Hiroyuki Takeshima Research Fellow Development Strategy and
Governance Division IFPRI [email protected] Pressure Group
Competition and GMO Regulations in Sub- Saharan Africa Insights
from the Becker Model Takeshima, Hiroyuki & Guillaume Grure.
(2011). Journal of Agricultural & Food Industrial Organization
9(1), Article 7.
Slide 2
Background 2 Influential role played by lobbyists (Paarlberg,
2008; Graff, Hochman & Zilberman, 2009; Grure & Sengupta,
2009) => linkages between anti-GMO lobbying and seemingly
irrational GMO regulation policies in these countries Despite
studies suggesting positive effects of GMOs (Qaim 2001; Aerni 2006;
Paarlberg 2006; Demont et al., 2009; Bout & Grure, 2011)
progress in SSA has been slow => Due to the influence of
anti-GMO lobbyists (Pinstrup-Anderson & Schioler, 2001;
Paarlberg, 2008) including private importers or retailers (Cohen
& Paarlberg, 2002; Grure & Sengupta, 2009)
Slide 3
Questions 3 Why anti-GMO pressure groups effective ? Why
anti-GMO lobbying can be effective in influencing GMO policies in
SSA, while pro-GMO lobbying cannot ?
Slide 4
Two possible reasons 4 Diffuse beneficiaries, low potential
return from lobbying relative to costs (Pray & Naseem, 2007;
Graff, Hochman & Zilberman, 2009) Already unfavorable
conditions even in the absence of lobbying - unfavorable conditions
make anti-GMO lobbying more effective
Slide 5
Unfavorable conditions 5 Unsuitability of foreign varieties to
specific local production environment Weak formal seed sector
capacity in SSA countries Insufficient institutional and biosafety
regulatory capacity (Pray & Naseem, 2007) Small market sizes
and their lack of biosafety regulatory system (Takeshima,
2010)
Slide 6
Why does it matter? 6 Different ways to support: If 1 st
reasons => support for lobbying the policy makers by SSA
producers who are often impoverished and diffused, and may have
little capacity to organize and effectively lobby If 2 nd reason
=> lobbying may not be the sole reason for GMO policies in SSA
countries understand what causes the anti-GMO lobbying to be more
effective than pro-GMO lobbying
Slide 7
Interaction b/w interest groups on opposite sides 7
Conceptualization of the workings of lobbying Both anti- and
pro-GMO groups can compete in influence on GMO policies Becker, G.
(1983). A Theory of Competition Among Pressure Groups for Political
Influence. The Quarterly Journal of Economics 98(3) : 371400.
Competing influence of pressure groups SSA policy makers goals are
not all precisely determined => appropriate for our study
Slide 8
Contribution to the literature 8 roles played by the political
pressure groups for designing GMO policies in SSA countries how
such roles may depend on exogenous factors for both anti- and pro-
GMO lobbyists what they may imply for the appropriate support for
SSA countries use Beckers model by showing how the model can be
used to illustrate the case of the lobbying for anti- or pro-GMO
policies
Slide 9
GMO policies 9 a set of discrete decisions at various
regulatory stages committee to further discuss issues associated
with GMO biosafety bills and/or regulations on the development,
testing and possible commercialization of GMO crops financial
support to such development, confined field trials venture capital
fund to finance biotech enterprises moratorium on imports of GMO
products ban research, laboratory experiment and field trial of GMO
Lobbyists' target authorities at each stage, including individual
competent authorities (regulatory committees) (Newell 2007)
Slide 10
Exogenous factors 10 Lobbying effectiveness depend on exogenous
factors agro-ecological and socio-economic conditions potential
productivity environmental impacts segregation costs (Grure and
Sengupta, 2009) external cost for domestic consumers willing to
avoid GMO products (Lapan and Moschini, 2004) others
Slide 11
Becker model 11 Two homogeneous lobbying groups s and t s :
subsidized, t: taxed R s = Z s - Z s 0 (redistribution to s) R t =
Z t 0 - Z t (redistribution away from t) F(R t ) R t, F* = dF/dR t
1 and F** = d 2 F/dR t 2 0 G(R s ) R s, G* 1 and G** 0 RtRt
F(Rt)F(Rt) RsRs G(Rs)G(Rs) DW
Slide 12
Becker model 12 n t * F(R t ) = I t (p s, p t, x): influence
function n s * G(R s ) = I s (p s, p t, x) I s + I t = 0: political
budget constraint p = p(m, n), m = an: pressure p depends on the
size n and each members contribution a Z s = Z s 0 + R s a s, Z t =
Z t 0 R t a t :Full income of each member
Slide 13
Becker model 13 Solved for equilibrium values of a s and a t a
s, a s depend on F* and G* => Each member max income when dR s /
da s = 1 dR t / da t = -1
Slide 14
Theorem from Beckers model 14 Marginal DW => F* , G* =>
=> Pressure from s , pressure from t Equilibrium subsidy
Competition among pressure groups favors efficient methods of
subsidy / taxation lower DW Exogenous factor (DW) affects Lobbying
efforts Lobbying effectiveness
Slide 15
Beckers theorem and GMO lobbying 15 Lobbying effectiveness
depends on DW Unfavorable conditions for GMOs => Anti-GMO
lobbying becomes effective Anti-GMO may be actually efficient
Favorable conditions for GMOs => anti-GMO policy => DW
pro-GMO policy => DW
Slide 16
What conditions ? 16 Nature of GMO technology, Environmental
and commercial risks Perceptions by producers and consumers
Institutional constraints
Slide 17
Favorable condition 17 Sufficient capacity developing
appropriate GMO varieties disseminating GMO varieties Greater GMO
benefits reduction in production costs a large number of producers
=> promoting GMO is an efficient way to support producers (i.e.,
a low DW for subsidizing pro-GMO lobbyists). => Anti-GMO policy
- less efficient way to allocate benefits to anti-GMO consumers and
importers
Slide 18
Favorable condition 18 sufficient formal seed sector capacity
Low segregation cost better tracking systems, identity preservation
along the supply chains, strong enforcement of the biosafety
regulatory framework Non-GMO may be provided to importers at a
lower cost a high DW for subsidizing anti-GMO lobbyists Anti-GMO
group may instead lobby for preferential agreements for importing
non-GMO from SSA countries cooperate with GMO promotion in SSA
countries
Slide 19
Unfavorable conditions 19 Low domestic capacity to develop GMOs
pro-GMO policy is inefficient way to support producer (cost
reduction is minimal) a high DW for subsidizing pro-GMO lobbyists
Aversion to GMO Alternative sources for non-GMO Weak institutional
capacity High segregation costs Greater chance of regulatory
response from importing countries => anti-GMO policies may be
more efficient way to support anti-GMO consumers in importing
countries or anti-GMO traders, than promoting GMO and segregating
them from non-GMO
Slide 20
Size of lobbying group 20 Another Beckers theorem smaller size
of lobbyist group = more efficient However, biotech companies are
also small, and yet generally not active in lobbying in Africa
anti- GMO lobbying > pro-GMO lobbying it is likely that the
situation in SSA is already unfavorable for GMO, less likely that
the anti-GMO lobbyists are making the situation unfavorable for
GMO
Slide 21
Situations in SSA 21 Potential domestic gains large (Qaim,
2001; Aerni, 2006; Paarlberg, 2006; Demont et al., 2009, Bout and
Grure, 2011) Damages of losing export to GMO sensitive countries
small (Anderson & Jackson, 2005; Paarlberg, 2006; Grure &
Sengupta, 2009) Consumer perceptions by consumers in various SSA
countries - favorable - Bt maize / cotton,Golden Rice in Nigeria
(Adeoti & Adekunle, 2007) - GMO Banana in Uganda (Kikulwe et
al., 2010) - Bt maize in Kenya (Kimenju and De Groote, 2008) - Bt
white maize in South Africa (Vermeulen et al., 2005) =>
Favorable conditions in terms of GMO potentials
Slide 22
Institutional constraints unfavorable conditions in SSA 22 GM R
& D regulatory capacity general law enforcement capacity
(Binenbaum et al., 2003; Pray and Naseem, 2007)
Slide 23
GM R&D Capacity in SSA 23 Only Republic of South Africa
(RSA) and Egypt domestic GM research (Takeshima, 2010) Backcrossing
varieties initially developed for use in the United States or other
early-adopting countries (Takeshima, 2010) Biological
characteristics of staple crops (cassava etc) less known (Falck-
Zepeda & Cohen, 2006) Difficulty in applying GM to such crops -
these technologies are developed in temperate zones (Naylor et al
2004) Patented technology - costly for African countries to develop
GMO depend on developed countries partners for necessary
technologies, than Asia or Latin America (Herdt, Toenniessen and
OToole, 2007) GMO crops suitable for local production environment -
takes longer (Eicher, Maredia & Sithole-Niang, 2006; Takeshima,
2010)
Slide 24
Regulatory Capacity in SSA 24 Needed to minimize environmental,
agronomic, and food and feed safety risks, ensure safe use by all
(Birner & Linacre 2008) Minimize gene flow in confined field
trials, testing Regulation on GMO imports / labeling (Grure &
Rao 2007) Testing of sample, monitoring and tracking Lack
institutional capacity to identify the best regulatory systems
while involving various stakeholders (Wafula & Clark 2005)
draft and enact their biosafety bill (Cohen & Paarlberg 2004)
few public research institutions in SSA can afford the costs of
biosafety assessments (Herdt, Toenniessen & OToole 2007)
Slide 25
Law enforcement capacity 25 required to punish illegal use of
patented technologies illegal entry of GMO cross porous borders
illegal methods of producing GMO by farmers potential
non-compliance with labeling regulations transaction costs for
negotiating license with patent holders discourages patent holders
to provide technologies local law does not recognize patent (Cohen
& Paarlberg 2002) Illegally export of patented technologies to
neighboring countries due to frequent transboundary movement of
crops in SSA (Binenbaum et al 2003; Eicher et al 2006;
Ushewokunze-Obatolu 2005) Royalty-free humanitarian licensing -
still requires market segmentation clear definition of
beneficiaries difficult where non-commercial markets cannot be
sharply delineated by region difficult to exclude spillovers to
non-targeted markets (Brewster et al., 2007)
Slide 26
Other unfavorable factors 26 Weak formal seed sector limit the
dissemination of commercial GMO that are authorized High seed
recycling rate in Nigeria - only purchase rice, maize and cowpea
seeds in any given year (Takeshima et al., 2010) Commercial risks
associated with decisions to develop or commercialize GMO crops may
be often more immediate than the benefits realized from the
adoption of GMO, as anti-GMO groups can immediately respond to such
decisions
Slide 27
Conclusions 27 Sizeable opportunity cost of delayed adoption of
GMO due to the constraints in regulatory capacity (Bayer, Norton
& Falck-Zepeda, 2010) potential GMO benefits largely offset by
institutional constraints Conditions highly unfavorable in SSA
Pro-GMO policy inefficient (DW ) Anti-GMO policy efficient (DW )
More anti-GMO lobbying than pro-GMO lobbying for pro- GMO
policy
Slide 28
Applications for other countries (US, EU / Japan) ? 28 US -
Favorable Vast land - greater benefits from GM on labor saving (?)
=> pro-GM lobbying (?) EU / Japan Unfavorable Small land - less
benefit from labor saving GM tech (?) Japan - Dominance of rice
(self-pollinating), small market for GM maize / soybean (?) =>
anti-GM lobbying (?)
Slide 29
Future directions 29 Different assumptions Different models
Empirical approach?
Slide 30
Key reference 30 Becker, G. (1983). A Theory of Competition
Among Pressure Groups for Political Influence. The Quarterly
Journal of Economics 98(3) : 371400. Takeshima H & G Grure.
(2011). Pressure Group Competition and GMO Regulations in
Sub-Saharan Africa Insights from the Becker Model. Journal of
Agricultural & Food Industrial Organization 9(1), Article
7.