Effects of Bt Cotton in India During the First Five Years of Adoption

Prakash Sadashivappa and Matin Qaim

No 49947, 2009 Conference, August 16-22, 2009, Beijing, China from International Association of Agricultural Economists

Abstract: While previous research has analyzed the impacts of Bt cotton in India, most available studies are based on one or two years of data only. We analyze the technology’s performance over the first five years of adoption, using panel data with three rounds of observations. On average, Bt adopting farmers realize pesticide reductions of about 40%, and yield advantages of 30-40%. Profit gains are in a magnitude of US $60 per acre. These benefits have been sustainable over time. Farmers’ satisfaction is reflected in a high willingness to pay for Bt seeds. Nonetheless, in 2006 Indian state governments decided to establish price caps at levels much lower than what companies had charged before. This intervention has further increased farmers’ profits, but the impact on aggregate Bt adoption was relatively small. Price controls might have negative long-term implications, as they can severely hamper private sector incentives to invest in new technologies.

Keywords: Environmental Economics and Policy; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 29
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae09:49947

DOI: 10.22004/ag.econ.49947

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