World Food Policy WFP Volume 4, No. 2, Spring 2018 | Page 32

World Food Policy
Yields of corn and cotton are
compared in Figure 1. The yields of cot-
ton in both countries increased when
GMO cotton was introduced from the
U.S. There is no obvious difference in
growth of corn yields despite more hy-
brid technology from MNCs in India.
Data on total factor roductivity in the
agricultural sector shows Indian pro-
ductivity growing much more rapidly
in after 2000 than in the decade before
2000. Chinese productivity growth is
slower after 2000 than before(Figure 2),
but FDI is likely to be very small factor
in these changes.
chinery industry with much less MNC
involvement, now makes up almost 12
percent of the world pesticide market
mainly selling generic glyphosate with
a big share going to Africa (Haggblade
et al. 2017).
5. Policy options and
future research
D
o the experiences of India and
China provide lessons for pol-
icy makers who want to in-
crease research and technology trans-
fer, reduce government expenditures,
increase the competitiveness of Chinese
and Indian firms, and improve farmers’
access to technology? The following
policy options seem to have some sup-
port from the literature.
Could allowing more FDI re-
duce the costs that governments, farm-
ers and consumers pay for agricultural
technology? The assumption of many
policy makers is that farmers will have
to pay higher prices for their inputs if
they come from MNCs and consum-
ers will end up paying higher prices for
agricultural products. They cite high
prices of hybrid seed or genetically
engineered seed. Numerous studies of
GM crops have shown that despite high
seed prices and technology fees, these
“expensive” technologies reduce farm-
er’s total costs and increase their profits
by lowering pesticide, labor and other
costs (Klümper and Qaim 2014).
1. Less restrictions on FDI and tech-
nology imports. This would mainly
affect the seed and biotech industry
in China but could also encourage
the input industry in India. To be
most effective FDI would need to
be combined with stronger IPRs
and less pressure for technology
transfer.
2. Better IPR enforcement would in-
crease investment in research and
technology transfer by MNCs, Indi-
an and Chinese firms without nec-
essarily threat of monopoly power.
Both Chinese and Indian agri-
cultural input industries have increased
their competitiveness in global markets
in recent years. In India the agricultural
machinery industry has taken over 19
percent of the global market with con-
siderable investments by MNCs (Table
2). Both Indian and MNCs are export-
ing machines to the Americas and the
Europe. The Chinese agricultural ma-
3. Strengthening SOEs is unlikely to
increase farmers’ access to technol-
ogy except the purchases of large
companies like Syngenta by SOEs
with government financial support
if it allows Syngenta to sell more of
its technology in China.
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