The Adoption and Economics of Bt Cotton in India - conclusions only

http://www.iimahd.ernet.in/publications/data/2006-09-04_vgandhi.pdf

INDIAN INSTITUTE OF MANAGEMENT
AHMEDABAD  INDIA
Research and Publications
The Adoption and Economics of Bt Cotton in India:
Preliminary Results from a Study
Vasant P. Gandhi
N.V. Namboodiri
W.P. No.2006-09-04
September 2006

CONCLUSIONS
The paper presents preliminary results from a study of the economics and adoption of Bt cotton
in India. Biotech crops, which made their appearance in the world about a decade ago, have
gained substantial popularity and acceptance in many parts of the world. However, their
introduction in India has been relatively late and they still have considerable ground to cover in
the country. Cotton is an important commercial crop in India but has substantial problems
particularly from extensive pest damage and poor yields. In light of this, Bt cotton offers a very
promising solution to these serious problems.
Data from the survey, which covered the important cotton states of Gujarat, Maharashtra,
Andhra Pradesh and Tamil Nadu indicates that Bt cotton offers good resistance to bollworms
as well as several other pests. The incidence of these pests is reported to be considerably lower
in Bt cotton versus Non-Bt cotton. The yields of Bt cotton are found to be higher and the yield
increase statistically significant in all the states under both irrigated and rain-fed conditions. As
a result, given the good market acceptance of the product, the value of output per hectare is
higher in all the states and conditions. The question of higher cost of cultivation exists because
of high seed cost and not commensurate reduction in pesticide cost. However, the profit is
found to be higher in all the states to the estimated extent of about 80-90 percent on an average
when the effect of the associated inputs are included. The returns are highest in Maharashtra
followed by Gujarat and then Andhra Pradesh in value terms. Subjective assessment indicates
that farmers find advantage in pest incidence, pesticide cost, cotton quality, yield and profit.
Almost all farmers indicate that they plan to plant Bt cotton in the future. To increase the
benefits from the technology, the farmers strongly urge reduction in the seed cost and greater
field extension and demonstration work on the correct practices.


Thomas R. DeGregori, Ph.D.
Professor of Economics
University of Houston
Department of Economics
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