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Effects of Bt Cotton in India During the First Five Years of Adoption

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  • Sadashivappa, Prakash
  • Qaim, Matin

Abstract

While previous research has analyzed the impacts of Bt cotton in India, most available studies are based on one or two years of data only. We analyze the technology’s performance over the first five years of adoption, using panel data with three rounds of observations. On average, Bt adopting farmers realize pesticide reductions of about 40%, and yield advantages of 30-40%. Profit gains are in a magnitude of US $60 per acre. These benefits have been sustainable over time. Farmers’ satisfaction is reflected in a high willingness to pay for Bt seeds. Nonetheless, in 2006 Indian state governments decided to establish price caps at levels much lower than what companies had charged before. This intervention has further increased farmers’ profits, but the impact on aggregate Bt adoption was relatively small. Price controls might have negative long-term implications, as they can severely hamper private sector incentives to invest in new technologies.

Suggested Citation

  • Sadashivappa, Prakash & Qaim, Matin, 2009. "Effects of Bt Cotton in India During the First Five Years of Adoption," 2009 Conference, August 16-22, 2009, Beijing, China 49947, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:49947
    DOI: 10.22004/ag.econ.49947
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    References listed on IDEAS

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    2. Kolady, Deepthi & Spielman, David J. & Cavalieri, Anthony J., 2010. "Intellectual property rights, private investment in research, and productivity growth in Indian agriculture: A review of evidence and options," IFPRI discussion papers 1031, International Food Policy Research Institute (IFPRI).

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