An ex-ante assessment of the socio-economic impacts of genetically modified sugarcane in the ILembe district of KwaZulu-Natal.

Abstract

The increasing prevalence of the stalk borer, Eldana saccharina Walker (eldana), and creeping grass weed, Cynodon dactylon (cynodon), in sugarcane growing regions of South Africa have caused costs associated with control of pests and diseases in sugarcane production to increase. This has contributed to a decline in the relative profitability of sugarcane farming, which has contributed to a decline in the area planted to sugarcane. The South African Sugar Research Institute (SASRI) is currently considering developing an insect-resistant (IR) and herbicide-tolerant (HT) genetically modified (GM) sugarcane cultivar to address these challenges. This GM cultivar is specifically intended to be suited to production in coastal regions of KwaZulu-Natal. The expected socio-economic impacts of introducing GM cultivars are an essential component of SASRI’s decision. A review of literature on the topic indicates that the adoption of GM crops, since the early 1990s, has generally had positive socioeconomic impacts. Farmers benefited through energy and environmentally friendly chemical control, reduced chemical cost, and improved human health owing to less handling of chemicals. However, no cultivars of GM sugarcane have yet been commercialised globally, and limited research has been done on the impact of GM perennial crops. This study, therefore, aims to fill this knowledge gap. Because the development and roll-out of a GM cultivar will take approximately ten years, this research is an ex-ante study. The study was conducted in the North Coast region of KwaZulu-Natal, where eldana and cynodon are most prevalent. Commercial sugarcane farms were aggregated into two representative farms, based on different climatic conditions, cane cutting cycles, yields, and soil types. Data were collected through focus group discussions with SASRI experts and commercial farmers. Microsoft Excel was used to compile enterprise budgets of GM sugarcane and conventional sugarcane under different cutting cycles to determine the profitability of the different sugarcane cultivars. An analysis of cultivar gross margins shows that the hypothetical GM sugarcane harvested on an 18-month cutting cycle is relatively more profitable than conventional sugarcane harvested on either a 14 to 16-month cutting, or an 18-month cutting cycle on sandy and loam soils in both the Coastal and Hinterland regions of the North coast. On clay soils in coastal areas, the N59 cultivar harvested on an 18-month cutting cycle had marginally higher gross margin than the hypothetical GM cultivar.

Mathematical Linear Programming farm models that account for risk using Baumol’s E-L criterion, variability in farmland resources, and SASRI’s recommendations against planting one variety of sugarcane in more than 33% of the total area under sugarcane on a farm, amongst other factors, were then compiled for each of the two representative farms. The models were verified by their ability to closely simulate observed land-use decisions on the representative farms for a current scenario. Having verified the models, the likely change in land use decisions due to GM sugarcane was investigated by re-running the models for a scenario in which a hypothetical GM sugarcane cultivar is available, ceteris paribus. The current scenario was used as a baseline due to uncertainty about a likely scenario ten years from now when a GM sugarcane cultivar is expected to become available. The impacts of GM sugarcane were assessed by comparing yields, gross margins, farmer’s production decisions, chemical applications, and employment across the two scenarios. Results of the study are that farmers that adopt GM sugarcane cultivars are likely to benefit through savings in pest and weed chemical control and improved sugarcane yield and quality. Furthermore, the reduction in chemical requirement has indirect benefits such as less handling of chemicals leading to improved health and safety of farmers, increased management time, and less on-field traffic reducing soil compaction, which increases soil stress, increasing the prevalence of eldana. Based on the findings, it is recommended that information and communication of GM sugarcane be shared along the supply chain for it to be successfully produced and commercialised. Additionally, the decision on the sugarcane cultivar that will be commercialised in the first stage is crucial for the successful adoption of GM cultivars. Furthermore, training of smallholder farmers is recommended to improve the likely impacts of GM sugarcane. Keywords: cynodon, eldana, genetically modified, herbicide-tolerant, insect-resistant, linear programming farm model, Sugarcane