An ex ante impact assessment of the farm level impacts of genetically modified (GM) sugarcane to contain insect resistant (IR) and herbicide tolerant (HT) genes in the Eston sugarcane supply region of KwaZulu-Natal, South Africa.

Abstract

Notwithstanding public contention about GM crops, commonly defined as crops for which the genes have been engineered by inserting genes from other organisms such as bacteria or animals into their DNAs, there is a general consensus in the agricultural economics literature that adoption of GM crops has generally benefitted the farm sector through increased yields, reduced use of agrochemicals and profit gains for farmers. The South African sugar industry is a high-quality competitive producer of sugar. Nonetheless, it is under financial stress, which has been partly attributed to increased prevalence of various pests, notably eldana and cynodon grass. Genetic modification of sugarcane has been advocated as a strategy to partially counter these threats. The South African Sugar Research Institute (SASRI) is currently developing an insect resistant (IR) and herbicide tolerant (HT) genetically modified (GM) sugarcane cultivar that is suited to coastal production regions. Some sugarcane cultivars suitable for production in coastal areas are also suited to commercial production in the inland regions where eldana and cynodon are also prevalent (e.g. the Eston cane supply region). This study investigates the socio-economic impacts of GM sugarcane in the Eston cane supply area in KwaZulu-Natal, assuming that the GM sugarcane cultivar is suitable for commercialization in the Eston area. In the Eston area, large-scale and smallholder growers produce 95% and 5% of sugarcane, respectively. Large scale farmers in the region were aggregated into three representative farms to account for climatic variation within the area. A fourth represents smallholder growers in the region. Data for representative farm models were collected through focus group discussions with SASRI experts and commercial farmers. In this study, GM sugarcane is modified on the N52 cultivar because it fits the desired traits (high yields, and resistance to diseases and drought tolerance) of GM cane. Microsoft Excel was used to compile enterprise budgets of GM cane and conventional cane to compute their gross margins. Furthermore, Linear Programming (LP) farm planning models were compiled for each representative farm to determine the likelihood of GM cane adoption and the risks associated with the technology. The baseline scenario, “without” GM cane was compared with the GM cane scenario to analyze impact on farm decisions, ceteris paribus. In addition, focus group discussions with smallholders were held to gauge their demand for GM cultivars of sugarcane. Results show that GM cane will be adopted on all four representative farms. Large scale farmers will save up to 29%, 75% and 49,3% on weed control at planting, ratoon management and on eldana control per hectare per annum, respectively. Farmers will also achieve up to a 34.5% share change in gross margin per ha per annum. The LP output shows that GM cane will perform well even in poorer soils: steep and marginal poor soils. Farmers and farm workers will also benefit from GM through sustainable farming and environmental conservation because less agrochemicals such as imazapyr will be used to control pests. Furthermore, higher yields on GM cultivars are expected to increase employment because ratoon management and harvesting will require more labours owing to higher yields. Keywords: ex ante, eldana, cynodon, genetically modified, insect resistant, herbicide tolerant, linear programming