Economic Impact of Genetic Engineering

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Genetic engineering (GE) is a recently developed technology that allows the alteration of the genetic make up of living organisms. This technology allows scientists not only to exchange genes from members of the same species, which is what farmers and nature has been doing through out history, but also the exchange of genes between completely separate species. For example genetic engendering allows scientists to insert the genes from a fish into a tomato, something that can never happen in nature. Many in the biotechnology industry claim that the recent advancements in this field of research will help solve many of the problems developing countries face. These claims have led to a massive increase in commercial growing of genetically modified organisms, (GMOs) from 1.7 million hectares in 1996 to 58.1 million hectares in 2002 worldwide. 99% of this growth has only been in four countries; Argentina, Canada, China and the USA, the USA being the largest, producing 68%. Amidst this enthusiasm there has been growing concern that there exist many hidden costs involved with GE technology. Critics of GE technology claim there are known and unknown health, social, ethical and environmental risks involved with the introduction of this technology. There are also claims that this technology has little if any benefits to the developing world and will in fact only benefit the developed world, and multinational biotech corporations such as Monsanto. Critics argue that whatever benefits developing nations gain from GE technology, these are far outweighed by the risks involved.

Proponents' of genetically modified foods strongest claim is that this technology will benefit farmers in developing countries by allowing those farmers to be more productive and grow a higher yield of crops. Many studies do agree that GE technologies do give farmers a higher yield, but even this is a contested issue. Because many of these studies are sponsored and linked to the very corporations that are developing these technologies, validity of the results are questionable. In fact, there have been certain independent studies that have concluded that genetically modified seeds in fact produce a lower yield than do conventional seeds. For example these is a two-year study by the University of Nebraska, in which Monsanto's Roundup Ready soybeans yield 6 percent less than their closest relatives and 11 percent less than high-yielding soybean varieties. This study shows that with all things being equal, genetically modified crops may in fact produce a lower yield. Because GE soy is commercially grown more than any other GE crop it will be good to take a look at why.

With Roundup Ready soybeans growing to 81% of the totally soy grown within the United States in 2003 , one must ask why farmers are switching to GE soy. The reason for this is the lower costs of pesticides and herbicides. The advantage of Roundup Ready soybeans is not that they are more productive or that the seeds cost less. In fact the seeds cost about six dollars more per acre than traditional soy seeds. The advantage comes in the form of a more resistant plant. Because Roundup Ready soy has been genetically altered to be more resistant to herbicides and pesticides, specifically a Monsanto produced brand called Roundup. Because these new GE soybeans are able to withstand stronger herbicide and pesticide use at a younger age, without any damage to the crop, farmers are able to kill off weeds and pests earlier and easier. This use of stronger herbicides and pesticides in farming leads to a cleaner crop, with a lower cost of labor.

A 1998 study by Mike Duffy, an economist from Iowa State University shows that all in all the costs and benefits of using GE technologies in soy and corn production do not lead to any sort of significant difference in returns compared to traditional none GE seeds. The main reasons for farmers switching to genetically altered technologies is the lower amount of labor...
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