Review of Previous Studies

Biotechnology and Technological Change in Developing-Country Agriculture

An Overview of OECD Development Centre Research

Carliene Brenner

OECD Development Centre, Paris, France

Introduction

In the first part of this paper, the approach taken in research on technological change in developing-country agriculture at the Organisation for Economic Co-operation and Development (OECD) Development Centre is discussed. In the second, the findings of our recent research project on Biotechnology and Sustainable Agriculture are outlined. Finally, drawing on the Development Centre experience, some observations are made about the methodological challenges presented by assessment of the impact of agricultural biotechnology.

Technological Change in Developing-Country Agriculture

The Development Centre's involvement in research related to biotechnology began with a study on "Biotechnology and Developing Country Agriculture: The Case of Maize," undertaken as part of a major research program on "Changing Comparative Advantages in Food and Agriculture" (1987–89). This study was concerned with the ways in which new developments in biotechnology in industrialized countries might affect the relative position of developing countries. The study addressed the following questions:

· What are the significant changes occurring in the ways in which research and technology development are conducted in agriculture "at the frontier"?

· Will these changes facilitate the introduction and diffusion of new technologies in agriculture in developing countries?

· If not, what are the principal impediments?

To address these questions, the approach taken was, first, to analyze global trends in maize production, patterns of consumption, and trade over the past 20 years or so. This drew attention to the problems developing countries confront in meeting growing demand for maize. Trends in research on maize biotechnology "at the frontier" were also examined.

Against the background of these international trends, country case studies of Brazil, Indonesia, Mexico, and Thailand were carried out (see Brenner 1991 for a summary). The country studies examined trends in domestic production and consumption of maize; the national maize research, technology development and diffusion system; and policies affecting maize production and consumption. They also addressed three closely interrelated sets of issues arising from the changing configuration of agricultural research and technology development: different aspects of technology generation, transfer, and diffusion; the roles of the public and private sectors; and intellectual property rights applied to plants.

The study highlighted the complexity and magnitude of providing genetically improved maize varieties and high-quality seed for a wide diversity of production and agroecological conditions. It found that progress made in the diffusion of improved seed, and the technological capability implied in resolving some of the particular research problems that had been tackled, is impressive given the short track record of maize research and delivery systems in the countries studied. Nevertheless, the problems of ensuring an adequate supply of "appropriate" varieties and of making improved seed accessible to all types of farmers, in all major production areas, had not been entirely resolved in any of the countries.

The study concluded that, in the short term, it was unlikely that the recent developments in maize biotechnology would be exploited. First, among the countries included in the study, very little capability in biotechnology (for example, in the disciplines of biochemistry, microbiology, and molecular biology) existed. Second, although some of the new technologies and bioprocesses could certainly facilitate or accelerate the process of producing varieties with sought-after characteristics, they would complement, but not supersede, conventional methods of crop improvement and genetic manipulation. Capability in those methods still required strengthening.

A second major study entitled "Technology and Developing-Country Agriculture: The Impact of Economic Reform" was undertaken in the Development Centre's 1990–1992 program (Brenner 1993). This sought to determine whether the structural adjustment and liberalization process and, by implication, changes in the public/private sector balance, was likely to enhance or impair the economic and institutional conditions conducive to technological innovation and greater productivity in developing-country agriculture. Given that this was a hitherto unresearched area, it was decided on the advice of a group of experts to take an eclectic approach and to conduct a number of different studies that would permit examination of the issues from a number of different angles. At the same time, it was agreed that in all the studies there should be strong emphasis on the implications for technology development and diffusion of the changing public/private sector balance implied by structural adjustment.

With these objective in mind, two commodity studies - one food and one export crop - were undertaken (Bloomfield and Lass 1992; Evenson and David 1993). Rice was selected as the world's most important food crop, and cocoa was retained as an export crop, which is produced only in developing countries and grown in each of the African, Asian, and Latin American continents. These commodity studies were complemented by a study on rice and cocoa biotechnology (Brenner 1992), which examined the ways in which the organization of research is evolving. It also addressed issues specific to the two crops raised by developments in biotechnology, i.e., the substitution of cocoa butter, the introduction of rice hybrids, and the conservation of plant genetic resources.

A study of Brazilian public research institutes and the ways in which they were responding to the changing conditions under structural adjustment was also undertaken (Wilkinson and Sorj 1992). This focused on soybean, wheat, and sugar.

Finally, a study of seed supply and of the impact of structural adjustment on the supply of seed to small-scale, semicommercial farmers was undertaken (Cromwell 1992). This study examined the situation in Malawi, Zambia, and Zimbabwe with respect to the crops that are most important in their farming systems.

The research addressed two separate but related sets of issues:

· How is the structural adjustment process affecting technological change in agriculture - and are these impacts different at different stages of the research, technology development, and diffusion process?

· How is the structural adjustment process affecting the pattern of incentives and disincentives to farmers to introduce technological change in production?

The research concluded that structural adjustment had mixed impact on income distribution among poor farmers and that special measures in favour of small-scale producers should be included in the design and sequencing of structural adjustment. Although producers might receive higher output prices, these were often offset by reductions in subsidies for fertilizer or improved planting material, combined with higher input prices.

With respect to agricultural research, it was found that significant changes in the public/private balance are indeed occurring. It also found that, in contradiction with the interests of long-term growth and sustainability in agricultural production, and of pressing environmental concerns, support for agricultural research was in danger of being sacrificed in the interests of the short-term requirements of stabilization and structural adjustment measures.

Current Research

A research project specifically focused on biotechnology, "Biotechnology and Sustainable Agriculture," was undertaken in the Centre's 1993–1995 program. This project is also made up of a number of different components. They include a conceptual study of agricultural biotechnology in the context of a national innovation system and an analysis of publicly funded international initiatives to stimulate the introduction of biotechnology in developing-country agriculture (Brenner and Komen 1994).

Six country studies were also conducted: India and Thailand in Asia, Colombia and Mexico in Latin America, and Kenya and Zimbabwe in Africa (Alam 1994; Sakarindr et al. forthcoming; Sanint 1995; Solleiro 1995; Woodend forthcoming). These have focused on the potential contribution of biotechnology in the areas of plant protection and production. An important feature of the country studies is that they have examined not only developments with respect to biotechnology research, but also the different phases in the whole process from basic research to the marketing and widespread diffusion of a biotechnology product.

More specifically, the terms of reference have included:

· Review of the macroeconomic, agricultural, and environmental background against which developments in biotechnology are occurring.

· Examination of national biotechnology policies and strategies in plant production and protection.

· Examination of national programs and priorities in biotechnology research and of the practices and structures in place, or not in place, to facilitate biotechnology product development and to stimulate technology diffusion.

· Analysis of successes and failures in biotechnology initiatives to identify constraints and bottlenecks in the successive phases of diffusion of biotechnology.

· Assessment of the coherence of combined national and international efforts in promoting the development of biotechnology for sustainable agriculture.

The overall objective of the project was to determine the kinds of institutional arrangements and policies that would enable biotechnology to contribute to more sustainable approaches to crop protection and production.

The country studies are now either published or are being revised and a workshop to review the project was held at the Development Centre in Paris on 9–10 February 1995. A synthesis volume, which distils the lessons to be drawn from the project and the discussions at the workshop, is now being prepared. Preliminary findings relevant to this workshop are given in the following.

Biotechnology Research

A growing number of countries and research institutions are undertaking biotechnology research. This is often, however, more a consequence of "science-push" than "demand-pull." Individual research projects and programs are often undertaken in the absence of clearly defined national priorities for biotechnology. In addition, biotechnology is not generally integrated within the broader national policy and institutional framework; for example, with the priorities set for agriculture and food production, science and technology policies, and environmental policies.

There appears to be a need for greater selectivity in biotechnology research to avoid the risk of dispersal rather than concentration of national effort, of duplication of effort, or of "reinventing the wheel." Research effort is highly concentrated in the public sector, sometimes in newly established biotechnology institutes, with very little involvement on the part of the private sector, although, as indicated in the following, efforts are being made to strengthen public/private sector collaboration.

All countries cite inadequate resources, both financial and human, as a major constraint in biotechnology research. Countries are gradually incorporating biotechnology disciplines and degree courses in university curricula but, for higher degrees, overseas training is often required.

Innovative mechanisms for financing research are also emerging. In the absence of clear national priorities, however, it is unclear what would, indeed, constitute an adequate level of financing or a "critical mass" of scientists. Linkages and interaction among the different stakeholders in biotechnology research - biotechnologists and the traditional agricultural research and plant-breeding community, public research institutions and the private sector, institutions with common research interests, scientists and agricultural producers or other users of biotechnology products - are also generally weak.

For the most part, developments in biotechnology research are not being explicitly linked to environmental concerns. Strong government support, however, is being given to the development of biopesticides in some countries.

Product Development and Technology Transfer

It is perhaps important to recall here that biotechnology may be considered as an enabling technique (for example, the use of genetic markers in plant breeding) or as being incorporated in a biotechnology product (for example, a new, disease-resistant plant variety). Whether a biotechnology product is imported or generated by local research effort, adaptation to local agroecological and production conditions and/or product development are necessary.

Moving from the purely research phase, development (small- to large-scale field testing, setting up of a pilot plant, seed multiplication, etc.) appears to be a major constraint. This is in part because development is not always included or is often underestimated, or both, in research budgets.

Similarly, little attention has been paid to technology diffusion or marketing mechanisms or to the demand side aspects of biotechnology. On the one hand, without the incentive of strong market potential, private firms are unwilling to undertake the risks of production and marketing. On the other hand, public research institutions are shown to be ill-equipped technically and do not generally have the financial resources to scale up from small- to large-scale testing and from pilot plant to large-scale production.

Few biotechnology products are yet on the market in the countries we have studied. In all countries, disease-free planting material produced by tissue culture and micropropagation (for vegetatively propagated crops and flowers in particular) is already available, usually marketed by commercial firms. In some cases, demand exceeds supply.

The case of biopesticides presents a contrasting picture. A number of governments are involved in trying to promote the diffusion of biopesticides to reduce dependence on chemical products, and research on biopesticides is being supported in public institutions. Unfortunately, the inadequate technical capacity of public institutions to produce biopesticides efficiently and to ensure consistent quality results in a lack of acceptability and effective demand on the part of farmers, and lack of interest on the part of the private sector in production and commercialization. The problem is further compounded in those situations where national extension services are shrinking as a result of reduced public expenditure or are being privatized. If, for reasons of environmental protection, governments are committed to the increased use of biopesticides, they will need to continue investing in or subsidizing production and technology transfer to farmers or provide incentives to the private sector to become involved.

A number of innovative examples of efforts to stimulate involvement of the private sector and to facilitate the creation of markets for biotechnology products have emerged from our research. These include tax exemptions and access to credit for local start-up firms, government procurement as a means of assuring an initial market for local start-up firms, the provision of large-scale testing facilities or quality control services by government agencies, and efforts to seek commercial partners as soon as research results appear promising.

A number of collaborative arrangements between public research institutions in developing countries and commercial companies (both domestic and foreign) are receiving donor support. In most cases, these concern biotechnology research and development where some elements of the technology, or specific research techniques, are "transferred" from developed-country laboratories to the developing-country institutions.

Sometimes, they concern research techniques, genes, or products over which private companies hold intellectual property rights. To date, a number of such techniques, or elements of technology, have been "donated" to developing countries by multinational corporations through nonexclusive, royalty-free licences.

Introduce insect-resistant genes in potato and sweet potatoODAUniv. of Wales, IARCsAgricultural Genetics Co. ABSP:

Stem-borer resistance in maizeUSAIDM.S.U., Cornell, Texas A& CRIFC ICI Seeds Indo–Swiss collaboration in biotechnology:

B.t.-based insecticides SDCDBT, Indian and Swiss partner institutesIndian agrochemicals firm ISAAA/Monsanto/CINVESTAV:

Transgenic potato resistant to PVX and PVY viruses RFCINVESTAV, INIFAPMonsanto, Biotecnologia 2000 Note: ODA: Overseas Development Administration, PRSP: Plant Sciences Research Programme, ABSP: Agricultural Biotechnology for Sustainable Productivity, SDC: Swiss Development Corporation, DBT: Department of Biotechnology, Delhi, ISAAA: International Service for the Acquisition of Agri-biotech Applications, INIFAP: National Institute of Forestry, Agricultural and Livestock Research, Mexico, CINVESTAV: Centre of Research and Advanced Studies, Mexico, RF: Rockefeller Foundation.

In two of the four cases, although the research has proceeded satisfactorily, unforeseen obstacles have been encountered at the development and diffusion stages. In one instance, field-testing of an insect-resistant potato has been delayed because, in the developing countries envisaged, biosafety procedures are not yet in place. In a second instance, involving insect-resistant transgenic maize, the fact that Indonesia has decided not to allow Plant Breeders' Rights (PBRs) on food crops, including maize, has introduced an element of uncertainty in the crucial seed production/distribution phase of the program.

Policy and Institutional Issues

In terms of policy implications, the research highlights, first and foremost, the lack of integration of biotechnology research in the broader national institutional and policy framework. Clearly, biotechnology policies and strategies should be country-specific, designed as a function of the particular conditions prevailing within a country, its particular scientific and technological capabilities, institutions, and the range of policies affecting agriculture. Similarly, it highlights the lack of effective linkages and interaction among the different stakeholders in biotechnology research, development, and diffusion.

One vexing question in formulating sensible policies for biotechnology in agriculture is that of the economic cost–benefit of biotechnologies and, more particularly, their economic advantage over other methods of plant protection and production. The case of biopesticides suggests that relatively low, short- to medium-term economic costs, which would need to be met by governments or through development assistance, may lead to major long-term, social and environmental benefits. It is important that methodologies be developed for assessing the comparative cost–benefits of new biotechnology products.

Other policy and institutional issues of particular importance in biotechnology are those of biosafety and intellectual property rights. Although a number of countries are currently establishing biosafety guidelines, in most countries national procedures are not yet in place. Our research suggests that the lack of biosafety procedures could inhibit the transfer of biotechnology. Similarly, it is important that countries clarify their intentions with respect to intellectual property rights in plant biotechnology.

Issues of Relevance for This Workshop

Research on biotechnology at the Development Centre has been undertaken from the broad perspective of technological change and innovation in agriculture. Essentially, the aim has been to examine what is at present in place to stimulate or impede the development and diffusion of new technology within a national context, and to determine what institutional arrangements and policies might improve the situation. This approach has the merit of pinpointing current impediments and proposing measures that might reduce identified constraints to technological change in the future. It also has the shortcoming of generating little quantitative, particularly economic, data.

This approach has been seen as fruitful given the formidable difficulties of both ex-ante and ex-post assessment of the impact of biotechnology. One difficulty stems from problems in arriving at a satisfactory definition of biotechnology. In one of its early publications, the OECD, which defines biotechnology as "the application of biological organisms, systems and processes based on scientific and engineering principles, to the production of goods and services," listed 11 definitions (Bull et al. 1982).

What is important to keep in mind is that biotechnology encompasses a mix in the form of an enabling tool (e.g., a genetic marker in plant breeding), a process (e.g., fermentation), or a product (e.g., a transgenic seed). The impact of each of those outputs may depend to a very large extent on interrelated, underpinning technologies and capacities. For example, a new crop variety may be the product of a combination of biotechnology, plant breeding, and seed production techniques and the contribution of the biotechnology input to the performance of that variety in the field may be extremely difficult to pinpoint. Similarly, the impact of biopesticides will depend both on the ability to produce products of consistent, high quality and on skill and timeliness in their application.

At the least, ex-ante assessment of a given biotechnology technique or product would require the following:

· Definition and description of the technology;

· Specification of alternative technology options for achieving the same objectives;

· Management strategies required for the technology;

· Assessment of the direct effect of the technology on yields, production costs, productivity, input demand, and a range of environmental, legal, safety, and other considerations; and

· Assessment of the indirect effects: identification of the losers/gainers, assessment of risks and uncertainties associated with the technology, and, finally, long-term impact.

In many situations, the availability of data on some of these variables, at either the macro- or microlevel, is highly problematic. Quantitative ex-post assessment of agricultural biotechnology products is also, to date, very limited. The first wave of genetically engineered products is only now beginning to reach the market, and very little economic analysis of the earlier products of tissue culture and micropropagation has been published. The socioeconomic assessments of bovine somatotropin (bST) now under way in the U.S. and Canada may have little relevance to the production systems, management, and climatic conditions of many developing countries.

A large part of the work on biotechnology assessment related to developing countries has focused on supply-side problems and constraints, with little assessment of potential demand. It is important that the methods used for setting national priorities in biotechnology should seek a better balance between demand and supply-side aspects. Effective demand will, to a large extent, determine the respective roles of the public and private sectors in the development and dissemination of new biotechnology products. In the case of those technologies with a strong public-good aspect (such as biopesticides), but with weak short-term market potential, the initial costs will need to be borne by governments.

Clearly, for countries to be able to formulate sensible national biotechnology strategies both quantitative and qualitative impact assessment are required and a number of different approaches and methods of assessment will be outlined by other participants. One approach that appears promising and that the OECD has begun to explore is that of a national system of innovation (NSI). [See, for example, Lundvall 1992; Nelson 1993; Niosi et al. 1993. Although there is as yet no consensus on a precise definition, a National System of Innovation (NSI) can be defined as the network of agents and set of policies and institutions that affect the introduction of technology that is new to the economy and that determine the rate and direction of technological learning and change.] It is not yet clear how relevant this concept is in a developing-country context.

References

· Alam, G. 1994. Biotechnology and sustainable agriculture: Lessons from India. Technical Paper No. 103, December. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Bloomfield, E.M.; Lass, R.A. 1992. Impact of structural adjustment and adoption of technology on competitiveness of major cocoa producing countries. Technical Paper No. 69, June. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Brenner, C. 1991. Biotechnology and developing-country agriculture: The case of maize. Development Centre Studies. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· 1992. Biotechnology and the changing public/private sector balance: Developments in rice and cocoa. Technical Paper No. 72, July. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· 1993. Technology and developing-country agriculture: The impact of economic reform. Development Centre Studies. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Brenner, C.; Komen, J. 1994. International initiatives in biotechnology for developing country agriculture: Promises and problems. Technical Paper No. 100, October. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Bull, A.T.; Holt, G.; Lilly, M.D. 1982. Biotechnology: International trends and perspectives. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Cromwell, E. 1992. The impact of economic reform on the performance of the seed sector in Eastern and Southern Africa. Technical Paper No. 68, June. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Evenson, R.; David, C. 1993. Adjustment and technology: The case of rice. Development Centre Studies, Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Lundvall, B. ed. 1992. National systems of innovation: Toward a theory of innovation and interactive learning. Printer Publications, London, UK.

· Nelson, R. 1993. National innovation systems: A comparative analysis. Oxford University Press, Oxford, UK.

· Niosi, P.; Saviotti, B.; Crow, M. 1993. National systems of workable concept. Technology in Society, vol. 15.

· Sakarindr, B.; Morakot, T.; Sutat, S. (forthcoming). Biotechnology and sustainable agriculture: The case of Thailand. Technical Paper. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Sanint L.R. 1995. Crop biotechnology and sustainability: A case study of Colombia. Technical Paper No. 4. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Solleiro, J.L. 1995. Biotechnology and sustainable agriculture: The case of Mexico. Technical Paper No. 105. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Wilkinson, J.; Sorj, B. 1992. Structural adjustment and the institutional dimensions of agricultural development in Brazil: Soybeans, wheat, and sugar cane. Technical Paper No. 76. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

· Woodend, J.J. (forthcoming). Crop biotechnology and sustainable agricultural in Zimbabwe. Organisation for Economic Co-operation and Development (OECD), Development Centre, Paris, France.

Employment Impacts of Agricultural Biotechnologies in Latin America

Coffee and Cocoa in Costa Rica

Regina M.A.A. Galhardi

Employment Strategies and Policies Branch, ILO, Geneva, Switzerland

Introduction

Attempts to assess the employment effects of biotechnology applications in developing countries have not been extensive. Even less effort has been devoted to the study of the socioeconomic implications of the (potential) substitution of Third World exports by others produced by new biotechnology applications in advanced industrialized countries.

A first and rather optimistic contribution came from Watanabe (1985). According to him, biotechnologies should be able to make a significant contribution not only to the growth of national wealth but also to individual incomes and employment, especially in Third World countries. Increased agricultural self-sufficiency of developing countries would have a negative effect upon industrialized country food exporters.

A more recent evaluation by Junne (1991) is somewhat more pessimistic. He says that biotechnologies ''will make many importing countries more self-sufficient and increase trade conflicts among overproducing countries." According to his analysis, biotechnologies will help to substitute products from industrialized countries for commodities from developing countries with uneven effects on the trading position of different exporting countries.

Very few studies, however, have been published up to now on the trade implications of biotechnological advances in developing countries, particularly in terms of potential employment generation or labour displacement. This paper attempts to fill this gap by assessing the employment consequences of biotechnology developments for small-scale agricultural production in developing countries with special reference to Latin American countries. It is based on the assumption that employment reduction or labour displacement may occur as a result of declining demand from industrialized countries for Third World food products. Although many of these impacts remain highly uncertain and difficult to quantify, their identification is required as far as this can influence policies and technological developments that may mitigate any plausible negative results.

The second section deals with the possible direct employment effects resulting from the declining demand from industrialized countries for Third World export crops. An attempt is made to quantify these possible effects by studying the production of coffee and cocoa in Costa Rica, was based on assumptions regarding production, consumption, and export for the next 10 years. This country case study was chosen because of the availability of data and labour coefficients for the production of these two export crops. The last section summarizes the main findings and qualifies the results.

Quantitative Employment Estimates

This section intends to provide information on the magnitude of possible direct employment effects resulting from declining demand from industrialized countries for some Third World export crops. An attempt to quantify such potential threats is desirable to warn policymakers, trade unions, farmers, and workers in developing countries and, possibly, mitigate the problems.

This quantification is, however, a speculative exercise based on the availability of labour coefficients for some Latin American crop production. This is especially important because no previous effort of this type has been made. This ex-ante analysis is beset with difficulties and shortcomings.

First, data on employment by crops for these countries are not systematically collected. Second, when they are available, they differ according to the source consulted. Third, labour intensity by crop varies according to size of the plot, cultivation techniques, and regions within each country. Fourth, cross-country comparison is very difficult because of the scattered information available on variables such as production, export, consumption, and employment by crop.

Nevertheless, with the purpose of providing an idea of the order of magnitude of such effects, this section will try to estimate the employment losses that may occur in the production of cocoa and coffee in Costa Rica. This case study was chosen because of the availability of information on the variables production, consumption, and export for the last two decades, and on technical and labour coefficients that permitted the calculation of the labour force involved.

The estimation procedure is centred on some assumptions concerning the expansion of the world agriculture toward 2000 (Alexandratos 1988). The underlying assumptions that will guide this analysis are:

· A slow down of industrialized country market demand/imports, and

· Latin America's agricultural production growth rate for the period 1985–2000 is expected to be lower than in the past 15 years.

It is also assumed that coffee will not be imported in significant quantities by developing countries and, therefore, nearly all coffee demand translates into import requirements from industrialized countries.

Another general assumption that underlies this estimation procedure is related to the availability of biotechnology as applied for coffee and cocoa. It is assumed that the biotechnological advances that may contribute to reducing the demand for cocoa and coffee beans from importing countries are already available and affecting trade patterns. This is a simplifying assumption because advanced biotechnological developments for improving cocoa and coffee production are far from being commercialized during the period covered here.

According to some experts, routine application of advanced biotechnology for cocoa and coffee improvement may be more than 10 years away. Although progress has been achieved in plant transformation methods and expression systems, the identification and isolation of genes of agronomic importance have lagged behind. The anticipation of the possible biotechnological achievements for both crops, however, is a necessary condition embodied in this analysis.

Coffee Employment Estimates

Methodology: Apart from data provided by (different) official institutions on production, area harvested and export of coffee. the employment data were estimated from the figures provided by PREALC (Programa Regional del Empleo para América Latina y el Caribe), Panama, for the years 1985 and 1989. These were calculated from existing technical coefficients for coffee production and the variation of area harvested for these years and extrapolated for the others. Data on consumption of coffee were provided by official sources for the period 1977–1985. The estimated values for the years 1987 to 1990 were based on the assumption of an annual growth of 3.0% for the domestic demand for coffee in Latin America for the period 1985–2000 as stated by the Food and Agriculture Organization of the United Nations (FAO, Annex V, 1988).

From these data, two different scenarios were built according to different assumptions regarding the decline of coffee demand from importing developed countries.

Scenario A: The variables consumption, production, employment, and export were calculated according to the following assumptions:

· Production It is considered that developing countries' agricultural production rate for 1985–2000 will be lower than in the past 15 years when it was 3.2% a year. Latin American production is expected to grow 2.7% per year from 1985 to 2000 (Alexandratos 1988). The slow-down in population growth expected for this period as well as the continued slow growth of the region's agricultural exports, will restrain the growth of total demand and, hence production. In terms of nonfood crops, it is estimated that Latin American output will rise by 1.6% per year from 1985 to 2000 mainly reflecting the unfavourable export prospects for coffee, which accounts for about 45% of all crop exports from Central America. It is expected that production will increase but at very low rates.

In the case of coffee production in Costa Rica, it is assumed that the production will grow 1.5% during the period 1990–95, 1.0% during 1995–2000, and 0.5% in the next 5 years. This will be the result of the declining demand from developed countries for coffee because of changes in the consumer requirements, flavour, and other substitutes, i.e., those induced directly or indirectly by the biotechnological advances discussed in the previous section.

· Export The net export of the developing countries is projected to grow 0.6% per year from 1985 to 2000 (FAO, Annex V, 1988). It is assumed that the slow down of consumption and imports of the developed market economies will intensify in the next decade because of the availability of biotechnological advances that will allow temperate countries to produce coffee or some substitute.

This will contribute to a reduced demand from developed countries for imports of coffee from tropical countries and, in particular, from Costa Rica. It is assumed, for illustrative purposes, that the gradual replacement of coffee grains by other substitutes would result in a reduction of 20% in the demand of importing countries for the period 1990–95, 25% for 1995–2000, and 40% for 2000–2005.

· Consumption The internal demand for coffee is assumed to increase at the rate of about 3.0% per year as estimated by FAO's "agriculture toward 2000" scenario (FAO, Annex V, 1988). In the estimate, an increase of 15% each quinquennia from 1990 to 2000 was considered.

· Employment The estimated employment figures were based on the assumption that the coefficient person-year/tonne will decrease by 4% each quinquennia in relation to the average ratio for the period 1985–1990, i.e. 0.41 person-years/tonne. According to this scenario, a decrease in employment will result even if production and internal consumption increases at rates expected for the period considered. About 6% of person-year jobs will be lost from 1990 to 2005.

Sources: Banco Central do Costa Rica, Difras sobre producción agropecuaría: 1977–1986, San José, 1988. Production, export, and consumption for 1980–85; Statistical Abstract of Latin America: Production and area harvested; Consejo Monetário Centroamericano, Boletin Estadistico 1991, San José, Costa Rica: Exports 1987–90. My own calculations: Employment and consumption and data for 1990–2005 (see methodology).

Scenario B: In this scenario, production is assumed to depend on exports. It is considered that the relationship between consumption plus exports/total production will be held at 95%. Apart from production and related employment figures, the other variables vary as in the previous scenario.

Sources: Banco Central do Costa Rica, Difras sobre producción agropecuaría: 1977–1986, San José, 1988. Production, export, and consumption for 1980–85; Statistical Abstract of Latin America: Production and area harvested; Consejo Monetário Centroamericano, Boletin Estadistico 1991, San José, Costa Rica: Exports 1987–90. My own calculations: Employment and consumption and data for 1990–2005 (see methodology).

Based on the foregoing considerations, 28,522 workers may lose their positions, i.e., a decrease of 48% in employment could be perceived at the end of the period 1990–2005 if we consider that the export of coffee is reduced as estimated before. Even if we consider that the demand for labour is not supposed to diminish, i.e., the ratio person-year/tonne is maintained at 0.39 up to the end of the simulation period, a reduction of 45% in the labour requirements will be perceived.

Because of the lack and unreliability of existing data, it was only possible to analyze the case of Costa Rica. In spite of the limited evidence, it is possible to see that displacements and redundancies may occur as a result of biotechnology advances. If these results have a significant effect on the employment level of Costa Rica, the most productive Latin American coffee producer, it may be worse for other countries where productivity is lower and production is more labour intensive, as in the case of Honduras and Guatemala. Coffee is the most important commercial crop in terms of foreign exchange and employment generation for both countries. In 1988, around 273,503 employees were reported as being involved in the production of coffee in Guatemala. In 1987, 62,720 rural workers were involved in the production of coffee in Honduras, i.e., 8.5% of the rural labour force.

Cocoa Employment Estimates

Methodology: The same assumptions that underlined the estimation procedure for coffee employment changes (i.e., a decreasing export tendency) are considered here. The methodology is similar to that used in the previous case studied. Employment figures were, however, calculated in a different way. Employment coefficients per unit of production and hectare harvested were defined from data provided by PREALC, Panama, for the year 1989.

The employment figures for the other years of the period 1980–1990 were estimated according to data provided by official local institutions and international or regional organizations and the employment coefficients calculated. Data on the consumption of cocoa were provided by the Central Bank of Costa Rica for the period 1977–1986. The figures for 1987–1990 were calculated from the information provided by FAO (1988) that an annual growth of 3.1% for the domestic demand of cocoa in the Latin American countries is expected from 1985 to 2000.

To illustrate the magnitude of possible employment changes because of the slowdown of export and production of cocoa beans in Costa Rica, some assumptions about production, export, and consumption were made. These are discussed in the following according to the scenarios proposed.

Scenario A: In this alternative scenario, employment consequences of a reduced demand of cocoa from importing developed countries are based on estimated shifts of production volume throughout the period 1990–2005.

· Production According to the prospects for the world agriculture development toward 2000, Latin American production of crops would increase at a rate of about 2.7% a year from 1985 to 2000, i.e., below the 2.9% figure recorded from 1969 to 1984. This lower growth is attributed in large part to the prospect of slower growth of output in Argentina, Brazil, Costa Rica, and Paraguay. Moreover, gross exports of crops from Central America would expand by only 0.5/year. The slow growth in the demand of importing industrialized countries for major export commodities of the developing countries is a key constraint for the growth of their production.

In view of this panorama of depressed demand for crops in general and for export crops in particular, it is assumed that production of cocoa will expand but at very low rates An average growth of 2.0%, 1.5%, and 1.0% is, therefore, attributed to each quinquennium from 1990 to 2005, respectively. These estimates are based on the accentuated export-oriented character of cocoa production and also supported by the long-term effect of the possible biotechnological breakthroughs for this crop improvement. Any potential substitution for cocoa will be accomplished more slowly than in the case of coffee considering that "traditional breeding in cocoa has not been as extensive as in coffee" and "tissue culture techniques have not been so advanced in cocoa" (Sondahl 1991) .

· Export With respect to exports, a decrease in imports by the industrialized market economies is expected to dominate the growth prospects for exports. Exports will shrink by 20% during the period 1990–95, 25% during 1995–2000, and 30% to 2005. Saturation of consumption levels in the importing countries associated with the biotechnological prospects of displacing tropical beverage raw materials will influence the reduction in the export demand for cocoa. This reduction, however, is estimated to occur at a less sharp rate than in the case of coffee, for the reasons related to "availability of the technology" commented on before.

· Consumption The internal demand for cocoa in Latin America is supposed to continue to grow at 3.1% per year up to 2005 based on the estimate provided by FAO (1988) for the period 1985–2000. In the analysis, an increase of 10% for each quinquennium from 1990–2005 is considered.

· Employment The employment figures for the period 1990–2005 were calculated considering that the coefficient person-year/tonne will decrease by 5.0% in each quinquennium. This assumption is based on the mid-1980s tendency and on possible technological advances and improvements that may be available to more cocoa producers during the next years and alter, therefore, the demand for labour. A reduction in the labour requirements of 15% may result if similar situations are faced by cocoa producers in Costa Rica.

Scenario B: In this scenario, the production of cocoa is subordinated to the export tendency This possible situation is based on the assumption that internal consumption of cocoa will not increase as expected in the previous scenario. It is assumed now that it will continue to grow as in the previous decades up to 1995 and, after that, will stagnate because of a slow down in population growth and unfavourable economic conditions constraining growth of demand. The other coefficients and variables remain constant, i.e., they were calculated as already described.

The production will adjust to face the declining external and internal demand for cocoa. The ratio between consumption plus export production and total production is fixed at 100% as in the previous scenario. A substantial reduction in employment of about 27% may be the result of such a situation.

Sources: Banco Central do Costa Rica, Cifras sobre producción agropecuaría: 1977–1986, San José, 1988; Banco Nacional de Costa Rica, Boletin Estadistico, San José; FAO Production Yearbooks; and my own calculations (see methodology).

This scenario took into consideration the fact that more than 50% of the cocoa production in Costa Rica is directed to the internal market and only about 30% to the external market. More dramatic employment displacements would be felt by a country where cocoa is an important export crop.

Conclusions

The introduction of new plant characteristics, either by changes in food processing, such as improvements in the fermentation and enzymatic processes or by the industrial production of synthetic substitutes of plants or their components, can also lead to changes in international trade patterns by enhancing the possibilities for crop substitution.

The development of tropical plants tailored to meet the specific needs of processing countries' industry and consumers is likely to lead to overproduction, declining prices, and economic and social instability in Third World exporting countries.

Assessment of many of these effects for rural producers in developing countries is beset with difficulties considering that many of the developments are still at the stage of laboratory-based research and, therefore, information on which to base the analysis of potential effects is limited.

Estimates of the magnitude of the possible direct employment effects resulting from declining demand from industrialized countries for Third World export crops is based on the availability of labour coefficients for the selected crop productions and on the availability of information on variables such as production, export, consumption, and employment by crop for the sample countries. This quantification is, therefore, a speculative exercise beset with difficulties and shortcomings.

Besides the long generation term of the biotechnological advances that may contribute to reducing the demand of tropical exports, there is a lack of reliable data. Data on employment by crops for developing countries are not systematically collected and, when they are available, they differ from source to source. The labour intensity by crop varies also according to size of plot, cultivation techniques, and regions in the country.

Even considering these constraints, employment losses resulting from shrinkage of exports were estimated for the case of coffee and cocoa production in Costa Rica. Scenarios were built according to different assumptions on the decline of coffee and cocoa demand from importing industrialized countries and its related implications on the variables production, export and, then, employment.

The results achieved from this simulation procedure point to a very significant employment reduction for exporting countries. A decrease in the labour force requirements may accrue even if the internal consumption and production increase at the expected rates.

The net employment effect of such substitutions, however, may be positive. It will depend on the quantitative significance of these displacements, the alternative production activities adopted by the affected producers to overcome the negative effects, and the labour coefficient of the crops involved, which varies across countries and within the country. The net employment effects induced by changes in the international trade pattern of tropical export crops need to be considered on a country-based analysis to be truly valid.

The estimations and scenarios analyzed here are not predictions but rather reasoned evaluations of possible situations. A more concrete estimation procedure should include the possibility of offsetting price movements, which would alter the production and employment for certain export crops; the analysis of the country's possibility to increase production; an assessment of the import demand from developed and developing countries, which are in deficit in that commodity; and an assessment of the country's share in total world import demand based on an analysis of trends and other relevant factors that are beyond the scope of this paper.

References

· Alexandratos, N., ed. 1988. World agriculture: Toward 2000. An FAO study. Belhaven Press, a division of Pinter Publishers, London, UK.

· FAO (Food and Agriculture Organization of the United Nations). 1988. Potential for agricultural and rural development in Latin America and the Caribbean, Annex I, Economic and Social Development; II Rural Poverty, and V Crops, Livestock, Fisheries and Forestry. FAO, Rome, Italy.

· Galhardi, R.M.A.A. 1993. Employment and income effects of biotechnology in Latin America. A speculative assessment. International Labour Office, Geneva, Switzerland.

· Junne, G. 1991. The impact of biotechnology on international trade. In Sasson, A.; Coslgreni, V., ed., Biotechnologies and prospective socio-economic implications for developing countries. United Nations Educational, Scientific and Cultural Organization (Unesco), Paris, France.

· PREALC (Programa Regional del Empleo para América Latina y el Caribe). 1991. Labour market adjustment in Latin America: An appraisal of the social effects in the 1980s. PREALC, Santiago, CL. Doc. WEP Working Paper no. 357.

· Sondahl, P.J. 1991. Coffee and cocoa. In Gabrielle, J. Persley, ed., Agricultural biotechologies: Opportunities for international development. CAB International, Wallingford, UK.

· Watanabe, S. 1985. Employment and income implications of the "bio-revolution": A speculative note. International Labour Review, 124(3), May–June.

Biotechnology and the Future of Agrcultural Development in Mexico

Michelle Chauvet

Department of Sociology, Universidad Autónoma Metropolitana, Mexico D.F., Mexico

Introduction

The applications of biotechnology that have been made to date in agriculture and the environment have clearly been more limited than predictions during the 1970s would have led us to expect. The reasons underlying this fact have to do with the accelerating pace of change in the world.

New technologies lie at the heart of change everywhere, and their impact is felt in economic fundamentals as much as in everyday life. In developing a theoretical and methodological framework for understanding the scope of these effects, we must include a study of observable trends that will let us make a realistic assessment of progress in biotechnology.

Biotechnology and Basic World Trends

The changes now occurring in the world are being shaped by the process of globalization. This term, however, is subject to various interpretations in the debate about how best to define contemporary reality. Are we dealing with a new and unique phenomenon, or is it merely a stage or phase through which the world economy is passing? We hear talk of globalization from a wide range of people, in the media, in the academic world, and in international organizations, but are they all talking about the same thing?

It is beyond the scope of this paper to attempt to interpret these changes and their relationship to developing countries' applications of biotechnology in agriculture and the environment. My purpose is merely to stress the importance of globalization as a factor in any theoretical and methodological framework for assessing the socioeconomic impact of biotechnology, and to propose a few analytical guidelines that should be kept in mind.

Globalization is said to be leading to homogenization. In effect, the influence of the stronger economies in terms of standardizing productive processes and the workings of markets is seen as a linear process that embraces all nations as a group. Yet interdependence among countries is asymmetrical, and this in turn leads to heterogeneous forms and responses in the globalization process. Thus, progress in biotechnology has not yet been generalized in the world as a whole.

Another aspect of globalization concerns the new areas in which governments are expected to be involved. According to Alejandro Dabat, in countries that have completed the process of privatization "there is a broad consensus that the old functions of promoting economic growth through state ownership of large industrial complexes in order to subsidize production and the domestic market should now be replaced by policies favouring the development of advanced technologies, supporting international competitiveness, ensuring sustainable development, and dealing with the major social problems that are caused by accelerating technological change and international competition" (Dabat 1993, p. 25).

If this view is accurate, we can expect to see a wider use of biotechnology in agriculture and the environment. As the century draws to a close, we are in a period of transition, where, amid constant questioning and redefining, we find both resistance to and pressure for change.

In summary, for purposes of our work, we need to abandon the deterministic view that puts too much weight on the agroindustrial might of the "North" and underestimates the room for joint action by producers in countries of the "South" (Llambi 1994). We must look at those local and regional processes that seem to run counter to the global trend and be ready to monitor changes in productive processes that may modify the impacts of biotechnology as observed to date.

Methodological Approaches to Research on the Socioeconomic Impacts of Agricultural Biotechnology

There is much debate about the progress that has been achieved in biotechnology, as to whether it represents a rupture or continuity in the technology patterns that have been applied to agriculture. We reviewed this debate in an earlier paper. It is clear that biotechnology has been adopted as a new paradigm for agriculture by the scientific community, but not by the agricultural producers themselves.

We are now in a phase of transition from an old pattern of agricultural development to a new one that will have to take account of technology, among other factors. Technology by itself will not define the new pattern, but it will lead to a redefinition of the role of agriculture in modern society (Casas and Chauvet 1994).

In this time of transition, some biotechnology applications will tend to intensify the existing pattern of agricultural production, which Junne (1992) calls the "neo-Fordist" pattern, and is based on the creation of hybrids and the massive use of fertilizers, with serious consequences for the environment. There are other biotechnologies, however, which, if their use becomes general, will tend to shape a new agricultural pattern, ("post-Fordist," as Junne calls it), where productivity improvements will be based on reproductively stable varieties that are not dependent on costly inputs and that should, in our view, make it possible for agriculture to become more sustainable.

In the paper cited, we concluded that "as a general argument, biotechnology offers some interesting possibilities for developing countries. Nevertheless, its degree of relevance for the Third World will depend on many factors, primarily the identification of specific problems that call for these technologies, the types of natural resources available, as well as the nature of the existing scientific and technical infrastructure and the existence of a policy framework that can produce a biotechnology strategy" (Casas and Chauvet 1994, p.12).

Another general aspect that must be included in a theoretical and methodological framework is the discrepancy of interests, both those of scientists and those of markets and consumers, between industrialized and developing countries. In the case of foodstuffs, for example, on the one hand, people in developed countries worry about the risks they may be exposed to in consuming agricultural products that incorporate biotechnology. In less well-endowed countries, on the other hand, the main concern for much of the population is not the quality of food or the level of toxicity it may contain, but simply to have access to food at all.

Specific Methodologies

Although there has been little work done on the socioeconomic impact of applying biotechnology to agriculture and the environment, there are a few studies available on economic, social, and political aspects that point to a certain methodological convergence as to the actual and potential impacts. (For example, Casas and Chauvet (1994) provides a partial compilation of works that make reference to each of these aspects.) The evidence presented following refers to actual impacts that have been studied with respect to Mexican agriculture.

Methodological Criteria

Background Research: The initial studies of the socioeconomic impact of biotechnology on Mexican agriculture were done using three distinct methodological approaches. In the first, the development of agricultural biotechnology at the world level was contrasted with its progress to date in Mexico. The second approach attempted to assess the potential benefits that biotechnology might bring to agricultural products in which Mexico has a production deficit. Studies covered sorghum, soya, maize, and milk, with a focus on technological components. Finally, an analytical outlook for biotechnology in sugar, yucca, and forest products was prepared during the 1980s, when biotechnology applications were just beginning (Arroyo et al. 1989a,b).

Studies by Product and Region: Studies by product and region have been conducted to assess the impacts of biotechnology in those agricultural processes where it has been applied. This approach moves away from generalizations about the socioeconomic impact of agricultural biotechnology and allows us to determine whether such effects may be concentrated in certain regions. In Mexico, as we know, the same product can be produced using widely varying methods.

In our studies of this aspect, we began with an analysis of the production process that existed before the introduction of biotechnology, and then assessed the changes that occurred as a result of its introduction. Case studies were conducted for livestock feed and breeding and flower growing. Research into potato cultivation is currently under way.

In our research, we examined both quantitative aspects related to increased yields, cost reduction, etc., and qualitative ones arising from cultural considerations, such as quality of life and customs, traditions, and popular preferences. We also distinguished between direct and indirect effects and anticipated and unanticipated ones.

Results from Case Studies

Next, we discuss results of the analysis of the actual impacts of bio- technology in the foregoing cases made during research done by the Sociology Department at the Universidad Autonoma Metropolitana in Azcapotzalco. (The research team consisted of Michelle Chauvet, Yolanda Massieu, Yolanda Castañeda, and Rosa Elvia Barajas.)

Biotechnology and Livestock

The livestock industry now extends over 65% of Mexico's territory, if we include pasture lands as well as land used for feed crops. The basic variables to be considered in cattle production are feed, health, and management. Practices with respect to these three parameters vary between producers, even in the same region, with a general bias toward lower levels of technology (Chauvet 1993).

Cattle raising for beef is based on natural pasturage, which in turn depends on the rain cycle. For this reason, the dominant pattern is extensive/extractive. There is a relatively small sector in the arid part of the country that is based on irrigation and grass cultivation, and another in the tropic zones where pulse has been planted for grazing, but these account for only 8.2% of the total land area devoted to cattle production (Chauvet 1993) .

Technical assistance is generally limited to animal health aspects, and even here there is only minimal attention paid to disease prevention through the use of vaccines. It has been left to the public institutions to undertake the widespread campaigns required against the more contagious diseases. There is also little effort at genetic improvement, and natural mating is still the most common method of reproduction.

In terms of livestock management, each ranch worker makes his own approach, on the basis of family traditions, and with little other knowledge or training. In general, facilities are simple and crude, with little investment in machinery or buildings.

This is the pattern found everywhere in the cattle industry, in breeding, fattening, and dual-purpose production (meat and milk). The dry and semi-arid regions specialize in raising yearling calves for export, whereas the tropic zone produces fattened cattle for the domestic market. Milk production is located mainly in the temperate zone in the middle of the country.

In intensive livestock production, each productive variable is controlled. Feed is kept balanced and uniform throughout the year, and the animals are protected from diseases. Reproduction is not left to chance - artificial insemination is used to maintain or improve the genetic quality of the herd.

The stabling of dairy herds, the use of feedlots, and commercial poultry and pork production fall under this classification. Here, the technological level is similar to that of livestock raising in industrialized countries and, in fact, production models have typically been imported as a package from those countries.

These are the livestock sectors where biotechnology processes have been applied. Three of these are discussed in the following. The first is Biofermel, a composite cattle feed made from agricultural by-products. (Biofermel is a fermentation of molasses (60%), fibre (corn stubble, 20%), cattle manure (5%), urea (2%), and water (13%), which can be substituted for 50% of feed supplements for dairy cattle, and up to 70% for fattening beef cattle (Castañeda 1991).) Its economic importance is that it can reduce feed costs by 50%. This technological innovation was developed at the Biomedical Research Institute of the National University of Mexico (UNAM/Instituto de Investigaciones Biomédicas, Universidad Nacional Autónoma de México) with production and marketing support from the Centre for Technological Innovation (CIT/Centro de Innovación Tecnológica), also at UNAM. Two production plants were built in the country's central agricultural region. Local farmers benefited by being able to sell their agricultural by-products, and nearby sugar mills provided the molasses (Castañeda 1991).

Despite the obvious potential of this new feed source for cattle, its use has not spread very widely among producers. This is mainly because of problems with marketing and distribution of the product to potential customers.

Other biotechnology products in use have come from laboratories abroad. These include probiotics for livestock and fodder crops, from Alltech Inc., and Monsanto's somatotropin (a growth hormone to stimulate milk production).

The probiotics in greatest use are those designed for feeding programs that provide for better assimilation of nutrients, and microorganisms that promote fermentation in silage and so improve its conservation. We studied the impact of these biotechnology products on milk and poultry production in the area around Aguascalientes. We found that producers who make use of these products have at least an average level of technological knowledge and the financial capacity to purchase them.

The study concluded that the use of biotechnology has not become widespread, because livestock farmers have tended to resist change. From their viewpoint, they have seen improvements in their revenues over the past 10 years, based solely on existing farming practices, and without any encouragement from government economic policies in the sector, and thus they see no need to modify their production methods. The demonstration effect is gradually leading them to introduce changes, but if their efforts are not reflected in government pricing policies, the process will come to a halt (Chauvet et al. 1992).

Somatotropin has been one of the most controversial biotechnology products. Because it is prohibited in the United States and Europe, Monsanto has been seeking other markets. Mexico offered favourable conditions, because it has a severe deficit in milk production, and holds the dubious honour of being the world's largest importer of milk powder. The product thus began to be used in certain Mexican dairying areas in 1990. In terms of its socioeconomic impact, the hormone has an immediate effect in raising yields, but such an intense rate of production exhausts the cows more quickly, necessitating higher investments that cannot, as noted earlier, be recouped at current market prices.

The final area is that of embryo transplants, a method that has been used only sporadically and is still far from being common practice. Technology levels remain low, and the essential prior step of artificial insemination is not yet widely practiced. An official campaign was launched to promote embryo transplants as a way to genetic improvement in the dairy sector, but it has not succeeded. In conclusion, biotechnology does offer possibilities for development in the livestock sector, but the Mexican industry is not yet in a position, economically or technologically, to take advantage of them.

It should be pointed out that in the case of somatotropin (rbST), the real impact occurred under conditions that were hardly anticipated. Here was an example of advanced biotechnology, developed in the First World and expected to benefit producers in industrialized countries in the first instance, being adopted by a traditionally structured cattle industry in a developing country. This demonstrates that we must be open and flexible, not linear, in our analysis of the impact of biotechnology - in this particular case, it was economic and political conditions that determined the pattern of application of somatotropin around the world.

Biotechnology and Flower Growing

The second case study on the actual impact of biotechnology concerned the intensive cultivation of flowers. The variables studied here were employment, the labour market and the monopoly of advanced technology (Massieu 1994).

Although Holland is the reigning power in the international flower market, Colombia has achieved a position of undoubted importance since the 1970s. It was during those years that Mexican flowers began to penetrate the United States market. Starting from a small base, the Mexican industry has since moved into the more systematic and intensive production of flowers.

Yolanda Massieu's field research focused on a comparison between traditional flower growing and that conducted in greenhouses, in terms of the variables mentioned earlier. Her work examined both state-owned and private enterprises. It showed the undeniable link between the use of genetically cloned materials and the increase in productivity of both land and labour. Greenhouse production of this type of plant is greater and more uniform than traditional, open-air cultivation, although a greenhouse implies a much higher level of investment.

As regards the effect on employment, state-owned greenhouses are relatively inefficient: in the State of Morelos, (greenhouse) production for export generates more employment than (traditional) production for the domestic market. In the State of Mexico, however, intensive private greenhouse cultivation reduces the number of workdays required, in comparison with traditional flower growing (respectively, 8 and 16 days per hectare). Nevertheless, the intensive growing of flowers in greenhouses, using biotechnology in the form of cloned plant materials, absorbs considerably more labour than do other agricultural crops: 2,975 workdays per year per hectare are needed for a greenhouse, whereas sorghum, for example, uses only 10 workdays per hectare during the whole season.

In terms of monopoly power over advanced technology, the cloned materials used in greenhouses originate from multinational Dutch, U.S., and French firms, and they are expensive, thanks to the high royalties these firms charge for use of their patented products. This leads to a paradoxical situation in a country like Mexico, where flower growing dates back to pre-Hispanic times, and where there is a considerable base of traditional technology and a great range of indigenous varieties, completely unpatented, that have never been utilized for intensive horticulture. One point that stands out is the low cost of agricultural labour in Mexico - were it not so, flower growers would never be able to afford these costly advanced technologies.

In conclusion, we can discern both positive and negative impacts. The former would include significant job creation, in the midst of the widespread unemployment that afflicts Mexican agriculture. This impact in effect contradicts the deterministic "law" that holds that advanced technology always displaces labour. A negative impact, however, lies in the high production costs occasioned by the monopolistic position of the suppliers of the technology - it is only the miserable wages paid to agricultural day labourers that makes it possible to afford these costs. One reason why it is possible to pay such low wages is that the work force is predominantly female, a feature common in rural Mexico.

Moreover, the high initial investment needed to launch intensive flower cultivation has prevented this technology from being widely used. To date, only a restricted number of producers have been able to take advantage of the technology and the competitive advantage it gives them over traditional producers in the domestic market.

Biotechnology in Sugarcane and Potato Cultivation

The research team is conducting another study to assess various biotechnology-based alternatives for overcoming the current crisis in the sugar industry (Castañeda 1991). We selected this as a further case study because of the importance of the crop in Mexico and the changes that have occurred in it as a result of the move to privatization. Because the study is not yet completed, we will mention only a few features relating to our initial remarks about the phenomenon of globalization.

When the sugar industry was being privatized, some of the buyers of the sugar mills were companies producing soft drinks. Under the North American Free Trade Agreement (NAFTA) among Mexico, the United States, and Canada, sugar is one of the products that still retains tariff protection. Nevertheless, 5 months after NAFTA entered into force, the United States submitted a list of 150 products on which it wanted Mexico to accelerate tariff reduction, among them fructose syrups and sugar. Casas and Chauvet (1994) report that:

Behind this request there is a complex network of interests, which we shall merely cite without going into detail. The list lets us conclude, however, that while there may be no such thing as technological determinism (though we must take technological innovation into account in socioeconomic analysis), there are political and social forces that do indeed determine events.

The actors involved include:

1. Sugar producers in Florida, who are eager to export sugar to Mexico.

2. Sugar producers in Mexico, who would be out of business without the current tariff structure.

3. Corn producers in the United States, who supply the manufacturers of fructose.

4. 4US manufacturers of fructose, who are also interested in penetrating the Mexican market.

5. The two big soft drink bottlers, Coca Cola and Pepsi Cola, who have bought some of the Mexican sugar mills from state ownership.

6. Mexican licensees of those two bottlers, who missed out on buying sugar mills, and who now object to paying the prices set by the "Sugar Exchange" [Bolsa Azucarera] that has been formed by the owners of the integrated mills.

7. [Mexican] sugar manufacturers, who argue that continued protection is needed to allow them to modernize their mills, and who claim the right to such compensation for their investment.

8. The Mexican government, which seeks to protect Mexican agro-industry as the mainstay of millions of peasants, and which considers it inconsistent to undermine the integration of the sugar industry with the soft drink industry, which the government has been promoting.

9. US trade officials, who are pressing for changes to the agreed reduction schedules in favour of US farmers and manufacturers.

Yet another addition to this list should be the sugar industry labour union. The tariff reduction schedules have not been changed, but the conflict of interests remains.

In January, 1995, we undertook a study of the effects of biotechnology on potato growing. The study is being funded with a small grant from Consejo Nacional de Desarrollo (CONACYT/National Development Council), and Dr Luis Lago of the Cuban Centre for Genetic Engineering and Biotechnology is also collaborating with a view to making a comparative analysis of the subject between the two countries.

Conclusions

To end this review of some of the real impacts of the use of biotechnology in Mexican agriculture, I shall go back to the question posed at the outset: do the biotechnologies applied to date represent a help or a hindrance for the future of Mexican agriculture? The answer clearly cannot be categorical. In some aspects there has been progress, whereas in others, there has been stagnation or regression, which has been caused not by biotechnology itself, but by the circumstances in which Mexican agriculture has found itself immersed.

The rural economy of Mexico has been excluded from national priorities over the last dozen years. Development strategy has been based on leaving the course of the economy to the play of market forces, and the State has withdrawn from any active role in many sectors of manufacturing, finance and services. Under this model, the agricultural sector has lost its vital place as a source of domestic supply, and policy has turned increasingly to the notion of comparative advantage as a way of meeting the country's needs in food and raw materials. The result has been a drop in profitability and a steady decapitalization of the agricultural sector. This has taken place at considerable social cost, as can be seen from the deterioration of rural living standards, growing impoverishment, and rising migration.

Mexico's current financial difficulties offer a new context within which to redefine a series of policies, including those relating to domestic food production. Current exchange rates are a threat to the advantages that local producers have enjoyed in the domestic market. On the one hand, it is becoming essential to offer some support to domestic production, a fact that opens up possibilities for encouraging the spread of agricultural biotechnology. On the other hand, the devaluation of the peso also represents a constraint on the importation of certain biotechnology processes including, for example, the cloned materials used in flower culture.

These considerations lead me to make the following methodological proposals for discussion:

· Establish permanent monitoring of the world scene with respect to the progress of biotechnology as applied to agriculture and the environment.

· Give close attention to those productive processes where biotechnology has been applied, to assess whether or not to adopt such methods here. Measure the results obtained in terms of increased yields, productivity, market penetration, employment generation, etc.

· Analyze emerging sectors as possible new fields for investment in biotechnology. Two potential areas in particular are the enhancement and conservation of the environment, and the contribution that biotechnology can make to ensuring sustainable agriculture.

· Develop rural policy priorities in consultation with the producers themselves, taking account of their experience, and encourage them to communicate their successes.

References

· Arroyo, G. coord. 1988. Biotecnología: ¿Una salida para la crisis agroalimentaria? Colección Agricultura y Economía, Plaza y Valdés/Universidad Autónoma Metropolitana (UAM), UAM-Xochimilco, México, MX. 391 pp.

· _____ 1989a. La biotecnología y el problema alimentario en México. Colección Agricultura y Economía, Plaza y Valdés/Universidad Autónoma Metropolitana (UAM), UAM-Xochimilco, México, MX. 235 pp.

· _____ 1989b. La pérdida de la autosuficiencia alimentaria y el auge de la ganadería en México. Colección Agricultura y Economía, Plaza y Valdés/Universidad Autónoma Metropolitana (UAM), UAM-Xochimilco, México, MX. 367 pp.

· Casas, R.; Chauvet, M. 1994. La biotecnologia: Recapitulacion sobre sus impactos en la agricultura y el medio ambiente. 480. Congreso Internacional de Americanistas (CIA). 4–9 July, CIA, Stockholm/Uppsala, Sweden. 40 pp.

· Castañeda, Y. 1991. Opciones biotecnológicas para la crisis de la agroindustria azucarera: Melazas y proteína unicelular. UAM-A, MX. Revista Sociológica, 16(mayo-augusto), 183–211.

· Chauvet, M. 1993. Auge, crisis y reestructuración de la ganadería bovina de carne en México. Tesis de Coctorado. Facultadad de Economía, Universidad Nacional Autónoma de México. México, MX. 216 pp.

· Chauvet, M. et al. 1992. La biotecnología aplicada a la producción ganadera en México. In Casas, R.; Chauvet, M.; Rodriguez, D. ed., La biotecnología y sus repercusiones socioeconómicas y políticas. Universidad Autónoma Metropolitana (UAM-Azcapotzalco/Instituto de Investigaciones Económicas, Instituto de Investigaciones Sociales), Universidad Nacional Autónoma de México (UNAM), México, MX. pp. 181–200.

· Dabat, A. 1993. El mundo y las nacines. Centro Regional de Investigaciones Multidisciplinarias, Universidad Nacional Autónoma de México (UNAM), México, MX. 225 pp.

· Junne, G. 1992. Le grandes enterprises face à la révolution biotechnologique. Cahiers d'Economie et Sociologie Rurales, no. 24–25, Institut National de la Recherche Agronomique (INRA), Ivry, France. pp. 143–159.

· Llambi, L. 1994. Globalización y ruralidad. Necesidad de un nuevo paradigma. Ponencia presentada en el Seminario Nuevos Procesos Rurales en México. Teorías, estudios de caso y perspectivas, Taxco, Guerreo 30 de mayo. MX. 24 pp.

· Massieu, Y. et al. 1992. Aplicaciones de la biotecnología a la floricultura en México: Efectos e el empleo. In Casas, R.; Chauvet, M.; Rodriguez, D. ed. La biotecnología y sus repercusiones socioeconómicas y políticas. Universidad Autónoma Metropolitana (UAM-Azcapotzalco/Instituto de Investigaciones Económicas, Instituto de Investigaciones Sociales), Universidad Nacional Autónoma de México (UNAM), México, MX.

· ----- 1994. Biotecnología y mercados de trabajo: El caso de la floricultura. Tesis de Doctorado, Universidad Nacional Autónoma de México (UNAM), México, MX. 322 pp.