The International Consortium on Agricultural Biotechnology Research (ICABR)


Managing European Corn Borer Resistance to Bt Corn with Dynamic Refuges

Silvia Secchi
Center for Agricultural and Rural Development
Iowa State University,

Terrance M. Hurley
Department of Applied Economics
University of Minnesota,
St. Paul, USA

Bruce A. Babcock
Department of Economics
Iowa State University,
Ames, Iowa,

Richard L. Hellmich
U.S. Department of Agriculture, Agricultural Research Service,
Department of Entomology, Iowa State University
Ames, Iowa,

The widespread adoption of Bt corn, genetically engineered to express Bacillus Thuringiensis (Bt) proteins which are toxic to the European Corn Borer (ECB), raises concerns that the ECB will rapidly develop resistance to Bt, thereby making it ineffective. Since the ECB is a mobile common property pest, farmers have few incentives to manage resistance on their own to preserve ECB susceptibility (the converse of resistance) and the value of Bt corn. Therefore, the Environmental Protection Agency’s (EPA) decision to mandate resistance management practices is an economically justified solution to a tragedy of the commons.

The EPA’s policy is based on a high-dose refuge strategy. Bt corn is designed to express a high level of toxins, to kill all but the most resistant ECB, while farmers are required to plant a proportion of their corn acreage to a conventional corn refuge. This allows susceptible ECB to thrive and mate with resistant ECB, which slows down resistance.

Current refuge requirements are based on a second best strategy that ignores optimal temporal variations in refuge size. The requirements also disregard the potential for new Bt corn varieties to replace existing varieties. Currently, Bt corn relies on a single toxin, while the next generation of Bt corn will probably use multiple toxins. Resistance is less likely to develop with multiple toxins because the ECB must overcome multiple sources of mortality. Thus, the characteristics of the new technology impact the salvage value of susceptibility and the current optimal use of Bt corn.

The purpose of this paper is to develop a dynamic bioeconomic model of temporally optimal refuge recommendations when a backstop technology arrives at a known date. The model is then used to compare temporally optimal refuge requirements with second best static requirements similar to the ones currently adopted by the EPA. The comparison is based on maximizing the value of agricultural production. Two alternative backstop technologies are considered. The first assumes that the backstop uses two toxins, one that is identical to the original and one functionally distinct. The second assumes that the backstop technology uses two toxins, both of which are distinct from the original toxin.

Two important results emerge from the analysis. First, it is optimal to manage resistance less aggressively by requiring less refuge when the technology is new and when it is almost obsolete. Initially, the value of Bt corn for controlling the ECB is relatively high, while the value of preserving susceptibility is low, so less refuge is optimal. As resistance develops and ECB populations decline, the value of controlling ECB diminishes, which increases the relative value of preserving susceptibility, so more refuge is optimal. As the introduction of a backstop technology approaches however, the value of preserving susceptibility declines and less refuge is again optimal. Second, while temporally optimal variations in refuge increase the value of production when compared to a second best static optimum, the increase is modest. Therefore, the benefits of administering a temporally optimal refuge policy are unlikely to outweigh the additional costs.

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