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Humboldt-Universität zu Berlin - Lebenswissenschaftliche Fakultät - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 2/06


Economic evaluation of transgenic pest resistant rice in the Philippines and Vietnam

Cezar B. Mamaril
The University of the Philippines-Los Banos, Laguna, the Philippines, and

George W. Norton
Virginia Tech, Blacksburg, VA, USA


Abstract

The poor in Asia receive about half their calories from rice and rice demand is expected to grow substantially over the next three decades. Results of rice biotechnology research may help address quantity and quality constraints to increased production in both favorable and fragile ecosystems. Preliminary field testing of transgenic Bt rice, conducted in collaboration between the International Rice Research Institute (IRRI) and national agricultural research and extension systems (NARES), has shown excellent resistance against stemborer, the most important insect pest of rice in Asia. This study focuses on projecting the level and distribution of benefits of Bt rice, assuming cross-country technology and price spillover effects, using Bt Indica rice for stemborer control in the Philippines and Vietnam as an example. Comparisons are made with potential benefits of other types of pest-related rice biotechnologies. Benefits are expressed in terms of changes in the present value of economic surplus. Total economic gains from adopting Bt rice in the Philippines under the baseline scenario are estimated (in 2000 prices) at $619 million (range of $306-717), with $270 million (range of $136-276) in the Philippines, $329 million (range of $159-415) in Vietnam, and $20 million (range of $10-26 million) in the rest of the world (ROW). These gains represent roughly 6% of the value of milled rice in the Philippines and Vietnam. Roughly two-thirds of the gains in both countries are received by producers, and the (small) benefits accruing to ROW result from the lower world price induced by production increases in Vietnam. Delaying the release of the Bt technology just 5 years cuts the benefits by 20%, assuming a 5% discount Rate.

Keywords: transgenic rice benefits, stemborer, economic surplus analysis

JEL: Q 160

Vol. 45 (2006), No. 2: 127-144