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The Impact of Agricultural Biotechnology on Supply and Land-Use

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  • Barrows, Geoffrey
  • Sexton, Steven
  • Zilberman, David

Abstract

Increased demand for agricultural produce for food, fiber, feed, and energy generates a tradeoff between high prices and environmentally costly land conversion. Genetically engineered (GE) seeds can potentially increase supply without recruiting new lands to production. We develop a simple adoption model to show how first-generation GE increases yield per hectare. We identify yield increases from cross country time series variation in GE adoption share within the main GE crops- cotton, corn, and soybeans. We find that GE increased yields 34% for cotton, 32% for corn, but only 2% for soybeans. The model also predicts that GE extends the range of lands that can be farmed profitably. If the output on these lands are attributed to GE technology, then overall supply effects are larger than previously understood. Considering this extensive margin effect, the supply effect of GE increases from 10% to 16% for corn, 15% to 20% for cotton, and 2% to 39% for soybeans, generating significant downward pressure on prices. Finally, we compute \saved" lands and greenhouse gasses as the difference between observed hectarage per crop and counterfactual hectarage needed to generate the same output without the yield boost from GE. We find that all together, GE saved 21million Ha of land from conversion to agriculture in 2010, or 0.41 Gt ofCO2emissions (using a constantCO2/land conversion factor). These averted emissions are equivalent to roughly 1/3 the annual emissions from driving in the US.

Suggested Citation

  • Barrows, Geoffrey & Sexton, Steven & Zilberman, David, 2013. "The Impact of Agricultural Biotechnology on Supply and Land-Use," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt3rg0c0fz, Department of Agricultural & Resource Economics, UC Berkeley.
  • Handle: RePEc:cdl:agrebk:qt3rg0c0fz
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    References listed on IDEAS

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    1. Khanna, Madhu & Zilberman, David, 1997. "Incentives, precision technology and environmental protection," Ecological Economics, Elsevier, vol. 23(1), pages 25-43, October.
    2. Elaine Meichen Liu, 2008. "Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China," Working Papers 1064, Princeton University, Department of Economics, Industrial Relations Section..
    3. José Benjamin Falck-Zepeda & Greg Traxler & Robert G. Nelson, 2000. "Surplus Distribution from the Introduction of a Biotechnology Innovation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 360-369.
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    5. Benjamin Crost & Bhavani Shankar & Richard Bennett & Stephen Morse, 2007. "Bias from Farmer Self-Selection in Genetically Modified Crop Productivity Estimates: Evidence from Indian Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(1), pages 24-36, February.
    6. Elaine M. Liu, 2013. "Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1386-1403, October.
    7. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-298, January.
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    9. Elaine M. Liu, 2008. "Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China," Working Papers 1064, Princeton University, Department of Economics, Industrial Relations Section..
    10. Steven Sexton & David Zilberman, 2011. "How Agricultural Biotechnology Boosts Food Supply and Accomodates Biofuels," NBER Working Papers 16699, National Bureau of Economic Research, Inc.
    11. Hochman, Gal & Rajagopal, Deepak & Timilsina, Govinda & Zilberman, David, 2011. "The role of inventory adjustments in quantifying factors causing food price inflation," Policy Research Working Paper Series 5744, The World Bank.
    12. Michael J. Roberts & Wolfram Schlenker, 2011. "Is Agricultural Production Becoming More or Less Sensitive to Extreme Heat? Evidence from U.S. Corn and Soybean Yields," NBER Chapters,in: The Design and Implementation of U.S. Climate Policy, pages 271-282 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Taheripour, Farzad & Mahaffey, Harry & Tyner, Wallace E., 2015. "Evaluation of Economic, Land Use, and Land Use Emission Impacts of Substituting Non-GMO Crops for GMO in the US," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 204907, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    2. Oliveira, Andréa Leda Ramos de & Silveira, José Maria Ferreira Jardim da, 2013. "Restructuring of the Corn Supply Chain in Brazil: Facing the Challenges in Logistics or Regulation of Biotechnology," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 16(4).
    3. Mahaffey, Harry & Taheripour, Farzad & Tyner, Wallace E., 2016. "Evaluating the Economic and Environmental Impacts of a Global GMO Ban," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235591, Agricultural and Applied Economics Association.
    4. repec:nbr:nberch:13940 is not listed on IDEAS
    5. Wesseler, Justus, 0. "Biotechnologies and agrifood strategies: opportunities, threats and economic implications," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 3.
    6. Jayson L. Lusk & Jesse Tack & Nathan P. Hendricks, 2017. "Heterogeneous Yield Impacts from Adoption of Genetically Engineered Corn and the Importance of Controlling for Weather," NBER Chapters,in: Understanding Productivity Growth in Agriculture National Bureau of Economic Research, Inc.

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    Keywords

    Social and Behavioral Sciences; genetic engineering; ge seeds; co2 emissions;

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