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.     

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.     

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.     

EU Food Safety Standards,Pesticide Use and Farm‐level Productivity: The Case of High‐value Crops in Kenya

This article provides an empirical analysis of the impact of European Union (EU) private food safety standards on pesticide use and farm‐level productivity among small‐scale vegetable producers in Kenya. We apply an extended three‐stage damage control production framework, accounting for multiple endogeneity problems, to farm‐level data collected from a random cross‐sectional sample of 539 small‐scale producers. Estimation results show that farmers producing vegetables for the domestic market use significantly lower quantities of pesticides than do export farmers. However, contrary to findings elsewhere, the econometric evidence here shows that both domestic and export‐oriented vegetable farmers in Kenya use pesticides at levels below the economic optimum. The results also show that the adoption of standards by export farmers does not have any significant impact on total pesticide use. However, adopter categories are distinguishable in terms of types of pesticide used, i.e. adopters use safer pesticides based on World Health Organization (WHO) classification. The third‐stage structural revenue model results demonstrate that adoption of standards has a positive and significant impact on revenue raised in vegetable production. Nevertheless, farmers producing for the export market are indistinguishable from those producing for the domestic farmers in terms of the total revenue earned from producing vegetables during the rainy season, on a ‘per acre’ basis. Although standards can potentially prevent resource‐poor smallholders from maintaining their position in the lucrative export markets, they can also result in positive changes in the production systems of those small‐scale farmers who adopt it, as shown by these results.     

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.     

From Circle of Poison to Circle of Virtue: Pesticides,Export Standards and Kenya’s Green Bean Farmers

In response to growing consumer concerns, developed‐country governments have reduced permissible pesticide residue levels in food. Many food retailers have developed even more stringent private food safety protocols relating to pesticide use, storage and disposal and passed them on to their suppliers. Exporters in developing countries enforce these developed‐country pesticide standards (DC‐PS) by subjecting farmers to close monitoring. This study explores the effects of enforcing compliance with DC‐PS on smallholder farmers’ pesticide‐related health costs. Results suggest that enforcing DC‐PS encourages farmers to use protection that lowers pesticide‐induced morbidity, hence reducing farmers’ health costs from pesticide exposure. The study concludes that there are health benefits to family farmers from complying with DC‐PS beyond the acknowledged income generation from selling fresh produce in premium export markets.     

Socio‐economic differentiation from a class‐analytic perspective: The case of smallholder tree‐crop farmers in Limpopo,South Africa

South African agrarian policy aims to integrate smallholder tree‐crop farmers into high‐end value chains with growth and employment potential, generally neglecting socio‐economic differentiation amongst them. This paper aims to analyse socio‐economic differentiation amongst tree‐crop farmers in Vhembe District, Limpopo, using a class‐based analysis based on livelihood diversification and accumulation. Cluster analysis of survey data and semi‐structured interviews reveals that most tree‐crop farmers engage in petty commodity production, internally differentiated by their combination of income sources and livelihood strategies. Farmers' ability to engage in accumulation and upward class mobility is generally severely constrained by limited access to capital. Agricultural diversification offers livelihood potential but limited possibility for accumulation, whereas salaried nonfarm work offers more promising prospects for accumulation but limited livelihood opportunities. A minority demonstrated characteristics of small‐scale capitalist farmers, internally differentiated by their reliance on salaried employment or agricultural production. The findings challenge the notion of an undifferentiated class of market‐oriented smallholders.     

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.     

The impact of coffee certification on small‐scale producers’ livelihoods: a case study from the Jimma Zone,Ethiopia

What is the impact of product certification on small‐scale farmers’ livelihoods? To what extent does the participation of Ethiopian small‐scale coffee farmers in certified local cooperative structures improve their socioeconomic situation? To answer these questions, this article employs household data of 249 coffee farmers from six different cooperatives collected in the Jimma zone of Southwestern Ethiopia in 2009. Findings show that the certification of coffee cooperatives has in total a low impact on small‐scale coffee producers’ livelihoods mainly due to (1) low productivity, (2) insignificant price premium, and (3) poor access to credit and information from the cooperative. Differences in production and organizational capacities between the local cooperatives are mirrored in the extent of the certification benefits for the smallholders. “Good” cooperatives have reaped the benefits of certification, whereas “bad” ones did not fare well. In this regard the “cooperative effect” overlies the “certification effect.”     

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.     

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.     

Farmers’ risk preferences and pesticide use decisions: evidence from field experiments in China

China faces health and environmental problems associated with the use of agricultural chemicals, including pesticides. While previous studies have found that risk aversion affects pesticide use in China, they have focused primarily on commercial cotton farmers. In this study, we consider the case of smaller, semisubsistence and subsistence farmers in a poor and landlocked province of China (Yunnan). We use a field experiment to measure risk aversion and collect detailed data on farm production and input use to specifically ask whether risk aversion affects pesticide use, and whether this effect differs for subsistence farmers producing exclusively for home consumption versus semisubsistence farmers who produce both for home and the market. We find that risk aversion significantly increases pesticide use, particularly for subsistence farmers and for market plots by semisubsistence farmers. Further, this effect of risk aversion significantly decreases with farm size for subsistence farmers, but not for semisubsistence farmers, implying that pesticide use may be used to ensure sufficient food supply for home consumption. Finally, we find barriers to the use of pesticides for subsistence farmers, both in terms of financial constraints and economies of scale. This finding implies that risk‐mitigation strategies, such as crop insurance, may not target food security concerns of subsistence farmers. Given these different motivations for pesticide use, policymakers may wish to consider effective tools to support rural food security for farmers in the poorer regions of China in order to decrease pesticide use.     

Selling Together: The Benefits of Cooperatives to Women Honey Producers in Ethiopia

Smallholder farmers in developing countries encounter multiple barriers in access to inputs and technology, which prevent them from reaping the benefits from market participation. Women farmers face additional constraints due to gender norms that further limit their engagement in productive activities. While collective action has been shown to improve access to markets and economic outcomes for farmers overall, the evidence on the effects of cooperative membership for women smallholders remains limited. We investigate empirically the economic benefits of collective action for women farmers in the honey sector in Ethiopia. Relying on a rich data set on women honey producers, both cooperative members and non‐members, we evaluate the effects of belonging to a cooperative on three outcome variables through coarsened exact matching and regression analysis. Our results indicate that cooperative membership significantly increases the market price and the production quantity and, while the average effect on the share of product marketed is statistically insignificant, significant differences emerge for women with given characteristics. These results are shown to be robust to a number of tests that address biases from selection on observables and unobservables. An analysis of the heterogeneous effects of household membership in multiple groups finds that membership of self‐help groups or farmer associations amplifies the positive outcomes from belonging to a formal cooperative. Finally, qualitative findings derived from the same communities indicate self‐reported improvements in agency and self‐esteem among women members, thus reinforcing the importance of the quantitative findings.     

Human health and pesticide use in Sub‐Saharan Africa

While pesticides–such as insecticides, fungicides, and herbicides–are often promoted as inputs that increase agricultural productivity by limiting a range of pre‐harvest losses, their use may have negative human health and labor productivity implications. We explore the relationship between pesticide use and the value of crop output at the plot level and a range of human health outcomes at the household level using large‐scale, nationally representative panel survey data from four Sub‐Saharan African countries where more than 10% of main season cultivators use pesticides. We find that pesticide use is strongly correlated with increased value of harvest, but is also correlated with higher costs associated with human illness, including increased health expenditures and time lost from work due to sickness in the recent past. We take these results as suggestive that the findings of more targeted studies are indeed generalizable beyond their original, purposively chosen samples.     

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.     

Perceptions and outlook on intercropping coffee with banana as an opportunity for smallholder coffee farmers in Uganda

Coffee and banana are important cash and food crops in Uganda and the surrounding East African highland region. Production is dominated by smallholders that have limited arable land and often coffee and banana are intercropped. No significant research and development efforts have been undertaken over the last few decades on this coffee/banana intercropping system. Because recent studies suggest that this system could be a practice with high benefits to the farmers, we decided to study the perceptions of stakeholders along the coffee value chain starting with farmers. Perception analysis based on open-ended interviews following interview guides revealed that a major limitation for the sustainability of this system was poor soil fertility conditions. Perceptions on the benefits of intercropping differed little among coffee actors; that is, banana intercropping provides additional food and income from smallholders’ limited land and helps farmers reduce risks related to drought, pest/disease attacks and coffee price volatility. However, farmers’ desire to minimize risks does not match the objective of stakeholders higher up the coffee value chain to maximize coffee production. Furthermore, research by public institutes, both national and international, is primarily organized for single crops and not systems. We conclude that the institutional setting of the coffee sector hampers the promotion of intercropping, despite the benefits for the farmer.     

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.