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. 28