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Government intervention in new biotechnical developments often counterproductive

Government guidelines for biotechnology and genetically modified crops often lead to very high investment costs.

Source: Wageningen University

Prof Justus Wesseler, Professor of Agricultural Economics at Wageningen University

Prof Justus Wesseler, Professor of Agricultural Economics at Wageningen University

Reduced levels of product development and concentration in that industry sector then follow, as well as a reordering of research priorities and a tendency for R&D to move to countries where the regulations are less strict. This trend has even impeded efforts to improve sustainability where it applies to the environment and to public health, said Prof Justus Wesseler, Professor of Agricultural Economics at Wageningen University (NL).

Wesseler has recently carried out research into the circumstances surrounding the obstruction of the ‘Golden Rice’ project in India. This case illustrates how complex economic, social and political issues are in the introduction of new technologies.

Golden Rice is a variety of rice that is enriched with vitamin A. Research has shown that it is an extremely effective method of combating vitamin A deficiency in children in southern and south-eastern Asia. The research also demonstrated that this rice would not be damaging to the environment or to public health and that it would be significantly cheaper than the alternatives. Nevertheless, pressure groups mounted stiff resistance to the introduction.

Wesseler, together with his American colleague David Zilberman, calculated  the public health costs for India over a period of 10 years of not being able to introduce this variety of rice. He arrived at a total of 1.5 billion life-years for the whole of India, excluding any indirect health effects. During this 10-year period, this state of affairs has cost the country at least $1.7 billion (almost $200 million per year).

Bioeconomy

The bioeconomy, the topic on which Prof Wesseler is working, is high on the political agenda in Europe and the US these days. In addition, the bioeconomy is expanding rapidly because of scientific developments, globalisation and IT progress, explained the professor in his inaugural address Agriculture in the Bioeconomy: Economics and Politics.

At present, the total annual turnover in the European bioeconomy is €2 trillion. It provides employment for more than 22 million people, around nine percent of the European population.

The production and consumption of new products can have an impact on public health and/or the environment. Governments tend to use legislation or tax measures to deal with any expected deleterious effects. However, according to Wesseler, external effects do not always justify immediate government intervention, so the benefits should be investigated for each individual case.

Real-option model

The impact of external effects on the environment or on public health can of course be irreversible or even disastrous. That is why the EU and the UN support the precautionary principle – that priority is given, not to the advantages, but to being alert to any damaging effects. That could lead to a ban on new technology.

Wesseler believes that if that is the outcome of this particular way of interpreting the precautionary principle, it is too rigid, illogical and also counterproductive. He argues for a more realistic consideration of the benefits when comparing them with any potentially negative effects or the chance of irreparable and possibly disastrous developments. In addition he would like to see this realistic approach extended to all the types of decision-making that deal with uncertainties and irreversible effects. These could include anything from investments or patents to the impact of grants and taxes.

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