Economic and Social Considerations in the Adoption of Bt Crops

Abstract

This chapter provides an overview of the economics of Bt crop adoption, with a special emphasis on Bt cotton. On average, the technology reduces insecticide applications and pest-related crop losses. In spite of higher seed prices, farmers realize substantial gains in cotton incomes. In India and China alone, Bt cotton produces annual welfare gains of several hundred million US dollars, with farmers being the main beneficiaries. In the USA, stronger IPR protection leads to larger benefit shares for biotechnology companies, but agricultural producers and consumers profit as well. More preliminary studies for maize, rice, and eggplant suggest that similar results can also be expected for other Bt crops. Furthermore, health benefits and aspects of consumer acceptance are analyzed. Finally, several institutional and regulatory issues are discussed, as these might have important ramifications for technology access, benefit distribution, seed market structures, and biodiversity.