Soybeans. Photo: Clearly Ambiguous

In the paper “Compliance with Biosafety Regulations in Indonesia and The Philippines“, which we presented at the  American Agricultural Economics Association 2007 Annual Meeting, we documented the cost for existing advanced events in the two countries.

Our costs estimates are much lower than the US$ 12-17 million estimated in a paper by Kalatzaidonakes and colleagues for the first maize and soybeans events released into the United States (Kalazaidonakes et al. 2006). The reason for the significant differences between these estimates was due to the fact that there is a lot of familiarity with the events introduced into the Philippines and Indonesia and thus there is a lot of knowledge already generated for potential regulatory system use in their assessments. The other factor is the possible underestimation of the costs associated with conducting evaluation activities themselves. In the paper by Pray et al. (2005 and 2006) the authors also point to the fact that the public sector may not do full costing of such procedures.

Cost is important but not the most important issue in many situations. In another paper (Bayer, Norton and Falck Zepeda, 2010), the cost of compliance compared to the potential economic benefits is not as important as the impact of regulatory delays in terms of releasing a potential technology. Where cost becomes important is through its impact on public sector and national firms investing in technology.

From the standpoint of anybody who is considering investing in any technology, what becomes more important in this decision is the uncertainty introduced by a ill-defined decision-making process for the potential approval of such technologies. Of course, as Wesseler and Ansik have reminded us in their papers, we presently do have to contrast cost incurred with the gains in information as a consequence of the decision to postpone release to get better/more information.

I hope that countries make their decisions based on full information, including costs, opportunities lost, and information gains.

References:

  1. Bayer, J. C., G. W. Norton, and J. B. Falck-Zepeda. (2010). Cost of compliance with biotechnology regulation in the Philippines: Implications for developing countries. AgBioForum 13(1): 53-62.
  2. Falck-Zepeda, Jose Benjamin, Yorobe Jr.  Jose, Manalo, A., Ramon, G.,Amirsuhin, B., Lokollo, E. M., Zambrano, P. 2007. The Cost of Compliance with Biosafety Regulations in Indonesia and The Philippines. Selected Paper 175075 presented at the American Agricultural Economics Association>2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon. http://purl.umn.edu/9947
  3. Kalatzaidonakes, N., Alston, J.M.,  and Bradford, K. J. (2006): Compliance Costs for Regulatory Approval of New Biotech Crops. in Economics of Regulation of Agricultural Biotechnologies, Julian Alston, David Zilberman, and Richard Just, eds. Springer.
  4. Manalo, A.J., & Ramon, G.P. 2007. The cost of product development of Bt corn event MON810 in the Philippines. AgBioForum, 10(1), 19-32. Available on the World Wide Web: http://www.agbioforum.org.
  5. Pray, C. E., P. Bengali and B. Ramaswami. 2005. The cost of regulation: the India experience. Quarterly Journal of International Agriculture 44 (3): 267-289
  6. Pray, C. E., B. Ramaswami, J. Huang, R Hu, P Bengali, and H Zhang. 2006. Costs and enforcement of biosafety regulations in India and China. International Journal Technology and Globalization vol 2 (1/2): 137-157.
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