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The payoffs to agricultural biotechnology: an assessment of the evidence

Listed author(s):
  • Marra, Michele C.
  • Pardey, Philip G.
  • Alston, Julian M.

Transgenic crops are relatively new technologies being adopted rapidly in the United States and in a few other countries. The economic impacts of these technologies have, thus far, been estimated in a piecemeal fashion. The purpose of this study was to collect and characterize the economic evidence available to date, organize it, and determine if any general implications can be drawn from it. The general classes of economic impacts at the farm level are discussed. The types of studies that generate estimates of these benefits are also characterized and categorized in terms of the implications for measuring economic impacts when the set of things held constant in the type of study does not correspond to those that economic theory suggests. The evidence is presented, along with some general implications drawn from the analysis. These implications are: (1) growing transgenic cotton is likely to result in reduced pesticide use in most years and is likely to be profitable in most years in most U.S. states in the Cotton Belt, 2) Bt corn will provide a small but significant yield increase in most years across the U.S. Corn Belt, and in some years and some places the increase will be substantial, and (3) although there is some evidence of a small yield loss in the Roundup Ready soybean varieties, in most years and locations savings in pesticide costs and, possibly, tillage costs will more than offset the lost revenue from the yield discrepancy. There is not yet enough evidence to generalize even these few conclusions to other countries. More farm- level studies in more years and across more locations are required before any additional implications can be drawn. Studies that measure the non-pecuniary benefits and costs of these technologies should be undertaken, as well.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series EPTD discussion papers with number 87.

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Date of creation: 2002
Handle: RePEc:fpr:eptddp:87
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  1. Moschini, GianCarlo & LAPAN, HARVEY E & Sobolevsky, Andrei, 1999. "Roundup Ready Soybeans and Welfare Effects in the Soybean Complex," ISU General Staff Papers 199909010700001325, Iowa State University, Department of Economics.
  2. Pray, Carl & Ma, Danmeng & Huang, Jikun & Qiao, Fangbin, 2001. "Impact of Bt Cotton in China," World Development, Elsevier, vol. 29(5), pages 813-825, May.
  3. 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.
  4. Pardey, Philip G. & Beintema, Nienke M., 2002. "Slow Magic: Agricultural R&D A Century After Mendel," Working Papers 14364, University of Minnesota, Center for International Food and Agricultural Policy.
  5. Fulton, Murray E. & Keyowski, Lynette, 2000. "The Impact Of Technological Innovation On Producer Returns: The Case Of Genetically Modified Canola," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C. 25998, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
  6. Couvillion, Warren C. & Kari, Fatimah & Hudson, Darren & Allen, Albert J., 2000. "A Preliminary Economic Assessment Of Roundup Ready Soybeans In Mississippi," Research reports 15783, Mississippi State University, Department of Agricultural Economics.
  7. Jose B. Falck-Zepeda & Greg Traxler & Robert G. Nelson, 2000. "Rent creation and distribution from biotechnology innovations: The case of bt cotton and Herbicide-Tolerant soybeans in 1997," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 21-32.
  8. E. Douglas Beach & Gerald A. Carlson, 1993. "A Hedonic Analysis of Herbicides: Do User Safety and Water Quality Matter?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 612-623.
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