotton. They were able to adopt and benefit from this new technology because all the institutional structures that facilitate a functioning market were in place at the time. These structures include functioning input markets (credit, seeds, and chemicals) and output markets (seed cotton buyer) that operate at market clearing prices. An important factor was that Vunisa was the only buyer and, because of this monopsony power, could supply production credit to farmers who did not own their land, using the forthcoming crop as collateral (Gouse, Shankar, and Thirtle 2008). This system is not uncommon to Africa, where widespread failure of credit and input markets (partly due to lack of land ownership that could serve as collateral) has led to interlocked transactions, in which a firm wishing to purchase the farm output—typically a ginner in the case of cotton—provides inputs to farmers on credit and attempts to recover the credit upon purchase of the product (Tschirley, Poulton, and Boughton 2006). However, when the credit system collapsed in 2002—because of farm- ers defaulting on their loans as a consequence of a combination of droughts, low prices (linked to the low and stagnated world cotton price), marginal prof- its, adverse selection, and market competition—the whole system collapsed, and cotton production dropped. The Makhathini smallholder experience is indeed a good example for the rest of Africa, as countries considering adoption of Bt cotton need to take note that although technical solutions can help address problems (such as lack of knowledge regarding insects and pest control, limited access to inputs, or evolution in pest pressure), no technology (GM or otherwise) can resolve the fundamental institutional challenges of smallholders and agri- culture in Africa. The particular case of the Makhathini Flats and the wider story of cotton in South Africa emphasize that although all agricultural systems require adequate investment and appropriate technologies, their viability is determined by the policies and institutions that facilitate sustain- able and profitable production. Bt cotton and more recently stacked (Bt/ HT) varieties are still the varieties of choice for smallholder producers, but 32 CHAPTER 1 production levels have decreased drastically and remain limited mainly due to the relatively low price of cotton. Bt Maize Globally, in 2007 GM maize was planted on 35 million hectares, or 24 percent of world maize plantings, of which 9.3 million hectares was Bt as single trait and another 18.8 million hectares in combination with other traits ( James 2007). In 2010 GM maize covered 46.8 million hectares globally, and the area increased to 51 million hectares in 2011 ( James 2010, 2011). Bt maize was first introduced in the United States in 1996, and by 2006 it covered 40 per- cent or 12.7 million hectares of the total US maize crop. In Argentina, vari eties containing the Bt trait were planted on 73 percent of the total Argentinean maize area, and in Spain it covered 54,000 hectares or 15 percent of the total maize area (Brookes and Barfoot 2008). Maize is the most important field crop in South Africa and annually cov- ers an estimated 30 percent of the total arable land. Maize serves as staple food for the majority of the South African population and also as the main feedgrain for livestock. Between 60 and 70 percent of the South African yel- low maize production is consumed in the chicken-production sector. Over the past 9–10 years, South Africa produced an average of 9.3 million metric tons of maize on 2.75 million hectares. Even though Bt yellow maize was released in 1998 for commercial pro- duction, GM white maize was commercialized only in 2001. That year, South Africa became the first country in the world to permit the commercial produc- tion of a GM subsistence crop—Bt white maize. In South Africa and other southern African countries, the losses sustained in maize crops due to damage caused by the African maize stem (stalk) borer (Busseola fusca) are estimated to be between 5 and 75 percent, and it is generally accepted that, pre-Bt, Busseola annually reduced the South African maize crop by an average of 10 percent (Annecke and Moran 1982). Gouse et al. (2005) showed that in 2005 with a seemingly conservative estimate of 10 percent for damage caused by both Busseola fusca and Chilo partellus, the average annual loss (in the absence of Bt) adds up to just under a million tons of maize, with an approximate value of ZAR810 million. At the 2008 maize price level (more or less similar to the 2011 price level), the potential damage caused by borers would be closer to ZAR1.6 billion (about $200 million). Both B. fusca and C. partellus can be controlled to a satisfactory level with the use of the Bt gene currently used in South African Bt varieties (Cry1Ac). SOCIOECONOMIC AND FARM-LEVEL EFFECTS OF GENETICALLY MODIFIED CROPS 33 As can be seen in Table 1.3, the initial spread of Bt maize was quite slow because of the scale-up time required to have a sufficient amount of seeds and to have the Bt trait inserted in hybrids that were suitably adapted to local conditions. Approval for commercial release of herbicide tolerance came in 2002 and the stacked traits of Bt and HT in 2007. Compared to cotton, the decrease in Bt and HT maize since the introduction of stacked maize was less pronounced. Bt remains the most popular trait, partly because especially white stacked maize adoption has been hindered by inadequate seed availability. In the 2008/09 production season, GM maize covered 70 percent of the total South African maize area, with Bt maize covering 43 percent. In 2009/10 the Bt maize area increased by a further 269,000 hectares up to 48 percent, mainly stemming from a drop in the white stacked maize area because of inadequate seed supply. Considering the adoption rates illustrated in Table 1.3, it is possible to con- clude that South African maize farmers have benefited from the introduction of GM maize. Similar to the indicated GM cotton adoption rates in Table 1.1, these GM maize adoption rates represent adoption by predominantly com- mercial farmers. There are no official smallholder GM maize adoption figures, but it is estimated that about 10,500 subsistence, smallholder, and emergent farmers (about 23 percent of the smaller farmers), buying hybrid seed from the three major seed companies, planted GM maize in 2007 (Gouse, Kirsten, and Van der Walt 2008). However, there are still areas in South Africa where small- holders plant mainly open-pollinated varieties and traditional/saved seed, and definitions of subsistence, smallholder, smallholder projects, and emerging farmers also complicate estimations. It can therefore be argued that the num- ber of smallholders planting GM maize is still relatively minimal. Marra, Pardey, and Alston (2002) found that there were significant ben- efits to planting Bt maize in the United States through increased yields, even when it appeared as if borer infestation levels were not large enough to con- trol with insecticides. Marra, Carlson, and Hubbell (1998) reported that the use of Bt maize boosted yields by 4–8 percent, depending on location and year. Results from outside the United States show a similar pattern. In the Huesca region in Spain, Brookes (2002) reported a yield increase of 10 percent over conventional maize protected with pesticides and an increase of 15 per- cent when insecticides were not used. Other regions in Spain enjoyed an aver- age Bt yield advantage of 6.3 percent, with a range of 2.9–12.9 percent. James (2002) reported a 8–10 percent yield increase in Argentina up to 2004, and more recent studies show a 5–6 percent increase (Brookes and Barfoot 2008). Gonzales (2002) recorded a yield advantage of 41 percent for Bt maize on 34 CHAPTER 1 T A B L E 1 .3 Es tim at ed a re a an d sh ar e of to ta l a re a pl an te d to g en et ic al ly m od ifi ed m ai ze in S ou th A fr ic a, 2 00 0/ 20 01 –2 00 9/ 10 Ev en t 20 00 /2 00 1 20 01 /0 2 20 02 /0 3 20 03 /0 4 20 04 /0 5 20 05 /0 6 20 06 /0 7 20 07 /0 8 20 08 /0 9 20 09