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The Impact of Agricultural Biotechnology on Supply and Land-Use

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

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.

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Paper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt3rg0c0fz.

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Date of creation: 14 Jun 2013
Date of revision:
Handle: RePEc:cdl:agrebk:qt3rg0c0fz
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  1. 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.
  2. 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 255-98, January.
  3. Michael J. Roberts & Wolfram Schlenker, 2010. "Is Agricultural Production Becoming More or Less Sensitive to Extreme Heat? Evidence from U.S. Corn and Soybean Yields," NBER Working Papers 16308, National Bureau of Economic Research, Inc.
  4. Khanna, Madhu & Zilberman, David, 1997. "Incentives, precision technology and environmental protection," Ecological Economics, Elsevier, vol. 23(1), pages 25-43, October.
  5. 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.
  6. Harry de Gorter & David Zilberman, 1990. "On the Political Economy of Public Good Inputs in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 131-137.
  7. 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.
  8. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers 12881, Iowa State University, Department of Economics.
  9. Huffman, Wallace & Evenson, Robert E., 1992. "Contributions of Public and Private Science and Technology to U.S. Agricultural Productivity," Staff General Research Papers 10990, Iowa State University, Department of Economics.
  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. Wallace E. Huffman & Robert E. Evenson, 1992. "Contributions of Public and Private Science and Technology to U.S. Agricultural Productivity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 751-756.
  12. 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, 02.
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