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Output Risk Aspects Of Genetically Modified Crop Technology In South Africa

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  • Bhavani Shankar
  • Richard Bennett
  • Steve Morse

Abstract

Technology involving genetic modification of crops has the potential to make a contribution to rural poverty reduction in many developing countries. Thus far, insecticide-producing 'Bt' varieties of cotton have been the main GM crops under cultivation in developing nations. Several studies have evaluated the farm-level performance of Bt varieties in comparison to conventional ones by estimating production technology, and have mostly found Bt technology to be very successful in raising output and/or reducing insecticide input. However, the production risk properties of this technology have not been studied, although they are likely to be important to risk-averse smallholders. This study investigates the output risk aspects of Bt technology using a three-year farm-level dataset on smallholder cotton production in Makhathini flats, Kwa-Zulu Natal, South Africa. Stochastic dominance and stochastic production function estimation methods are used to examine the risk properties of the two technologies. Results indicate that Bt technology increases output risk by being most effective when crop growth conditions are good, but being less effective when conditions are less favourable. However, in spite of its risk increasing effect, the mean output performance of Bt cotton is good enough to make it preferable to conventional technology even for risk-averse smallholders.

Suggested Citation

  • Bhavani Shankar & Richard Bennett & Steve Morse, 2007. "Output Risk Aspects Of Genetically Modified Crop Technology In South Africa," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(4), pages 277-291.
    • Handle: RePEc:taf:ecinnt:v:16:y:2007:i:4:p:277-291
    DOI: 10.1080/10438590600692926
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    References listed on IDEAS

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    1. Gouse, Marnus & Kirsten, Johann F. & Jenkins, Lindie, 2002. "Bt Cotton In South Africa: Adoption And The Impact On Farm Incomes Amongst Small-Scale And Large Scale Farmers," Working Papers 18022, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
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    Cited by:

    1. Hurley, Terrance M., 2010. "A review of agricultural production risk in the developing world," Working Papers 188476, HarvestChoice.
    2. Jones, Ashley D. & Dalton, Timothy J. & Smale, Melinda, 2012. "A Stochastic Production Function Analysis of Maize Hybrids and Yield Variability in Drought-Prone Areas of Kenya," Working Papers 202593, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    3. Mintewab Bezabih & Remidius Ruhinduka & Mare Sarr, 2016. "Climate change perception and system of rice intensification (SRI) impact on dispersion and downside risk: a moment approximation approach," GRI Working Papers 256, Grantham Research Institute on Climate Change and the Environment.
    4. Stephen Morse & A.M. Mannion, 2009. "Can genetically modified cotton contribute to sustainable development in Africa?," Progress in Development Studies, , vol. 9(3), pages 225-247, July.

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