Hostname: page-component-586b7cd67f-2brh9 Total loading time: 0 Render date: 2024-11-20T09:28:45.483Z Has data issue: false hasContentIssue false
  • English
  • Français

Bt cotton, damage control and optimal levels of pesticide use in Pakistan

Published online by Cambridge University Press:  19 November 2013

Shahzad Kouser  and
Matin Qaim
Shahzad Kouser
Affiliation:
Institute of Agricultural and Resource Economics, Faculty of Social Sciences, University of Agriculture, Faisalabad, Pakistan. Tel: +92-41-9200161-2802. Fax: +92-41-9200764. E-mail: [email protected]
Matin Qaim
Affiliation:
Department of Agricultural Economics and Rural Development, Georg-August University of Goettingen, Germany. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

We use farm survey data and a damage control framework to analyze impacts of Bt cotton on yields and pesticide use in Pakistan. We also derive optimal levels of pesticide use with and without Bt, taking into account health and environmental externalities. This has not been done previously in the literature. Conventional cotton growers suffer from significant insect crop damage; they underuse pesticides from a profit-maximizing perspective. Yet, the picture is reversed when externalities are also considered. The social optimum of pesticide use is much lower than the private optimum, and both optima are lower with Bt than without this technology. Bt controls pest damage more effectively. Hence, yields on Bt farms are about 20 per cent higher in spite of lower pesticide use. Large pest damage is a typical phenomenon in developing countries. In such situations, Bt can contribute to productivity growth, while reducing pesticide applications and associated negative externalities.

Type
Research Article
Information
Environment and Development Economics , Volume 19 , Issue 6 , December 2014 , pp. 704 - 723
Copyright
Copyright © Cambridge University Press 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Abdulai, A. and Huffman, W.E. (2005), ‘The diffusion of new agricultural technologies: the case of crossbred-cow technology in Tanzania’, American Journal of Agricultural Economics 87(3): 645–659.Google Scholar
Ali, A. and Abdulai, A. (2010), ‘The adoption of genetically modified cotton and poverty reduction in Pakistan’, Journal of Agricultural Economics 61(1): 175–192.Google Scholar
Amemiya, T. (1974), ‘The nonlinear two-stage least-squares estimator’, Journal of Econometrics 2: 105–110.Google Scholar
Arias-Estévez, M., López-Periago, E., Martínez-Carballo, E., Simal-Gándara, J., Mejuto, J.C., and García-Río, L. (2008), ‘The mobility and degradation of pesticides in soils and the pollution of groundwater resources’, Agriculture, Ecosystems & Environment 123(4): 247–260.CrossRefGoogle Scholar
Asfaw, S., Mithöfer, D., and Waibel, H. (2010), ‘Agrifood supply chains, private sector standards, and farmers' health: evidence from Kenya’, Agricultural Economics 41(3–4): 251–263.Google Scholar
Bandiera, O. and Rasul, I. (2006), ‘Social networks and technology adoption in northern Mozambique’, Economic Journal 116(514): 869–902.Google Scholar
Bennett, R., Buthelezi, T., Ismael, Y., and Morse, S. (2003), ‘Bt cotton, pesticides, labour and health: a case study of smallholder farmers in the Makhathini Flats, Republic of South Africa’, Outlook on Agriculture 32(2): 123–128.CrossRefGoogle Scholar
Bennett, R., Ismael, Y., Morse, S., and Shankar, B. (2004), ‘Reductions in insecticide use from adoption of Bt cotton in South Africa: impacts on economic performance and toxic load to the environment’, Journal of Agricultural Science 142(6): 665–674.Google Scholar
Bennett, R., Kambhampati, U., Morse, S., and Ismael, Y. (2006), ‘Farm-level economic performance of genetically modified cotton in Maharashtra, India’, Review of Agricultural Economics 28(1): 59–71.Google Scholar
Crost, B., Shankar, B., Bennett, R., and Morse, S. (2007), ‘Bias from farmer self selection in genetically modified crop productivity estimates: evidence from Indian data’, Journal of Agricultural Economics 58(1): 24–36.Google Scholar
Deaton, A. (2010), ‘Instruments, randomization, and learning about development’, Journal of Economic Literature 48(2): 424–455.Google Scholar
Diagne, A. and Demont, M. (2007), ‘Taking a new look at empirical models of adoption: average treatment effect estimation of adoption rates and their determinants’, Agricultural Economics 37(2–3): 201–210.Google Scholar
Feder, G., Just, R.E., and Zilberman, D. (1985), ‘Adoption of agricultural innovations in developing countries: a survey’, Economic Development and Cultural Change 33(2): 255–298.Google Scholar
Florax, R.J.G.M., Travisi, C.M., and Nijkamp, P. (2005), ‘A meta-analysis of the willingness to pay for reductions in pesticide risk exposure’, European Review of Agricultural Economics 32(4): 441–467.Google Scholar
Government of Pakistan (2009), Agricultural Statistics of Pakistan 2007–2008, Islamabad: Ministry of Food and Agriculture, Government of Pakistan.Google Scholar
Government of Pakistan (2012), Pakistan Economic Survey 2011–12, Islamabad: Ministry of Finance, Government of Pakistan.Google Scholar
Greene, H. (2008), Econometric Analysis, Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
Hayee, A. (2004), Cultivation of Bt Cotton – Pakistan's Experience, Islamabad: Action Aid Pakistan.Google Scholar
Heckman, J.J. and Vytlacil, E. (2005), ‘Structural equations, treatment effects and econometric policy evaluation’, Econometrica 73(3): 669–738.CrossRefGoogle Scholar
Hossain, F., Pray, C., Lu, Y., Huang, J., Fan, C., and Hu, R. (2004), ‘Genetically modified cotton and farmers' health in China’, International Journal of Occupational and Environmental Health 10(3): 296–303.Google Scholar
Huang, J., Hu, R., Rozelle, S., Qiao, F., and Pray, C. (2002), ‘Transgenic varieties and productivity of smallholder cotton farmers in China’, Australian Journal of Agricultural and Resource Economics 46(3): 367–387.Google Scholar
Huang, J., Hu, R., Pray, C., Qiao, F., and Rozelle, S. (2003), ‘Biotechnology as an alternative to chemical pesticides: a case study of Bt cotton in China’, Agricultural Economics 29(1): 55–67.Google Scholar
James, C. (2012), ‘Global status of commercialized biotech/GM crops: 2012’, ISAAA Brief No. 44, International Service for the Acquisition of Agri-biotech Applications, Ithaca, NY.Google Scholar
Jeyaratnam, J. (1990), ‘Acute pesticide poisoning: a major global health problem’, World Health Statistics Quarterly 43(3): 139–144.Google ScholarPubMed
Kabunga, N.S., Dubois, T., and Qaim, M. (2012), ‘Heterogeneous information exposure and technology adoption: the case of tissue culture bananas in Kenya’, Agricultural Economics 43(5): 473–486.Google Scholar
Kathage, J. and Qaim, M. (2012), ‘Economic impacts and impact dynamics of Bt (Bacillus thuringiensis) cotton in India’, Proceedings of the National Academy of Sciences 109(29): 11652–11656.Google Scholar
Knox, O.G.G., Constable, G.A., Pyke, B., and Gupta, V. (2006), ‘Environmental impact of conventional and Bt insecticidal cotton expressing one and two Cry genes in Australia’, Australian Journal of Agricultural Research 57(5): 501–509.CrossRefGoogle Scholar
Kouser, S. and Qaim, M. (2011), ‘Impact of Bt cotton on pesticide poisoning in smallholder agriculture: a panel data analysis’, Ecological Economics 70(11): 2105–2113.Google Scholar
Kouser, S. and Qaim, M. (2013), ‘Valuing financial, health, and environmental benefits of Bt cotton in Pakistan’, Agricultural Economics 44(3): 323–335.Google Scholar
Krishna, V.V. and Qaim, M. (2008), ‘Potential impacts of Bt eggplant on economic surplus and farmers' health in India’, Agricultural Economics 38(2): 167–180.Google Scholar
Krishna, V.V. and Qaim, M. (2012), ‘Bt cotton and sustainability of pesticide reductions in India’, Agricultural Systems 107: 47–55.Google Scholar
Kuosmanen, T., Pemsl, D., and Wesseler, J. (2006), ‘Specification and estimation of production functions involving damage control inputs: a two-stage, semiparametric approach’, American Journal of Agricultural Economics 88(2): 499–511.Google Scholar
Lichtenberg, E. and Zilberman, D. (1986), ‘The econometrics of damage control: why specification matters’, American Journal of Agricultural Economics 68(2): 261–273.Google Scholar
Lu, Y., Wu, K., Jiang, Y., Guo, Y., and Desneux, N. (2012), ‘Widespread adoption of Bt cotton and insecticide decrease promotes biocontrol services’, Nature 487(7407): 362–365.Google Scholar
Marra, M., Pannell, D.J., and Ghadim, A.A. (2003), ‘The economics of risk, uncertainty and learning in the adoption of new agricultural technologies: where are we on the learning curve?’, Agricultural Systems 75(2–3): 215–234.Google Scholar
Matuschke, I. and Qaim, M. (2009), ‘The impact of social networks on hybrid seed adoption in India’, Agricultural Economics 40(5): 493–505.Google Scholar
Morse, S., Bennett, R., and Ismael, Y. (2006), ‘Environmental impact of genetically modified cotton in South Africa’, Agriculture, Ecosystems & Environment 117(4): 277–289.Google Scholar
Nazli, H., Orden, D., Sarker, R., and Meilke, K. (2012), ‘Bt cotton adoption and wellbeing of farmers in Pakistan’, Contributed paper at the 28th Conference of the International Association of Agricultural Economists (IAAE), 18–24 August, Foz do Iguacu, Brazil.Google Scholar
Pimentel, D. (2005), ‘Environmental and economic costs of the application of pesticides primarily in the United States’, Environment, Development and Sustainability 7(2): 229–252.Google Scholar
Pingali, P.L. (2001), ‘Environmental consequences of agricultural commercialization in Asia’, Environment and Development Economics 6(4): 483–502.Google Scholar
Pray, C., Huang, J., Hu, R., and Rozelle, S. (2002), ‘Five years of Bt cotton in China – the benefits continue’, Plant Journal 31(4): 423–430.Google Scholar
Qaim, M. (2009), ‘The economics of genetically modified crops’, Annual Review of Resource Economics 1: 665–694.CrossRefGoogle Scholar
Qaim, M. and de Janvry, A. (2005), ‘Bt cotton and pesticide use in Argentina: economic and environmental effects’, Environment and Development Economics 10(2): 179–200.Google Scholar
Qaim, M. and Kouser, S. (2013), ‘Genetically modified crops and food security’, PLOS ONE 8(6): e64879.Google Scholar
Qaim, M. and Zilberman, D. (2003), ‘Yield effects of genetically modified crops in developing countries’, Science 299(5608): 900–902.Google Scholar
Qaim, M., Subramanian, A., Naik, G., and Zilberman, D. (2006), ‘Adoption of Bt cotton and impact variability: insights from India’, Review of Agricultural Economics 28(1): 48–58.Google Scholar
Rosenbaum, P.R. and Rubin, D.B. (1983), ‘The central role of the propensity score in observational studies for causal effects’, Biometrika 70(1): 41–55.CrossRefGoogle Scholar
Shankar, B. and Thirtle, C. (2005), ‘Pesticide productivity and transgenic cotton technology: the South African smallholder case’, Journal of Agricultural Economics 56(1): 97–116.CrossRefGoogle Scholar
Shankar, B., Bennett, R., and Morse, S. (2008), ‘Production risk, pesticide use and GM crop technology in South Africa’, Applied Economics 40(19): 2489–2500.Google Scholar
Shelton, A.M., Zhao, J.Z., and Roush, R.T. (2002), ‘Economic, ecological, food safety, and social consequences of the deployment of Bt transgenic plants’, Annual Review of Entomology 47(1): 845–881.Google Scholar
Smith, J.A. and Todd, P.E. (2001), ‘Reconciling conflicting evidence on the performance of propensity-score matching methods’, American Economic Review 91(2): 112–118.Google Scholar
Subramanian, A. and Qaim, M. (2010), ‘The impact of Bt cotton on poor households in rural India’, Journal of Development Studies 46(2): 295–311.CrossRefGoogle Scholar
Terza, J.V., Basu, A., and Rathouz, P.J. (2008), ‘Two-stage residual inclusion estimation: addressing endogeneity in health econometric modeling’, Journal of Health Economics 27: 531–543.Google Scholar
Thirtle, C., Beyers, L., Ismael, Y., and Piesse, J. (2003), ‘Can GM-technologies help the poor? The impact of Bt cotton in Makhathini Flats, KwaZulu-Natal’, World Development 31(4): 717–732.Google Scholar
Travisi, C. and Nijkamp, P. (2008), ‘Valuing environmental and health risk in agriculture: a choice experiment approach to pesticides in Italy’, Ecological Economics 67(4): 598–607.Google Scholar
WHO (2010), The WHO Recommended Classification of Pesticides by Hazard and Guidelines to Classification 2009, Geneva:World Health Organization.Google Scholar
Wolfenbarger, L.L.R., Naranjo, S.E., Lundgren, J.G., Bitzer, R.J., and Watrud, L.S. (2008), ‘Bt crop effects on functional guilds of non-target arthropods: a metaanalysis’, PLOS ONE 3: e2118.Google Scholar
Supplementary material: PDF

Kouser and Qaim Supplementary Material

Appendix

Download Kouser and Qaim Supplementary Material(PDF)
PDF 42.2 KB