Source: University of Illinois Extension - The Farm Gate

Why do you use Roundup Ready soybeans? Lower production cost? Better yields? Time savings? How about Bt corn, or Roundup Ready corn? Lower production costs? Better yields? Time savings? Are your reasons the same for each crop or different? The farm gate has an idea what the real reason may be. See if you agree on this issue, and you may end up with an entirely different approach to genetically modified crops and the way you incorporate them in your operation.

The background for this comes from ag economists Dr. Carl Nelson and Dr. (to be) Justin Gardner at the University of Illinois. They looked at Genetically Modified Crops and Labor Savings in US Crop Production, in an attempt to find out why 90% of US soybean acreage is glyphosate resistant, yet there is no significant profit advantage to using Roundup Ready soybeans, which of course are glyphosate resistant. Another study theorized the use of genetically modified crops allowed farmers to save on management time. But do all of them allow a time savings? Some of us have spent a lot of time walking beans, but cornfields haven’t been walked since Grandpa was farming.

A 2002 study found:

1. Bt cotton is likely to be profitable in the cotton belt and reduces pesticide use.

2. Adopting Bt corn should provide a small yield increase, and in some cases adopting causes significant increases in profit. 

3. For herbicide tolerant soybeans cost savings should offset any revenue loss due to yield drag.

A 2001 study found:

1. Herbicide tolerant technology leads the farmer to substitute relatively less-expensive glyphosate for other herbicides. 

2. Farmers realize a change in the shadow price of labor and management.

3. Due to glyphosate’s effectiveness at killing larger weeds, weather induced spraying delays do not significantly affect weed control. 

4. When farmers switch to herbicide tolerant technology substitution effects lead to a decrease in the price of alternative herbicides. 

In 2005 herbicide tolerant crops made up 87% and 60%, of U.S. soybean and cotton acreage respectively, while 35% of the corn acreage and 60% of cotton acres were insect resistant.

Gardner and Nelson believe that there either has to be a profit motive or a labor savings reasons for the adoption of a biotech crop. If it is not profit related, they say, "Farmers can then reallocate household labor to off-farm work or leisure thus increasing household welfare and maintaining the same on-farm profit.” And they add, “If the household exhibits a preference for on-farm work there will be important implications in how the household allocates labor. If the preference is strong enough then all available labor will be allocated to on-farm work, constrained by the number of hours in the day or off-farm obligations.”

What Gardner and Nelson found in their analysis was:

1. Adopting herbicide tolerant soybeans, under conventional tillage, reduces household labor by 23 percent. Consequently, “It appears that farmers are substituting HT soybeans for household labor, freeing up the resource for off-farm employment and leisure.

2. Neither Bt corn nor HT corn has a statistically significant impact on household labor. This result can easily be explained, in the absence of Bt technology many corn farmers simply do not attempt to control for corn borers.

3. Unlike Bt corn, adopting Bt cotton saves household labor. Bt cotton requires less spraying. This difference amounts to a 29% decrease in household labor.

4. With the exception of corn, we find that GM crops save labor.

Summary

Farmers have adopted biotechnology for a wide variety of crops, but for different reasons. Weed control in soybeans can be labor intensive, so herbicide tolerant soybeans have become quite popular. Pest control in cotton requires many field operations, so insect resistant cotton has become quite popular. While corn yields can suffer from both insects and weeds, their control has not been labor intensive. However, biotech corn has become popular because of its positive impact on farm financial welfare.