Big Ag Subsidies and Little Biotech Research: Is there a relation?

The World Bank metareview of evaluations of the CGIAR noted that the International Agricultural Research Centers (IARCs) spend only about US$25 million on biotechnology research in the last decade.

The North has been estimated to spend about US$350 billion per year on agricultural subsidies.

Is there a connection?

There are lots of reasons countries might want to keep domestic agriculture alive. Reasons might be nostalgia for an agricultural past, assuring safe food supplies in the event of future war, or social policy preference for a strong rural sector. Politically, the agricultural sector may trade electoral support for subsidies, and may be powerful enough to get its way. Elites based in agricultural sectors may have influence beyond that which might be expected from their contemporary status, stemming from historical events and processes. I am no expert, but the result seems clear -- industrial and post-industrial countries work hard to keep agriculture alive.

Tariffs and trade quotas were effective for centuries in protecting agriculture, but are made less effective in today's global movement toward free trade. Subsidies for farmers also work, making it possible for them to sell food cheaply and still make a profit, and thus making it harder for farmers from other countries without such subsidies to sell into the markets. (Secondary subsidies are also possible, such as the provision of water to farmers at prices far below the actual costs, supply of free publicly financed services such as agricultural extension, or allowance of farmers to avoid payment for environmental damage their actions may create. )


Non-trade barriers can also be effective in protecting markets. Restrictions on food imports in the name of food safety can reduce foreign competition. Long delays may be imposed in the process of demonstrating food safety. Is it possible that European nations restricting the imports of genetically modified foods (without scientific evidence that they are harmful) do so to protect domestic markets from foreign competition. You bet! Indeed, since European countries have lagged in developing and testing GM crops that might increase farm productivity, they have even more to gain by excluding GM crops.

Of course, consumer preference helps exclude foreign foods. If people in the North prefer their domestically produced foods, and will pay a premium for them, less subsidy from tax revenues will be needed to protect the domestic market. A serious effort to inform the European public about the safety of GM foods might reduce their preference for domestically produced, non-GM foods (as well as their enthusiasm for non-trade barrier protections against the imports of those foods). Is it a coincidence that few governments have undertaken major programs to educate the public about the real risks and benefits in GM foods?

Do such policies have negative, long-term impacts -- the economists would say so. Consumers would be expected to pay more for food. Resources that could be directed to more productive economic activities are instead tied to inefficient agricultural practices.

But what does this have to do with the topic of this blog -- "knowledge for development"? Biotechnology can be a very powerful tool in the hands of researchers seeking knowledge to improve agricultural productivity. But if you can't sell GM crops into international markets, it doesn't make sense to use GM as a tool to increase yields in those crops. So prohibitions against GM crop imports in Europe reduce the demand for biotechnology in the research on crop improvement.

Looking at the CGIAR, what is the likelihood that the many European donors -- representatives of countries prohibiting the production and importation of GM food -- have pushed for use of biotechnology in IARC research program?

The effect on developing nations of agricultural subsidies in the North has been the subject of a great deal of discussion. Many feel that the cost to developing nations in reduction of their food exports is much greater than the total development assistance they receive. So too, in the long run, there will be important costs from the discouragement of use of biotechnology for agricultural research. These costs will be felt, unfortunately not only in the pocket book, but in the belly and the mortality statistics.