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The economic impact and the distribution of benefits and risk from the adoption of insect resistant (Bt) cotton in West Africa:

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Author Info

  • Falck-Zepeda, Jose
  • Horna, Daniela
  • Smale, Melinda

Abstract

"Cotton is the largest source of export receipts of several West African countries. Statistics however show a decreasing tendency in cotton yields and an increasing tendency in pesticide use. Under this circumstances there appear to be potential payoffs from the use of biotechnology products in the farming systems of the region. In this study we estimate different scenarios for the potential deployment of insect resistant cotton in selected countries in West Africa (WA). We use an economic surplus model augmented with a more rigorous sensitivity analysis of model parameters. Hypothetical scenarios of Bt cotton adoption in WA are simulated and single point values of model parameters are substituted with probability distributions. The scenarios include: no adoption in WA; adoption of existing varieties; adoption of WA varieties backcrossed with private sector lines; and fluctuating adoption patterns. According to the simulations, the total net benefits of adopting Bt seem to be small even after including the innovator surplus who accrues a larger share of the benefits. In contrast the WA countries included in the evaluation are worse off if they decide no to adopt Bt cotton. These results are in part explained by the conservative assumptions taken. The adoption pattern and the length of the adoption period affect the share of benefits earned by producers as compared to innovators. This study provides tools and information that can be used to build greater confidence in the process of setting agricultural research investment priorities." from Authors' Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 718.

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Date of creation: 2007
Date of revision:
Handle: RePEc:fpr:ifprid:718

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Related research

Keywords: Economic impacts; Bt-cotton; Economic surplus model; Economic surplus; Risk; Probability distributions; Impact assessment; Net benefits; biotechnology;

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References

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  1. Jose B. Falck-Zepeda & Greg Traxler & Robert G. Nelson, 2000. "Rent creation and distribution from biotechnology innovations: The case of bt cotton and Herbicide-Tolerant soybeans in 1997," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 21-32.
  2. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MTID discussion papers 48, International Food Policy Research Institute (IFPRI).
  3. Alfons Oude Lansink & Alain Carpentier, 2001. "Damage Control Productivity: An Input Damage Abatement Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(3), pages 11-22.
  4. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready� soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
  5. José Benjamin Falck-Zepeda & Greg Traxler & Robert G. Nelson, 2000. "Surplus Distribution from the Introduction of a Biotechnology Innovation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 360-369.
  6. World Bank, 2004. "Burkina Faso : Risk and Vulnerability Assessment," World Bank Other Operational Studies 15539, The World Bank.
  7. Dercon, Stefan, 1993. "Peasant Supply Response and Macroeconomic Policies: Cotton in Tanzania," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 2(2), pages 157-94, October.
  8. James F. Oehmke & Eric W. Crawford, 2002. "The Sensitivity of Returns to Research Calculations to Supply Elasticity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 366-369.
  9. Demont, Matty & Tollens, Eric, 2002. "Impact Of Agricultural Biotechnology In The European Union'S Sugar Industry," Working Papers 31854, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
  10. Julian M. Alston & Philip G. Pardey & Jennifer S. James & Matthew A. Anderson, 2009. "The Economics of Agricultural R&D," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 537-566, 09.
  11. Huang, Jikun & Hu, Ruifa & Pray, Carl & Qiao, Fangbin & Rozelle, Scott, 2003. "Biotechnology as an alternative to chemical pesticides: a case study of Bt cotton in China," Agricultural Economics, Blackwell, vol. 29(1), pages 55-67, July.
  12. Huang, Jikun & Hu, Ruifa & van Meijl, Hans & van Tongeren, Frank, 2004. "Biotechnology boosts to crop productivity in China: trade and welfare implications," Journal of Development Economics, Elsevier, vol. 75(1), pages 27-54, October.
  13. Zhao, Xueyan & Griffiths, William E. & Griffith, Garry R. & Mullen, John D., 2000. "Probability distributions for economic surplus changes: the case of technical change in the Australian wool industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(1), March.
  14. George C. Davis & Maria Cristina Espinoza, 1998. "A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 868-879.
  15. Elbehri, Aziz & Macdonald, Steve, 2004. "Estimating the Impact of Transgenic Bt Cotton on West and Central Africa: A General Equilibrium Approach," World Development, Elsevier, vol. 32(12), pages 2049-2064, December.
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Citations

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Cited by:
  1. Pitoro, Raul & Walker, Thomas S. & Tschirley, David L. & Swinton, Scott M. & Boughton, Duncan & de Marrule, Higino Francisco, 2009. "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," 2009 Conference, August 16-22, 2009, Beijing, China 51633, International Association of Agricultural Economists.
  2. 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).
  3. John Baffes, 2011. "Cotton Subsidies, the WTO, and the ‘Cotton Problem’," The World Economy, Wiley Blackwell, vol. 34(9), pages 1534-1556, 09.
  4. Baffes, John, 2010. "Markets for cotton by-products : global trends and implications for African cotton producers," Policy Research Working Paper Series 5355, The World Bank.

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