Agriculture Reference
In-Depth Information
Adoption of Bt cotton and corn was associated with increased returns
when pest pressures were high
.
The adoption of Bt cotton had a positive
association with producer net returns in 1997, but the association was negative
for Bt corn in 1998. This suggests that Bt corn may have been used on some
acreage where the (ex post) value of protection against the European corn
borer was lower than the premium paid for the Bt seed. Because pest
infestations vary from one region to another and from one year to another, the
economic benefits of Bt corn are likely to be greatest where pest pressures are
most severe. Farmers must decide to use Bt corn before they know what the
European corn borer pest pressure will be that year, and damage caused by the
European corn borer varies from year to year. Some farmers may have
incorrectly forecast infestation levels, corn prices, and/or yield losses due to
pest infestations, resulting in “overadoption.” Also, producers may be willing
to pay a premium for Bt corn because it reduces the risk of significant losses if
higher-than-expected pest damage does occur (Fernandez-Cornejo and
McBride, 2002).
Despite the rapid adoption of HT soybeans by U.S. farmers, no
significant association with net farm returns was evident in 1997 or 1998
.
The lack of increased profitability for some farmers who adopted HT soybeans
suggests that factors other than those included in traditional farm returns
calculations may be driving adoption for these farmers. In particular, weed
control may become simpler and require less management time, which allows
growers of HT soybeans to control a wide range of weeds and makes harvest
easier and faster. One important alternative use of management time is off-
farm employment by farm operators and their spouses (Fernandez-Cornejo and
McBride, 2002).
Adoption of HT soybeans is associated with increased household
income.
Recent ERS research showed that adoption of HT soybeans was
associated with a significant increase in off-farm household income for U.S.
soybean farmers. On-farm household income is not significantly associated
with adoption but total farm household income is significantly higher for
adopters, suggesting that most managerial time saved by adopters is used in
off-farm work (Fernandez-Cornejo et al., 2005).
Adoption of GE crops is associated with reduced pesticide use
.
Pesticide
use rates (in terms of active ingredient) on corn and soybeans have declined
since the introduction of GE corn and soybeans in 1996 (figure 8). In addition,
ERS research suggests that, controlling for other factors, pesticide use declined
with adoption. There was an overall reduction in pesticide use associated with
the increased adoption of GE crops (Bt and HT cotton, HT corn, and HT
