The International Consortium on Agricultural Biotechnology Research (ICABR)


Smallholder Adoption and Economic Impacts of Bt Cotton in the Makhathini Flats, South Africa

Yousef IsmaŽl1, Lindie Beyers2, Lin Lin3 and Colin Thirtle3

Since 1998, a group of smallholder cotton farmers in one of the lower potential cotton areas in South Africa started to adopt a genetically modified cottonseed variety (NUCOTN 37B with Bollguard). Emotive issues aside, the question is whether farmers benefit from this genetically modified crop. If so, in what way do they benefit and to what extent. Is this benefit an example of GMC-potential for smallholder farmers in other (regions of) developing countries.

An attempt is made to answer these questions through analysis of the survey data. The results showed that farmers on larger land holdings and with more years of farming experience were more likely to adopt the Bt-cotton technology. The majority of the farmers cultivated a variety of cash crops in conjunction with cotton. Farmers indicated that potential savings on chemicals and labour, as well as potential increases in yields represent the most important perceived benefits of adopting the Bt-technology. The perceived benefits were realised by those farmers who did adopt the technology: the applied quantity of chemicals decreased, leading to reduced chemical cost as well as reduced demand for spraying-labour. Compared to non-GM varieties, yields (per hectare and per kilogram of seed input) increased even during the comparatively wet second season (1999/2000).

From the estimated production function, the net effect of increased chemical application is an increase in cotton yield. Similarly, adoption of Bt-technology (the net effect of the adoption decision, either in season one or in season two or both) leads to increased yields. The estimated cost function results indicate that optimal levels of input use, for cost minimisation or profit maximisation, has not been attained, yet. Approximate elasticities indicate that farmers can still expand their operations to reach their levels of minimum average cost.

In conclusion, the technological success of the Bt-cotton variety should be noted. However, technological success does not necessarily imply high rates of adoption and success. The study period is too short to make definitive conclusions of adoption dynamics. It might very well be that some farmers decide to return to non-GM varieties in the long run. Programs that aim to promote adoption of GMC-technology in rural areas should address the associated economic and sociological problems of rural areas. These problems include, amongst other, access to financial-, input- and product markets as well as access to information. Literacy, nutrition, health and cultural beliefs play important roles in farming practices in rural areas. If new technologies ignore these aspects, their benefits will remain confined to laboratories and experimental plots without ever producing spill-over poverty alleviation effects in the developing countries.

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