Impact of GMO Agricultural Procucts on Economic Development

Impactof GMO Agricultural Procucts on Economic Development

Impactof GMO Agricultural Procucts on Economic Development

Geneticallymodified foods (GMO) refer to products that have been produced usingmethods of genetic engineering. These foods are produced fromorganisms with specific alterations done to their DNA. Thesetechniques have enabled the addition of new traits and control ofgenetic matter in different organisms. Most of the geneticmodification to date has been focused on the cash crops that are onhigh demand so that they can be resistant to herbicides and pathogensas well as improve their nutrient profiles (Moyeset al., 1999).Since the GMO crops were put on the market in the mid-1990s, therehave been several economic impacts in different countries. This paperanalyses the extent and the main reasons behind the economicdevelopment that has been realized as a result of the use of geneticengineering on crops.

GMOProducts and Economic Development

Thecommercial use of the GMO technology began is the mid-1990s. Sincethen, this know-how has spread in very many countries, both thedeveloped and the developing ones. In 2008, the genetically modifiedproducts were grown in over 25 countries with the largest percentagein the United States of America (Brookes&amp Barfoot, 2005).Although many countries have already approved the growing of GMOproducts on their lands, the commercial exploitation of theseproducts has still been neglected because of the associated problemssuch as public acceptance and regulatory frameworks that areunfavorable. There are some GMO products that were nevercommercialized or were pulled out of the market owing to marketingproblems and difficulties with the consumer acceptance (Brookes&amp Barfoot, 2005).

Thereare various studies that have been carried out to analyze themacro-level effect on welfare as a result of the commercialization onthe genetically modified crops. The market of one single crop isconsidered to determine the equilibrium models in the market and alsothe spillover effects of other related markets and sectors. Whenevera new crop technology is adopted, the productivity increases, thusincreasing the overall supply. Bennet et al., (2005), estimates thatGM cotton gained the United States of America an economic surplus ofaround $164 in the late nineties. Around 37% of this surplus wascaptured by the farmers and 18% by the consumers. Generally, anincrease in the supply of food in turn leads to a drop in the prices,as a result, the welfare of the consumers improves and this is one ofthe objectives of economic development.

Empiricalevidence from various studies also shows that these crops can have apositive effect on income and they can also be used to reduce povertylevels (Raney,2006).The farmers who use the genetically modified seeds benefit more thanthose who use the conventional seeds because they produce productsthat are of better quality as well as large quantities. For thisreason, they are able to sell more and therefore, get more income.There are currently some GM technologies that are still underresearch and they could witness even greater benefits than the onesalready in the market (Raney,2006).There has been an ever growing global demand for agriculturalproducts hence the use of this technology can help meet thesedemands by maintaining food security and sustainable development inthe global economy. Economic research is very important as it helpsto realize the maximum potential of these crops. The exploitation ofgenetic modification is able to help the economies of all nations,especially the least developed nations to meet their developmentgoals.


Bennett,R. M., Ismael, Y., Kambhampati, U., &amp Morse, S. (2005). Economicimpact of genetically modified cotton in India.

Brookes,G., &amp Barfoot, P. (2005). GM crops: the global economic andenvironmental impact-the first nine years 1996-2004.

Moyes,Catherine L. and Dale P. J., (1999). &quotOrganicFarming and Gene Transfer from Genetically Modified Crops:&quotMAFF Research Project. Norwich, UK: John Innes Centre

Raney,T. (2006). Economic impact of transgenic crops in developingcountries. CurrentOpinion in Biotechnology,17(2),174-178.

Qaim,M., &amp Zilberman, D. (2003). Yield effects of genetically modifiedcrops in developing countries. Science,299(5608),900-902.