The International Consortium on Agricultural Biotechnology Research (ICABR)

 

The Economics of Multiple HT Varieties in a Crop Rotation

W. H. Furtan,
R. S. Gray,
University of Saskatchewan

New crop varieties that are tolerant to specific herbicides, such as canola that is tolerant to Roundup™, have been evaluated in terms of cost saving to farmers. As additional new crop varieties are developed that have similar characteristics, such as wheat, farmers may have two crops that are tolerant to the same chemical in the same crop rotation. This may reduce the economic benefit of the HT varieties because of weed problems in the rotation. This paper examines some of the economic implications of more than one HT crop in a rotation.

We examine the crop rotation, for a typical farm on the Canadian prairies, were the farmers can chose between no HT crop varieties, one HT crop and two HT crops. The costs and benefits of each of the rotations are simulated over a number of years to determine which rotation is the most profitable. The difference in costs between the rotations is a function of weed infestation levels and the corresponding loss in yield, costs of segregation, higher seed prices, technology fees that may apply depending on the variety, and extra herbicide costs the farmer may incur due to the sequencing of HT crop varieties. Additional benefits arise from reduced herbicide costs; less labor and machinery costs and possible yield increases.

The economic analysis shows that there is a limited increase in profits, that is about $6 per acre, from using a single HT crop varieties in a rotation. When a second HT crop is added to the rotation the level of profit drops by approximately fifty percent and is sensitive to any increase in weed infestation problems. A small percentage increase in weed infestation removes all profitability. Likewise any increase in the cost of marketing, such as segregation costs, reduce the potential benefits of HT crops.


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