Columbia, Missouri
July 2008
AgBioForum Volume 11
Number 1
Nicholas Kalaitzandonakes, Editor
Table of contents
Biofuels in the US: Today and in the Future
Martha Schlicher, GTL Resources
Corn-grain-based ethanol
has the real and viable potential of producing 15 billion
gallons of ethanol by 2015, leaving a net of 12.3 billion
bushels of corn available for feed, food, and export
markets. This is up 3.0 billion bushels from 2006 and 0.9
billion bushels from 2007. With the incorporation of
near-term technologies and increased corn production,
corn-grain-based ethanol is also well poised to remain the
lowest-cost ethanol production per gallon of any significant
volume.
Continued support and investment in corn-based ethanol
technologies will assure that this is possible. These
technologies, despite decades of research and investment,
remain at early stages of economic viability and will, near
term, likely carry significantly higher production costs.
The Economic Realities, Sustainable Opportunities, and Technical
Promises of Biofuels
James S. McLaren, StrathKirn, Inc.
The supply of petroleum
transportation fuels appears to be increasingly finite,
while demand only continues to grow. This disparate
situation leaves sole dependence on petroleum as a
transportation fuel unattractive for many countries,
including the United States. As the United States looks to
diversify its portfolio of available fuels, it has a number
of emerging options. Ethanol and biodiesel have been the
dominant fuels to-date, but new production methods and
alternative feedstocks may bolster their suitability for
wide-scale adoption. Other fuel types such as biogas and
Fischer-Tropsch liquids may offer further options for
countries to use to displace petroleum. This article
inventories some of the emerging alternative fuel
technologies and discusses the issues affecting their
potential adoption.
Global Impact of Biotech Crops: Socio-Economic and Environmental
Effects, 1996-2006
Graham Brookes & Peter Barfoot, PG Economics Ltd.
(Dorchester, UK)
Genetically modified (GM)
crops have been grown commercially on a substantial scale
for eleven years. This paper updates the assessment of the
impact this technology is having on global agriculture from
both economic and environmental perspectives. It examines
specific global economic impacts on farm income and
environmental impacts associated with pesticide usage and
greenhouse gas (GHG) emissions for each of the countries
where GM crops have been grown since 1996. The analysis
shows that there have been substantial net economic benefits
at the farm level amounting to $6.94 billion in 2006 and
$33.8 billion for the eleven-year period (in nominal terms).
The technology has reduced pesticide spraying by 286 million
kg and, as a result, decreased the environmental impact
associated with herbicide and insecticide use on these crops
by 15.4%.
GM technology has also significantly reduced the release of
GHG emissions from this cropping area, which, in 2006, was
equivalent to removing 6.56 million cars from the roads.
Can Information about Genetically Modified Corn and Its Oil Have
Significant Effects on Japanese Consumers' Risk Perception and
Their Valuation?
Taku Terawaki, Ritsumeikan University (Japan)
This study investigates
whether the information regarding the safety of genetically
modified (GM) corn and GM corn oil can significantly affect
the Japanese consumers; risk perceptions and whether these
risk perceptions can determine their willingness-to-pay
(WTP) premium for non-GM corn oil. This WTP premium was
measured by using a contingent valuation method that is
commonly applied for valuing non-market commodities. Our
empirical results show that, when the scientific knowledge
of the safety of GM corn and GM corn oil was provided, the
risk perceptions expressed by the mean of a probability
distribution and those by the variance both substantially
decreased, while the WTP unchanged with the given
information. In addition, Japanese consumers'
premium percentage for non-GM corn oil was found to be about
40% of the price of the cooking corn oil sold in markets.
Performance of Tissue-Cultured Sweet Potatoes Among Smallholder
Farmers in Zimbabwe
Edward Mutandwa, Bindura University of Science Education
(Africa)
Tissue culture has the
potential of improving the livelihoods of subsistence
farmers that largely rely on vegetatively propagated crops.
This study assesses the impact of growing tissue-cultured
sweet potatoes on yields and economic profitability among
smallholder farmers in the Hwedza District of Zimbabwe. A
sample of 133 smallholder farmers was chosen using a
multi-stage sampling process. Primary data was collected
using structured and semi-structured interviews, focus group
discussions, and direct-yield measurements.
The results of the study showed that yields were 0.5 and 1.8
tons per hectare for households using unimproved and
tissue-cultured sweet potatoes, respectively. The net
economic return for tissue-cultured sweet potatoes was
Z$3,605,000 (US$36.05) per hectare while a net loss of
Z$9,157,500 (US$91.58) per hectare was observed for
unimproved sweet potatoes. Farmers were also constrained by
an inadequate supply of improved planting material. These
findings suggest the need to increase the supply of
tissue-cultured planting materials and to consolidate farmer
knowledge on vegetative propagation in local community
tissue culture laboratories. This will enhance the role of
tissue culturing sweet potatoes in the attainment of
household food security.
Biotechnology Adoption Over Time In the Presence of
Non-Pecuniary Characteristics that Directly Affect Utility: A
Derived Demand Approach
Nicholas E. Piggott & Michele C. Marra, North Carolina State
University
Generally, new production
technologies are adopted because they will increase profits,
mostly due to lower production costs ceteris paribus.
In the case of the first-generation crop biotechnologies,
however, additional factors play a role. These factors
affect the utility functions of individual producers
directly, as well as possibly affecting their utility
functions indirectly through profits. This article considers
the effect that embodied non-pecuniary factors have on the
derived demand for a new, first-generation crop
biotechnology over time. We show that the derived demand for
the biotechnology will increase (shift out) at first and
then begin to become more inelastic to price increases as
adopters get accustomed to, and value more highly, the
non-pecuniary benefits. We consider the convenience embodied
in the Roundup Ready soybean system as an example. Then, as
empirical support for the transformation of the elasticity
of derived demand, we examine Roundup Ready soybean system
costs and adoption over the period 1996-2007. The data
suggest that, despite recent increases in the system costs
of the technology, adoption continued to increase, signaling
a relatively inelastic demand response.
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