Refining opportunity cost estimates of not adopting GM cotton: An application in seven Sub-Saharan African countries

Abstract

A computable general equilibrium model is applied to evaluate the opportunity costs of not adopting Bt cotton, a genetically-modified (GM) insect resistant cotton, in Benin, Burkina-Faso, Mali, Senegal, Togo, Tanzania, and Uganda when it is adopted in other countries. Our model uniquely employs country-specific partial adoption rates and factor-biased productivity shocks in the cotton and oilseed sectors of all adopting regions. Assuming a 50% adoption rate, the opportunity cost of not adopting Bt cotton in the seven surveyed countries amounts to $41 million per year, which is a significant but lower cost than that suggested by the results of previous studies. Trade liberalization only marginally increases this estimate. © The Author(s) 2011. Published by Oxford University Press, on behalf of Agricultural and Applied Economics Association. All rights reserved.