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An Ex Ante Analysis of the Benefits from the Adoption of Corn Rootworm Resistant, Transgenic Corn Technology

Listed author(s):
  • Alston, Julian M.
  • Hyde, Jeffrey
  • Marra, Michele C.
  • Mitchell, Paul D.

This study examined the potential economic impacts in the United States of the commercial adoption of a corn rootworm (CRW) resistant transgenic corn. Using a counterfactual approach, we estimated that if the technology had been made available in the year 2000 at a price that would equate per acre costs to those for insecticide-based corn rootworm control, and adopted on all of the acres treated for corn rootworm in that year, the total benefits would have been $460 million. This benefit includes $171 million to the technology developer and seed companies, $231 million to farmers from yield gains, and a further $58 million to farmers from reduced risk, time savings, and other nonpecuniary benefits associated with reduced use of insecticides. This is a one-year benefit with 100 percent adoption. Our nation-wide survey of corn producers suggests that initial adoption might be as low as 30 percent, which means that the first-year benefits might be only one-third of the value implied by 100 percent adoption. Different pricing assumptions would mostly change the distribution of the benefits between farmers and others, so long as the pricing did not influence the adoption rate as well. Benefits over time would reflect changing adoption patterns and evolving insect resistance. Further analysis could include the effects of any refuge requirements implemented to slow the development of resistance, when such requirements are known.

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Paper provided by Australian Agricultural and Resource Economics Society in its series 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia with number 57828.

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Date of creation: Feb 2003
Handle: RePEc:ags:aare03:57828
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AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200

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  1. Ramanan Laxminarayan & R. Simpson, 2002. "Refuge Strategies for Managing Pest Resistance in Transgenic Agriculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(4), pages 521-536, August.
  2. Mitchell, Paul D., 2002. "Yield Benefit Of Corn Event Mon 863," Faculty Paper Series 23978, Texas A&M University, Department of Agricultural Economics.
  3. Livingston, Michael J. & Carlson, Gerald A. & Fackler, Paul L., 2000. "Bt Cotton Refuge Policy," 2000 Annual meeting, July 30-August 2, Tampa, FL 21850, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
  5. Erik Lichtenberg & Robert C. Spear & David Zilberman, 1993. "The Economics of Reentry Regulation of Pesticides," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 946-958.
  6. Hurley, Terrance M. & Babcock, Bruce A. & Hellmich, Richard L., 2001. "Bt Corn And Insect Resistance: An Economic Assessment Of Refuges," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
  7. Mitchell, Paul D. & Gray, Michael E. & Steffey, Kevin L., 2002. "Composed Error Model For Insect Damage Fucntions: Yield Impact Of Rotation Resistant Western Corn Rootworm In Illinois," 2002 Annual meeting, July 28-31, Long Beach, CA 19602, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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