Bt Cotton Adoption in the United States and China: International Trade and Welfare Effects

AgBioForum, Vol. 9, No. 2, pp. 69-78, 2006

Posted: 21 Nov 2006

See all articles by George B. Frisvold

George B. Frisvold

University of Arizona - Department of Agricultural and Resource Economics

Russell Tronstad

University of Arizona - Department of Agricultural and Resource Economics

Jeanne M. Reeves

affiliation not provided to SSRN

Abstract

Many studies report that Bt cotton has led to significant yield gains, reduced insecticide use, or both in different countries. With rare exception, these studies examine adoption in one region in isolation from adoption in others. This article summarizes the global impacts of Bt cotton adoption in the United States and China based on results from a three-region model of the world cotton market. In 2001, adoption of Bt cot-ton in China and the United States increased world cotton production by 0.7% and reduced the world cotton price by 1.4 cents per pound. Global economic benefits were $836 million. Consumer surplus increased $63 million. Chinese producers gained by $428 million and US producers by $179 million. The fall in world price reduced rest-of-world (ROW) producer surplus by $349 million. Net rest-of-world benefits were $69 million, however, because purchaser gains outweighed producer losses.

Keywords: biotechnology, Bt cotton, China, spillovers, trade, United States, welfare

Suggested Citation

Frisvold, George B. and Tronstad, Russell and Reeves, Jeanne M., Bt Cotton Adoption in the United States and China: International Trade and Welfare Effects. AgBioForum, Vol. 9, No. 2, pp. 69-78, 2006, Available at SSRN: https://ssrn.com/abstract=946181

George B. Frisvold (Contact Author)

University of Arizona - Department of Agricultural and Resource Economics ( email )

1110 E. North Campus Drive
Economics, Rm. 403E
Tucson, AZ 85721-0023
United States
520-621-6269 (Phone)

HOME PAGE: http://ag.arizona.edu/AREC/dept/faculty/frisvold.h

Russell Tronstad

University of Arizona - Department of Agricultural and Resource Economics ( email )

Tucson, AZ 85712-0023
United States
520-621-2425 (Phone)

HOME PAGE: http://map.arizona.edu/cgi-bin/data-no/00023.cgi

Jeanne M. Reeves

affiliation not provided to SSRN ( email )

No Address Available

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