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.     

Potential Conflict and Inefficiencies Arising in Agri‐environmental Management

We characterise the welfare implications of uncoordinated policy decisions in the presence of multiple externalities, illustrated with an aquifer. We concentrate on the problem of coordination that can occur when distinct agricultural and water authorities implement their respective policies (to optimise food production and groundwater use) with environmental concerns in mind. We represent this problem as an open‐loop Nash game, which compares the game‐theoretical solution to a centrally planned solution. We show that the inefficiencies arise from differences in the account taken of relevant costs by different authorities. We demonstrate that the magnitude of the inefficiency generated by the absence of coordination of our authorities varies depending on the weights put on environmental benefits by each authority, and discuss the implications of analysis for future research and policy.