Agricultural Biotechnology in the European Union: Alternative Technologies and Economic Outcomes

All seed firms in six EU countries were surveyed in May 1999 to determine how seed development budgets were distributed across three crop development technologies and the effects of the type of technology in use on employment, sales and exports. The results indicate that an evaluation of the economic consequences of an emergent technology such as genetic engineering should both consider the effect of competitive alternative technologies and survey all firms within the sector, rather than focusing on a subset of high technology firms. Only about 10% of the combined 1999 research budget of European seed firms was spent on genetic engineering, although this should increase to about 15% by 2002. Alternative technologies to develop new plant varieties, such as conventional plant breeding and conventional breeding combined with techniques that were developed for genetic engineering, are considerably more important economically. In fact, there is no difference in expected employment and sales per development employee by the type of technology in use, while export rates are highest among firms that combine conventional plant breeding with advanced techniques.