Ex-Ante Economic Impact Assessment of Genetically Modified Banana Resistant to Xanthomonas Wilt in the Great Lakes Region of Africa

Abstract

Background: Credible empirical evidence is scanty on the social implications of genetically modified (GM) crops in Africa, especially on vegetatively propagated crops. Little is known about the future success of introducing GM technologies into staple crops such as bananas, which are widely produced and consumed in the Great Lakes Region of Africa (GLA). GM banana has a potential to control the destructive banana Xanthomonas wilt disease.

Objective: To gain a better understanding of future adoption and consumption of GM banana in the GLA countries which are yet to permit the production of GM crops; specifically, to evaluate the potential economic impacts of GM cultivars resistant to banana Xanthomonas wilt disease.

Data sources: The paper uses data collected from farmers, traders, agricultural extension agents and key informants in the GLA.

Analysis: We analyze the perceptions of the respondents about the adoption and consumption of GM crop. Economic surplus model is used to determine future economic benefits and costs of producing GM banana.

Results: On the release of GM banana for commercialization, the expected initial adoption rate ranges from 21 to 70%, while the ceiling adoption rate is up to 100%. Investment in the development of GM banana is economically viable. However, aggregate benefits vary substantially across the target countries ranging from US$ 20 million to 953 million, highest in countries where disease incidence and production losses are high, ranging from 51 to 83% of production.

Conclusion: The findings support investment in the development of GM banana resistant to Xanthomonas wilt disease. The main beneficiaries of this technology development are farmers and consumers, although the latter benefit more than the former from reduced prices. Designing a participatory breeding program involving farmers and consumers signifies the successful adoption and consumption of GM banana in the target countries.

Fig 1. Farmers’ awareness of BXW disease in target countries.

Fig 2. Losses in banana production due to BXW incidences in target countries.

Fig 3. Willingness of farmers to adopt GMB-BXW in target countries.

Fig 4. Projected adoption rate of GM BXW resistant banana in target countries.

Fig 5. Proportion of annual banana production sold.

Fig 6. Farmers’ and consumers’ preferences and inquiries.

(A) Represents farmers’ consumption preference for banana varieties. (B) Represents consumers’ inquiry about banana before purchase from either farmers or traders.

Fig 7. Potential consumers of GM banana (N = 101) in target countries.

Fig 8. Frequency (%) of reasons for consumer preference of GM banana.

Fig 9. The upper panel reports the changes in NPV relative to baseline values (Table 6) due to doubling of inputs costs, reduction of initial and ceiling adoption rates by 50%, and reduction of yield by 25%.

The middle panel reports the changes in IRR relative to baseline values (Table 6) due to doubling of inputs costs, reduction of initial and ceiling adoption rates by 50%, and reduction of yield by 25%. The bottom panel reports the changes in BCR relative to baseline values (Table 6) due to doubling of inputs costs, reduction of initial and ceiling adoption rates by 50%, and reduction of yield by 25%. Notes: In the upper, the yield gain for Rwanda was reduced by 5% as reduction by 25% would lead to economic losses. In the middle panel, the IRR for Rwanda could not be computed when input costs are doubled, while IRR for Tanzania could not be computed when yield gain was reduced by 25%.