In India, GM Crops Come at a High Price

Courtesy of PRRI/ISAAAThe flower of a Bt cotton plant in a field in Hussainpur village, Andhra Pradesh.

During a recent United Nations summit meeting on genetically modified organisms in Hyderabad, a busload of scientists gathered in the cotton fields of Hussainpur, a village 40 kilometers (25 miles) away. They came to see how small cotton growers in India benefited from genetic technology.

The farmers were growing Bt cotton, a crop whose genes were altered to produce a protein fatal to some insects. They now saw dramatic improvements in yields, explained representatives from the International Service for the Acquisition of Ag ri-Biotech Applications (ISAAA), the pro-biotechnology group that organized the meeting. The farmers no longer suffered from bollworms, which once ruined large sections of their crop, and saved time and money on pesticides, representatives said.

The farmers were less enthusiastic. True, their fields were no longer infected by the bollworm after switching to Bt cotton â€" but the farmers were paying for it.

Courtesy of Vivek NemanaT. Venkatesh a cotton farmer from Hussainpur, Andhra Pradesh.

“We're getting higher yields, but we're not better off,” said T. Venkatesh, one of the cotton farmers, in an interview. “Our costs have gone up much faster than the price of cotton.”

Srinivas Reddy, another farmer, said, “We buy our seeds on the black market now, and we pay three times, sometimes five times, as much as we did for the normal seeds.  But nobody is selling non-Bt seeds anymore.” Mr. Reddy said he was also paying more for farmhands and pesticides.

The farmers in Hussainpur raised a central question in the controversy over genetically modified crops: What makes them so expensive to farm?

As developing countries like India and China expand their production of genetically modified crops, engineered for traits like natural pest resistance or tolerance of herbicides, farmers are seeing costs rise. Crop biotechnology companies like Monsanto already charge a premium on their seeds to defray the cost of research. But in India, where agriculture consists mainly of small farms, a complex web of inadequate crop management, regulatory barriers, and incre asing weed and pest resistance has pushed the costs for farmers even higher.

Bt cotton is currently India's only genetically modified crop, but it accounts for 95 percent of all cotton farming in the country. The seeds can cost anywhere between 700 to 2,000 rupees ($38) per packet, or about three to eight times the cost of conventional seeds.

Seed companies say that the high prices are largely due to stringent regulation by governments, which they say inflate the costs for the companies.

“Burdensome regulations have been adopted and indiscriminately used by regulators to assess extremely remote risks,” said Eric Sachs, regulatory lead at Monsanto. “But the added requirements provide no significant reduction in risk, lengthen the review time and contribute to higher costs.”

Out of concerns that live genetically modified organisms will contaminate local species and potentially pose health and environmental threats, governments usually require ex tensive field trials and risk assessments before approving a seed for local planting. A recent industry-financed study by the agribusiness consulting firm Phillips McDougall found that seed companies spent on average five years and $35 million, or a quarter of their entire costs, on such requirements while developing a genetically modified crop.

“You have to look at the different actors that are working here â€" civil society groups, organic groups, consumer associations, environmental parties â€" that have been putting pressure on the different regulatory agencies to do more in terms of conducting research and field trials,” said Jose Falck-Zepeda, senior research fellow at the International Food Policy Research Institute in Washington, D.C. “So instead of having five trials, the regulatory system might ask you to do 10 trials. That means that the costs will go up.”

In addition, Indian regulators have directly regulated the price of genetically modified seeds. The state of Andhra Pradesh, for instance, intervened in 2006 when Bt cotton seeds were selling for thousands of rupees and has now fixed the price at 750 rupees â€" far less than what the Hussainpur farmers said they paid.

Bhagirath Choudhary, a scientist at the ISAAA office in New Delhi, blamed the price ceiling for creating a black market in India's Bt cotton seed market, worth an estimated $364 million, according to a Le Monde report. “The demand for the seeds is so high that the seed distributors actually sell the material at a much higher price than retail, so the farmer ends up paying much more to the distributor,” Mr. Choudhary said.

In June, the news magazine India Today reported that Andhra Pradesh faced an acute shortage of Bt cotton seeds, driving up black market prices to as high as 2,000 rupees per packet and leading to a profusion of bootlegged seeds illegally marketed as genetically modified products.

Though of genetically modifie d agriculture, as well as some independent studies, say that higher yields offset the costs of the seeds, farmers have seen other costs rise as well. The Hussainpur farmers said their crops were now affected by aphids, which replaced the bollworms that Bt cotton was designed to resist. The new pesticides require fewer applications, they said, but are far more expensive.

“The old pesticide used to cost us 200 rupees per liter,” said Mr. Reddy, who has been planting Bt cotton for six years. “Now I have to pay between 2,000 to 3,000 rupees. And I need to apply it more and more every year.”

Some critics of genetically modified seeds see a cycle of rising costs â€" and debts â€"  for farmers.

“Farmers buy the seeds, and the costs of the pesticides, which they buy from the same companies, are probably tenfold what they used to pay,” said Shivani Shah, a campaigner for Greenpeace in India. “So it's creating a system of dependency. It is a deliberate idea of increasing costs and increasing royalties â€" there is no intention of reducing those costs through economies of scale.”

Ling Li Ching, a researcher with the Third World Network, a nonprofit devoted to developmental issues, said the increased costs from the rise of aphids was an expected turn of events. “As ecologists have pointed out from the start, you take out a target pest, you're likely to have secondary pests coming because that's how ecology works: you vacate one niche, you'll have another niche take its place,” she said.

Higher seed and pesticide costs have left small farmers in India â€" and other developing countries â€" more vulnerable to failed monsoons and other climate change-related dangers.

For small farmers, the consequences can be tragic. When weak monsoon rains led to crop failures in 2005, hundreds of debt-ridden Bt cotton farmers in the states of Andhra Pradesh and Maharashtra committed suicide by drinking pesticide. A PB S documentary on the suicides by Chad Heeter reported that the indebtedness was largely due to expensive genetically modified seeds and pesticides. And each growing season, the suicides of indebted cotton farmers continue to make headlines in India.

There are practices that can help manage the cost of growing Bt cotton, like planting buffer zones that will delay how quickly insects develop resistance to the crops. But the practice has been unpopular in India, where small farmers often cannot afford to spare land for less-profitable ventures, and it has in some regions even led to the return of the bollworm â€" the very crop-destroying insect that Bt cotton was designed to resist.

“We don't plant the buffer crops,” said Mr. Reddy, the Hussainpur farmer. “It would waste our precious land.”

The best remedy for rising costs in developing countries, say critics of genetically modified crops, is a shift toward organic and eco-friendly farming methods.

“By using ecological methods, you can actually increase yields and production greatly for these farmers,” said Ms. Ling. “And these are low technology, simple to use, not costly methods â€" you don't have the high costs of pesticides or genetically modified seeds â€" but yet they make real differences in lives, immediately.

“What farmers in developing countries need now are techniques to work on and improve the biodiversity they already have in their farms,” she said.