USDA - Economic Research Service
July 20, 1999
Genetic engineering is a technique used to alter or move genetic material (genes) of
living cells. (A number of the terms used in this article are defined in Agricultural Biotechnology
Concepts and
Definitions). U.S. acreage using genetically engineered crops has increased from about
8 million acres in 1996 to more than 50 million acres in 1998, in major states where data
have been collected (see Genetically Engineered Crops for Pest Management, also in this
Issues Center). Has adoption of this technology benefited farmers and the environment?
Answering this question is not easy, even though survey data have been collected on the
characteristics and performance of farms adopting biotech crops. Attributing differences
in yields, pesticide use, and profits between adopters and nonadopters observed in the
data solely to adoption of genetically engineered crops is nearly impossible because many
other factors also affect yield and pesticide use. For example, producers with more
favorable soils and climate may have higher yields than those operating under less
favorable conditions, whether they used herbicide-tolerant varieties or not. Producers in
areas of greater pest pressure may use more pesticide applications than those with fewer
pest problems, despite adopting Bt crops.
However, the impacts of GMO (Genetically Modified Organisms) adoption can be explored by
statistically controlling for other factors that also affect the impact. Multivariate
regression modeling in effect decomposes the influence various factors exert on the
decision to adopt GMO technology, and the influence of other factors on yields, pesticide
use, and variable profits. This report summarizes preliminary findings from such models
using 1997 survey data.
Factors Affecting Adoption
What combination of producer characteristics and resource conditions are associated with
greater probability of adopting GMO technology? Variables examined included farm size,
operator education and experience, target pest for insecticide use, seed price,
debt-to-assets ratio, use of marketing or production contracts, irrigation, crop price,
and use of consultants The statistical significance and importance of these variables
varied among crops and technologies, illustrated by the cases of herbicide-resistant
soybeans and Bt cotton.
Herbicide-resistant soybeans
Larger operations and more educated operators are more likely to
use herbicide-tolerant soybean seed. As economists have observed in other cases, expected
profitability positively influences the adoption of agricultural innovations. Thus,
average crop price is a statistically significant and positive factor influencing
adoption. Use of conventional tillage is another significant factor that reduces adoption,
since farmers use conventional tillage to help control weeds,while herbicides are used
with conservation or no-till practices. Weed infestation levels and seed price were
positively correlated with adoption, with adopters preferring more expensive, higher
quality seed, even excluding technical fees for herbicide-resistant varieties.
Bt Cotton
Adoption of insect-resistant cotton was only modeled in the Southeast (AL, GA, NC,
SC) because insecticide use in this region was less affected by routine spraying regimes
unrelated to the use of Bt cotton, such as boll weevil control in other producing regions,
notably Mississippi. Production and marketing contracts and seed price were statistically
significant variables positively associated with the adoption of Bt cotton. Presence of
insect pests targeted for insecticide use was also statistically significant, but
negative: more target pests treated with traditional synthetic insecticides are associated
with lower Bt cotton adoption levels.
Modeling Impacts of Adoption
Given a specific level of GMO adoption, the impact can be assessed by controlling for the
many factors that also contribute to that impact, in addition to using GMO seeds.
Herbicide-tolerant soybeans and cotton and Bt-enhanced cotton crops are modeled
individually. In each model, pest infestation levels, other pest management practices,
crop rotations, and tillage are controlled for statistically. Geographic location is
included as a proxy for soil, climate, and agricultural practice differences that might
influence impacts of adoption. In addition, the impact model includes correction factors
(obtained from the adoption model) to control for self-selection of the technology due to
differences in producer characteristics between adopters and nonadopters
Results of such modeling can be interpreted as an elasticity-- the change in a particular
impact (yields, pesticide use or profits) relative to a small change in adoption of the
technology from current levels. The results can be viewed in terms of aggregate impacts
across the entire agricultural sector as more and more producers adopt the technology, or
in terms of a typical farm as they use the technology on more and more of their land. As
with most cases in economics, the elasticities estimated in the quantitative model should
only be used to examine small changes (say, less than 10 percent) away from current levels
of adoption.
Impacts From Adopting Herbicide-Tolerant Crops
Cotton production relies heavily upon herbicides to control weeds, often requiring
applications of two or more herbicides at planting and postemergence herbicides later in
the season. Close to 28 million pounds of herbicides were applied to 97 percent of the 13
million acres devoted to upland cotton production in the 12 major states in 1997. In 1997,
increases in adoption of herbicide-tolerant cotton are estimated to have increased yields,
leading to increased variable profits (see Table 1, Impact of Adoption of
Herbicide-Tolerant and Insect-Resistant Crops). However, no statistically significant
change in herbicide use on cotton was observed in 1997.
By contrast, increased use of herbicide-tolerant soybeans (17 percent of 1997 soybean
acres)
produced only a small increase in yield, and no significant change in variable profits in
1997. Soybean production in the U.S. uses a large amount of herbicides, and 97 percent of
the 66.2 million acres devoted to soybean production in the 19 major states were treated
with more than 78 million pounds of herbicides in 1997. Genetic engineering produces
tolerance to glyphosate herbicide in soybeans, of which 15 million pounds were used in
1997. However, almost two-thirds of the herbicides used on soybeans were other synthetic
materials. As GMO adoption increased, use of glyphosate herbicide (such as Roundup©) also
increased but use of other synthetic herbicides decreased by a larger amount. The net
result was a decrease in the overall pounds of herbicide applied.
Impacts From Adopting Insect-Resistant Cotton
Cotton production uses a large amount of insecticides and 77 percent of the 13 million
acres devoted to upland cotton production in the 12 major states were treated with 18
million pounds of insecticides in 1997. Malathion was the top insecticide used on cotton,
with farmers applying more than 7 million pounds of this chemical in 1997. Aldicarb was
second (2.4 million pounds), followed by methyl parathion (2 million pounds), and acephate
(0.9 million pounds).
In 1997, an increase in adoption of Bt cotton in the Southeast (to 22 percent of cotton
acres) led to an increase in cotton yields and variable profits (see Table 1, Impact of Adoption of
Herbicide-Tolerant and Insect-Resistant Crops). While use of organophosphate
insecticides and pyrethroid insecticides did not have significant changes associated with
an increase in Bt adoption, there was a significant decrease in other insecticides, such
as aldicarb.
Summary
Statistically controlling for factors other than adoption of genetically engineered seeds
allows an
understanding of the likely impacts of marginal changes in adoption on yields, profits,
and pesticide use.
Impacts vary with the crop and technology examined. Increases in adoption of
herbicide-tolerant
cotton were associated with significant increases in yields and variable profits, but were
not associated with significant changes in herbicide use. Increases in adoption of
herbicide-tolerant soybeans were associated with small increases in yields and variable
profits, and significant decreases in herbicide use.
Increases in adoption of Bt cotton resistant to insects in the Southeast were associated
with significant increases in yields and profits and decreased insecticide use.
For more information, contact Kitty Smith,
202-694-5500, or Ralph Heimlich, 202-694-5504.
Links
Genetically Engineered Crops for Pest Management, in the Issues
Center on the ERS website.
New Crops, New Century, New Challenges: How Will Scientists, Farmers,
and Consumers Learn To Love Biotechnology and What Happens if They Don't, a July 13,
1999, speech by Secretary of
Agriculture Dan Glickman. Company news
release
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