Academic journal article Agricultural and Resource Economics Review

Revisiting the Impact of Bt Corn Adoption by U.S. Farmers

Academic journal article Agricultural and Resource Economics Review

Revisiting the Impact of Bt Corn Adoption by U.S. Farmers

Article excerpt

This study examines the impact of adopting Bt corn on farm profits, yields, and insecticide use. The study employs an econometric model that corrects for self-selection and simultaneity. The model is estimated using nationwide farm-level survey data for 2005. Regression analysis confirms that Bt adoption is associated with increased variable profits, yields, and seed demand. However, the results of this analysis suggest that Bt adoption is not significantly related to insecticide use. This result may be due to the fact that insect infestation levels were lower in 2005 than they were in previous years.

Key Words: genetically engineered corn, insect resistance, Bt corn, insecticide use, technology adoption, yields

(ProQuest: ... denotes formulae omitted.)

Genetically engineered (GE) crop varieties with enhanced pest management traits, such as insect resistance and herbicide tolerance, are being adopted by U.S. farmers at a very rapid rate.1 In- sect-resistant crops (Bt crops) contain a gene from a soil bacterium, Bacillus thuringiensis (Bt), which produces a protein that is toxic to specific insects. Bt corn with traits to control the Euro- pean corn borer was introduced commercially in 1996 (Hyde et al. 1999). By the year 2000, Bt corn accounted for 19 percent of corn-planted acres. Bt corn with traits to control corn root- worms was commercially introduced in 2003. By 2010, Bt corn accounted for approximately 63 percent of domestic corn acres (Figure 1).

Estimating the costs and benefits associated with Bt corn use is complicated by the high de- gree of variability in regional factors such as weather, infestation levels, and seed costs. More- over, the impact of Bt adoption is often con- founded with the effect of other production prac- tices such as crop rotation. Several studies have analyzed how Bt corn affects pesticide use, yields, costs, and profits (Duffy 2001, McBride and El- Osta 2002, Fernandez-Cornejo and McBride 2002, Pilcher et al. 2002, Baute, Sears, and Schaafsma 2002, Dillehay et al. 2004, Fernandez-Cornejo and Li 2005, Mungai et al. 2005, Fang et al. 2007). Generally speaking, these studies have found that Bt corn yields are higher for adopters than for growers of conventional varieties (Table 1). For example, Duffy (1999) found that Bt corn yields were approximately 13 bushels per acre higher than conventional yields. Mitchell, Hurley, and Rice (2004) found that adoption increased yields by 2.8 to 6.6 percent. Dillehay et al. (2004) found that adoption increased yields by 5.5 per- cent in Pennsylvania and Maryland. Fernandez- Cornejo and Li (2005) found that, on average, adopters had 12.5 bushels per acre higher corn yields than non-adopters. Several studies also concluded that adopters used less insecticide than non-adopters (Table 1).

However, most studies have analyzed data col- lected in the first years of adoption. As a recent report by the National Research Council (NRC) (NRC 2010) suggests, "The environmental, eco- nomic, and social effects on adopters and non- adopters of GE crops [have] changed over time...."

Corn farmers have experienced significant changes in market and environmental conditions since the turn of the twenty-first century. For in- stance: (i) corn borer infestations have decreased dramatically (Hutchinson et al. 2010); (ii) new traits, such as corn rootworm resistance (intro- duced in 2003) and corn earwonn resistance (in- troduced in 2010) have been engineered into Bt seeds; and (iii) average corn prices, as well as most input costs, have increased.

One would expect decreases in pest popula- tions to slow rates of Bt adoption. As Figure 1 demonstrates, there was a decrease in adoption rates between 1999 and 2002. However, adoption rates rose from 2003 onwards. This may be be- cause fanners placed a premium on the new (in- sect-resistance) traits that have been incorporated into Bt seeds since 2003. Alternately, increases in expected profits may have made these seed pur- chases more palatable. …

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