Monitoring the impact of GM cotton in India

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Abstract or Summary

This report summarises the findings of a number of studies designed to explore aspects of the impact of insect-resistant Bt (Bacillus thuringiensis) cotton on small-scale farmers and the cotton industry in India. The Bt gene confers plant resistance to Lepidoptera (such as the bollworm complex) and certain Coleoptera

The farmer-level impact studies are the first of their kind in India as they are based on farmers’ own practices rather than trial plots. Results suggest that while the cost of cotton seed was much higher for farmers growing Bt cotton relative to those growing non-Bt cotton, the costs of bollworm spray were much lower. While Bt plots had greater costs (seed plus insecticide) than non-Bt plots, the yields and revenue from Bt plots were much higher than those of non-Bt plots (some 39% and 63% higher in 2002 and 2003 respectively). Overall, the gross margins of Bt plots were some 43% (2002) and 73% (2003) higher than those of non-Bt plots, although there was some variation between the three sub-regions of the state. The results suggest that Bt cotton has provided substantial benefits for farmers in India over the two years, but there are questions as to whether these benefits are sustainable. There is also significant spatial and temporal variation in this benefit, and much can depend upon where production is taking place and the season.

An additional complication is that in India as well as official Bt hybrids (i.e. those that have gone through a formal approval process) there are also unofficial Bt hybrids produced without such approval. The owners of the official hybrids, Monsanto-Mahyco, claim that the unofficial hybrids are not as good and could even damage the perception of Bt cotton amongst farmers. Anti-GM groups claim that neither type of Bt hybrid provides a yield or economic advantage over non-Bt hybrids. A study of official vs unofficial vs non-Bt hybrids in Gujarat suggests that the official Bt varieties (MECH 12 and MECH 162) significantly outperform the unofficial varieties in terms of gross margin. However, unofficial, locally-produced Bt hybrids can also perform significantly better than non-Bt hybrids, although second generation (F2) Bt seed appears to have no yield advantage compared to non-Bt hybrids but can save on insecticide use.

With regard to impacts on livelihood this is a complex question to answer given that the evidence suggests that those adopting the Bt technology tend to be farmers with more assets. The greater level of household income for adopters of Bt cotton relative to nonadopters can be assumed to be in part a function of the profitability of the Bt hybrid but also that these farmers may be the more resource-rich. The extra income generated by Bt cotton is used to pay back debt and to finance the education of the children.

The introduction of Bt cotton has also generated changes in the upstream (input supply) and downstream cotton industries in India. Based on a study in 2004 there is evidence to suggest that input suppliers are becoming more homogenous in the sense that they are moving away from insecticide sales and towards the supply of Bt seed. Seed companies are looking for partnerships with Monsanto (the owner of the Bt gene). As well as declining demand for bollworm insecticide, another factor driving this change is credit. 6 Companies normally supply credit for farmers to buy insecticide but not to buy seed. Difficulties with pursuing repayment of credit has also encouraged companies to move away from insecticide sales.

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