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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

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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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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
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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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  1. Alfons Oude Lansink & Alain Carpentier, 2001. "Damage Control Productivity: An Input Damage Abatement Approach," Journal of Agricultural Economics, Blackwell Publishing, vol. 52(3), pages 11-22. [Downloadable!] (restricted)
  2. Falck-Zepeda, Jose Benjamin & Traxler, Greg & Nelson, Robert G, 2000. " Surplus Distribution from the Introduction of a Biotechnology Innovation," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(2), pages 360-69, May. [Downloadable!] (restricted)
  3. Dercon, Stefan, 1993. "Peasant Supply Response and Macroeconomic Policies: Cotton in Tanzania," Journal of African Economies, Oxford University Press, vol. 2(2), pages 157-94, October.
  4. Fisher, Monica G. & Masters, William A. & Sidibe, Mamadou, 2000. "Technical change in Senegal's irrigated rice sector: impact assessment under uncertainty," Agricultural Economics, Blackwell, vol. 24(2), pages 179-197, January. [Downloadable!] (restricted)
  5. Jaffe, Gregory, 2006. "Comparative analysis of the national biosafety regulatory systems in East Africa:," EPTD discussion papers 146, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Moschini, Giancarlo & Lapan, Harvey & Sobolevsky, Andrei, 2000. "Roundup Ready Soybeans and Welfare Effects in the Soybean Complex," Staff General Research Papers 1799, Iowa State University, Department of Economics.
  7. Pray, Carl & Ma, Danmeng & Huang, Jikun & Qiao, Fangbin, 2001. "Impact of Bt Cotton in China," World Development, Elsevier, vol. 29(5), pages 813-825, May. [Downloadable!] (restricted)
  8. Oehmke, James F & Crawford, Eric W, 2002. " The Sensitivity of Returns to Research Calculations to Supply Elasticity," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 84(2), pages 366-69, May. [Downloadable!] (restricted)
  9. 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. [Downloadable!] (restricted)
  10. Moschini, GianCarlo & Lapan, Harvey, 2002. "Intellectual Property Rights and the Welfare Effects of Agricultural R & D," Staff General Research Papers 5048, Iowa State University, Department of Economics.
  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. [Downloadable!] (restricted)
  12. Davis, George C & Espinoza, M Cristina, 2000. " A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models: Reply," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(1), pages 241-43, February. [Downloadable!] (restricted)
  13. Baffes, John, 2004. "Cotton : Market setting, trade policies, and issues," Policy Research Working Paper Series 3218, The World Bank. [Downloadable!]
  14. Meinzen-Dick, Ruth Suseela & Adato, Michelle & Haddad, Lawrence James & Hazell, P.B.R., 2004. "Science and poverty," Food policy reports 16, International Food Policy Research Institute (IFPRI). [Downloadable!]
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