Genetic engineering: Affects on Farmers

The graph above shows how the profit from genetically modified crops has been increasing since 2000. However, between 2007-2008 the revenues dropped. This drop may be due to increased consumer concern for the environment.

Scientists have worked to genetically engineer plants for various reasons including: “to improve the shelf-life of produce, improve crop nitrogen fixation, and bolster control of agricultural pests.” Most plants grown today include genetic variations to protect against insects and traits that protect the plants against herbicides. We see economic effects of genetic engineering at two levels. The first level affected is the supply, the farmers. The genetically modified traits that allow plants to resist insects leads to increased outputs and a reduction in the cost of pesticides needed. The second popular modification is the herbicide resistant genes.  These genes are intended to make damage control cheaper and easier, not to increase outputs. Both genes can improve the cost efficiency of harvesting. Insect resistant crops have a reduced demand for inputs such as, pesticide, machinery, fuel, and water. Herbicide resistant crops historically have led to and increased use of no-tilling farming, which changes the types of equipment needed but reduces the amount of fuel, effort, and soil erosion. However, these benefits do come with a cost to the farmers; since 1994 seed prices have increased 140%.

 To read the full article: http://www.choicesmagazine.org/magazine/print.php?article=129

 

Sources:

 Zilberman, David, Jorge Fernandez-Cornejo, Steve E. Sexton, and Michele Marra. "The Economic Impact of Genetically

                    Engineered Crops." Choices n.d.: n. pag. The Economic Impact of Genetically Engineered Crops. Print.
Picture Sources:
"Biotechnology is Technology." Search Results. N.p., n.d. Web. 17 Dec. 2012.
 

Genetic engineering: Affects on Markets

How do the costs and benefits of genetic engineering affect the consumers? Due to increased crop yields the supply of crops has increased substantially. This change in supply affects the price and product. The farmers gain anywhere from 5-40% profitability, depending on the price, yield, and seed cost. The innovators of the genetically modified seeds generally get between 10-70% of those benefits. Of course, some of those benefits are transposed to the consumers. Studies in the US show that the consumers share the benefits of anywhere from 6-60%! The share of benefits accumulated by consumers is greater with genetically modified plants that those plants that are not modified which creates a very inelastic demand, characterized by “a small increase in supply reduces prices substantially.” However farmers who use non-modified plants are being affected by the increased use of genetic modification as well, because herbicide resistant plants are causing the price of herbicides to increase, and insect resistant plants are causing pesticides to increase.  Further, as environmental awareness has been increasing, the demand for genetically modified plants has been in decline.

          This picture compares genetically modified corn(left) to natural corn(right).

To read more about genetically modified crops and its effects on the market read the full article here: http://www.choicesmagazine.org/magazine/print.php?article=129

Sources:

Zilberman, David, Jorge Fernandez-Cornejo, Steve E. Sexton, and Michele Marra. "The Economic Impact of Genetically

                  Engineered Crops." Choices n.d.: n. pag. The Economic Impact of Genetically Engineered Crops. Print.

Picture Sources:

"Genetically Modified Corn." POS Software Advice. N.p., n.d. Web. 17 Dec. 2012.

Renewable energy in agriculture industry:Biofuels

 As people become more and more involved in creating sustainable methods of production across all industries the amount of research and viability of renewable energy sources has been on the rise. Many companies are looking for renewable energy sources from the sun, wind, hydroelectric, and geothermal sources to provide energy. The agriculture industry is no different. Many, especially larger, agricultural firms are looking into more sustainable ways to fuel their farms. One solution that many farmers are considering is using biofuels to run their machinery. Although, it is a larger investment in the short-term to buy equipment that is compatible with the fuels, the long-term benefits have been proven. Biofuels will help the economy in two main ways, one is job production. Biofuels will spur local employment; By 2004 the ethanol industry had created more than 147,000 jobs. Second, biofuels have become viable substitutes for fossil fuels. Once we can replace fossil fuels with biofuels not only are we able to reduce our CO2 emmissions but we can reduce the price and instability of our fuel sources.

          This graph shows the U.S. Biofuels Plan. Each color represents a type of biofuel. The

          dark green color represents ethonal products.  Biomass-based diesel would be the type

          primarily used by farmers. As you can see the U.S. plans to increase the amount of

          biofuels consumes to over 35billion gallons in 2022.

 For More material on the Renewable Energy and Sustainable Agriculture Symposium:

http://www.sare.org/Learning-Center/Conference-Materials/Renewable-Energy-and-Sustainable-Agriculture-Symposium

Sources:
Werner, Carol. "Renewable Energy and Sustainable Agriculture Symposium." / Conference Materials / Learning
             Center /SARE Nationwide. Environmental and Energy Studies Institute, n.d. Web. 17 Dec. 2012.
Picture Sources:
"The Resilient Earth." Killing Biofuels. N.p., n.d. Web. 17 Dec. 2012.

Government involvement: subsidies

Agriculture is a highly volatile yet necessary industry. Due to unpredictability of temperature, precipitation, insect levels farmers rely on the support and backup of the government (Grace). On average between the years 1999-2005 farmers produced $1.19 billion in food commodities; they spend $1.24 billion to raise those commodities. This means that from 1999-2005 farmers were losing $51 million a year to grow food crops. These looses make farmers highly dependent on the over $184 million of subsidies given to farmers each year. Studies in other regions have found that government subsidies have been 50-100% of the profit made by farmers. By the end of 2002 many farmers in the Midwest relied solely on non-production income to pay for costs of farming each year (Food Facts). Currently the government is subsidizing mainly grain and “the variety and quantity of nutrient-dense ³specialty crops´ including fruits and vegetables has been kept limited ± whilehuman and environmental health, the economy, and small and medium-sized farmers havesuffered” (Moltzen). Hopefully in the near future we see the government shift towards helping sustainable agriculture with extra-incentives.

For more information about Kelly Moltzen's analysis concerning current agricultural policy check out her paper at: http://www.academia.edu/403705/Subsidies_and_Specialty_Crops_An_Analysis_of_the_Current_State_of_U.S._Agricultural_Policy

To learn more about government subsidies in biotech and agriculture watch a video for organiccomsumers.org: http://www.youtube.com/watch?v=AaLMKfV6zl4

Sources:
"Food Facts: Results from Marketing and Food Systems Research." Leopold Center for Sustainable Agriculture. N.p., n.d.
             Web. 17 Dec. 2012.

"Grace Communications Foundation." Food Economics. N.p., n.d. Web. 16 Dec. 2012.
Moltzen, Kelly. "Subsidies and "Specialty" Crops: An Analysis of the Current State of U.S. Agricultural Policy | Kelly
              Moltzen - Academia.edu." Subsidies and "Specialty" Crops: An Analysis of the Current State of U.S. Agricultural Policy |
             Kelly Moltzen -Academia.edu. N.p., n.d. Print.
Video Sources:
"OrganicConsumers.org." YouTube. YouTube, n.d. Web. 17 Dec. 2012.