Consumer Perception of Genetically Modified Food: Empirical Evidence From India

Although the advent of genetically modified (GM) foods changed the agricultural scenario in developed countries, existing research confirms that consumer perception about the consumption of the same is often distorted. GM foods entered the Indian market amid widespread controversies and criticisms. There exists a host of studies that tried to establish the factors that shape favorable consumer perception toward GM foods indeed, but evidence from developing countries like India is still missing. The article undertakes an exploratory investigation of the factors that shape consumer perception about the consumption of GM foods in India and subsequently confirms the same with the aid of a measurement model. The study provides important implications for managers in directing efforts toward influencing consumer perception and instigating positive attitudes toward GM foods so that the benefits of their use can be extended to the masses in relatively nascent markets.     

Consumers’ Response to Genetically Modified Ingredients in Processed Food in an Emerging Economy

Genetically modified (GM) foods are available in many countries including post–Soviet Union countries. However, empirical evidence on consumer acceptance for this region is scarce. In this study, we investigate consumers’ willingness to purchase a processed food containing GM ingredients. For this purpose, a consumer survey was conducted in 2015 in Tajikistan. In many aspects, our results confirm previous empirical findings showing that women are more skeptical toward GM food and a higher level of respondents’ education and the presence of minors in households are negatively correlated with their willingness to purchase a processed food containing GM ingredients. Moreover, a higher risk perception of GM food is negatively associated with the probability to purchase and consume such foods. However, our results indicate that risk perceptions of GM food seem to be relatively low in comparison to other studies with 41.5% of Tajik respondents connecting no risks with GM food. This result is surprising given the existing knowledge about post–Soviet Union consumers who are usually assumed to reject GM food due to their strong focus on naturalness.     

Heterogeneous Consumer Preferences for Nanotechnology and Genetic‐modification Technology in Food Products

This study investigates heterogeneous consumer preferences for nanofood and genetically‐modified (GM) food and the associated benefits using the results of choice experiments with 1,117 US consumers. We employ a latent class logit model to capture the heterogeneity in consumer preferences by identifying consumer segments. Our results show that nano‐food evokes fewer negative reactions compared with GM food. We identify four consumer groups: ‘Price Oriented/Technology Adopters’, ‘Technology Averse’, ‘Benefit Oriented’, and ‘New Technology Rejecters’. Each consumer group has a distinctive demographic background, which generates deeper insights into the diversified public acceptance of nano‐food and GM food. Our results have policy implications for the adoption of new food technologies.     

A latent class approach to investigating demand for genetically modified banana in Uganda

This study explores consumer acceptance and valuation of a genetically modified (GM) staple food crop in a developing country prior to its commercialization. We focus on the hypothetical introduction of a disease‐resistant GM banana variety in Uganda, where bananas are among the most important staple crops. A choice experiment is used to investigate consumer preferences for various attributes related to the banana (such as bunch size, technology, producer benefit, and price) and examine their opinions on GM foodstuff. Choice data come from 421 banana‐consuming households randomly selected from three regions of Uganda. A latent class model is used to investigate the heterogeneity in consumers’ preferences for selected attributes related to the banana and to profile consumers who are more or less likely to accept GM bananas. Our results reveal that there is significant heterogeneity in consumer preferences across our sample. GM bananas are valued the most by poorer households located in the rural areas of the Eastern region. These food‐insecure households would experience the highest benefits (i.e., welfare gains) from the commercial release of GM bananas. In contrast, urban consumers are less accepting of GM bananas, and they would experience significant welfare losses if GM banana is released. According to our welfare estimates, both the total welfare benefits acquired by the gainers and the total welfare losses borne by the losers of this technology are significant and large. These results suggest the need for further investigation of the overall welfare effects of the introduction of GM bananas on the Ugandan society as a whole.     

Poor but allocatively efficient—evidence from the Eastern Amazon

This research empirically investigates the well‐known “poor‐but‐efficient” hypothesis formulated by Schultz (1964) assuming that small‐scale farmers in developing countries are reasonably efficient in allocating their scarce resources by responding positively to price incentives. Deviating from Schultz it is assumed here that scale effects explain a considerable proportion of small‐scale farmers' relative efficiency. The theoretical underpinnings of the scale efficiency concept are briefly reviewed before a normalized generalized Leontief (GL) profit function is modeled by using its output supply and input demand system to capture the joint production of cassava flour and maize by a sample of small‐scale farmers in the Bragantina region of the Eastern Amazon, Brazil. The discussion of theoretical consistency and functional flexibility is considered by imposing convexity on the GL profit framework. The empirical results confirm our revised hypothesis that small farmers in traditional development settings are “poor‐but‐allocatively efficient” by clearly suggesting considerable inefficiency with respect to the scale of operations.     

Protecting Biotechnology IPRs in Developing Countries: Simple Analytics of a Levy Solution

High transaction costs and an absence of institutional infrastructure in developing countries prevent comprehensive enforcement of intellectual property rights and generate obstacles to the adoption of genetically modified (GM) crop technology. Governments of developing countries that are members of the World Trade Organization are faced with two options when licensing GM crop technology: (1) attempt to regulate GM crops to the standards of the Agreement on Trade‐Related Aspects of Intellectual Property (TRIPS) or (2) allow a black market in GM seeds and risk trade retaliation from the GM innovator's host country through a TRIPS trade complaint. This paper develops a conceptual model that frames the adopting country's range of licensing options, including a new levy system, and derives welfare measures for each option. The model illustrates how a levy on GM technology can be a welfare‐increasing policy for developing countries, and the operation of a levy is discussed. The conceptual model is applied to Brazil's soybean market and quantitative economic surplus measures are estimated within a calibrated welfare model for a range of licensing scenarios. The model's results suggest that a levy may interfere with the long‐term prospects for innovators to collect monopoly rents in adopting countries.     

Is Bt Cotton a Pro‐Poor Technology? A Review and Critique of the Empirical Record

Policy makers, journalists and other commentators have hailed genetically modified (GM) crops as a ‘pro‐poor’ success in the developing world. Their confidence appears to be justified by the encouraging conclusions reached by academic studies on the performance and impacts of GM crops, which seem to provide convincing evidence of substantial benefits for smallholders in developing countries. However, a detailed, critical examination of studies on transgenic, insect‐resistant cotton in China, India and South Africa demonstrates that the technology's impacts have been evaluated and represented in selective and misleading ways. The performance and impacts of GM crops have in fact been highly variable, socio‐economically differentiated and contingent on a range of agronomic, socio‐economic and institutional factors. The shortcomings of the GM crop‐impacts literature have done a disservice to public and policy debates about GM crops in international development and impeded the development of sound, evidence‐based policy.     

Consumer willingness to pay for genetically modified food in Kenya

Genetically modified (GM) crops are popular in many regions of the world, but their deployment in Africa is hindered by safety concerns and regulatory issues, although the continent is in dire need of boosting its food production. Although consumers' acceptance of GM food has been analyzed in many continents, no such studies have been conducted in Africa. Therefore, a survey of 604 consumers was conducted in Nairobi, Kenya, in 2003, to gauge consumers' awareness of GM crops, their willingness to pay (WTP) for GM food, and the factors that influence their WTP. Consumers' knowledge of GM crops was limited and only 38% of the 604 respondents were aware of GM crops. People in higher education and income groups were more aware than others. Regardless, people were generally appreciative of the technology, and a large majority (68%) would be willing to buy GM maize meal at the same price as their favorite brand. Consumers were, however, concerned about possible side effects, especially on the environment and biodiversity. WTP was estimated using a double‐bounded dichotomous choice model, and the mean WTP was found to be 13.8% higher than the average price of non‐GM maize meal. Perceptions of health risk, and ethical and equity concerns had a negative influence on the likelihood of purchasing GM maize meal, whereas trust in government to ensure food quality had a positive influence on WTP. People with at least some secondary education and those in the high‐income category were more likely to purchase GM maize meal at the same price. The study concludes that, because awareness is still low, appropriate communications are needed to involve the consumer in the debate. Consumers' acceptance in this study was high, but the research needs to be expanded to rural areas, where most consumers live, and other survey methods need to be explored.     

Comparative Advantage in Demand: Experimental Evidence of Preferences for Genetically Modified Food in the United States and European Union

The United States (US) exports more than US$6 billion in agricultural commodities to the European Union(EU) each year, but one issue carries the potential to diminish this trade: use of biotechnology in food production. The EU has adopted more stringent policies towards biotechnology than the US. Understanding differences in European and American policies towards genetically modified (GM) foods requires a greater understanding of consumers’ attitudes and preferences. This paper reports results from the first large‐scale, cross‐Atlantic study to analyse consumer demand for genetically modified food in a non‐hypothetical market environment. We strongly reject the frequent if convenient assumption in trade theory that consumer preferences are identical across countries: the median level of compensation demanded by English and French consumers to consume a GM food is found to be more than twice that in any of the US locations. Results have important implications for trade theory, which typically focuses on differences in specialization, comparative advantage and factor endowments across countries, and for on‐going trade disputes at the World Trade Organization.     

Canadian consumer acceptance of gene-edited versus genetically modified potatoes: A choice experiment approach

In 2016, second-generation genetically modified (GM) potatoes were approved for production and sale in Canada. In this study, we analyze how consumer acceptance of GM potatoes may be affected by various factors, including the trait introduced (i.e., the product benefits), the type of breeding technology used, and the developer of the potato using any technology. We conduct an online survey and use a stated choice experiment to collect data on consumer acceptance of GM and other potatoes in Canada. Random utility models are used to analyze the economic value consumers place on the various attributes of the potatoes. Our results show that consumers are willing to pay more for a health attribute (reduced acrylamide produced when potatoes are fried) and an environmental attribute. Respondents in general need to face discounted prices to buy potatoes created by either gene editing or GM (either transgenic or cisgenic/intragenic) technologies. However, consumers are in general more accepting of the gene editing technology than the GM technologies. Our results also show that government is the most preferred developer of the potatoes, regardless of technology. Results from this study can help guide public and private management of the introduction of new foods when the products are developed with unpopular technologies.     

Bias from Farmer Self‐Selection in Genetically Modified Crop Productivity Estimates: Evidence from Indian Data

In the continuing debate over the impact of genetically modified (GM) crops on farmers of developing countries, it is important to accurately measure magnitudes such as farm‐level yield gains from GM crop adoption. Yet most farm‐level studies in the literature do not control for farmer self‐selection, a potentially important source of bias in such estimates. We use farm‐level panel data from Indian cotton farmers to investigate the yield effect of GM insect‐resistant cotton. We explicitly take into account the fact that the choice of crop variety is an endogenous variable which might lead to bias from self‐selection. A production function is estimated using a fixed‐effects model to control for selection bias. Our results show that efficient farmers adopt Bacillus thuringiensis (Bt) cotton at a higher rate than their less efficient peers. This suggests that cross‐sectional estimates of the yield effect of Bt cotton, which do not control for self‐selection effects, are likely to be biased upwards. However, after controlling for selection bias, we still find that there is a significant positive yield effect from adoption of Bt cotton that more than offsets the additional cost of Bt seed.     

Economic Effects of the Consumer‐oriented Genetically Modified Products in Markets with a Labelling Regime

This paper builds on the literature on the economic effects of the second‐generation, consumer‐oriented genetically modified products (GMPs). It analyses the market and welfare impacts of the introduction of these new products in markets, like the EU, that mandate the segregation and labelling of the first‐generation, producer‐oriented GMPs. Developing an empirically relevant model of heterogeneous consumers and producers, the study determines the effects of the consumer‐oriented GMPs on the markets of conventional, GM and organic products, and the welfare of consumers and agricultural producers. Analytical results indicate that the market effects of the new GMPs are case specific and depend on: (i) the consumer valuation of the quality‐enhancing attribute of the new GMP; (ii) the level of consumer aversion to GMOs; (iii) the strength of consumer preference for organic products; and (iv) the production costs and marketing margins in the different supply channels. The policy on the labelling of the first‐generation GMPs does not affect the impacts of the second‐generation GMPs on the quantities and market shares of the different products. However, it does affect their price effects and welfare implications. The introduction of consumer‐oriented GMPs under a mandatory labelling regime can result in losses for some GM consumers and all producers of the conventional product.     

Economic growth,convergence, and agricultural economics

After nearly two centuries of lagging behind the industrial countries, growth in many developing countries has surged since the early 1990s. This outperformance has major implications for almost all areas of agricultural economics and, if continued, will likely do so into the future. This article aims to identify the key ways in which the changes in rich and poor country growth rates matter for agricultural economists, as a basis for formulating better research agendas. A key impact arises through sharp increases in demand for agricultural resources as demand for livestock products increases. This changing structure of food demand has important implications for nutrition studies and policies, with the emergence of a double burden of malnutrition. On the supply side, growth in developing countries tends to increase domestic food supply, which is also boosted by increases in research and development spending. Growth in developing countries both stimulates and benefits from increases in infrastructure investment, evaluation of which requires new analytical tools. Negative impacts include the contribution of increased demand for livestock products to global greenhouse gas emissions. In terms of trade policy, growth in developing country is tending to lead to convergence of agricultural policies with the pattern of assistance seen in today's developed countries, raising concerns about the future need to deal with collective action problems, particularly those that increase the volatility of world prices.     

Implications of higher global food prices for poverty in low‐income countries1

In many poor countries, the recent increases in prices of staple foods have raised the real incomes of those selling food, many of whom are relatively poor, while hurting net food consumers, many of whom are also relatively poor. The impacts on poverty will certainly be very diverse, but the average impact on poverty depends upon the balance between these two effects, and can only be determined by looking at real‐world data. Results using household data for 10 observations on nine low‐income countries show that the short‐run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but that poverty increases are much more frequent, and larger, than poverty reductions. The recent large increases in food prices appear likely to raise overall poverty in low‐income countries substantially.     

Post–Uruguay Round price linkages between developed and developing countries: the case of rice and wheat markets

The Uruguay Round Agreement on agriculture attempted to lower distortions in global agricultural markets. However, the significant fall in commodity prices in the late 1990s may have reduced the incentives for both developed and developing countries to better integrate into world markets. This study analyzes price linkages and adjustment between developed and developing countries during the post–Uruguay Round period. Prices of two key commodities, long‐grain rice and medium‐hard wheat, are assembled for major exporters and producers. Results of multivariate cointegration analysis suggest partial market integration between developed and developing countries in the post–Uruguay Round period. Developed countries are found to be price leaders in these two markets, and in most cases, changes in their prices have relatively large impacts on those of the developing countries. Developing countries (e.g., Vietnam and Argentina) have faced considerable price adjustment due to changes in the developed countries' prices.     

Food Price Pass‐Through and the Role of Domestic Margin Services

The recent volatility in international agricultural markets has drawn attention to the impact of rising international agricultural prices and the induced price‐insulating measures on consumer food prices. Analyses based on simulation models on this topic typically ignore the role of domestic margin services. We extend the standard Global Trade Analysis Project (GTAP) model to allow for variations in the share of domestic margin services in consumed food across countries. This approach enables us to differentiate consumer prices from producer prices. Following the extension, the results show that domestic margin services reduce the consumer food price volatility for all countries, especially in high‐income countries, where the share of domestic margin services in final food consumption is higher. The effect of price‐insulating border policies is also reduced in the extended model. We find that our extension of the GTAP model greatly improves simulations of the 2007 surge in international agricultural prices. We validate our extension of the GTAP model by showing that the econometrically estimated food price pass‐through is decreasing with income and thus, is smaller in high‐income countries.     

The impact of food inflation on urban poverty and its monetary cost: some back‐of‐the‐envelope calculations

This article uses a sample of 72 developing countries to estimate the change in the cost of alleviating urban poverty brought about by the recent increase in food prices. This cost is approximated by the change in the poverty deficit (PD), that is, the variation in financial resources required to eliminate poverty under perfect targeting. The results show that, for most countries, the cost represents less than 0.2% of gross domestic product. However, in the most severely affected, it may exceed 3%. In all countries, the change in the PD is mostly due to the negative real income effect of those households that were poor before the price shock, while the cost attributable to new households falling into poverty is negligible. Thus, in countries where transfer mechanisms with effective targeting already exist, the most cost‐effective strategy would be to scale up such programs rather than designing tools to identify the new poor.     

On the Segregation of Genetically Modified,Conventional and Organic Products in European Agriculture: A Multi‐market Equilibrium Analysis

Evaluating the possible benefits of the introduction of genetically modified (GM) crops must address the issue of consumer resistance as well as the complex regulation that has ensued. In the European Union (EU), this regulation envisions the co‐existence of GM food with conventional and quality‐enhanced products, mandates the labelling and traceability of GM products and allows only a stringent adventitious presence of GM content in other products. All these elements are brought together within a partial equilibrium model of the EU agricultural food sector. The model comprises conventional, GM and organic food. Demand is modelled in a novel fashion, whereby organic and conventional products are treated as horizontally differentiated but GM products are vertically differentiated (weakly inferior) relative to conventional ones. Supply accounts explicitly for the land constraint at the sector level and for the need for additional resources to produce organic food. Model calibration and simulation allow insights into the qualitative and quantitative effects of the large‐scale introduction of GM products in the EU market. We find that the introduction of GM food reduces overall EU welfare, mostly because of the associated need for costly segregation of non‐GM products, but the producers of quality‐enhanced products actually benefit.     

Agricultural trade liberalization and economic development: the role of downstream market power

A model is developed to characterize the vertically linked and concentrated nature of developed‐country food markets. This model is then parameterized and used to simulate the effects of varying food market structures on the benefits to developing‐country exporters of agricultural commodities from trade liberalization by developed countries. Results demonstrate that even relatively modest departures from perfect competition can cause much of the benefits from trade liberalization to flow to marketing firms instead of producers in the developing country. The distributional effects under downstream market power differ significantly from the perfectly competitive case and may result, somewhat paradoxically, in developing countries receiving a lower share of the total value added within the food chain as trade reform occurs.     

Dial “A” for agriculture: a review of information and communication technologies for agricultural extension in developing countries

Agriculture can serve as an important engine for economic growth in developing countries, yet yields in these countries have lagged far behind those in developed countries for decades. One potential mechanism for increasing yields is the use of improved agricultural technologies, such as fertilizers, seeds, and cropping techniques. Public sector programs have attempted to overcome information‐related barriers to technological adoption by providing agricultural extension services. While such programs have been widely criticized for their limited scale, sustainability, and impact, the rapid spread of mobile phone coverage in developing countries provides a unique opportunity to facilitate technological adoption via information and communication technology (ICT)‐based extension programs. This article outlines the potential mechanisms through which ICT could facilitate agricultural adoption and the provision of extension services in developing countries. It then reviews existing programs using ICT for agriculture, categorized by the mechanism (voice, text, internet, and mobile money transfers) and the type of services provided. Finally, we identify potential constraints to such programs in terms of design and implementation, and conclude with some recommendations for implementing field‐based research on the impact of these programs on farmers’ knowledge, technological adoption, and welfare.