Abstract
The paper analyses ex ante the potential economic effects of tissue culture biotechnology, which is being introduced into the Kenyan banana sector through an international collaborative project. The expected yield and income gains are sizable, because the pathogen-free banana planting material could substantially reduce the current crop losses induced by pests and diseases. However, using the technology is associated with relatively high set-up costs for farmers. This might discourage innovation adoption, especially for the smallholders. Lowering the price of tissue-culture plantlets could help to avoid undesired income distribution effects among the banana growers. Furthermore, community-based initiatives for local biotechnology dissemination could ameliorate the adoption conditions. The example demonstrates the great potential of biotechnology to contribute to welfare growth in developing countries. Yet public support is needed to make sure that certain disadvantaged groups are not excluded from the benefits.
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