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Betting on cotton: Potential payoffs and economic risks of adopting transgenic cotton in West Africa

Author

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  • Falck-Zepeda, Jose Benjamin
  • Horna, J. Daniela
  • Smale, Melinda

Abstract

Cotton is the largest source of export receipts in several West African nations where yields are declining and pesticide use is rising. Although there may be payoffs to introducing genetically modified Bt (Bacillus thurigiensis) cotton, limited information is available to predict its potential economic impact and there is uncertainty about its performance. Recognizing these constraints, we use an economic surplus model augmented with stochastic simulation to estimate ex ante the impact and distribution of benefits from Bt cotton. We consider the effects of adoption on both yields and abating crop damage, and offer scenarios depicting the policy options faced by West African stakeholders. The findings indicate that although the total net benefits of adopting Bt cotton may be relatively small for the countries studied, these countries would be worse off without the technology. Our approach, which incorporates variability and uncertainty, may be useful in decisions about investments in crop biotechnology.

Suggested Citation

  • Falck-Zepeda, Jose Benjamin & Horna, J. Daniela & Smale, Melinda, 2008. "Betting on cotton: Potential payoffs and economic risks of adopting transgenic cotton in West Africa," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 2(2), pages 1-20, September.
  • Handle: RePEc:ags:afjare:56962
    DOI: 10.22004/ag.econ.56962
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    Cited by:

    1. Kergna, Alpha & Smale, Melinda & Assima, Amidou & Diallo, Abdoulaye & Weltzien, Eva & Rattunde, Fred, 2017. "The potential economic impact of Guinea-race sorghum hybrids in Mali: A comparison of research and development paradigms," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 12(1), March.
    2. Antoine Bouët & Guillaume P. Gruère, 2011. "Refining Opportunity Cost Estimates of Not Adopting GM Cotton: An Application in Seven Sub-Saharan African Countries," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 260-279.
    3. Kergna, Alpha & Smale, Melinda & Assima, Amidou & Weltzien, Eva & Rattunde, Fred, 2016. "The potential economic impact of guinea-race sorghum hybrids in Mali: Comparing research paradigms," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246964, African Association of Agricultural Economists (AAAE).
    4. Falck-Zepeda, Jose Benjamin & Gruère, Guillaume P. & Sithole-Niang, Idah (ed.), 2013. "Genetically modified crops in Africa: Economic and policy lessons from countries south of the Sahara," IFPRI books, International Food Policy Research Institute (IFPRI), number 978-0-89629-795-1, February.
    5. Antoine Bouet & Guillaume Gruère, 2010. "Refining opportunity cost estimates of not adopting GM cotton : An application in seven sub-saharan african countries," Larefi Working Papers 201002, Larefi, Université Bordeaux 4.
    6. Frisvold, George & Reeves, Jeanne, 2015. "Genetically Modified Crops: International Trade And Trade Policy Effects," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(2), pages 1-13, April.
    7. Horna, Daniela & Zambrano, Patricia & Falck-Zepeda, Jose Benjamin & Sengooba, Theresa & Kyotalimye, Miriam, 2013. "Genetically modified cotton in Uganda: An ex ante evaluation," IFPRI book chapters, in: Falck-Zepeda, Jose Benjamin & Gruère, Guillaume P. & Sithole-Niang, Idah (ed.), Genetically modified crops in Africa: Economic and policy lessons from countries south of the Sahara, chapter 3, pages 61-97, International Food Policy Research Institute (IFPRI).

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    Keywords

    Crop Production/Industries;

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