Comparative Analysis of the Economics of Bt and Non-Bt Cotton Production
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Comparative Analysis of the Economics of Bt and Non-Bt Cotton Production Jana Orphal A Publication of the Pesticide Policy Project Hannover, January 2005 Special Issue Publication Series, No. 8 Pesticide Policy Project Publication Series Special Issue No. 8, January 2005 Institute of Economics in Horticulture Faculty of Business Administration and Economics Universität Hannover, Germany In cooperation with Food and Agricultural Organization of the United Nations (FAO), Rome, Italy Comparative Analysis of the Economics of Bt and Non-Bt Cotton Production Editors of the Pesticide Policy Project Publication Series: Prof. Dr. H. Waibel Dr. Gerd Walter-Echols (guest editor) Institute of Economics in Horticulture FAO-EU IPM Programme for Cotton Faculty of Business Administration and Economics in Asia Universität Hannover Maliwan Mansion Königsworther Platz 1 39 Phra Atit Road 30167 Hannover, Germany 10200 Bangkok, Thailand Tel.: +49 (0)511 762 2666 Tel: +66 (0)2 697-4000 Fax: +49 (0)511 762 2667 Fax: +66 (0)2 697-4445 E-Mail: [email protected] E-Mail: [email protected] All rights reserved by the author Publication of the Institute of Economics in Horticulture, Königsworther Platz 1, D-30167 Hannover Printing: Uni Druck Hannover, D-30167 Hannover ISBN: 3-934373-08-9 Table of Contents List of Tables ................................................................................................... v List of Figures ..................................................................................................vi List of Boxes ....................................................................................................vi List of Annexes ................................................................................................vi List of Abbreviations ......................................................................................viii Conversion Table...........................................................................................viii Preface ............................................................................................................ix Acknowledgements..........................................................................................xi Summary ........................................................................................................xii 1 Introduction ............................................................................................ 1 1.1 Background........................................................................................ 1 1.2 Cotton in India.................................................................................... 2 1.3 Bt cotton in India ................................................................................ 4 1.4 Objectives of this study...................................................................... 7 2 Study area.............................................................................................. 8 3 Methodology ........................................................................................ 11 3.1 Sampling procedure......................................................................... 12 3.2 Data collection ................................................................................. 12 3.3 Indicators / data obtained by questionnaire..................................... 13 3.3.1 Land holding and cropping pattern............................................. 13 3.3.2 Cotton production data............................................................... 13 3.3.3 Pesticide use.............................................................................. 14 3.3.4 Bt cotton and farmers’ attitude ................................................... 14 3.4 Methodology of data analysis .......................................................... 14 4 Results and discussion ........................................................................ 15 4.1 Land holding .................................................................................... 15 4.2 Cropping pattern .............................................................................. 16 4.3 Farmers’ attitude and assessment of Bt cotton ............................... 16 iv 4.4 Pesticide use ................................................................................... 20 4.5 Productivity of non-Bt and Bt Cotton ............................................... 26 4.6 Economics of Cotton Production ..................................................... 30 5 Summary.............................................................................................. 35 6 Conclusions ......................................................................................... 37 References .................................................................................................... 39 Annex............................................................................................................. 42 v List of Tables Table 1.1: Selected statistics of cotton production in India from crop years 1970/1971 to 2001/2002 ................................................. 2 Table 2.1: Area and production of hybrids in Karnataka relative to other states ............................................................................. 10 Table 3.1: Number of respondents by type.............................................. 11 Table 3.2: Bt cotton sale in Karnataka ..................................................... 12 Table 4.1: Farm size categories [ha] of respondents............................... 15 Table 4.2: Source of farmers’ knowledge concerning Bt cotton............... 17 Table 4.3: Farmers’ reason(s) for adopting Bt cotton, 2002 .................... 17 Table 4.4: Advantages of Bt cotton reported by farmers, 2002 ............... 18 Table 4.5: Disadvantages of Bt cotton reported by farmers..................... 19 Table 4.6: Number and quantity of pesticide applications ....................... 22 Table 4.7: Average number of pesticide applications per pest and farmer...................................................................................... 23 Table 4.8: Classification of pesticides ...................................................... 23 Table 4.9: Number of pesticide applications and percent overdose for Bollworm and Sucking Pests, 2002 ........................................ 25 Table 4.10: Comparison of market prices non-Bt vs. Bt cotton [US$/qtl] in Dharwad, 2002 .................................................................... 29 Table 4.11: Economics of cotton production, across farm comparison, non-irrigated [US$/ha] ............................................................. 30 Table 4.12: Economics of cotton production, across farm comparison, irrigated [US$/ha] .................................................................... 31 Table 4.13: Economics of cotton production, on-farm, pair wise comparison, non-irrigated, study area 2002 ........................... 33 Table 4.14: Economics of cotton production, on-farm comparison, irrigated, study area 2002 ....................................................... 33 vi List of Figures Figure 1.1: International comparison of yield and area under cotton .......... 1 Figure 2.1: Cotton map of India ................................................................... 8 Figure 2.2: Area and yield of cotton in Karnataka ....................................... 9 Figure 3.1: Sampling design...................................................................... 11 Figure 4.1: Cropping pattern in the season 2002/2003 ............................. 16 Figure 4.2: Average number of pesticide applications, 1998-2002 ........... 20 Figure 4.3: Frequency of pesticide applications, 2002 .............................. 21 Figure 4.4: Pesticides used on Bollworm and Sucking Pests, 2002 (based on number of applications).......................................... 24 Figure 4.5: Annual rainfall 1991-2002 (Karnataka State) .......................... 26 Figure 4.6: Cotton yield for different conditions, across-farm and on- farm comparison, 2002 ........................................................... 27 Figure 4.7: Distribution of farmers by seed cotton yield level, crop year 2002 ........................................................................................ 28 Figure 4.8: Gross margins and revenues of across-farm comparison ...... 32 List of Boxes Box 1.1: Bt toxin mechanism of action .................................................... 4 Box 1.2: Chronology of Bt cotton in India................................................ 6 List of Annexes Annex A-1: Villages in study area.............................................................. 42 Annex A-2: Distribution of variable production cost according to farm size for non-Bt cotton [US$/ha] ............................................... 43 Annex A-3: Distribution of variable production cost according to farm size for Bt cotton [US$/ha] ...................................................... 43 Annex A-4: Yield of Bt and non-Bt seed cotton, across-farm comparison, 2002.................................................................... 44 Annex A-5: Yield of Bt and non-Bt seed cotton, on-farm comparison, 2002 ........................................................................................ 44 vii Figure A-6: Percentage of respondents according to their land holding [ha] in Karnataka districts........................................................ 44 Annex A-7: Sales rates for non-Bt and Bt cotton varieties in Dharwad