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AgBioForum, 7(3): 96-100. ©2004 AgBioForum.
Introduction
India is an important grower of cotton on a global scale.
It ranks third in global cotton production after the
United States and China; with 8–9 million hectares
grown each year, India accounts for approximately 25%
of the world’s total cotton area and 16% of global cotton
production. Most of the cotton in India is grown under
rainfed conditions, and about a third is grown under irri-
gation (Sundaram, Basu, Krishna Iyer, Narayanan, &
Rajendran, 1999). However, yields of cotton in India are
low, with an average yield of 300 kg/ha compared to the
world average of 580 kg/ha.
Cotton is a very important cash crop for Indian farm-
ers and contributes around 30% to the gross domestic
product of Indian agriculture. However, as with many
cotton growing areas of the world, a major limiting fac-
tor is damage due to insect pests, especially the boll-
worm complex (American bollworm, Helicoverpa
armigera; Spotted bollworm, Earias vittella; Pink boll-
worm, Pectinophora gossipiella). Sucking pests such as
aphids (Aphis gossypii), jassids (Amrasca bigutulla),
and whiteflies (Bemisia tabaci) are also a problem in
terms of direct damage to the plant and the transmission
of viruses.
In March 2002, the Indian government permitted
commercial cultivation of genetically modified Bt
(Bacillus thuringiensis) cotton. The Bt gene produces a
protein that is toxic to bollworms. Bt cotton has now
been produced in India for two seasons—2002 and
2003. In 2002, some 38,000 hectares were planted with
Bt cotton, with more than 12,000 hectares being grown
by more than 17,000 farmers in the state of Maharash-
tra. Given the scale of the cotton industry in India and
the current global debates over advantages/disadvan-
tages of GM technology, it is not surprising that there
has been considerable and vigorous debate regarding the
agronomic and economic performance of Bt cotton in
India with various reports claiming both successes and
failures. Qaim (2003), for example, analyzed trial data
from seed companies testing Bt cotton and concluded
that quantities of insecticide can be reduced by about
one third relative to conventional (non-Bt) varieties, and
yield gains can be up to 80% in seasons with bad boll-
worm infestations (a typical increase may be 30–40%).
However, trial data can be criticized as being untypical
models of the real conditions that prevail on Indian
farms, and yield benefits may as a result be far less than
those projected from trials. Even so, other studies have
also shown potential gains to producers from growing
Bt cotton in a number of developing countries (James,
2002), including South Africa (Bennett, Buthelezi,
Ismael, & Morse, 2003; Ismael, Bennett, & Morse,
2002), Argentina (Qaim & De Janvry, 2002), Mexico
(Traxler, Godoy-Avilla, Falck-Zepeda, & Espinoza-
Arellano, 2001), Indonesia (Manwan & Subagyo,
2002), China (Pray, Rozelle, Huang, & Wang, 2002),
and India (Naik, 2001; Qaim & Zilberman, 2003).
This paper presents an analysis of data collected
from a large sample of farmers growing both conven-
tional and Bt cotton under real commercial field condi-
tions over two seasons (2002 and 2003) since Bt cotton
has been licensed for commercial use in India; this is the
first such study of its kind. The paper presents a much-
needed and timely assessment of the performance of Bt
cotton under typical farmer-managed conditions in India
(Food and Agriculture Organization of the United
Nations, 2004). Unlike previous Indian studies (Naik,
2001; Qaim & Zilberman, 2003; Qaim, 2003), it ana-
lyzes commercial field data rather than trial plot data. In
this, it meets the recent (May 2004) FAO call for more
market-based studies that will accurately reflect the
agronomic and economic environments faced by grow-
R.M. Bennett, Y. Ismael, U. Kambhampati, and
S. Morse
University of Reading, Berkshire, UK
This paper presents the results of a study aimed at measuring
the economic impact of genetically modified cotton in Maharash-
tra State, India. It is the first study of its kind in India in that the
data have been collected from farmers growing the crop under
market conditions, rather than from trials. The research com-
pares the performance of more than 9,000 Bt and non-Bt cotton
farm plots in Maharashtra over the 2002 and 2003 growing sea-
sons. Results show that Bt cotton varieties have had a signifi-
cant positive impact on average yields and on the economic
performance of cotton growers.
Key words: Bt, cotton, economic impact, India, Maharashtra
Economic Impact of Genetically Modified Cotton in India
AgBioForum, 7(3), 2004 | 97
Bennett et al. — Economic Impact of Genetically Modified Cotton in India
ers of Bt cotton. The analysis concentrates on address-
ing the question as to whether Indian farmers have
experienced economic gains from growing Bt hybrids
released by a company affiliated with Monsanto
(Mahyco-Monsanto) compared to a complex of non-Bt
hybrids and cultivars. The paper explores the perfor-
mance of the Bt variety, including spatial differences.
Methodology
The data were collected from two random samples of Bt
cotton growers in the state of Maharashtra over two sea-
sons (2002 and 2003). Maharashtra has an area of
307,690 km2 and a population of almost 79 million; the
state contributes some 23% of the nation’s industrial
output. It is among the most industrialized states in
India, but even so about 70% of the state’s population
depends on agriculture. In the first season of the study a
sample size of 2,709 farmers was obtained, whereas in
the second season a sample size of 787 farmers was
obtained. The samples covered 16 districts (out of 31 in
the state) and 1,275 villages in three cotton-growing
subregions of the state (Khandesh, Marathwada, Vidar-
bha).
There are two species of cotton grown in Maharash-
tra: G. hirsutum and G. arboreum. Most of the cotton
grown (73% of cotton area) is an intra-hirsutum hybrid,
with the remainder of the cotton area planted with
improved (nonhybrid) hirsutum and arboreum cultivars.
There are three Mahyco-Monsanto Bt cotton hybrids
grown in the subregions: MECH-162 Bt, MECH-184
Bt, and MECH-12 Bt. Popular non-Bt varieties include
Bunny, Tulsi, NHH-44, and JK-666.
Respondents were randomly selected within the
three subregions. A questionnaire was designed and
taken onto farms by trained and experienced agricultural
extension workers. Farmers were personally inter-
viewed, and data on cotton production (seed quantity/
costs, number and cost of sprays, yields, cotton prices
obtained, etc.) were collected. In the 2002 season (but
not in 2003) it was also possible to get information on
the soil type of each plot (three categories) and the num-
ber of irrigations. In nearly all cases, farmers grew both
Bt and conventional cotton varieties on the same farm,
providing useful plot data for comparing the perfor-
mance of Bt and non-Bt varieties for the same producer.
This provides some control for a number of producer-
related factors that might influence performance of the
technology (such as entrepreneurial ability, age, experi-
ence and expertise in growing the crop, and access to
other inputs such as credit and irrigation). The data pro-
vide comparison across some 7,751 plots in 2002 and
1,580 plots in 2003. Raw data failed the Anderson-Dar-
ling test for normality, even with transformation; there-
fore, data have been compared with the Kruskal-Wallis
nonparametric test.
Results
The results (means for Bt and non-Bt for the two sea-
sons) are shown in Figures 1 and 2. As sample sizes
were large, the standard errors were small and would not
be seen as bars on these graphs. Therefore, the signifi-
cance levels have been indicated.
In both seasons the non-Bt plots were larger than the
Bt plots. In 2002, non-Bt plots averaged 0.97 ha, 35%
larger than the average Bt plot size of 0.63 ha. In 2003,
the non-Bt and Bt average plot sizes were 1.12 ha and
0.96 ha respectively, a difference of 14%. Both differ-
ences were statistically significant. There was no signif-
icant difference in terms of soil type and the number of
irrigations each plot received. The lower plot size for Bt
adopters could be due to a variety of factors but is most
likely a function of the higher seed cost for those variet-
ies. More expensive seed results in farmers growing a
smaller area of the variety, assuming that they maintain
the same plant density. The results also suggest that
farmers are not preferentially planting the Bt variety on
better soil or using more irrigations.
Significant differences are seen in the use of insecti-
cide between non-Bt and Bt plots (Figure 1). Over both
seasons the number of sprays applied to control sucking
pests (such as aphids and jassids) was similar for non-Bt
and Bt adopters (Figure 1a), and costs for this input are
also quite similar (Figure 1c). Bt resistance, of course,
confers no resistance to sucking pests, so one would
expect to see the same pattern for both groups of farm-
ers. However, although not so apparent from Figure 1,
there were subtle but statistically significant differences.
In 2002, the Bt growers applied less insecticide to con-
trol sucking pests that non-Bt adopters, while in 2003
this was reversed. It may be that in the first season some
farmers did not fully understand the nature of the new
technology and reduced sucking pest spray input,
believing that the Bt variety needed less of such sprays.
Bad experiences in 2002 may have led to an upsurge in
spraying against these pests by Bt adopters in 2003.
For bollworm insecticide the pattern is very clear
and consistent. The use of bollworm sprays was much
lower for Bt than for non-Bt plots (Figure 1b), with a
corresponding reduction in expenditure per hectare (Fig-
ure 1d; 72% and 83% on average in 2002 and 2003
AgBioForum, 7(3), 2004 | 98
Bennett et al. — Economic Impact of Genetically Modified Cotton in India
respectively). It should be noted that although Bt con-
fers resistance to bollworm, some spraying may be nec-
essary, as resistance diminishes with plant age.
Therefore, even Bt adopters have to use some bollworm
insecticide. Even so, Bt adopters made substantial sav-
ings.
However, savings on insecticide have to be balanced
against the higher cost of Bt cotton seed. In Figure 2, the
per-hectare seed costs were much higher for Bt adopters
due to the premium they have to pay (Figure 2a; over
200% higher in both seasons). Indeed, once the higher
seed costs are balanced against the savings in insecti-
cide, the result showed slightly higher average costs
overall for Bt adopters compared to nonadopters (Figure
2b; 15% and 2% in 2002 and 2003, respectively).
Figure 1. Number of insecticide sprays and costs for Bt cotton adopters and nonadopters (** P < 0.01; *** P < 0.001; ns = not
significant at 0.05).
Figure 2. Seed and total costs for Bt cotton adopters and nonadopters (*** P < 0.001; ns = not significant at 0.05).
2.25
2.2
2.37**
2.24***
012345
2002
2003
A. Number of sucking pest sprays per plot
Nonadopters
Adopters
1,565
1,285
1,306
1,404***
0 500 1,000 1,500 2,000 2,500 3,000
2002
2003
C. Cost of sucking pest sprays (Rupees/ha)
3.84
3.11
0.71***
1.44***
012345
2002
2003
B. Number of bollworm pest sprays per plot
2,432
2,881
482***
692***
0 500 1,000 1,500 2,000 2,500 3,000
2002
2003
D. Cost of bollworm pest sprays (Rupees/ha)
1,137
1,163
3,684***
3,773***
0 1,000 2,000 3,000 4,000
2002
2003
A. Cost of cotton seed (Rupees/ha)
Nonadopters
Adopters 5,061
5,337
5,451***
5,805***
0 2,000 4,000 6,000 8,000
2002
2003
B. Total costs (seed + insecticide; Rs/ha)
AgBioForum, 7(3), 2004 | 99
Bennett et al. — Economic Impact of Genetically Modified Cotton in India
Evidence suggest that the real benefits of growing Bt
cotton are not so much in reduced costs but rather in
higher output (Figure 3). Average yields for both types
of cotton are high—typically 1.5–2.5 t/ha. This is a
reflection of the good growing conditions for the crop
and the use of irrigation. Yields of the Bt varieties are
significantly higher than those of the non-Bt types (Fig-
ure 3a). In 2002, the average increase in yield for Bt
over non-Bt was about 45%, while in 2003 this
increased to 63%. These figures are of the order of mag-
nitude found by Qaim (2003) with trial data and suggest
a major benefit for the growers of Bt cotton compared to
growers of non-Bt who use insecticide. Even though
non-Bt growers are using a great deal of insecticide (3–4
sprays a season, on average), this might not be enough
to control the pests. There may also be problems with
ineffective and uneven application, as all spraying is
done by hand. It should be noted that almost all of the
cotton grown by farmers in the area is a hybrid, although
it may be that the genetic background within which the
Bt gene is located could also be providing some addi-
tional advantage.
Whatever the cause, higher yields for Bt cotton,
combined with a price that is similar to non-Bt cotton
(Figure 3b), results in much higher revenues for adopt-
ers of Bt cotton (Figure 3c). The price for Bt cotton was
actually lower than the price for non-Bt cotton in 2002
(possibly as a result of unfamiliarity with the variety
among merchants) but identical in 2003. When costs are
taken into account (gross margin = revenue – variable
costs), the result is a much higher gross margin for Bt
growers compared to growers of non-Bt varieties (Fig-
ure 3d). It is worth noting that the average gross margin
gap between Bt adopters and nonadopters was larger in
2003 (74%) than in 2002 (49%).
Discussion
This study is the first of its kind in India, in being based
on real farms and markets rather than the more artificial
conditions that exist with trials. Although trial data can
be easily dismissed as being unrepresentative of the real
conditions that farmers face, surveys such as this one are
important in providing some insights into the market
within which Indian cotton growers have to survive.
Findings appear to show that since its commercial
release in 2002, Bt cotton has had a significant positive
impact on yields and on the economic performance of
Figure 3. Yield, price, and revenue for Bt cotton adopters and nonadopters (*** P < 0.001; ns = not significant at 0.05).
1.50
1.38
2.25***
2.18***
0 0.5 1 1.5 2 2.5 3
2002
2003
A. Cotton yield (tonnes/ha)
Nonadopters
Adopters
31,078
34,597
44,600***
56,357***
0 10,000 20,000 30,000 40,000 50,000 60,000
2002
2003
C. Revenue from cotton yield (Rupees/ha)
20,370
24,990
25,040
19,530***
0 5,000 10,000 15,000 20,000 25,000 30,000
2002
2003
B. Price of cotton (Rupees/tonne)
26,005
29,279
50,904***
38,796***
0 10,000 20,000 30,000 40,000 50,000 60,000
2002
2003
D. Gross margin (Rupees/ha)
AgBioForum, 7(3), 2004 | 100
Bennett et al. — Economic Impact of Genetically Modified Cotton in India
cotton growers in Maharashtra. Yields of Bt cotton are
significantly higher than those of non-Bt varieties, and
use of insecticide is less—just as important, given insec-
ticides’ toxicity and potential for environmental dam-
age. However, the higher profits are not due to reduced
costs (i.e., less insecticide) but rather the higher revenue
that arises from higher yield if the Bt variety is not dis-
advantaged in the market; although in 2002 there was
some evidence of this, it was not present in 2003.
These findings echo the results from a number of
other developing and developed countries (Baffes,
2004). However, it is important to note that although
this research has looked at two seasons, it could be
argued that there are no guarantees the gross margin
benefits will continue. As with all market-led agricul-
tural production, it is possible that prices for cotton will
fall as supply increases, but costs may also come down.
If the technology can sustain its apparent advantages to
farmers in India, then there could be a significant posi-
tive impact on farmers’ livelihoods and on agricultural
gross domestic product for India.
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