These are notpredictions of the future, nor are probabilities or likelihoods assigned to them. They were created to provoke thought over a wide range of possibilities, so no single scenario should be considered in isolation. Indeed, we can be relatively certain that when we look back a decade from now, none of the scenarios will have accurately represented what actually occurred in the interim. Nor do they represent the full range of conceivable outcomes.
However, they do demonstrate the sensitivity of agriculture and the food system to events that can tip the future in different ways, and, looked at together, provide an opportunity to extract additional knowledge about broader impacts into the future. Here, then, are three scenarios we have created, among the many that could be developed. We have entitled them “Rosy Future,” “Continental Islands,”, and “Biotech Goes Niche.” Using and adding to the list of certainties and uncertainties, you can build your own scenarios.
Because each of these scenarios has implications for farm income, consumers, the environment, trade, private investment, USDA agendas, and resources, we advise you to read these scenarios without making value judgments or picking a favorite. Instead, we advise you to consider the consequences of each if the scenario or some version thereof came to pass. After outlining the three scenarios, we will pose a series of specific questions that could help you work out some of the implications.
I. “Rosy Future”
By 2015, life science research delivered beyond anyone’s expectations. Like those involved in the information technology revolution, even those doing the research and investment were overwhelmed by the scale and speed of change. Among the new products were crops with increased yield, resistance to key stresses like drought, plants engineered for new energy uses, including production of biodiesel, and new food products that provide valuable health benefits. In addition, plants with various combinations of traits significantly increased the utility or impact of these new crops.
Agricultural biotechnology began being employed all over the world, not only in agricultural exporting countries. Research and development continued in the Western world and in those developing countries whose governments quickly recognized the opportunities and were able to provide an appropriate investment climate. European nations continued their development of new ag biotech uses for pharmaceutical, industrial, and energy products. European opposition to food uses decreased significantly as EU governments, non-governmental organizations, and consumers realized the value of increasing agricultural productivity on GDP and competitiveness.
More food could be produced on less land, which was fortunate because, as Chinese and Indian incomes rose, demand for animal feed exploded. Had the new transgenic products not come on line, meeting demand would have required bringing enormous amounts of new agricultural land under cultivation.
Farmers now faced a much more complex world with an even broader array of crop and seed variety options. Their acreage could now be used not just for food, feed, and fiber production, but also for chemical, pharmaceutical, and energy production. This meant that they could participate in, and had to understand and follow, a wider range of markets, financial instruments, and opportunities. Niche and small family farming became profitable because of the high value of some transgenic products grown on farms. Non-food uses for crops became increasingly economically important, but remained high value, low acre opportunities.
Overall farm and agribusiness income increased and there was ever less dependence on subsidies. Alternatives like converting biomass to energy meant there was now a floor price on grains. Why sell a bushel of corn for food or feed at the government loan rate if energy companies would pay more? In addition, because the increased number of agricultural biotechnology products and uses reduced the need for subsidies, trade wars became less of an issue.
An increasingly sophisticated and broad set of companies established partnerships with various segments of the agribusiness chain. Pharmaceutical companies used their new networks of seed producers to begin growing various medicines and vaccines. Some forms of animal husbandry became far more specialized, regulated, and profitable as areas like medical and materials production grew. Information, computing, and diagnostic companies became increasingly involved in this process. Energy companies began to invest in bio-based energy. Governments began permitting the establishment of carbon trading enterprises based on an increased focus on global warming. Farmers, particularly those using biotech products in no-till agriculture, began to capitalize on these new market opportunities.
As various conglomerates began to integrate technologies and outlets, mergers and acquisitions blossomed on a very broad scale. Bioinformation companies merged with financial companies. Mergers between seed companies and chemical-pharmaceutical companies continued. Some energy companies began developing broad portfolios of alliances and acquisitions outside the traditional energy business.
Companies began seeing more and more diverse business opportunities. Even with increased global competition, for U.S. companies the overall opportunity “pie” was growing faster than the increase in competition.
Some medicine-producing goats were worth hundreds of thousands of dollars and were cared for as carefully as human patients in a hospital. Highly specialized animal products for xenotransplantation6 merged the most sophisticated laboratories and boutique farms.
Within the food system, a series of niche markets serving different “nutriceutical” needs provided farmers with far more specialized markets and opportunities. Foods engineered to help people lose weight or ward off certain diseases exploded off supermarket shelves. This created consumer pull for a wide range of new farm products and a much broader acceptance of biotechnology. Further integrating the grocery industry and food processors with projected crop needs became ever more important. As niche crops became more important, often a farmer’s whole crop was sold prior to planting, as long as it met strict quality criteria. Some environmentalists throughout the developed world continued to worry that the increasing rate of new product introductions could lead to a serious accident, but so far this had not occurred.
Farmers adapting to the new technologies became more profitable regardless of farm size. Those who did not adapt had a harder time and were replaced by more technically sophisticated producers. For high value crops, production became highly vertically integrated, continuing existing trends in that direction.
Most of the innovations took place in major crops, but some improvements to minor crops took place and began to change cropping patterns in the U.S. and elsewhere.
Maintaining the integrity and traceability of the streams of products coming off the farm and into various supply chains including chemicals, energy, cosmetic, and food became ever more important. This meant that much of the production during the first years of this broad biotech revolution continued within the US market and expanded to other agricultural exporting countries. Countries with a long history of technologically intensive, greenhouse-based production, became formidable competitors for specific products. Higher margins and a need for tight control over all aspects of the food chain made the idea of moving production of the specialty applications of crop biotechnology to the developing world less attractive for U.S. companies.
Not all was positive however: changes in global consumption and production patterns – increased global demand for animal feed, increased demand for energy uses and continued population growth and urbanization - created its own set of pressures. As farmers increasingly used commodity crops for other uses besides food, commodity prices rose and there was increased clamor to bring ever more land under cultivation. Environmentalists throughout the developed world lobbied to limit this trend. Biotechnology was utilized as a tool to increase the efficient use of agricultural land. There was continuing concern over long-term environmental degradation resulting from the exclusive focus on output optimization. However, the overwhelming impact of biotech crops grown on large areas was to reduce the environmental impacts of agriculture. Less overall water, fuel, chemical pesticides and packaging were used compared to non-biotech agriculture, and soil erosion problems were reduced.
Governments adopted compatible regulatory systems, essential for development of, and trade in, new products. However, the poorest developing countries found themselves ever more marginalized. Much of the benefits and profits of this revolution went to those who had done the biotechnological research and provided sophisticated services. There was increased talk and concern of a life sciences divide as well as the digital divide.
While the increased number of new patented seeds, animals, and techniques reflected a broader acceptance of the importance of intellectual property, intellectual property remained a significant battleground between developed and developing countries. However, a few developing countries saw the future and joined the developed world with respect to these techniques. Some countries also began producing generic versions of popular products.
II. “Continental Islands”
New products of biotechnology continued to be developed and introduced into the marketplace. Farmers in a number of countries in the Americas and Asia continued to adopt biotech crops, based on significant positive economic impacts. Many of these new products were plant varieties with two or more new traits in a single variety, providing additional value for growers, and some new agronomic and consumer focused products have come to the market. Development of transgenic animals continued for niche applications, including xenotransplantation, but not for food uses. Given smaller markets, little investment was made in minor crop biotechnology.
The process for bringing transgenic agricultural products through the regulatory approval process to commercialization remained efficient in the U.S., Canada, and Argentina, and China, Mexico and Brazil joined their ranks. In some other countries with much slower regulatory processes, such as India, Australia, the European Union, and some African countries, additional products were only commercialized slowly. In other countries the approval processes remained non-existent or cumbersome.
Despite continued efforts, no international harmonization of regulations occurred and restrictive regulations continued to serve as trade barriers. Different countries or regions had varying regulatory systems and procedures. Labeling of biotechnology products varied by country and was non-standard.
The United States continued to be a major producer and distributor of biotechnology products. Other major growers and producers were Canada, Argentina, China, India, Brazil, and South Africa. One or more of these countries commercialized a major transgenic crop not commercialized in the U.S. Asia and the rest of Africa remained divided, with some countries accepting or promoting the technology, and others rejecting it (even as food aid).
The EU (including the accession countries) continued not to accept food products in general, though they accepted products for feed uses and approved some products for field testing and importation. Despite the approvals, though, no products were actually tested (except for very small-scale field trials) nor were many food products imported and offered for sale.
Commodities destined for food use and those for feed use continued to be handled differently in different continents or regions.
The impacts seen in the farming community varied from farmer to farmer, depending on whether their principal markets were domestic or export. The domestic market continued to utilize transgenic products. Some exporters continued to test for their absence since non-transgenic certified products could be sold at a premium to food manufacturers wanting to avoid labeling and other compliance issues. Premium contracts with growers were often used to meet these non-transgenic crop needs.
Along the agricultural food chain, the pattern was similar. Products containing ingredients derived from transgenic varieties were acceptable and widely used for domestic markets, while food products for export largely sourced for non-transgenic-derived ingredients. Multinational food companies also used non-transgenic ingredient sources where there was mandatory biotech food labeling, or used non-transgenic ingredient sourcing globally. Since much of the biotech corn, soy and cotton produced in the U.S. was destined for domestic markets or markets with approval of biotech crops, farmers continued to plant large amounts of biotech corn, cotton and soybeans and realize the associated economic returns. With an increased demand for ethanol, the demand for corn in the U.S. continued to increase, creating additional growth and consumption of biotech corn.
Research and development activities by multinational technology providers and developers focused more on basic research since the market for new transgenic products was limited, and there was more emphasis on leveraging genetic understanding into targeted breeding programs, etc. There was continued consolidation among technology providers, but little additional capital for expansion. Research and development activities by public universities now focused on basic research.
Consumers worldwide remained divided and/or ambivalent. Those in the U.S. and most of the Americas continued to accept products containing ingredients derived from the first generation of transgenic plants without special labeling. Those in the EU and some other parts of the world were either opposed to the technology (and supported mandatory labeling as a means of product avoidance) or were ambivalent. Consumers in other countries varied in their sentiments, depending on the views of their governments. The situation was most confused in Africa, given the dire need for food and given confusion regarding trade-related issues, especially with the EU.
There continued to be no negative health implications from transgenic-derived food products. Continued positive environmental impacts were realized in the U.S., particularly with respect to decreases in pesticide use and increases in conservation tillage.
International trade remained complicated given regulatory and acceptance differences. USDA, the State Department and other agencies continued to expend a significant amount of resources in fighting for biotechnology in the trade arena. Several other countries opposing the spread of the technology devoted comparable resources on the opposite side.
III. “Biotech goes niche”
After a splashy debut, genetically engineered crops products did not turn out to be major components of world commodity agriculture, but continued to thrive in important niche markets. The first two products of crop biotechnology--- Bt and herbicide tolerance products, widely adopted in the U.S., Canada, and South America, were not followed by other blockbuster products. Some major agricultural regions continued to reject genetically engineered crops.
No transgenic varieties of wheat were ever commercialized. None of the promised new traits—drought tolerance or cold tolerance—panned out for corn, soy, cotton, or canola. The first generation of adopters remained enthusiastic about herbicide-tolerant and insect resistant (Bt) crops but was gradually forced to turn away from them because of lack of global acceptance and increased use of marker assisted technologies for development of improved germplasm in conventional seeds, but not “transgenic crops”.
The public did not accept the genetic engineering of animals for food uses, and given the technical difficulties associated with many of the modifications, there was no enthusiasm for commercializing genetically engineered animals for those uses. However, applications involving genetic engineering of animals for producing pharmaceuticals or tissues for xenotransplantation came on line.
The reasons for the fading away of transgenic products were complicated. First, the technology never overcame the barriers inherent in engineering useful traits involving multiple genes. Research costs remained high. The few products with claims to improved nutrition were never attractive enough to enjoy large price premiums. Without those price premiums it was hard to justify big investments in continued research and identity preservation schemes.
In the regulatory arena, mandatory food safety approval and transboundary movement requirements continued to increase as did the cost and time it took to go to market. There were some efforts amongst countries to harmonize requirements. However, the majority of countries developed their own regulatory systems based on local needs and market protection preferences. Consequently product developers had to deal with multiple diverse regulatory schemes in order to do international business. This was further complicated by farm-to-table traceability and labeling requirements and country-of-destination requirements imposed by the Cartagena Protocol on Biosafety and several other international treaties. Frequent detections of transgenes in both traditional and other transgenic crops posed interrelated policy challenges. Attempts to address those challenges with new approaches to adventitious presence, approved detection and sampling methods, and what constitutes a “novel” product never met with consensus.
Another part of the equation was consumer resistance. Consumers in the United States continued to be generally receptive or somewhat indifferent to transgenic crops, but consumers in many other countries remained opposed to the technology. In the increasingly interconnected global marketplace, international retail companies simply found it easier to source non-transgenic material. There was no consumer demand for genetically engineered products, so there seemed little reason for food companies to take on the extra burden of selling “GMOs” to customers who did not want them.
Food manufacturers, fast-food chains and mega-retail enterprises began specifying non-transgenic-sourced food ingredients and raw materials for their branded products. Many consumers failed to recognize potential benefits of the technology and questioned whether benefits from transgenic commodities were being directed to big business. Business economics demonstrated that new transgenics would only be profitable in the specialty “niche” market. Concerns grew stronger over the potential discovery of a pharmaceutical gene product in a food product. Although scientists said it did not present any human health risks, customers nevertheless tended to reach for other food options.
Although interest in new commodity transgenics faded, agricultural innovation continued. On the scientific front the complete genomes of the major food, feed and oil crops were made available through public databases to scientists, researchers, breeders and others in developed and developing economies. There was welcome progress in the ability to translate sequence information into agricultural improvements. Agricultural advances were facilitated by exponential growth of data delivered from various technologies, such as genomics, proteomics, gene expression assays, and bioinformatics.
Some innovations resulted from marker-assisted or traditional breeding. While the fruits of genomics were a while in coming, the mountains of data were eventually digested. Because traditional breeding could more readily accomplish selection for interacting sets of genes, the new products wound up providing a broader variety of traits than did genetic engineering. In addition, because they were traditionally bred, the new products could be brought to market with little regulatory oversight. However, some problematic new diseases, for which enhanced traditional approaches were not effective, emerged. Except for some groups focused on patenting and monopoly concerns, most of the new, innovative products escaped consumer opposition.
Some innovations depended on new non-biotech systems of agriculture and included new ways of enriching soil, protecting against pests and increasing yields. Many of these ideas were generated in the research done in support of organic and other new systems made possible by research funds diverted from investment in biotechnology products. With steady increases and double digit annual growth, these new food production systems rose to constitute 6 percent of total food production. Several large multinational food companies launched new product lines. Marker-assisted breeding programs became integrated with farmer and producer needs and were welcomed into these new systems.
Scientists did not abandon genetic engineering, but aimed their research at niche markets that generally did not involve the food system. The new genetically engineered products included a few energy crops, although most energy crops were produced using traditional or marker-assisted breeding. The production of pharmaceuticals in transgenic non-food crops also became a niche market. Two genetically engineered foods, for which developers were able to make compelling claims for prevention of heart disease and Alzheimer’s, performed well in clinical trials and were expected to be commercialized soon. Companies redirected their efforts onto new niche markets, like energy-based or pharmaceutical products. These markets offered viable survival strategies for seed and technology companies.
The trade arena continued to be dynamic. China emerged as both a market and a competitor to the U.S. in the global commodity arena—huge and unpredictable. The demand for commodity products increased but so did global agricultural production as new areas in South America and Central Europe came on line. The result was an unpredictable seesaw of prices. There was growing concern globally that farmers in China were benefiting from the widespread use of biotechnology products in China without any regulatory oversight in the international markets. Some U.S. biotech companies transferred their research and development efforts to China and other developing countries with more open trade policies and greater food security needs.
With regard to farm subsidies, deadlines for agreed-upon reductions in payments were not met. National and regional trade restrictions continued, as did high tariffs. Through two election cycles since the last Farm Bill, both the U.S. farm policy and the European Common Agriculture Policy remained surplus-friendly. A number of developing economies led by several small Asian and African countries continued to fight against subsidies in the WTO round of discussions by demanding that subsidies and protective tariffs be eliminated and markets opened to products grown in these developing economies. Global trade in agricultural products continued to be characterized by a maze of national/regional phytosanitary standards, but the adoption of genetic engineering technology faded as a factor in global competition..
Developing countries—the poorest countries of the world—remained poor, because the world community remained unable to help them develop the infrastructure, access to markets, and targeted agricultural research investments that would result in an agriculture that could increase incomes and exports.
Without a barrage of new transgenic products on the horizon, the State Department and USDA and other agencies did not need to expend resources in fighting for market access for commodities and other agricultural products generated through biotechnology in the trade arena, in Codex Alimentarius and in other arenas. Overall, the drop-off in introduction of new transgenic commodity crops decreased the U.S. policy focus on international acceptance of those crops, and consequently lessened global agricultural trade frictions. This freed up some resources for other purposes, including assistance to poor countries.
A decrease in biotechnology crop plantings resulted in a return to agricultural farm practices based on conventional crops. This resulted in an increase in overall volumes of insecticides and herbicides used to protect crops, and an increase in the use of energy and water in the manufacture, transport and application of these products. Additionally, soil erosion began to increase as more farmers used tillage in their fields.
You have now visited three very different worlds. Here are a few questions you might wish to consider for these and other scenarios you might envision. These questions are designed to provoke discussion and help prepare for an uncertain future.
What is the economic impact of the scenario?
Farmer income and rural development
What is the impact of the scenario on the natural environment?
3. What are the implications of the scenario for USDA?
Trade and promotion
Impacts on other government agency resources that could affect USDA
What are the implications of the scenario for consumers and for public acceptance?
What are the implications of the scenario for addressing global food sufficiency/food security?
1 Biotechnology is a range of tools, including traditional breeding techniques, that: (1) alter living organisms (or part of organisms) to make or modify products; (2) improve plants or animals; or (3) develop microorganisms for specific uses. Much of the discussion of biotechnology in this report focuses on “products of modern biotechnology” and “transgenic (or genetically engineered) organisms” (or their products), namely organisms produced through genetic engineering or recombinant DNA processes, and products derived from them.
2 Several authors have detailed the methodology of scenario planning, including Peter Schwartz, in “The Art of the Long View.”
3 Although population growth has slowed somewhat over the past decade it continues to expand in absolute numbers, particularly in the developing world. http://www.census.gov/ipc/prod/wp02/wp-02001.pdf
6 “Xenotransplantation” refers to transplantation of organs derived from other animal species for therapeutic purposes. As of 2004, there is active biotechnology research to “humanize” animal organs to make them less likely to be rejected by organ recipients.