Ex-ante Evaluation of Biotechnology Innovations: the Case of Folate Biofortified Rice in China

In order to valorize novel biotechnology innovations, there is a need to evaluate ex-ante their market potential. A case in point is biofortification, i.e. the enhancement of the micronutrient content of staple crops through conventional or genetic breeding techniques. In a recent article in Nature Biotechnology, for example, De Steur et al. (2010) demonstrated the large potential consumer health benefits of folate biofortified rice as a means to reduce folate deficiency and Neural-Tube Defects. By focusing on a Chinese high-risk region of Neural-Tube Defects, the current study defines the potential cost-effectiveness of this genetically modified crop where the need to improve folate intake levels is highest. Building on the Disability-Adjusted Life Years (DALY) approach, both the potential health impacts and costs of its implementation are measured and benchmarked against similar innovations. The results show that this transgenic crop could be a highly cost-effective product innovation (US$ 120.34 - US$ 40.1 per DALY saved) to alleviate the large health burden of folate deficiency and reduce the prevalence of neural-tube birth defects. When compared with other biofortified crops and target regions, folate biofortified rice in China has a relatively high health impact and moderate cost-effectiveness. This research further supports the need for, and importance of ex-ante evaluation studies in order to adequately market and, thus, valorize biotechnology innovations. Although the cost-effectiveness analysis enables to illustrate the market potential of innovative agricultural biotechnology research, further research is required to address policy issues on transgenic biofortification, such as biosafety regulatory requirements.