Socio-Economic Assessment Of GM Innovations In Agricultural Crop Production

Philipp Wree

The total global production area of genetically modified (GM) crops increased from 1.7 mil. ha in 1996 to 175.3 mil. ha in 2013. Currently more than 30 different GM crops are commercially cultivated in 29 countries with the main production sites found in North- and South America. However, in EU (Spain and Portugal only) maize is the only GM crop that is cultivated. The reasons for the slow adoption of GM crop cultivation in Europe is that the potential agronomical benefits of GM innovations face skepticism and rejection by society. We contribute to the social discussion, which is often emotionally biased, with economic, scientific, and neutral points of view. We analyze potential benefits and costs of using GM crops based on scientific studies. Using real options as a theoretical framework we develop threshold values for potential social irreversible costs (maximum incremental social tolerable irreversible costs (MISTICs)) of GM innovations under different scenarios. If actual irreversible costs–the exact determination of which appears unfeasible with our current state of knowledge–are larger than the threshold values, then from a socio-economic point of view the technology should not be introduced.