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The payoffs to agricultural biotechnology: an assessment of the evidence


  • 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.

Suggested Citation

  • Marra, Michele C. & Pardey, Philip G. & Alston, Julian M., 2002. "The payoffs to agricultural biotechnology: an assessment of the evidence," EPTD discussion papers 87, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:eptddp:87

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    References listed on IDEAS

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
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    Cited by:

    1. Konduru, Srinivasa & Kalaitzandonakes, Nicholas G. & Magnier, Alexandre, 2009. "GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49594, Agricultural and Applied Economics Association.
    2. Joshua D. Detre & Hiroki Uematsu & Ashok K. Mishra, 2011. "The influence of GM crop adoption on the profitability of farms operated by young and beginning farmers," Agricultural Finance Review, Emerald Group Publishing, vol. 71(1), pages 41-61, May.
    3. Eicher, Carl K. & Maredia, Karim & Sithole-Niang, Idah, 2006. "Crop biotechnology and the African farmer," Food Policy, Elsevier, vol. 31(6), pages 504-527, December.
    4. Kym Anderson & Ernesto Valenzuela & Lee Ann Jackson, 2008. "Recent and Prospective Adoption of Genetically Modified Cotton: A Global Computable General Equilibrium Analysis of Economic Impacts," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 265-296.
    5. Sebastian, Leocadio & Payumo, Jane G., 1. "NARES Capacity in Relation to International Treaties and Conventions on Intellectual Property Rights, Agricultural Biotechnology, and Plant Genetic Resources Management," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 3(1).
    6. Anderson, Kym & Damania, Richard & Jackson, Lee Ann, 2004. "Trade Standards and the Political Economy of Genetically Modified Food," CEPR Discussion Papers 4526, C.E.P.R. Discussion Papers.
    7. Gruere, Guillaume & Bouet, Antoine & Mevel, Simon, 2007. "Genetically modified food and international trade: The case of India, Bangladesh, Indonesia, and the Philippines," IFPRI discussion papers 740, International Food Policy Research Institute (IFPRI).
    8. Greg Traxler, 2004. "The Economic Impacts of Biotechnology-Based Technological Innovations," Working Papers 04-08, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    9. Antoine Bouët & Guillaume P. Gruère, 2011. "Refining Opportunity Cost Estimates of Not Adopting GM Cotton: An Application in Seven Sub-Saharan African Countries," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 260-279.
    10. Onyango, Benjamin M. & Nayga, Rodolfo M., Jr., 2004. "Consumer Acceptance of Nutritionally Enhanced Genetically Modified Food: Relevance of Gene Transfer Technology," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
    11. Gouse, Marnus, 2013. "Socioeconomic and farm-level effects of genetically modified crops: The case of Bt crops in South Africa," IFPRI book chapters,in: Falck-Zepeda, Jose Benjamin & Gruère, Guillaume P. & Sithole-Niang, Idah (ed.), Genetically modified crops in Africa: Economic and policy lessons from countries south of the Sahara, chapter 1, pages 25-41 International Food Policy Research Institute (IFPRI).
    12. Chang, Ching-Cheng & Hsu, Shih-Hsun & Wu, Chia-Hsuan, 2004. "An Economy-Wide Analysis Of Gm Food Labeling Policies In Taiwan," 2004 Annual meeting, August 1-4, Denver, CO 19929, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Yawson, Robert M. & Yawson, Ivy, 2008. "Policy options of agricultural biotechnology R&D in Sub-Saharan Africa: key issues and aspects," MPRA Paper 34880, University Library of Munich, Germany.
    14. Amrita Chatterjee & Arpita Ghose, 2016. "Consumer’s Acceptance towards Genetically Modified Crops and Growth of the Economy: A Theoretical Approach," Working Papers 2016-137, Madras School of Economics,Chennai,India.
    15. Haggblade, Steven, 2007. "Returns to Investment in Agriculture," Food Security Collaborative Policy Briefs 54625, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    16. Nielsen, Chantal Pohl & Robinson, Sherman & Thierfelder, Karen, 2002. "Trade in genetically modified food," TMD discussion papers 106, International Food Policy Research Institute (IFPRI).
    17. repec:laf:wpaper:201002 is not listed on IDEAS
    18. Oliver Musshoff & Norbert Hirschauer, 2011. "A behavioral economic analysis of bounded rationality in farm financing decisions: First empirical evidence," Agricultural Finance Review, Emerald Group Publishing, vol. 71(1), pages 62-83, May.
    19. Radhakrishnan, Manju & Islam, Nazrul & Ward, Glynn, 2009. "Measuring the benefits from R&D investment beyond the farm gate: the case of the WA wine industry," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48169, Australian Agricultural and Resource Economics Society.
    20. Eicher, Carl K. & Maredia, Karim & Sithole-Niang, Idah, 2005. "Biotechnology and the African Farmer," Staff Papers 11495, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    21. Anderson, Kym & Jackson, Lee Ann, 2004. "Implications of genetically modified food technology policies for Sub-Saharan Africa," Policy Research Working Paper Series 3411, The World Bank.
    22. Nielsen, Chantal Pohl & Thierfelder, Karen & Robinson, Sherman, 2003. "Consumer preferences and trade in genetically modified foods," Journal of Policy Modeling, Elsevier, vol. 25(8), pages 777-794, November.

    More about this item


    Transgenic plants.; Technological innovations.; Agricultural research Economic aspects.; Rate of return.; Impact assessment;


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