Agriculture as Economic Development

Editor’s Note: As part of our new blog series, The Next Generation, the Chicago Council on Global Affairs is inviting a diverse group of experts to explore topics related to youth employement and agriculture in advance of  the 2018 Global Food and Security Symposium.  Join the discussion using #GlobalAg, and tune in to the symposium live stream on March 21 and 22.
By Dr. David Zilberman
The emergence of agriculture marked the beginning of human civilization as we know it. For millennia, agriculture employed most of humanity, as there was a very low rate of technological change. But since the 19th century, society went through a science-based revolution introducing mechanical, chemical, and biological innovation, increasing the amount of food grown per farmer, and allowing humanity to shift to industrial activities, with the rapid expansion of urban areas. Agriculture has provided the feedstock for the earliest industries, which processed and preserved food, and provided fiber. Through fermentation humans were able to preserve food and produce alcohol, and through various processes produce other food products that enhanced health, and improved quality of life. 
The progress of agriculture in the US and around the world wouldn’t have been possible without the establishment of supportive infrastructure and policy. This includes the land grant colleges, agricultural experiment stations, and cooperative extension that discovered new knowledge, developed cutting edge technologies, and built the capacity of farmers to utilize the technologies. More recently, we have seen the emergence of the educational-industrial complex, where the results of university research are developed by industry and result in new products that increase the productivity of farmers, improve product and food safety, and enhance environmental conditions and quality of life of consumers. The implementation of agricultural innovation benefited from an environment of increasingly open international trade and required innovative development of supply chains. Agribusiness executives have been challenged to design supply chains to implement innovations taking account of economies of scale, differences in capacity across locations, and they continue to adapt their supply chain and business models, as technology and economic conditions evolve.

Agriculture is Vital in the Modern Age

In the current age, agriculture employs fewer people, but remains a crucial source of raw materials that are necessary for the large agrifood sector that is so paramount for quality of life. The discovery of DNA and new developments in information and nanotechnology provide the foundation for a new agricultural revolution that will enhance productivity and reduce, or even eliminate, some of the negative side effects of agricultural production. Furthermore, they provide the foundation for a new bioeconomy that will expand the range of products derived from agricultural and natural resource sectors to provide feedstock for fuel, fiber, and fine chemicals. A major challenge of our generation is to move to a sustainable system and to mitigate emissions and adapt to climate change. The new bioeconomy can provide the tools to help meet these challenges by revolutionizing the agrifood sector, moving towards a renewable economy while replacing our dependence on non-renewables like fossil fuels with new renewable feedstocks. The notion of sustainable development that would allow improvement of human welfare globally, while sustaining and improving environmental quality of our planet depends on a progressive and advanced agrifood sector and an effective and efficient bioeconomy.
However, the gap between high income and lower income regions persists. Many developing countries are facing the challenge of eliminating poverty and improving the quality of life, and much of it can be done via the modernization of agriculture. Yield per unit of land is much higher in the developed countries. Europe and the United States, for example, are producing five to ten times more corn per unit of land than low- and middle-income countries. Even doubling or tripling the yield in these regions will allow the elimination of malnourishment, may reduce the footprint of agriculture, and reduce deforestation. Development of agriculture and agribusiness is key strategy for development. Agricultural transformation will provide the foundation for societal development in general, as it will lead to an expanded agrifood sector that provide consumers with nutritious, convenient, flavorful, and quality food. It will provide more jobs in rural areas, enhancing quality of life in these areas and reducing the need for farmers to move to urban areas in search of livelihoods.

Building Transformative Economies

However, transformation of agriculture in many developing countries is constrained by limited human capital, lack of investment in research and education, regulation that impedes adoption of innovation, and restrictions on trade. Investment by governments and donors has already improved educational obtainment globally and established networks of international and national agricultural research organizations. Despite this progress, much needs to be done. Modernization of agriculture requires investing in and expanding educational systems to improve the capabilities of consumers and farmers. There is a growing commitment to significant and sustainable investment in research, extension, technology transfer, and expansion of the model of educational-industrial complex around the world. While developing regions are likely to be the major beneficiary of new discoveries with agricultural biotechnology, they haven’t gained much from this new capability because of restrictive regulations. Science-based regulations that balance benefits with risks will lead to adoption of and development of new agricultural capabilities and allow developing countries to better address their resource challenges.
There is a need to develop economic systems that are transparent, with minimal barriers to trade and low transaction costs, and to develop an environment that encourages individuals to be entrepreneurial and innovate new businesses and supply chains that will lead to the build-up of the bioeconomy. There is growing evidence of the entrepreneurial capacity of the agrifood sector in developing regions, and the gains from evolving supply chains, especially in exporting flowers (in Kenya) and creating new aquaculture systems (in Bangladesh and Myanmar). But these emergent examples should be expanded and the scientific, educational and financial capabilities need to be expanded to allow for further development of similar systems and expansion of the bioeconomy to new activities in developing countries.
Practitioners in industry, policymakers in government, and activists in NGOs must be aware of the changing agrifood sector, the great potential of modern agriculture as an engine for growth, and how to take advantage of it. Importantly, these groups need to work together to create an agrifood sector that works for all.

Supply Chain Innovation

Facilitating conversation and shared understanding around these priorities is the goal of the agrifood supply chains workshop that we are now organizing for the third year. This year’s workshop theme is “Innovations in Agrifood Supply Chains: People-Planet-Profitability”. We decided to focus on the interconnected area of people, which includes consumers and producers, planet, which is of course our environment, and profit, which still has to be the main matrix of any successful business. We realized that the global food and agriculture industry is having to deal with not only the resource related issues, such as water and energy, but also consumers’ growing desire to be more responsible with their purchasing decision and demanding more from the producers and manufactures to be more ethical than ever. At the same time, businesses will still have to continue to maximize their profit. We are hoping to shed light on practices that supports all three in our workshop this year.
What makes this program unique is the collaboration with Solidaridad Network and the interests of other academic institutions. Solidaridad is an international non-profit organization with over 45 years of experience and it is unique in its understanding of the importance of business and building business relationships and supply chains spanning developed and developing countries.
We collaborate with other academic institutions, such as UC Davis, Michigan State, and Guelph, and we have been partnering with Mars and have strong relationships with Costco and Bank of America. We are also participating in workshops in Peru and Germany, and are the nexus of an emerging global consortium.
With an increasing world population, with the need for food growing unabated, natural resources under pressure and the need for food that is healthy and responsibly produced, the agrifood industry has to transform, from the focus solely on making profits to aiming to achieve other goals that were traditionally advocated by non-profits in the past. This is a paradigm shift that the agrifood industry is having to embrace, along with recognizing their role as partners in sustainable development as well.

Self-interest, the denial of climate change, and resistance to agricultural biotechnology

I first encountered the debate on climate change in the 1980s when I helped to organize a workshop at the Beltsville Agricultural Research Center. Our aim was to discuss the findings and implications of emerging research on climate change. As I recall there was not yet a consensus among meteorologists and other scientists about interpreting observed changes, but by the early 1990s most scientists accepted that humans contributed significantly to global warming, and importantly, that it is a major risk to humanity and that it requires a managed, political response.


This emerging consensus resulted in the UN Convention on Climate Change in 1992, which led to the Kyoto Protocol, adopted in 1997 and signed by many nations, including the US in 1998 under Clinton but not ratified by the Senate. I was part of a White House taskforce that initiated research and education efforts that attempted to lead to ratification by the US senate. We organized workshops in Washington and elsewhere, met with staffers, legislators, lobbyists, and experts. Through these, I realized that representatives opposed Kyoto not because they didn’t believe in climate change, but because it is against the immediate self-interest of their voters. Most representatives and staffers recognized the key point that climate change poses risks to society but they felt that their constituents would not want to pay the price of mitigation. Furthermore, for representatives from some regions (e.g. the Dakotas) global warming seems like climate improvement. A key feature of the Kyoto Protocol was that developed countries would reduce emissions since they contribute a greater share to GHG emissions and subsidize reductions by developing countries (they still need to grow).

I knew of very few scientists that were skeptics (their number has declined over time), and some people denied climate change because of religious beliefs. One strategic approach of politicians who didn’t want the US and developed countries to pay the lion’s share of mitigation was to assume the role of skeptics, or even deniers of climate change. But my impression is that many of the deniers are not ignorant and do believe in science, but they do not want to pay. Someone once summarized it as “they are not stupid they are mean.”  I would not go that far though – they are driven by short term self-interest. This is not a unique situation. For example, in retrospect we have found that much of the denial of the health effects of cigarettes by tobacco companies used the same logic.


My interpretation of some of the resistance to GMOs is similar. I was introduced to agricultural biotechnology in the late 1980s, as some of the early researchers were on campus and I knew some of them. I worked on pesticides and realized that chemical pesticides provide significant value but are costly both economically and environmentally. Development of new crop varieties, by various means (including use of radiation to generate mutations) has been an effective way to develop pest and disease control. I knew that some of the developers of new pest controlling traits aimed to reduce or replace chemical pesticides and even expand the tools of organic agriculture. They also have other goals, such as reducing dependence on fertilizers (i.e., by enhancing nitrogen fixation), improving nutritional content of food, etc. I appreciate that biotechnology relies on basic understandings of processes inside the plant. I expect, as many others, that this knowledge and its applications will improve over time as we will have more knowledge and improved tools which will lead to more sustainable diverse and efficient agriculture, allowing to improve human well-being and environmental health.

However, understandable and exaggerated concern by activists has led to excessive and costly regulations that gave major companies like Monsanto an edge in developing new products. Companies that were threatened by new biotechnology products lobbied against it. I recall that in a hearing of the NRC committee on the future of pesticides, a presentation by a Bayer official stated that GMOs have limited potential to solve pesticide problems and they recommended larger investments in chemical pesticides. It is ironic because now Bayer is acquiring Monsanto, with its relative advantage in agricultural biotechnology. Herbicide manufacturers, like the American Cyanamid Company, were affected negatively by RoundUp Ready varieties. Most of the chemical companies that were negatively affected by biotechnology were European, and Monsanto, who kept tight control of IPR, was American, and that was one of the self-interest drivers to European opposition to biotechnology. And I suspect that it even led to implicit partnerships between environmental groups and companies. There are many other political economic reasons for opposing GMOs in Europe. The negative attitude towards GMOs spilled over to some of the public and increased the political power of the opposition. They also realized that by picketing near retailers, they could reduce the spread of the technology. This led to severe restriction on the use of GMOs in Europe, and utilization of the technology around the world. Even worse, it led to heavy restriction of the use of GMOs in developing countries, contributing to malnutrition in Africa and blindness in South Asia, among other problems. The recent letter by many Nobel Laureates and scientists bring these points home. This letter implicitly supports my argument that some opposition to GMOs doesn’t reflect ignorance about the benefit but rather self-interest of various groups. It is ironic that the potential of transgenics to contribute to adaptation to climate change has been ignored by the IPCC, which I believe reflects political economic considerations.


If self-interest plays an important role in the denial of climate change and opposition to GMOs, what can we do about it? First, we shouldn’t give up on the power of persuasion and information. We need to continue research documenting the likelihood and impact of climate change, and the benefits of GMOs and the costs of opposing it. The technology needs to be delinked from Monsanto and other companies. While they possess intellectual property rights on certain varieties and technical knowhow, they do not own this plant breeding technology. It is part of the shared human knowledge. Many politicians and people are on the fence about it, and might respond to additional information, which will affect the debate. It may be useful to connect real-world phenomenon to climate change and biotechnology delicately. For example, the strength and frequency of recent hurricanes may give people who oppose taking action against climate change to realize the cost of this strategy. Second, we need to recognize some of the reasons for the objection and accommodate them in developing policies. I am a big believer in carbon taxes to reduce GHG emissions. But once they are introduced, some of the proceeds should address coping with higher energy prices, especially by the poor. Transition from one form of energy to another may be associated with transfers that make the adjustment easier. In the case of biotechnology, developing and introducing traits that address major social concerns and clearly benefit consumers and the poor will make the technology more appealing.


I am not deluding myself, the denial of climate change and resistance to biotechnology will continue and society will pay the price. Our challenge is to develop research and educational efforts that will lead to faster change of mind, and better policies.


Links for pictures:

GMO picture

Climate change picture

New players and new tools in the bio-economy

Almost every year over the last 20 years, the International Consortium of Applied Bio-economy Research (ICABR), was meeting in beautiful Ravello in Italy to present new research results on the economics and policies of agricultural biotechnology, biofuels and the environment.

We enjoyed the wonderful views and food of the Amalfi Coast, and the meetings inspired publications and useful policy ideas, and led to lasting friendship. This year, we moved the ICABR meeting to Berkeley. We held them in the elegant Berkeley City Club to maintain the Ravello standard and we had a wonderful conference dinner on the San Francisco Bay.

[1]Our theme this year was “New Players and New Tools in the Bioeconomy,” and Berkeley was an appropriate location being the best place for gene-editing technology CRISPR and many synthetic biology innovations. Indeed, three leading Berkeley researchers provided an overview of frontier discoveries.

Much of the emphasis was on gene editing, which is easier to perform and much more difficult to detect than transgenic technologies. The technology is still in infancy and it is likely to be refined and improved, but its growth shouldn’t be impeded by the excessive regulations. Some of the presentations in the conference suggest that thousands of lives and millions of dollars will be lost under excessive regulation of transgenic technologies.

Brian Staskawicz reported on new genome editing strategies to (1) produce resistance to cassava brown streak virus, (2) protect against Downy mildew and other tomato diseases, (3) control severe fungal diseases in wheat and (4) find solutions to cacao swollen-shoot virus which threatens the cacao industry in West Africa.

Krishna Niyogi reported on discovery of transgenic traits that may increase crop yields by 15-30% by increasing the efficiency of utilizing solar energy by the plants. This discovery, once commercialized, has a potential to drastically increase the supply of food, reduce its price and reduce the environmental footprint of agriculture.

Jay Keasling reported that while the development of second generation biofuels has been slower than expected, the cost per gallon is declining over time and within a decade, cellulosic biofuels are expected to be competitive with conventional fuels and generate only 25% of the greenhouse gas emissions of gasoline per unit. This line of research is expected to lead to new aviation fuels and other fine chemicals. It is a part of larger research agenda on conversion of biomass to produce fuels. Biomass derivatives have the potential to replace liquid fuels, generate natural gas and provide feedstocks for power plants. The efficiency of conversion of biomass to fuels is low, the cost of conversion is high, and the assessment of impact of conversion of forest products to biofuels is challenging. The research on biofuels is in early stages. It is combining advances in microbiology, better understanding of forestry and ecology, and design of industrial processes and supply chains for renewable products.

In the past, much of the emphasis of ICABR was on crop biotechnology. But modern breeding has perhaps even more impact on animal agriculture, both with land and water animals. Alison Van Eenennaam emphasized that scientific progress leading to improved breeding of poultry and other livestock improves food security and contributes to environmental sustainability by reducing pressure on crop systems. Transgenics and gene editing are improvements on existing breeding varieties that improve the versatility and capability of scientists and farmers.

Perry Hackett showed how gene editing can improve the quality of livestock, in addition to reducing exposure to disease and accelerating animal growth. He emphasized that regulations are the key constraint for taking advantage of modern breeding which is much more accurate and precise than traditional breeding. New faster growing breeds of poultry, for example, makes protein available for hundreds of millions of people.

Another big challenge is to improve the availability of fish through aquaculture and mariculture. Faster growing fish in controlled environments combined with sound regulation will enable protection of natural fish populations from depletion and improve human nutrition.

Ronald Stotish from AquaBounty told the story of development of transgenic salmon that grows much faster than traditional salmon and can be commercially utilized within one season. It can be grown in ponds and it overcomes the transportation and freshness constraints and reduces the availability of fish in inland regions. After 25 years, transgenic salmon passed all the regulatory hurdles and is currently available in Canada. However, its future in the US is still uncertain.

The modern bio-economy takes advantage of both better genetic tools as well as improved information technologies. Giuseppe Novelli highlighted that we are approaching the era of personal treatment of humans as well as livestock and fields, by identifying precision technologies that enable monitoring performance at micro units and identifying challenges, for example, diseases and lack of nutrients. This allows for administering targeted solutions to improve livelihoods as well as improve food supplies and likely to reduce pressure on the environment and the challenge of climate change.

The development of this technology, of course, will take time and wouldn’t be immediately profitable. Therefore, continued support of public research will allow for new basic discoveries that can then be transferred to the private sector for commercialization. The recent past (in particular, the experience of medical biotechnology vs. agricultural biotechnology) also suggests that universities may aim to sell non-exclusive licenses to major process innovations, so that multiple companies can take advantage of these technologies rather than sell exclusive rights to few companies. The development of new technology will not be without glitches and therefore having a regulatory framework that both prevents mishaps and enable progress is essential.

The life sciences and other major sectors of the bio-economy are going through major transitions, including the proposed acquisition of Monsanto by Bayer, Syngenta by ChemChina, and Dupont by Dow Chemical. Robert Fraley of Monsanto suggested that the mergers are important, as companies need to develop integrated technologies to take advantage of new biological, chemical and informational knowledge.

Companies aim to develop complementary capabilities, achieve sufficient economies of scale and reduce transaction costs to develop better and cost-effective products. He suggested that we will end up with several major agribusiness companies that compete but share the rights to IPR to utilize advanced knowledge yet maintain unique offerings.

This perspective suggests that the structure of the agricultural life science sector is approaching the structure of major sectors like telecommunications, automobiles and pharmaceuticals with several major giants that control many of the new products complemented by numerous specialized local firms that serve specific needs of the consumers.

The discussion that followed suggested that there is a risk of abusing market power and therefore calls for effective regulatory oversight, which is a challenged to protect consumers and the environment while enabling the development and implementation of innovations and changes. Furthermore, it is important to have a structure that allows new innovations to be commercialized by startups which may challenge or lead to changes of the status quo.

Neal Gutterson from Pioneer suggested that informational and biological technologies are revolutionizing the agricultural input sector and will result in new products available to farmers and consumers. More powerful computing and improved microbiological methods, enable a much better understanding of the working of living systems. Combined with gene editing and other tools, the development of new solutions to address plant disease and improved productivity and performance is accelerated, but the capacity to bring it to market depend on regulatory constraints.

The performance of new biological solutions is enhanced by precision technologies that are able to adjust input use and crop treatment to differences at the field level. This will increase yields and reduce negative side effects of agricultural production, but it also requires a joint effort between seed companies and equipment manufacturers. These new developments are likely to occur first in developed countries, but it is essential to develop capacity to transfer them to developed countries that are more likely to be challenged by climate change and thus can gain more from these new capabilities.

Ronald Herring emphasized that the technological use patterns in agriculture are affected less by what is technically feasible but rather by regulatory and political considerations. Regulators enabled accelerated use of medical over agricultural GMOs due to urban bias and higher perceived benefit versus risk. Political economic considerations led to differences in regulation in the US versus Europe and Africa. Self-interest of activists and historical development fueled some of the resistance to GMOs.

But new technologies like CRISPR may have a cleaner slate. The introduction of CRISPR is likely to the emergence of new players and new regulatory environments. We may see smoother regulatory sailing, especially for gene editing applications that do not require transfer of gene between organisms.

The importance of strong public sector research capacity and openness to new technologies was emphasized by Dr. Lopes, the president of Brazilian Agricultural Research Corporation (Embrapa). Before the mid-20th century much of Brazil’s land wasn’t fertile but research by Embrapa and others transformed poor acidic soils into fertile lands and developed new crop and animal production system that are sustainable and appropriate to the climatic conditions of Brazil.

Brazil is now engaging in low to no tillage production methods and has permitted the use of transgenic crops. The use of Bt corn in particular has allowed Brazil to overcome the Fall Armyworm problem and enabled double cropping on much of the land. Brazil has become a powerhouse food producer. It is the largest producer of sugarcane, the second largest producer of soybeans and third largest producer of corn.

The presentations by Jennifer Thompson and Sylvester Oikehemphasized the waste and costs associated with excessive regulations. They noted that 500 million dollars were invested in development on transgenic varieties for sub-Saharan Africa, and that there are several crops in the pipeline. While the adoption of Bt corn in South Africa was successful and benefited the poor, regulations have blocked the adoption of other transgenic varieties. These varieties have been shown to reduce damage from pests and climatic changes in major staple crops (banana in Uganda, cowpea and corn in other countries,) but barring their use is costly in terms of human lives and income.

Pedro Sanchez, a World Food Prize winner, emphasized that improving productivity, through diversified approaches that include the use of fertilizers, better soil management, pest control and improved varieties are especially crucial for Africa. Africa has been making a lot of progress in terms of children’s education, ownership of appliances and livestock, and life expectancy. Yet yields are much lower than in other regions in the world. Changes in practices will require changes in policy, including reducing the cost of inputs, improving transportation and access to markets and infrastructure, farmers’ education and improved regulation.

Dr. Sanchez also highlighted the Fall Armyworm, a current pest that is spreading at unprecedented speed from East to West Africa, destroying maize fields, making it a clear and present danger for famine. He noted that it can be controlled by Bt corn varieties, as we saw in Brazil. However, Bt corn is banned in most of Africa today and now is the time to remove the ban and give it a chance.

The most rewarding aspect of being a member of ICABR is recognizing the improved capabilities of technologies based on modern biology and contributing to the challenge of developing policies that will allow us to take advantage of these technologies in a sustainable manner. This is an on-going process, but as we are challenged with addressing climate change, improving food security and preserving biodiversity, the value of the bioeconomy is becoming more transparent than ever.

[1] The conference was sponsored by the Giannini Foundation, Iowa State University, Innovative Genomics Institute, the College of Natural Resources of UC Berkeley, Monsanto and the Matthew Winkler Family Foundation. It was run by the International & Executive Programs of College of Natural Resources.