The International Consortium on Agricultural Biotechnology Research (ICABR)
"Analysis of the Distribution Welfare From the Introduction of
Transgenic Cotton Varieties in Mexico: A Case Study of the Coahuila-Durango Region."
University of Wisconsin
José de Jesús Espinoza-Arellano
Little hard empirical evidence exists concerning the welfare impacts of transgenic varieties in developing country agriculture. In this paper we present preliminary results of a case study of the welfare impacts of the introduction and adoption of Bt transgenic cotton varieties in Mexico. Our data collection efforts were focused on the states of Coahuila and Durango, with some data coming in from the neighboring states of Chihuahua and Tamaulipas, all in northern Mexico. Data collected served to estimate the distribution of economic surplus accrued by the gene and germplasm innovators, producers and consumers. The economic surplus estimation follows the methodology described in Falck-Zepeda, Traxler and Nelson (2000). The methodology is derived from Alston, Norton and Pardey (1995), and modified to accommodate monopoly in the input market as suggested by Moschini and Lapan (1997). Additional objectives of this study were to document the change in pesticide use patterns in the region, and to present information of the institutional and policy environment associated with the introduction and adoption of Bt cotton.
Transgenic Bt cotton was first planted commercially in Mexico in 1997. Previous years losses due to lepidopterans resulted in high adoption rates of the Bt cotton technology in the Coahuila-Durango region. Pink-bollworm, the lepidopteran target pest in the region is controlled by Bt cotton. Preliminary estimates indicate that Bt cotton adoption in the area may be as high as 96% of planted area in 2000. Adoption rates in the states of Chihuahua and Durango are lower, in part due to the lesser importance of the target pests controlled by Bt cotton in those states.
Land holdings in the study area varied from 1 to 40 hectares per person. Access to credit is granted only to landowners under the supervision of a private consultant. Each private consultant manages approximately 400-500 hectares of cotton. There has been a tendency to homogenize small plots into larger management areas to harmonize production practices and thus a management area may include several small holders. Because of the institutional and production arrangements in the Coahuila-Durango region, study efforts were centered on collecting information from the consultants and extension personnel. A total of 120 questionnaires were sent to the Coahuila-Durango region, representing approximately 50% of the area planted. In addition, 10 and 20 questionnaires were sent to large producers (greater than 1,000 hectares each) in the states of Chihuahua and Tamaulipas respectively.
The focus of the questionnaires was to estimate the net cost reduction in pesticide costs and yield changes attributable to the adoption of the Bt transgenic technology in 2000. The surveys provided information on differences in yield and cost of production between traditional and biotechnology cotton varieties for different classes of producers. Attempts are being made to collect information on results of planting Bt cotton in 1998 and 1998 within the surveys and through secondary information contained in production records.
The findings have implications for national and international research institutions for research planning, formulating collaborative arrangements, and for sharing germplasm with private firms, and should extend our knowledge about the effects of these technologies in developing countries.
Alston, J. M., G. W. Norton, and P. G. Pardey. Science Under Scarcity: Principles and Practice For Agricultural Research Evaluation and Priority Setting.
Moschini, G. and H. Lapan. "Intellectual Property Rights and the Welfare Effects on Agricultural R&D." Amer. J. Agr. Econ. 79(November 1997):1229-1242.
Falck-Zepeda, J. B., Traxler,G., and R. G. Nelson. "Surplus Distribution from the Introduction of a Biotechnology Innovation." Amer. J. Agr. Econ. 82(November 2000):1229-1242.