A dynamic economic model of soil conservation and drought tolerance involving genetically modified crops

This paper attempts to model the positive role of cultivation of genetically modified (GM) crops with its soil-anchoring root characteristic in conservation tillage technology. In a dynamic optimization framework, the farmer produces an optimal combination of a GM and a non-GM variety of the same or of different crops at the steady state, though the steady state is approached most rapidly by producing a single crop. The improvement in the capacity to anchor the soil and an increase in organic matter content in top soil will raise the long-run soil stock under certain conditions. However, the increase in R&D investment and imposition of an input subsidy on GM sector will lead to an increment in area under GM cultivation though their effect on long-run soil stock is uncertain. The empirical validation of the findings suggests that agricultural practices associated with GM crop cultivation will lead to positive growth of the economy.