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Can Bt Technology Reduce Poverty Among African Cotton Growers? An Ex Ante Analysis of the Private and Social Profitability of Bt Cotton Seed in Mozambique

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  • Pitoro, Raul
  • Walker, Thomas S.
  • Tschirley, David L.
  • Swinton, Scott M.
  • Boughton, Duncan
  • de Marrule, Higino Francisco

Abstract

This paper presents an ex ante analysis of the private and social profitability of the introduction of Bt cotton for a major cotton producing area of northern Mozambique. Cotton is especially relevant to rural poverty reduction because smallholders often have few alternative cash earning activities, and yields are among the lowest in Africa. Multivariate regression is used to quantify the relationship between pest control and yield loss at farm level as a basis for estimating the expected yield gain from the introduction of Bt cotton. Partial budget analysis of technical packages with and without Bt cotton seed reveals a strong divergence between private (negative) and social (positive) profitability. The Mozambique case indicates that effective bio-safety and legal frameworks may be a necessary but not sufficient condition for Bt cotton technology adoption and poverty reduction. Policy changes to align private and social profitability of cotton production with Bt seed, as well as complementary improvements in crop management, especially timely planting and weed control, are also necessary for Bt technology to change the fortunes of Mozambican cotton growers. With improved policy and technology in place the adoption of Bt cotton varieties could result in a sizeable reduction in poverty as measured by the predicted change in squared poverty gap.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51633.

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Date of creation: 2009
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Handle: RePEc:ags:iaae09:51633

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Keywords: Bt cotton; social profitability; poverty reduction; Mozambique; Agricultural and Food Policy; Crop Production/Industries; International Development; Production Economics; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies;

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  1. Smale, Melinda & Zambrano, Patricia & Falck-Zepeda, José & Gruère, Guillaume, 2006. "Parables: applied economics literature about the impact of genetically engineered crop varieties in developing economies," EPTD discussion papers 158, International Food Policy Research Institute (IFPRI).
  2. John Baffes, 2005. "The "Cotton Problem"," World Bank Research Observer, World Bank Group, vol. 20(1), pages 109-144.
  3. Anderson, Kym & Valenzuela, Ernesto, 2006. "The World Trade Organization's Doha cotton initiative : a tale of two issues," Policy Research Working Paper Series 3918, The World Bank.
  4. Anderson, Kym & Valenzuela, Ernesto & Jackson, Lee Ann, 2006. "Recent and prospective adoption of genetically modified cotton : a global computable general equilibrium analysis of economic impacts," Policy Research Working Paper Series 3917, The World Bank.
  5. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MSSD discussion papers 48, International Food Policy Research Institute (IFPRI).
  6. Falck-Zepeda, Jose & Horna, Daniela & Smale, Melinda, 2007. "The economic impact and the distribution of benefits and risk from the adoption of insect resistant (Bt) cotton in West Africa:," IFPRI discussion papers 718, International Food Policy Research Institute (IFPRI).
  7. Boughton, Duncan & Tschirley, David L. & de Marrule, Higino Francisco & Osorio, Afonso & Zulu, Ballard, 2002. "Cotton Sector Policies and Performance in Sub-Saharan Africa: Lessons Behind the Numbers in Mozambique and Zambia," Food Security Collaborative Policy Briefs 55233, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  8. Eicher, Carl K. & Maredia, Karim & Sithole-Niang, Idah, 2006. "Crop biotechnology and the African farmer," Food Policy, Elsevier, vol. 31(6), pages 504-527, December.
  9. Walker, Thomas S. & Pitoro, Raul & Tomo, Alda & Sitoe, Isabel & Salencia, Celestino & Mahanzule, Rosalina & Donovan, Cynthia & Mazuze, Feliciano M., 2006. "Priority Setting for Public-Sector Agricultural Research in Mozambique with the National Agricultural Survey Data," Food Security Collaborative Working Papers 56113, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  10. 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.
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