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Testing for Complementarity: Glyphosate Tolerant Soybeans and Conservation Tillage

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  • Perry, Edward
  • Moschini, GianCarlo
  • Hennessy, David A.

Abstract

Many decisions in agriculture are made over combinations of inputs and/or practices that may form a technology system linked through complementarity. The presence of complementarity among producer decisions can have far-reaching implications for market outcomes and for the effectiveness of policies intended to influence them. Identifying complementarity relations, however, is made difficult by the presence of unobserved heterogeneity. Drawing on recent methodological advances, in this paper we develop a test for complementarity between glyphosate tolerant soybeans and conservation tillage that overcomes certain limitations of previous studies. Specifically, we develop a structural discrete choice framework of joint soybean-tillage adoption that explicitly models both complementarity and the correlation induced by unobserved heterogeneity. The model is estimated with a large unbalanced panel of farm-level choices spanning the 1998–2011 period. We find that glyphosate tolerant soybeans and conservation tillage are complementary practices. In addition, our estimation shows that farm operation scale promotes the adoption of both conservation tillage and glyphosate tolerant seed, and that all of higher fuel prices, more droughty conditions, and soil erodibility increase use of conservation tillage. We apply our results to simulate annual adoption rates for both conservation tillage and no-tillage in a scenario without glyphosate tolerant soybeans available as a choice. We find that the adoption of conservation tillage and no-tillage have been about 10% and 20% higher, respectively, due to the advent of glyphosate tolerant soybeans.
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  • Perry, Edward & Moschini, GianCarlo & Hennessy, David A., 2015. "Testing for Complementarity: Glyphosate Tolerant Soybeans and Conservation Tillage," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205751, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205751
    DOI: 10.22004/ag.econ.205751
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    Cited by:

    1. Wang, Tong & Ayesh, Abubakr & Hennessy, David & Feng, Hongli, 2018. "Cropland Reflux: Trends In and Locations of Land Use Change in the Dakotas, 2007 to 2012 and 2012 to 2017," Bulletin 274938, South Dakota State University, Agricultural Experiment Station.
    2. Wang, Tong & Luri, Moses & Janssen, Larry & Hennessy, David & Feng, Hongli & Wimberly, Michael & Arora, Gaurav, 2016. "Farmers’ Rankings of the Determinants of Land Use Decisions at the Margins of the Corn Belt," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235109, Agricultural and Applied Economics Association.
    3. Chelsea Sutherland & Savannah Gleim & Stuart J. Smyth, 2021. "Correlating Genetically Modified Crops, Glyphosate Use and Increased Carbon Sequestration," Sustainability, MDPI, vol. 13(21), pages 1-15, October.
    4. Perry, Edward D. & Hennessy, David A. & Moschini, GianCarlo, 2019. "Product concentration and usage: Behavioral effects in the glyphosate market," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 543-559.
    5. Elizabeth Canales & Jason S. Bergtold & Jeffery R. Williams, 2020. "Conservation practice complementarity and timing of on‐farm adoption," Agricultural Economics, International Association of Agricultural Economists, vol. 51(5), pages 777-792, September.
    6. Edward D. Perry & David A. Hennessy & GianCarlo Moschini, 2022. "Uncertainty and learning in a technologically dynamic industry: Seed density in U.S. maize," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1388-1410, August.
    7. Chen, Le & Rejesus, Roderick M. & Aglasan, Serkan & Hagen, Stephen & Salas, William, 2022. "The Impact of No-Till Production on Agricultural Land Values in the US Midwest," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322445, Agricultural and Applied Economics Association.
    8. Wang, Tong & Luri, Moses & Janssen, Larry & Hennessy, David A. & Feng, Hongli & Wimberly, Michael C. & Arora, Gaurav, 2017. "Determinants of Motives for Land Use Decisions at the Margins of the Corn Belt," Ecological Economics, Elsevier, vol. 134(C), pages 227-237.
    9. Arora, Gaurav & Wolter, Peter T. & Hennessy, David A. & Feng, Hongli, 2016. "Land Use Change and Policy in Iowa’s Loess Hills," Sustainable Agriculture Research, Canadian Center of Science and Education, vol. 5(4).
    10. Claassen, Roger & Bowman, Maria & McFadden, Jonathan & Smith, David & Wallander, Steven, 2018. "Tillage Intensity and Conservation Cropping in the United States," Economic Information Bulletin 277566, United States Department of Agriculture, Economic Research Service.
    11. Julian M. Alston & Philip G. Pardey, 2020. "Innovation, Growth, and Structural Change in American Agriculture," NBER Chapters, in: The Role of Innovation and Entrepreneurship in Economic Growth, pages 123-165, National Bureau of Economic Research, Inc.
    12. Federico Ciliberto & GianCarlo Moschini & Edward D. Perry, 2019. "Valuing product innovation: genetically engineered varieties in US corn and soybeans," RAND Journal of Economics, RAND Corporation, vol. 50(3), pages 615-644, September.
    13. Perry, Edward & Hennessy, David A. & Moschini, GianCarlo, 2017. "Product Formulation and Glyphosate Application Rates: Confusion or Rational Behavior?," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259115, Agricultural and Applied Economics Association.
    14. Tran, Dat Q. & Kurkalova, Lyubov A., 2017. "Testing for complementarity between the use of continuous no-till and cover crops: an application of Entropy approach," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259149, Agricultural and Applied Economics Association.
    15. Scheitrum, Daniel & Schaefer, K. Aleks & Nes, Kjersti, 2020. "Realized and potential global production effects from genetic engineering," Food Policy, Elsevier, vol. 93(C).
    16. Jayson L. Lusk, 2017. "Evaluating the Policy Proposals of the Food Movement," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(3), pages 387-406.
    17. Che, Yuyuan & Rejesus, Roderick M. & Cavigelli, Michel A. & White, Kathryn E., 2022. "Long-Term Economic Impacts of No-Till Adoption," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322171, Agricultural and Applied Economics Association.
    18. Hennessy, David A. & Zhang, Jing & Bai, Na, 2019. "Animal health inputs, endogenous risk, general infrastructure, technology adoption and industrialized animal agriculture," Food Policy, Elsevier, vol. 83(C), pages 355-362.
    19. Le Chen & Roderick M. Rejesus & Serkan Aglasan & Stephen Hagen & William Salas, 2023. "The impact of no‐till on agricultural land values in the United States Midwest," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 760-783, May.
    20. Braeden Van Deynze & Scott M. Swinton & David A. Hennessy, 2022. "Are glyphosate‐resistant weeds a threat to conservation agriculture? Evidence from tillage practices in soybeans," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 645-672, March.
    21. Jayson L. Lusk & Jesse Tack & Nathan P. Hendricks, 2018. "Heterogeneous Yield Impacts from Adoption of Genetically Engineered Corn and the Importance of Controlling for Weather," NBER Chapters, in: Agricultural Productivity and Producer Behavior, pages 11-39, National Bureau of Economic Research, Inc.
    22. Ye, Ziwei & Krupke, Christian & DiFonzo, Christina & Hennessy, David A. & Wu, Felicia, 2022. "Aligning Bt Maize Planting with Pest Incidence and Efficacy Erosion Risk Suggests the Need for Paradigm Shifts," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322082, Agricultural and Applied Economics Association.
    23. Bullock, David S. & D'Arcangelo, Filippo Maria & Desquilbet, Marion, 2018. "A discussion of the market and policy failures associated with the adoption of herbicide-tolerant crops," TSE Working Papers 18-959, Toulouse School of Economics (TSE), revised Aug 2019.
    24. Osman, Eliyasu Y. & Bergtold, Jason S., 2023. "The Variation in Intensity of Alternative Tillage Practices Adopted by Farmers due to Crop Rotation and Geographic Factors," 2023 Annual Meeting, July 23-25, Washington D.C. 335830, Agricultural and Applied Economics Association.
    25. Lee, Seungki & Moschini, GianCarlo & Perry, Edward D., 2023. "Genetically engineered varieties and applied pesticide toxicity in U.S. maize and soybeans: Heterogeneous and evolving impacts," Ecological Economics, Elsevier, vol. 211(C).

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    More about this item

    Keywords

    Production Economics; Productivity Analysis;

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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