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Size And Distribution Of Market Benefits From Adopting Biotech Crops

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Author Info

  • Price, Gregory K.
  • Lin, William W.
  • Falck-Zepeda, Jose Benjamin
  • Fernandez-Cornejo, Jorge

Abstract

This study estimates the total benefit arising from the adoption of agricultural biotechnology in one year (1997) and its distribution among key stakeholders along the production and marketing chain. The analysis focuses on three biotech crops: herbicide-tolerant soybeans, insect-resistant (Bt) cotton, and herbicide-tolerant cotton. Adoption of these crops resulted in estimated market benefits of $212.5-$300.7 million for Bt cotton, $231.8 million for herbicide-tolerant cotton, and $307.5 million for herbicide-tolerant soybeans. These benefits accounted for small shares of crop production value, ranging from 2 percent to 5 percent. U.S. farmers captured a much larger share (about a third) of the benefits for Bt cotton than with herbicide-tolerant soybeans (20 percent) and herbicide-tolerant cotton (4 percent). Innovators' share ranged from 30 percent for Bt cotton to 68 percent for herbicide-tolerant soybeans. For herbicide-tolerant cotton, U.S. consumers and the rest of the world (including both producers and consumers) received the bulk of the estimated benefits in 1997. Estimated benefits and their distribution depend on the specification of the analytical framework, supply and demand elasticity assumptions, the inclusion of market and nonmarket benefits, crops considered, and year-specific factors (such as weather and pest infestation levels).

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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Technical Bulletins with number 33562.

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Date of creation: 2003
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Handle: RePEc:ags:uerstb:33562

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Keywords: Agricultural biotechnology; distribution of benefits; Bt cotton; herbicide-tolerant cotton; herbicide-tolerant soybeans; Crop Production/Industries; Research and Development/Tech Change/Emerging Technologies;

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Cited by:
  1. Robert Finger & Nadja El Benni & Timo Kaphengst & Clive Evans & Sophie Herbert & Bernard Lehmann & Stephen Morse & Nataliya Stupak, 2011. "A Meta Analysis on Farm-Level Costs and Benefits of GM Crops," Sustainability, MDPI, Open Access Journal, vol. 3(5), pages 743-762, May.
  2. Lin, William W. & Somwaru, Agapi & Tuan, Francis C. & Huang, Jikun & Bai, Junfei, 2005. "Consumers' Willingness to Pay for Biotech Foods in China," 2005 Annual meeting, July 24-27, Providence, RI 19569, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Frisvold, George B. & Reeves, Jeanne M., 2008. "The costs and benefits of refuge requirements: The case of Bt cotton," Ecological Economics, Elsevier, vol. 65(1), pages 87-97, March.
  4. Ramasundaram, P. & Suresh, A. & Samuel, Josily & Wankhade, Shwetal, 2014. "Welfare Gains from Application of First Generation Biotechnology in Indian Agriculture: The Case of Bt Cotton," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(1).
  5. Run Yu & Ping Leung, 2012. "The economic implication of rising transport cost for a small open economy: a case study of Hawaii’s vegetable sector," The Annals of Regional Science, Springer, vol. 48(3), pages 855-875, June.
  6. Takeshima, Hiroyuki, 2011. "Distribution of welfare gains from GM cassava in Uganda across different population groups and market margins," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 6(1), March.
  7. Antoine Bouet & Guillaume Gruere, 2010. "Refining opportunity cost estimates of not adopting GM cotton : An application in seven sub-saharan african countries," Working Papers hal-00637587, HAL.

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