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Understanding the Adoption of Cotton Biotechnologies in the US: Firm Level Evidence

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  • Suntornpithug, Pasu
  • Kalaitzandonakes, Nicholas G.
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    Abstract

    By most measures, adoption of first generation crop biotechnologies in the United States and elsewhere has been extremely fast. Yet, only modest research effort has been devoted to understanding why producers in different parts of the world have adopted these technologies at such rapid rates. In this paper, we analyze producer decisions on whether to adopt three separate cotton biotechnologies in the US and to what extent. We find that US cotton producers tend to choose bundles of conventional technologies, agrobiotechnologies and relevant agronomic practices out of many possible ones. Hence, their behavior is characterized by multiple simultaneous and interdependent adoption decisions. Furthermore, US cotton producers partially adopt one or more of the biotechnologies, probably, as a way of optimizing their use through “learning by doing†thereby incorporating complex dynamic considerations in their decision process. By most measures, adoption of first generation crop biotechnologies in the United States and elsewhere has been extremely fast. Yet, only modest research effort has been devoted to understanding why producers in different parts of the world have adopted these technologies at such rapid rates. In this paper, we analyze producer decisions on whether to adopt three separate cotton biotechnologies in the US and to what extent. We find that US cotton producers tend to choose bundles of conventional technologies, agrobiotechnologies and relevant agronomic practices out of many possible ones. Hence, their behavior is characterized by multiple simultaneous and interdependent adoption decisions. Furthermore, US cotton producers partially adopt one or more of the biotechnologies, probably, as a way of optimizing their use through “learning by doing†thereby incorporating complex dynamic considerations in their decision process.

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    File URL: http://purl.umn.edu/58281
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    Bibliographic Info

    Article provided by Greek Association of Agricultural Economists in its journal Agricultural Economics Review.

    Volume (Year): 10 (2009)
    Issue (Month): 1 (January)
    Pages:

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    Handle: RePEc:ags:aergaa:58281

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    Keywords: Industrial Organization;

    References

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    1. Bhavani Shankar & Colin Thirtle, 2005. "Pesticide Productivity and Transgenic Cotton Technology: The South African Smallholder Case," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(1), pages 97-116.
    2. Huang, Jikun & Hu, Ruifa & Rozelle, Scott & Qiao, Fangbin & Pray, Carl E., 2002. "Transgenic varieties and productivity of smallholder cotton farmers in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(3), September.
    3. Matin Qaim & Arjunan Subramanian & Gopal Naik & David Zilberman, 2006. "Adoption of Bt Cotton and Impact Variability: Insights from India," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(1), pages 48-58.
    4. Qaim, Matin & De Janvry, Alain, 2005. "Bt cotton and pesticide use in Argentina: economic and environmental effects," Environment and Development Economics, Cambridge University Press, vol. 10(02), pages 179-200, May.
    5. Marra, Michele C. & Hubbell, Bryan J. & Carlson, Gerald A., 2001. "Information Quality, Technology Depreciation, And Bt Cotton Adoption In The Southeast," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
    6. Pray, Carl & Ma, Danmeng & Huang, Jikun & Qiao, Fangbin, 2001. "Impact of Bt Cotton in China," World Development, Elsevier, vol. 29(5), pages 813-825, May.
    7. Payne, Tim & Fernandez-Cornejo, Jorge & Daberkow, Stan G., 2003. "Factors Affecting The Likelihood Of Corn Rootworm Bt Seed Adoption," 2003 Annual Meeting, July 13-16, 2003, Denver, Colorado 35983, Western Agricultural Economics Association.
    8. Jose B. Falck-Zepeda & Greg Traxler & Robert G. Nelson, 2000. "Rent creation and distribution from biotechnology innovations: The case of bt cotton and Herbicide-Tolerant soybeans in 1997," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 21-32.
    9. Huang, Jikun & Hu, Ruifa & Pray, Carl & Qiao, Fangbin & Rozelle, Scott, 2003. "Biotechnology as an alternative to chemical pesticides: a case study of Bt cotton in China," Agricultural Economics, Blackwell, vol. 29(1), pages 55-67, July.
    10. Alexander, Corinne E. & Fernandez-Cornejo, Jorge & Goodhue, Rachael E., 2003. "Effects of the GM Controversy on Iowa Corn-Soybean Farmers' Acreage Allocation Decisions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December.
    11. Just, Richard E & Zilberman, David, 1983. "Stochastic Structure, Farm Size and Technology Adoption in Developing Agriculture," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 307-28, July.
    12. Lisa A. Cameron, 1999. "The Importance of Learning in the Adoption of High-Yielding Variety Seeds," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 83-94.
    13. Jeffrey H. Dorfman, 1996. "Modeling Multiple Adoption Decisions in a Joint Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 547-557.
    14. Abadi Ghadim, Amir K. & Pannell, David J., 1999. "A conceptual framework of adoption of an agricultural innovation," Agricultural Economics, Blackwell, vol. 21(2), pages 145-154, October.
    15. José Benjamin Falck-Zepeda & Greg Traxler & Robert G. Nelson, 2000. "Surplus Distribution from the Introduction of a Biotechnology Innovation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 360-369.
    16. Richard Bennett & Stephen Morse & Yousouf Ismael, 2006. "The economic impact of genetically modified cotton on South African smallholders: Yield, profit and health effects," Journal of Development Studies, Taylor & Francis Journals, vol. 42(4), pages 662-677.
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