Why Do Some Bt-Cotton Farmers in China Continue to Use High Levels of Pesticides?

China was the first developing country to introduce Bt cotton on a large scale. This paper provides an indepth economic analysis of Bt cotton production by small-scale farmers in China. Data were collected in 2002 in Linqing County, in Shandong Province and comprised a season-long cotton production monitoring with 150 farmers and complementary household interviews. For quality assessment, the Bt toxin concentration of the various Bt varieties used by the farmers was determined for each plot. All farmers were growing insect resistant Bt cotton varieties. Yet, they sprayed high amounts of chemical insecticides, out of which 40% were extremely or highly hazardous. The paper reviews methodological issues inherent to impact assessment of crop biotechnology and identifies market and institutional failure as possible reasons for continued high pesticide use. Using the damage function methodology the coefficients for both damage control inputs, i.e., Bt varieties (measured as toxin concentration), and insecticide quantity were not significantly different from zero. Results show that absence of enabling institutions and lack of farmer knowledge can considerably limit the benefits of Bt cotton for small-scale farmers. The paper points out the importance to include the institutional conditions in the evaluation of agricultural biotechnology in developing countries.     

Transgenic varieties and productivity of smallholder cotton farmers in China

Genetically modified cotton varieties have greater production efficiency for smallholders in farming communities in China. We also find that the adoption of Bacillus thuringiensis (Bt) cotton varieties leads to a significant decrease in the use of pesticides. Hence, we demonstrate that Bt cotton appears to be an agricultural technology that improves both production efficiency and the environment. In terms of policies, our findings suggest that the government should investigate whether or not they should make additional investments to spread Bt to other cotton regions and to other crops.     

A Question of Integrity: Variants of Bt Cotton,Pesticides and Productivity in Pakistan

Bt cotton remains one of the most widely grown biotech crops among smallholder farmers in lower income countries, and numerous studies attest to its advantages. However, the effectiveness of Bt toxin, which depends on many technical constraints, is heterogeneous. In Pakistan, the diffusion of Bt cotton occurred despite a weak regulatory system and without seed quality control; whether or not many varieties sold as Bt are in fact Bt is also questionable. We utilise nationally representative sample data to test the effects of Bt cotton use on productivity. Unlike previous studies, we invoke several indicators of Bt identity: variety name, official approval status, farmer belief, laboratory tests of Bt presence in plant tissue, and biophysical assays measuring Bt effectiveness. Only farmer belief affects cotton productivity in the standard production model, which does not treat Bt appropriately as damage‐abating. In the damage control framework, all Bt indicators reduce damage from pests. Biophysical indicators have the largest effect and official approval has the weakest. Findings have implications for impact measurement. For policy‐makers, they suggest the need, on ethical and productivity grounds, to improve variety information and monitor variety integrity closer to point of sale.     

Ecosystem impacts of pesticide reductions through Bt cotton adoption

This article examines the ecosystem impacts of transgenic Bt cotton technology resulting from reduced chemical pesticide use. Employing unique panel data from smallholder farmers in India, negative environmental and health effects of pesticide use are quantified with the environmental impact quotient (EIQ), with and without Bt technology. An environmentally sensitive dynamic production function is estimated, treating the environmental risk of pesticide toxicity as an undesirable output in the production process. Negative externalities are significantly lower in Bt than in conventional cotton. The reduction in EIQ through Bt technology adoption has increased from 39 per cent during 2002–2004 to 68 per cent during 2006–2008. Bt adoption has also contributed to higher environmental efficiency. Environmental efficiency is influenced by the quality of Bt technology: high‐quality Bt seeds are associated with higher environmental efficiency than lower‐quality seeds.     

Bias from Farmer Self‐Selection in Genetically Modified Crop Productivity Estimates: Evidence from Indian Data

In the continuing debate over the impact of genetically modified (GM) crops on farmers of developing countries, it is important to accurately measure magnitudes such as farm‐level yield gains from GM crop adoption. Yet most farm‐level studies in the literature do not control for farmer self‐selection, a potentially important source of bias in such estimates. We use farm‐level panel data from Indian cotton farmers to investigate the yield effect of GM insect‐resistant cotton. We explicitly take into account the fact that the choice of crop variety is an endogenous variable which might lead to bias from self‐selection. A production function is estimated using a fixed‐effects model to control for selection bias. Our results show that efficient farmers adopt Bacillus thuringiensis (Bt) cotton at a higher rate than their less efficient peers. This suggests that cross‐sectional estimates of the yield effect of Bt cotton, which do not control for self‐selection effects, are likely to be biased upwards. However, after controlling for selection bias, we still find that there is a significant positive yield effect from adoption of Bt cotton that more than offsets the additional cost of Bt seed.     

Bt Cotton,Pesticide Use and Environmental Efficiency in Pakistan

There is a broad literature on the impact of Bt cotton adoption in different countries, but few studies have explicitly looked at environmental and health effects from an economic perspective. We analyse the impact of Bt cotton on environmental efficiency in Pakistan, using farm survey data and a doubly heteroskedastic stochastic production function framework. Negative environmental and health effects of chemical pesticide use are quantified with the environmental impact quotient. Bt‐adopting farms have higher cotton yields, while using lower pesticide quantities and causing less environmental damage. Bt farms are both technically and environmentally more efficient than non‐Bt farms. Bt adoption increases environmental efficiency by 37%. Achieving the same reduction in negative environmental and health impact without Bt would cost conventional cotton farmers US$ 54 per acre in terms of foregone yields and revenues (7% of total revenues). Extrapolating this shadow price of the technology's health and environmental benefits to the total Bt cotton area in Pakistan results in an aggregate value of US$ 370 million. These benefits are in addition to the profit gains for Bt‐adopting farmers. Our results suggest that Bt technology can contribute to sustainable agricultural development.     

The Sustainability of the Farm‐level Impact of Bt Cotton in China

The short‐run impact of Bt cotton adoption has been well documented; however, the sustainability of the impact remains unclear. In particular, pest resistance build‐up and secondary pest outbreaks have caused concern regarding the sustainability of this benefit. This paper analyses the effects and impact dynamics of Bt cotton adoption in China. Using six unique waves of panel data collected between 1999 and 2007, we show that the benefits of Bt cotton continue 10 years after it has been commercialised, albeit with evidence of a decline in the benefit since the early adoption period. Importantly, we also show that the benefit has been shared by both Bt and non‐Bt cotton adopters.     

美国2008新农业法案中的棉花补贴政策及其启示

本文分析了美国2002农业法案框架下棉花补贴政策的实施情况,考察了美国2008新农业法案中棉花补贴政策的改革内容。研究表明,美国的巨额棉花补贴显著地提高了棉花农场的收益,促进了棉花生产,但同时也有负面影响。美国2008新农业法案增添了新的补贴政策,其实质在于维护和提高美国棉花的国际竞争力。     

Valuing financial,health, and environmental benefits of Bt cotton in Pakistan

Data from a farm survey and choice experiment are used to value the benefits of Bt cotton in Pakistan. Unlike previous research on the economic impacts of Bt, which mostly concentrated on financial benefits in terms of gross margins, we also quantify and monetize health and environmental benefits associated with technology adoption. Due to lower chemical pesticide use on Bt cotton plots, there are significant health advantages in terms of fewer incidents of acute pesticide poisoning, and environmental advantages in terms of higher farmland biodiversity and lower soil and groundwater contamination. Farmers themselves value these positive effects at US$ 79 per acre, of which half is attributable to health and the other half to environmental improvements. Adding average gross margin gains of US$ 204 results in aggregate benefits of US$ 283 per acre, or US$ 1.8 billion for the total Bt cotton area in Pakistan.     

Managing Resistance Evolution in Two Pests to Two Toxins with Refugia

We use a regulatory model with resistance evolution in two pests to insecticidal Bt cotton and pyrethroids (a conventional insecticide) to examine non-Bt cotton (refuge) planting requirements designed to manage Bt-resistance evolution in the midsouth. Our analysis suggests that reduced refuge requirements would enhance producer profitability, sprayed refugia are more cost effective than unsprayed refugia, and producers would receive slightly higher returns under dynamic relative to static refuge policies. Pyrethroid susceptibility in one of the pests was a renewable resource, and toxin-mixture effects associated with pyrethroid use in Bt cotton were important considerations for midsouth refuge policies.     

Pesticide Productivity and Transgenic Cotton Technology: The South African Smallholder Case

This paper empirically investigates how the productivity of pesticide differs in Bt versus non‐Bt technology for South African cotton smallholders, and what the implications for pesticide use levels are in the two technologies. This is accomplished by applying a damage control framework to farm‐level data from Makhathini flats, KwaZulu‐Natal. Contrary to findings elsewhere, notably China, that farmers over‐use pesticides and that transgenic technology benefits farmers by enabling large reductions in pesticide use, the econometric evidence here indicates that non‐Bt smallholders in South Africa under‐use pesticide. Thus, the main potential contribution of the new technology is to enable them to realise lost productivity resulting from under‐use. By providing a natural substitute for pesticide, the Bt technology enables the smallholders to circumvent credit and labour constraints associated with pesticide application. Thus, the same technology that greatly reduces pesticide applications but only mildly affects yields, when used by large‐scale farmers in China and elsewhere, benefits South‐African smallholder farmers primarily via a yield‐enhancing effect.     

Adoption of Bt Cotton and Impact Variability: Insights from India

There is a growing body of literature about the impacts of Bacillus thuringiensis (Bt) cotton in developing countries. While many studies show remarkable benefits for farmers, there are also reports that question these results. Most previous studies consider impacts in deterministic terms, neglecting existing variability. Here we explain the main factors influencing the agronomic and economic outcomes. Apart from differences in pest pressure and patterns of pesticide use, germplasm effects can play an important role. Theoretical arguments are supported by empirical evidence from India. Better understanding of impact variability can help explain some of the paradoxes in the recent controversy over genetically modified crops.     

The Adoption of Genetically Modified Cotton and Poverty Reduction in Pakistan

This article employs a propensity score‐matching approach to examine the direct effects of adoption of Bacillus thuringiensis (Bt) cotton on yields, pesticide demand, household income and poverty, using cross‐sectional data from a survey of farmers in the Punjab province of Pakistan. Generally, the findings reveal that adoption of the new technology exerts a positive and significant impact on cotton yields, household income and poverty reduction, and a negative effect on the use of pesticides. The positive and significant impact of the technology on yields and household income is consistent with the potential role of new agricultural technology in directly reducing rural poverty through increased farm household income.     

Role of Tractors,Tubewells and Plant Breeding in Increasing Cropping Intensity in Pakistan's Punjab

Cropping intensity in the cotton-wheat areas of Pakistan's Punjab is well below its potential, and also significantly lower than in neighbouring areas of India's Punjab. Analysis of annual cropping intensity indicates that access to irrigation water is the major factor explaining differences in cropping intensity in a cross-section of farmers. Ownership of a tractor plays a lesser role in increasing cropping intensity, although official credit policy has emphasized tractorization over investments in tubewells. Analysis of season-specific cropping intensity also indicates that lack of appropriate varieties for double cropping also constrain cropping intensity. It is estimated that cropping intensity could be increased by at least 30% through policies directed at improving water supplies and by promoting research on earlier varieties of cotton, maize and oilseeds.     

Potential impacts of Bt eggplant on economic surplus and farmers' health in India

In this article, the potential impacts of Bt eggplant technology in Indian agriculture are analyzed. Several proprietary Bt hybrids are likely to be commercialized in the near future. Based on field trial data, it is shown that the technology can significantly reduce insecticide applications and increase effective yields. Comprehensive farm-survey data are used to project farm-level effects and future adoption rates. Simulations show that the aggregate economic surplus gains of Bt hybrids could be around US$108 million per year. Consumers will capture a large share of these gains, but farmers and the innovating company will benefit too. As the company has also shared its technology with the public sector, Bt open-pollinated varieties might become available with a certain time lag. This would make the technology more accessible, especially for resource-poor farmers, entailing further improvements in welfare and distribution effects. The wider implications of the private–public technology transfer are discussed. Furthermore, the potential benefits for farmers' health resulting from reduced insecticide applications are examined, using an econometric model and a cost-of-illness approach. These benefits are worth an additional $3–4 million per year, yet they constitute only a small fraction of the technology's environmental and health externalities. More research is needed for comprehensive impact analysis.     

Elasticity of demand for Australian cotton in Japan

Although a relatively small producer, Australia exports more than 90 per cent of its cotton production, making it the world's third largest cotton exporter in recent years. This means that export performance plays a major role in determining the profitability of the Australian cotton industry. The primary aim of this study was to determine the competitive position of Australian cotton in the Japanese market, based on the original non-linear Almost Ideal Demand System model using data from 1972 to 1998. The main findings are that the USA had a relatively strong market position and that Australia needs to improve its cost competitiveness and quality image to advance its market standing.     

Risk analysis of new maize technology in Zaire: a portfolio approach

Risk associated with the adoption of new maize technology and the impact of mandatory cotton production on traditional farmers in the Kasai Oriental Region of Zaire are evaluated within a portfolio context using a quadratic programming model. Seasonal net returns for farm plans including four levels of maize technology in combination with staple food crops are evaluated, with and without mandatory cotton production. The results indicate that cropping systems that include new maize technology are risk-efficient relative to local maize varieties while mandatory cotton production is not risk-efficient at the prevalent price and yield levels in the farming system.