The International Consortium on Agricultural Biotechnology Research (ICABR)


Economic and Environmental Impacts of Agrobiotechnology: The Case of Cotton


Pasu Suntorpithug, Nicholas Kalaitzandonakes, University of Missouri-Columbia






After some 15 years in the laboratory, agrobiotechnology reached the market place in the mid-1990s. To date, some 50 transgenic crop products, 100 biopesticides, and over 60 animal therapeutics have been approved for commercialization worldwide. Several of the early products to market have focused on input trait technologies, such as herbicide tolerance and pest resistance. Transgenics include most major crops, such as canola, corn, cotton, potatoes, and soybeans. Second generation biotechnologies involving transgenic plants with multiple input traits and enhanced quality traits are also beginning to enter the market (Kalaitzandonakes & Maltsbarger; Kalaitzandonakes & Hayenga).

Much of the initial excitement associated with the introduction of transgenic crops came from the rapid adoption of the technology by U.S. and Canadian farmers. Total acres planted to transgenic crops worldwide in 1999 are estimated at 100 million acres. In 1998, 65 million acres of transgenic crops were planted – double 1997 levels. These transgenic crops were mainly planted in the U.S. (74% of global acreage), Argentina (15%), Canada (10%), and Australia (1%)

This rapid rate of adoption may not continue into 2000, however, as the successful commercialization of transgenic crops has brought to the forefront an increasingly complex array of environmental, socioeconomic and policy issues. These issues are unlikely to disappear any time soon, and will probably increase in the immediate future, as greater emphasis is placed on the conflicting dimensions of agricultural biotechnology. One reason behind the resistance towards bioengineered crops appears to be the increasing emphasis towards potential risks from the use of agrobiotechnology and the lack of attention towards the benefits delivered by its applications. Specifically, while economic and environmental benefits have been generally anticipated from first generation biotechnologies, these impacts have not been measured or extensively discussed in the literature.

II. Literature

There are a few studies that have investigated the economic and environmental impacts of agrobiotechnology (Falk-Zepeda et al., Traxler and Falk-Zepeda, Klotz et al., Moschini et al.,). These studies provide significant insights on the economic and environmental benefits of agrobiotechnology, although, some present conflicting results (e.g. Falk Zepeda et al, and Moscini et al). Despite their significant insights, a key limitation of existing impact assessment studies is that they do not account for the variation of impacts across time and space. In particular, they all depend on survey data from a single season and a limited planting and growing region or pull impact data from field and varietal trials. Because of that approach, they are vulnerable to variations due to weather, pest infestations etc. which can significantly affect impacts of agrobiotechnologies from one year to another and one location to another. Worse, the results of such studies can not be generalized as it is unclear how representative they are of the overall adoption and diffusion patterns of the various agrobiotechnologies. Accordingly, the current empirical results should be considered tentative.


III. Objectives of proposed study

This study remedies some of the limitations of previous studies and measures:

  • the total economic impact of cotton biotechnologies in the US by assessing the revenue gains and cost reductions across all adopting states over the period 1996-2000.
  • the total environmental impact of cotton biotechnologies across all adopting states over the period 1996-2000. Such environmental impacts include changes in pesticide use and shifts towards minimum tillage systems attributable to the use of agrobiotechnology in the US.

The analysis is based on a unique data set on the total adoption of insect resistant and herbicide resistant cotton (including stacked varieties). This data set consists of the census of cotton biotechnology adoption and diffusion (by grower and area) and it is the most comprehensive dataset of its kind.

IV. Procedures

Data on yield differentials, chemical applications, costs, tillage systems and managerial variables that complement the basic dataset of adoption and diffusion have been obtained through a carefully designed survey that will ensure representativeness of the sample over the whole population of adopters and non-adopters. Using econometric techniques, differences in yields, costs, profits, tillage systems and chemical use attributable to the use of agrobiotechnology will be estimated. These differences will then be projected over the entire population and adopting regions through calibration of relevant sub-samples.




Falk-Zepeda, J.B., Traxler, G. and Nelson, R. (in press). Surplus distribution from the introduction of a biotechnology innovation. American Journal of Agricultural Economics.

Kalaitzandonakes, N. and Maltsbarger, R. (1998, December). Biotechnology and identity preserved supply chains: A look at the future of crop production and marketing. Choices 15-19.

Kalaitzandonakes, N. & Hayenga, M. "Change in the biotechnology, seed and chemical industrial complex: Theory and evidence. " Transitions in Agbiotech: Economics of Strategy and Policy, Proceedings, W. Lesser and J. Caswell, Eds., 1999

Klotz-Ingram, C., Jans, S., Fernandez-Cornejo, J., & McBride, W. (1999). Farm-Level production effects related to the adoption of genetically modified cotton for pest management. AgBioForum, 2(2), 73-84. Available on the World Wide Web:

Moschini, G., H. Lapan, and A. Sobolevsky, (2000), Roudup Ready Soybeans and Welfare Effects in the Soybean Complex, Staff Paper #324, Iowa State University

Traxler G. & Falck-Zepeda J. (1999). The distribution of benefits from the introduction of transgenic cotton varieties. AgBioForum, 2(2), 94-98. Available from the World Wide Web:



Home Page Program Registration Ravello and surroundings