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Village-wide Effects of Agricultural Biotechnology: The Case of Bt Cotton in India

  • Subramanian, Arjunan
  • Qaim, Matin
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    Summary Previous studies on impacts of agricultural biotechnology have mostly focused on direct effects. We suggest an economy-wide framework to analyze income distribution aspects more carefully. For a village in India, a micro-social accounting matrix (SAM) is developed and used to simulate the effects of Bt cotton adoption. Overall, the technology is employment generating, although family labor in cotton production is saved. While substantial benefits are observed for small and large farmers, total household income effects are bigger for larger farms. This is mostly due to differential opportunity incomes of saved family labor. Some research and policy implications are discussed.

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    Article provided by Elsevier in its journal World Development.

    Volume (Year): 37 (2009)
    Issue (Month): 1 (January)
    Pages: 256-267

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    Handle: RePEc:eee:wdevel:v:37:y:2009:i:1:p:256-267
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    1. Matin Qaim & Arjunan Subramanian & Gopal Naik & David Zilberman, 2006. "Adoption of Bt Cotton and Impact Variability: Insights from India," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(1), pages 48-58.
    2. Matin Qaim & Alain de Janvry, 2003. "Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 814-828.
    3. Matin Qaim, 2005. "Agricultural Biotechnology Adoption in Developing Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1317-1324.
    4. Thirtle, Colin & Beyers, Lindie & Ismael, Yousouf & Piesse, Jenifer, 2003. "Can GM-Technologies Help the Poor? The Impact of Bt Cotton in Makhathini Flats, KwaZulu-Natal," World Development, Elsevier, vol. 31(4), pages 717-732, April.
    5. Hareau, Guy Gaston & Norton, George W. & Mills, Bradford F. & Peterson, Everett B., 2004. "Potential Benefits Of Transgenic Rice In Asia: A General Equilibrium Approach," 2004 Annual meeting, August 1-4, Denver, CO 20334, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Gouse, Marnus & Kirsten, Johann F. & Jenkins, Lindie, 2002. "Bt Cotton In South Africa: Adoption And The Impact On Farm Incomes Amongst Small-Scale And Large Scale Farmers," Working Papers 18022, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    7. Qaim, Matin, 2003. "Bt Cotton in India: Field Trial Results and Economic Projections," World Development, Elsevier, vol. 31(12), pages 2115-2127, December.
    8. 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.
    9. Richard Bennett & Uma Kambhampati & Stephen Morse & Yousouf Ismael, 2006. "Farm-Level Economic Performance of Genetically Modified Cotton in Maharashtra, India," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(1), pages 59-71.
    10. 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.
    11. Pyatt, F Graham & Round, Jeffery I, 1979. "Accounting and Fixed Price Multipliers in a Social Accounting Matrix Framework," Economic Journal, Royal Economic Society, vol. 89(356), pages 850-73, December.
    12. 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.
    13. Fernandez-Cornejo, Jorge & Hendricks, Chad & Mishra, Ashok K., 2005. "Technology Adoption and Off-Farm Household Income: The Case of Herbicide-Tolerant Soybeans," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(03), December.
    14. Subramanian, Shankar & Sadoulet, Elisabeth, 1990. "The Transmission of Production Fluctuations and Technical Change in a Village Economy: A Social Accounting Matrix Approach," Economic Development and Cultural Change, University of Chicago Press, vol. 39(1), pages 131-73, October.
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