Adoption of Unapproved Varieties of Bt Cotton in Pakistan: Impact on Production and Trade
Adoption of Unapproved Varieties of Bt Cotton in Pakistan: Impact on Production and Trade
By Hina Nazli PhD Candidate, Food Agricultural and Resource Economics, University of Guelph, Canada
Presentation for the Brown Bag Seminar at IFPRI September 9, 2009 Plan of Presentation • Background
• Why unapproved Bt cotton in Pakistan
• Bt cotton survey 2009
• Conclusions and direction for future research
2 Importance of Cotton for Pakistan • 4th largest producer
• 3rd largest consumer
• Cotton and textiles contribute – 10% to GDP – 21% to employment – 60% to export earnings (yarn and finished textile products)
• Cotton farmers’ problem – high fluctuations in yield (pest infestation) – high cost of production (38% on plant protection)
3 Yield per hectare in Selected Countries
1400
1200 World China 1000 India Pakistan 800
600 Kg/hectare
400
200
0
1976 2006 1970 1972 1974 1978 1980 1982 1984 1986 1988 2000 2002 2004 2008
1990 1990 1992 1996 1998 1994 1994
4 GM cotton is considered a solution to farmer’s problem • GM cotton is obtained by inserting the gene of soil born bacterium Bacillus thuringiensis (Bt) into cotton seed. This gene produces Cry protein that is harmful to the larvae of moths and butterflies, beetles, and flies
• Cost advantages – Reduces the number of sprays => Reduces pesticide expenditure – Labor saving
• Yield advantages
• Higher profitability than conventional varieties – Despite higher price of seed
• Health and environmental advantages – Lower exposure to hazardous pesticides 5 Comparison of cost and yield between Bt and non-Bt varieties in China and India
Diff in number of Gross margin pesticide Percentage difference in Bt and non-Bt (rev-cost) sprays varieties (US$/ha) Pesticide Seed cost cost Total cost Yield Bt Non Bt
China (2001) -- -58.1 333.3 -27.5 10.9 277 -225
India (2006)
Gujrat -- -- 136.8 13.7 35.4 713 405
Maharashtra -1.9 -21.3 192.4 36.5 46.3 503 318
Andhra Pradesh -3.8 -25.8 173.1 5.6 44.6 418 121
Tamil Nadu -2.0 -54.5 237.0 13.7 28.5 339 128
6 Bt Cotton in Pakistan • Cotton is grown in two provinces: Punjab (80%), Sindh (20%)
• Private breeders developed Bt type varieties by using Monsanto’s transforming event MON531 (Bollgard)
• PARC conducted a detailed scientific survey in 2008
– 50% of the cotton growing area in Punjab and 80% in Sindh was under these unapproved Bt type varieties – 39 unapproved varieties of Bt cotton were under cultivation. – 10% of the sample in Punjab and 19% in Sindh were not positive for the Cry protein – Variation in intensity of protein expression from high concentration to low – Non-uniform plant population
• variable and unknown quality of seed – seed mixing – spurious seed
7 Why Unapproved Bt Cotton? • Slow progress in agricultural biotech research (initiated in 1981) – Mainly 2 public institutions and many private breeders are involved – Weak research infrastructure – Weak institutional support – Lack of coordination
• Lack of political will to adopt biotechnology (slow progress in the legislation process) – Convention on Biodiversity (CBD) was signed in 1992 – Cartagena Protocol on Biosafety was signed in 2001 but not ratified until 2009 – Biosafety guidelines and the rules approved in April 2005 – An independent body, the Intellectual Property Organization - Pakistan (IPOP) has been formed in 2005 – Amendments in the Plant Breeders’ Right Act and Seed Act are still awaiting approval from the parliament 8 Current Situation
• For the approval of a GM variety, a three tier system is introduced – Institutional biosafety committee (IBC), Technical advisory committee (TAC), National biosafety committee (NBC) – Variety IBC TAC NBC IPOP NBC field trials
• No variety was submitted to NBC for approval until 2008 – Fear of infringement of Monsanto’s patent rights – Fear of law suit and trade sanctions if infringement is found
• The GoP recently approved the field trials for six Bt cotton varieties and allowed the import of hybrid seed from India and China for field trials
• The commercial Bt seed is expected to be available for the 2010-11 planting season 9 Issues Raised in Public Debate
• IPR
• Technical issues – Bt varieties are ineffective for sucking pests (CLCV) – Lack of awareness about the use of biotechnology
• Market issues – Uncertain seed quality – Inefficient seed pricing – Confidence of farmers on approved varieties – Impact on textile sector (quality of fiber)
• Social issues – Uneven distribution of benefits (raised by NGOs) – Issue of food security (long duration)
10 Bt Cotton Survey 2009 • PARC (2008) survey examined the presence/absence of Cry protein in the existing Bt varieties
• PARC survey did not collect information on the economic performance of these varieties in Pakistan
• Bt Cotton Survey 2009 aims to examine the economic impact of the unapproved Bt varieties on cost of production, yield and gross margin in Pakistan
11 Agro-climatic Zones of Pakistan
China
Iran
Indian Ocean
12 Sample Selection Methodology
• The selected sample is drawn from the existing sampling frame of the Pakistan Rural Household Survey (PRHS) (2 rounds) – 4 cotton growing districts in 2 provinces
• One district selected from each province based on the share of cotton production in the province (Bahawalpur in Punjab and Mirpur Khas in Sindh) – 16 villages, 208 cotton farmers
• Survey conducted during February-March 2009 (difficult security situation)
• How representative are these districts of cotton growing areas
13 Selected Sample – Bt Cotton Survey 2009
China
Bahawalpur Iran
Mirpur Khas
Indian Ocean
14 Basic Facts – Selected Sample
CW-Punjab CW -Sindh Incidence of poverty (%) 55.51 56.81 % of rural population 17.47 11.20 % of rural poor 20.13 13.21 Bahawalpur Mirpur Khas Development Rank 64/100 65/100 Weather Hot and dry Hot and humid Soil quality Sandy Clay Average distance (in km) between selected villages and major facilities Distance to seed/fertilizer/pesticide shop 15 12 Distance to ZTBL 18 17 Distance to nearest clinic/dispensary 3 5 Distance to secondary girls school 13 11 Distance to secondary boys school 11 9 15 Percentage Distribution of Farmers by Operated Land
60.0 55.8 52.9 Bhawalpur Mirpur Khas 50.0
40.0
30.0 farmers 24.0 % % 19.2 20.0 14.4 11.5 9.6 10.0 6.7 3.8 1.9 0.0 Less than 5 acres 5 to under 12.5 12.5 to under 25 25 to under 50 50 acres and acres acres acres above
16 Type of Tenure
90.0
77.9 Bahawalpur 80.0 73.1 Mirpur Khas 70.0
60.0
50.0
farmers 40.0 % %
30.0 23.1 20.0 12.5 9.6 10.0 3.8 0.0 Owner operator Sharecropper and tenant Owner cum sharecropper
17 Adoption of Bt Cotton
100%
90% Bahawalpur
80% Mirpur Khas
70%
60%
50%
% farmers % 40%
30%
20%
10%
0% 2006 2007 2008
18 Type of Cotton Grown
100.0 90.0 86.5 Bhawalpur 80.0 Mirpur Khas 70.0 58.7 60.0
50.0 farmers
% % 40.0 30.0 27.9
20.0 13.5 9.6 10.0 3.8 0.0 Bt only Non-Bt only Both Bt and non-Bt
19 Sources of Bt Cotton Seed
100
90 86.8 Bhawalpur 80 Mirpur Khas 70 58.2 60
50 farmers
% % 40 34.7 30
20 10 5.3 7.1 6.6 0 Seed dealer Fellow farmer Landlord
20 Awareness about Bt Technology among Farmers
20 18.4 Bahawalpur 18 Mirpur Khas 16
14 13.26 yes’ 12
10
8
6 3.94
% farmers responded ‘ responded farmers % 4 2.04 2
0 Do you know that poor quality of Bt seed Do you know about the refuge area may not be effective to control pests
21 Seed Expenditure (Rs/acre)
1600 1,381 Bt 1400 Non-Bt 1200 1,148
1000 838 800
Rs/acre 652 600 Significantly Significantly different 400 different
200
0 Bahawalpur Mirpur Khas
22 Total Pesticide Expenditure (Rs/acre)
3,500 3,238 Bt Non-Bt 3,000 2,636 2,555 2,500
2,000 1,929
significantly Rs/acre 1,500 different significantly different 1,000
500
- Bahawalpur Mirpur Khas
23 Number of pesticide Sprays
5 4.04 Bt 4 3.88 Non-Bt 3.50 4 3.12 3 2.60 2.67 3
2 1.54 2
Number ofsprays 1.18 1 Significantly Significantly 1 different different
0 Bollworm spray Non Bollworm spray Bollworm spray Non Bollworm spray
Bahawalpur Mirpur Khas
24 Pesticide Expenditure (Rs/acre)
4,000 3,488 3,500 Bt 3,073 2,993 Non-Bt 3,000 2,667 2,605 2,500 2,093
2,000 1,846 Rs/acre 1,500 1,259 Significantly 1,000 different Significantly 500 different
- Bollworm spray Non Bollworm spray Bollworm spray Non Bollworm spray
Bahawalpur Mirpur Khas
25 Total expenditure (Rs/acre)
16,000 Bt Non-Bt 14,000
12,000
10,000
8,000 Rs/acre 6,000
4,000
2,000
- Bahawalpur Mirpur Khas
26 Yield (Kg/acre)
1,000 Bt Non-Bt 900
800
700
600
500 Rs/acre 400 Significantly 300 different 200
100
- Bahawalpur Mirpur Khas
27 Revenue (Rs/acre)
30,000 Bt Non-Bt 25,000
20,000
15,000 Rs/acre
10,000 Significantly different
5,000
- Bahawalpur Mirpur Khas 28 Gross Margin (Rs/acre)
16,000 Bt Non-Bt 14,000
12,000
10,000
8,000 Rs/acre
6,000 Significantly 4,000 different
2,000
- Bahawalpur Mirpur Khas
29 Characteristics of Adopters and Non- adopters Individual Characteristics Household Characteristics Farm characteristics Age (years) Household size Operated land (acres) Experience in cotton farming (years) (+*) Number of dependents Owned land (acres) Education (years) Own motorcycle (yes=1) Cotton area as % of Kharif area Degree of risk aversion (-*) Own TV (yes=1) Value of livestock (Rs/animal) (+*) Have telephone (yes=1) Agricultural credit (yes=1) Crop income (Rs/year) Livestock income (Rs/year) Other income (Rs/year) (-*) Total income (Rs/year) Share of food expenditure (-*) Share of education expenditure (+*) 30 Summary of Findings • Technical issues – Low levels of awareness among farmers about Bt technology – The impact of Bt varieties differs across two districts
• Market issues – Adoption rate is high among both owners and sharecroppers – Pesticide expenditure is lower and seed expenditure is higher on Bt varieties – Higher revenue – Profitable for farmers
• Social issues – Both owners and sharecroppers get the benefit
31 Comparison of Pakistan’s Unapproved Bt Varieties with China and India’s Approved Bt Varieties
# of Percentage difference in Bt and non-Bt Gross margin sprays varieties (US$/ha) Pesticide Seed cost cost Total cost Yield Bt Non Bt
China (2001) -- -58.1 333.3 -27.5 10.9 277 -225
India (2006)
Gujrat -- -- 136.8 13.7 35.4 713 405
Maharashtra -1.9 -21.3 192.4 36.5 46.3 503 318
Andhra Pradesh -3.8 -25.8 173.1 5.6 44.6 418 121
Tamil Nadu -2.0 -54.5 237.0 13.7 28.5 339 128
Pakistan (2009)
Bahawalpur -0.90 -21.07 64.9 -4.19 5.86 452 384
Mirpur Khas -1.86 -26.81 76.3 4.54 39.27 408 230 32 Future Directions for Research • Need for a national survey – Due to the high diversity of cotton growing areas, more location-specific information and larger sample size is required
• Need for further analysis – Can Pakistan come out of unregulated market after the commercialization of Bt cotton?
33 Thank You