An Economic Assessment of Banana Genetic Improvement and ...

CHAPTER 6
A Trait-Based Model of the Potential Demand
for Transgenic Banana Cultivars in Uganda
Svetlana Edmeades and Melinda Smale
This chapter derives farmer demand for planting material from the demand for genetic
traits and cultivar attributes in an agricultural household model with missing markets,
building on the general model presented in Chapter 2. 1 Applied to the sample data described
in Chapter 2 and Appendix D, the econometric approach is used to explore several
issues of importance to national decisionmakers. We begin by identifying the determinants of
farmer demand for planting material of cooking banana cultivars that are candidate hosts for
insertion of pest and disease resistance by NARO. At the level of the individual farm household,
demand for planting material is defined by the decision to “adopt” (use) and the scale of
use (number of mats). We then use the fitted equation to generate three pieces of information.
First, we develop client prototypes by describing the characteristics of farm households with
high and low predicted demands for particular cultivars. This exercise illustrates how the
choice of host planting material for genetic transformation can have social consequences.
Second, we use the example of Nakitembe to estimate the total size of industry demand for
planting material of a genetically transformed host cultivar. Third, we simulate changes in
demand for planting material when resistance traits are inserted, with varying degrees of effectiveness,
and when other supporting public investments are made in extension, market infrastructure,
and education. The simulation demonstrates how the magnitude of the payoff to
research investment crucially depends on other types of investments. This point reiterates that,
as documented in other literature about agricultural innovations (see Chapter 1), seed-based
technical change depends not only on the release of an improved cultivar, but also on the
markets, information, and policies that enable its widespread adoption.
Theoretical Model
The trait-based model in this chapter (Edmeades 2003) derives the demand for planting material
in the decisionmaking framework of the agricultural household with imperfect markets
(Singh, Squire, and Strauss 1986). The conceptual framework draws from Lancaster’s theory
of consumer choice (1966) and models of demand for farm input and output characteristics
(Ladd and Martin 1976; Ladd and Suvannunt 1976). The model focuses on the demand for
planting material, or seed in the broad sense, including endemic farmers’ cultivars, cultivars
improved through crossing, and genetically engineered cultivars as special cases.
1
A more detailed version of this chapter was published in Agricultural Economics in 2006.
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