A paper by Gruere and Pal suggests that well conducted socio-economic assessments can have four distinct benefits to society, listed below in italics. I will expand on these four items a bit to get a better sense of
1) Objectively weigh benefits and cost for better decisions
When ex ante studies are done following accepted standards of disciplinary excellence, using best available tools and methods subject to the customary budget constraint, then these studies can indeed objectively weigh benefits and cost, which in turn can lead to better decisions. Elements includes those such as conducting basic surveys or using secondary data to describe a baseline or a counter factual, using random or stratified random sampling to collect data, use significance tests, full data and tools/method disclosure, data and other supporting material submission with reports or publication, publication in peer reviewed journals and venues, use of peer review as an indicator of quality, full disclosure of all conflicts of interest by researchers and funding sources, amongst other.
2) Provide useful lessons that may avoid costly mistakes
A paper by my colleague friend Marnus Gouse and his own colleagues, introduces one of the most interesting lessons from the Bt cotton adoption story in Makhathini Flats, South Africa. Marnus describes this lesson as “the story of Bt cotton is that of a technological triumph but an institutional failure.” Conducting adoption and impact studies can help identify and avoid those institutional failures that may derail technologically superior innovations.
3) Suggest management practices to increase benefits from use
In a set of papers examining the potential Bt cotton adoption in Burkina Faso and West Africa (Falck Zepeda 2008a, 2008b) we examined not only the overall economic benefits derived from the potential use of Bt cotton in the region, but also examined those institutional and management practices that may have an impact on the success or failure of the technology in the hands of farmers. Carefully done studies, can indeed identify those issues that may play a limiting role for technology adoption and impact. Issues include availability of complementary inputs (fertilizer, herbicides, and prompt management decisions) or credit or insurance programs to help manage customary production risk.
4) Support economically beneficial applications and pave the way for promising new tech
The competent authority, usually National Biosafety Committees or Authorities, are not only concerned with risk assessments but also with their Government’s commitments to improving overall food security and national development objectives in a sustainable manner.
The issue is then to compare the immediate costs of compliance with biosafety regulations -this does apply not only to socio-economic considerations but also to the environmental and food/feed safety assessment- with the delays in the onset of benefits, and both with the future gains in knowledge. The examination of these issues should consider the uncertainty surrounding these issues.
In a paper Kikulwe, et al. (2008) examined all some of these issues and trade-offs within the scope of cost and benefit irreversibility in a real options model with an application to fungal (Black Sigatoka) resistant bananas in Uganda. Interestingly enough, the authors found out that even when considering all of these issues, every year that Uganda delays in approving such technologies, society loses 200-300 million US$. Bananas are a staple crop in Uganda having large food security and poverty impact implications. The fungal resistant banana is being developed by the public sector.
Decision makers in practice may face two distinct set of situations with increased knowledge. One where additional knowledge may help weed out unsafe and/or undesirable technology or product, as is may have a negative socio-economic impact. Second, a situation may exist were a technology that has been deemed as “safe” by the biosafety assessment process can actually be not approved for deliberate release into the environment due to a “negative” ex ante socio-economic assessment. These two cases open a lot of discussions in terms of the reliability/verifiability of SEC studies and who is the appropriate entity to make decisions about technology (i.e. producers versus SEC assessors versus regulators/decision makers). I will expand this discussion later in this blog.
- Falck Zepeda, J.B., D. Horna, P. Zambrano and M. Smale. “Policy and Institutional Factors and the Distribution of Economic Benefits and Risk from the Adoption of Insect Resistant (Bt) Cotton in West Africa.” 2008. Asian Biotechnology Development Review 11(1):1-32.
- Falck Zepeda, J., D. Horna and M. Smale. “Distribution of economic benefits and risk from the adoption of insect resistant cotton in West Africa” 2008. African Journal of Agricultural and Resource Economics.
- Kikulwe, Enoch; Wesseler, Justus, Falck-Zepeda, José. “Introducing a genetically modified banana in Uganda : Social benefits, costs, and consumer perceptions.” 2008. IFPRI Discussion Paper 767. Washington, D.C. International Food Policy Research Institute (IFPRI). http://www.ifpri.org/pubs/dp/ifpridp00767.asp
- Gouse, M., J. Kirsten, B. Shankar and C. Thirtle. “Bt Cotton in KwaZulu Natal: Technological Triumph but Institutional Failure”. http://www.grain.org/system/old/research_files/Gouse_etal.pdf