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Valuing financial, health, and environmental benefits of Bt cotton in Pakistan

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  • Shahzad Kouser

    (Georg-August-University Göttingen)

  • Matin Qaim

    (Georg-August-University Göttingen)

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    Abstract

    Data from a farm survey and choice experiment are used to value the benefits of Bt cotton in Pakistan. Unlike previous research on the economic impacts of Bt, which mostly concentrated on financial benefits in terms of gross margins, we also quantify and monetize positive externalities associated with technology adoption. Due to lower chemical pesticide use on Bt cotton plots, there are significant health advantages in terms of reduced incidence of acute pesticide poisoning, and environmental advantages in terms of higher biodiversity and lower soil and groundwater contamination. These positive externalities are valued at US$ 79 per acre, of which half is attributable to health and the other half to environmental improvements. Adding average gross margin gains of US$ 204 results in an aggregate benefit of US$ 283 per acre of Bt, or US$ 1.7 billion for the total Bt cotton area in Pakistan.

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    Bibliographic Info

    Paper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 105.

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    Date of creation: 10 Jan 2012
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    Handle: RePEc:got:gotcrc:105

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    Keywords: Bt cotton; Pesticide use; Health and environmental benefits; Choice experiment; Pakistan;

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    1. Khan, M. Azeem & Iqbal, Muhammad & Ahmad, Iftikhar & Soomro, Manzoor, 2002. "Economic Evaluation of Pesticide Use Externalities in the Cotton Zones of Punjab, Pakistan," MPRA Paper 2688, University Library of Munich, Germany, revised 2002.
    2. Kouser, Shahzad & Qaim, Matin, 2011. "Impact of Bt cotton on pesticide poisoning in smallholder agriculture: A panel data analysis," Ecological Economics, Elsevier, vol. 70(11), pages 2105-2113, September.
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    12. Qaim, Matin & De Janvry, Alain, 2005. "Bt cotton and pesticide use in Argentina: economic and environmental effects," Environment and Development Economics, Cambridge University Press, vol. 10(02), pages 179-200, May.
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    15. Travisi, Chiara Maria & Nijkamp, Peter, 2008. "Valuing environmental and health risk in agriculture: A choice experiment approach to pesticides in Italy," Ecological Economics, Elsevier, vol. 67(4), pages 598-607, November.
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    17. Mullen, Jeffrey D. & Norton, George W. & Reaves, Dixie Watts, 1997. "Economic Analysis Of Environmental Benefits Of Integrated Pest Management," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(02), December.
    18. Krishna, Vijesh V. & Qaim, Matin, 2007. "Potential Impacts of Bt Eggplant on Economic Surplus and Farmers’ Health in India," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9909, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Vivien Foster & Susana Mourato, 2000. "Valuing the Multiple Impacts of Pesticide Use in the UK: A Contingent Ranking Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(1), pages 1-21.
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