GM Rice Adoption: Implications for Welfare and Poverty Alleviation

The first generation of genetically modified (GM) crop varieties sought to increase farmer profitability through cost reductions or higher yields. The next generation of GM food research is focusing also on breeding for attributes of interest to consumers, beginning with ‘golden rice’, which has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of poor people in developing countries. This paper analyses empirically the potential economic effects of adopting both types of innovation in Asia, including its impact on rice producers and other poor households. It does so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest the farm productivity gains (even if extended beyond GM rice to include those from adopting other GM grains and oilseeds) could be dwarfed by the welfare gains resulting from the potential health-enhancing attributes of golden rice, which would boost the productivity of unskilled workers among Asia’s poor.