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.     

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.     

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.     

Cotton farmers’ willingness to pay for pest management services in northern Benin

This study was carried out to assess cotton farmers’ willingness to pay (WTP) for pest management services in northern Benin. Targeted staggered control (TSC) has been introduced to reduce pesticide use in cotton cropping and generate an estimated benefit of FCFA48,800 (€74.40) per cotton hectare accruing from increased productivity and reduced pesticide cost. However, TSC application requires extra time for pest identification and scouting, and its adoption remains low due to the lack of funding to boost farmers’ awareness and cover training costs. An interval regression model was used to analyze responses to a double‐bounded contingent valuation survey with data collected from 300 cotton farmers. The results showed that 87.3% of cotton farmers were willing to pay for TSC services. Annual WTP per cotton hectare was estimated at FCFA16,962 (€25.80), revealing an existing demand for TSC adoption. Respondents' WTP was driven by farm and socio‐economic characteristics. Financial mechanisms managed by farmers could thus potentially foster technology adoption, and in turn, generate economic and environmental benefits.     

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.     

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.     

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.     

Farm-Level Economic Performance of Genetically Modified Cotton in Maharashtra, India

A study of the commercial growing of Bacillus thuringiensis (Bt) cotton in India, compares the performance of over 9,000 Bt and non-Bt cotton farm plots in Maharashtra over the 2002 and 2003 seasons. Results show that since their commercial release in 2002, Bt cotton varieties have had a significant positive impact on average yields and on the economic performance of cotton growers. Regional variation showed that, in a very few areas, not all farmers had benefited from increased performance of Bt varieties.     

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.     

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.     

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.     

The Costs of Coexistence Measures for Genetically Modified Maize in Germany

We estimate the perceived costs of legal requirements (‘coexistence measures’) for growing genetically modified (GM) Bt maize in Germany using a choice experiment. The costs of the evaluated ex‐ante and ex‐post coexistence measures range from zero to more than €300 per measure and most are greater than the extra revenue the farmers in our survey expect from growing Bt maize or than estimates in the literature. The cost estimates for temporal separation, the highest in our evaluation, imply that the exclusion of this measure in Germany is justified. The costliest measures of the ones that are currently applied in Germany are joint and strict liability for all damages. Our results further show that neighbours do not cause a problem and opportunities for reducing costs through agreements with them exist. Finally, we find that farmers’ attitudes towards GM crops affect the probability of adoption of Bt maize. Our results imply that strict liability will deter the cultivation of Bt maize in Germany unless liability issues can be addressed through other means, for example, through neighbours agreements.     

Does IPM Have Staying Power? Revisiting a Potato‐producing Area Years After Formal Training Ended

Integrated pest management (IPM) potentially reduces pesticide use and costs of agricultural production. However, IPM is knowledge intensive and its spread may dissipate over time due to knowledge required for its effective implementation and to competing messages about pest control. We examine IPM spread and adoption several years after formal intensive IPM outreach efforts ceased in a potato‐producing region in Ecuador. We describe adoption patterns and sources of IPM knowledge in 2012 and compare them with patterns that existed when outreach ceased in 2003. Results show that IPM adoption continues in the area but with a lower proportion of farmers fully adopting all practices and a higher proportion adopting low to moderate levels as compared to 2003. Almost all potato farmers in the area use some IPM practices, reflecting a major increase in IPM use. Farmer‐to‐farmer spread has supplanted formal training and outreach mechanisms. IPM adoption significantly lowers pesticide use and saves production costs for adopters.     

Cooperative membership and adoption of green pest control practices: Insights from rice farmers

Reducing the use of chemical pesticide while preserving crop yield is a practical strategy that makes agricultural production economically, socially and environmentally sustainable. Although the adoption of green pest control practices can help achieve such a goal, its adoption rate remains quite low. This study explores whether membership in agricultural cooperatives improves smallholder farmers' adoption of green pest control practices, utilising farm-level data surveyed from rice farmers in China. To enrich our understanding, we also investigate how the adoption of green pest control practices mediates the effects of cooperative membership on chemical pesticide expenditures. An endogenous switching probit model and a bootstrap-based mediation method are employed to achieve these goals. The empirical results show that cooperative membership significantly increases the probability of adopting physical pest control practices (e.g. pest-killing lamps or sticky plate traps) and biological pest control practices (e.g. biopesticides) by 6% and 19%, respectively. Cooperative membership significantly reduces chemical pesticide expenditures through its mediation effect on improving the probability of adopting biological pest control practices. There is also a complementary relationship between physical and biological pest control practices in pest management of rice production. The adoption of physical pest control practices significantly increases rice yield, while the adoption of biological pest control practices does not.     

The Dynamics of Pest Resistance Management: The Case of Refuge Fields for Bt Crops

We examine the optimal time‐variant refuge policy to manage pest resistance to Bacillus thuringiensis (Bt) crops in a finite, discrete‐time horizon model. We identify analytically the intertemporal effects of refuge fields on the pest population and its susceptibility. The shape of the optimal refuge policy and whether or not pest susceptibility should be exhausted completely at the end of the time horizon depend crucially on the values of a cost premium of Bt seeds and the fitness cost of resistance (over mortality of resistant pests) and are addressed via numerical simulations. We demonstrate the importance of modeling the dynamics of the biological system accurately, of defining a diploid (and not haploid) biological model, and of using a discrete‐time (rather than continuous‐time) framework.     

Early adoption,experience, and farm performance of GM corn seeds

The current article explores the characteristics that distinguish early from late adopters of GM corn and measures the productivity impacts of early adoption, for a sample of farmers in Minnesota and Wisconsin. The results of the adoption analysis confirm that size, education as well as specialization are positively correlated with early adoption. In addition, these results also show that farms that are mostly worked by family labor but hire some off‐farm labor are more likely to adopt GM seeds earlier in the diffusion process. The productivity analysis demonstrates the superiority of stacked varieties. At the same time, we find no evidence of a direct impact of experience on yields. Given the previously documented impact of early adoption on the use of stacked varieties, we conclude that experience plays a role through the adoption of these new technologies but does not play a role in allowing the producer to use the technology more efficiently, once it has been adopted.     

Specification and Estimation of Production Functions Involving Damage Control Inputs: A Two-Stage, Semiparametric Approach

Productivity assessment of damage control inputs (such as pesticides) is complicated because their effect depends on the exposure to damage agents (such as pests). We discuss some open specification and estimation issues. The contribution is threefold. First, we elaborate the separability conditions for the damage control function and production function. Second, we employ a two-stage semiparametric technique to combine attractive features of both nonparametric and parametric approaches. Third, we model the interaction between pest exposure and damage control inputs by using slope dummies. An application to productivity analysis of small scale Bt cotton production in China illustrates the approach.