Agricultural biotechnology: 
Adoption of biotechnology and its production impacts 

Economic Research Service USDA 31may01

Driven by farmers' expectations of lower production costs, higher yields, and reduced pesticide use, the rate at which U.S. farmers adopt genetically engineered (GE) crop varieties has jumped dramatically. About 98 million acres of GE crops were cultivated worldwide in 1999, a 43-percent increase over acreage in 1998, and U.S. acreage accounts for 72 percent of this. However, actual benefits in terms of costs, yields, and pesticide use vary with the crop and engineered trait.

Crops carrying herbicide-tolerant genes were developed to survive certain herbicides that previously would have destroyed the crop along with the targeted weeds. Farmers thus can choose from a broader variety of herbicides to control weeds. The most common herbicide-tolerant crops are Roundup Ready (RR) crops resistant to glyphosate, a herbicide effective on many species of grasses, broadleaf weeds, and sedges. Glyphosate tolerance has been incorporated into cotton, corn, soybeans, and canola. Other genetically modified herbicide-tolerant crops include Liberty Link (LL) corn resistant to glufosinate-ammonium, and BXN cotton resistant to bromoxynil.

Adoption of herbicide-tolerant crops has been particularly rapid (see NASS' crop production reports for 1999 and 2000, prospective plantings report for 2001, and excel spreadsheet of adoption data). Herbicide-tolerant (HT) soybeans, first available to farmers in 1996, expanded to about 17 percent of soybean acreage (in the major States surveyed) in 1997, and to more than 50 percent in 2000. HT cotton expanded from 10 percent of surveyed acreage in 1997 to 26 percent in 1998 and 46 percent in 2000.

Bt crops containing the gene from a soil bacterium, Bacillus thuringiensis (Bt), are the only insect-resistant crops commercially available. The bacteria produce a protein that is toxic when ingested by certain lepidopteran insects, such as butterflies and moths. Crops containing the Bt gene are able to produce this toxin, thereby providing protection against lepidopteran insects throughout the entire plant. Bt has been built into several crops, the most important being corn and cotton.

Bt cotton is primarily effective in controlling the tobacco budworm, the bollworm, and the pink bollworm. Use of Bt cotton expanded rapidly, reaching 15 percent of cotton acreage in 1996 and 35 percent in 2000.

Bt corn provides protection from the European corn borer and, to a lesser extent, the corn earworm, the southwestern corn borer, and the lesser cornstalk borer. The Environmental Protection Agency (EPA) approved Bt corn in August 1995 and its use grew from about 1 percent of planted corn acreage in 1996 to 19 percent in 1998. It peaked at about 26 percent in 1999 before falling to 19 percent in 2000. The reasons for the reduction are largely unknown but may be due to reductions in pest pressure and some possible uneasiness with respect to exports.

These results confirm other studies showing that expected profitability positively influences the adoption of agricultural innovations. Hence, factors expected to increase profitability by increasing revenues per acre (price of the crop times yield) or reducing costs are expected to promote adoption. Given that an objective of pest management in agriculture is to reduce crop yield losses, there is a high incentive for innovations that reduce these losses.

Effect of GE crops on yields

It is difficult to estimate the farm-level effect of genetically engineered crops on yields because impacts vary with the crop and technology examined. Yields also depend on locational factors such as soil fertility, rainfall, and temperature, which can also influence the very presence of pests.

An additional problem with estimating the benefit of GE crops is self-selection: farmers are not assigned randomly to the two groups (adopters and nonadopters) but make the adoption choice themselves. Therefore, adopters and nonadopters may be systematically different and these differences may manifest themselves in farm performance and could be confounded with differences due purely to adoption.

GE crops do not increase the yield potential of a hybrid. In fact, yield may even decrease if the varieties used to carry the herbicide-tolerant or insect-resistant genes are not the highest yielding cultivars. However, by protecting the plant from certain pests, GE crops can prevent yield losses compared with non-GE hybrids, particularly when infestation of susceptible pests occurs.

This effect is particularly important in the case of Bt crops. Before the commercial introduction of Bt corn in 1996, the European corn borer was only partially controlled using chemical insecticides. The economics of chemical use were not always favorable and timely application was difficult. For these reasons, farmers often accepted yield losses (of 3-6 percent per one corn borer per plant, depending on the stage of plant development) rather than incur the expense of chemical pesticides to treat the insect.

An ERS study estimated the impact of adopting GE crops using 1997 survey data. Herbicide-tolerant soybeans and cotton and Bt-enhanced cotton were modeled individually. In each model, pest infestation levels, other pest management practices, crop rotations, tillage, and self-selection were controlled for statistically. Geographic location was included as a proxy for soil, climate, and agricultural practice differences that might influence impacts of adoption.

Results of such modeling can be interpreted as an elasticity or responsiveness to 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 producers adopt the technology, or in terms of a typical farm as they use the technology on 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.

The study shows that adoption of herbicide-tolerant cotton led to significant increases in yields (see table). The elasticity of yields with respect to the probability of adoption of herbicide-tolerant cotton is +0.17. That is, an increase of 10 percent in the adoption of herbicide-tolerant cotton led to a 1.7-percent increase in yields. Similarly, the adoption of Bt cotton in the Southeast increased yields significantly (elasticity of yields is +0.21). On the other hand, increases in adoption of herbicide-tolerant soybeans led to small (but significant) increases in yields (elasticity of yields is 0.03).

Effect of GE crops on pesticide use

Data on pesticide use by producers who did and did not adopt genetically engineered crops are available, but many factors other than adoption affect pesticide use, making simple comparisons suspect. In addition, the changing mix of pesticides that accompanies adoption complicates the analysis, because characteristics like toxicity and persistence in the environment vary across the pesticides used.

Several perspectives on estimating GE-induced changes in pesticide use are available from an ERS analysis of survey data using three statistical methods:

• Same-year differences. Compares mean pesticide use between adopters and nonadopters within 1997 and within 1998 for a given technology, crop, and region, and applies that average to total acres producing each crop in each year.
• Year-to-year differences. Estimates aggregate differences in pesticide use between 1997 and 1998, based on increased adoption of GE crops between those 2 years and average total pesticide use by both adopters and nonadopters.
• Regression analysis. Estimates differences in pesticide use between 1997 and 1998, with an econometric model controlling for factors other than GE crop adoption that may affect pesticide use.

Changes in pesticide acre-treatments resulting from adoption range from -6.8 million to -19 million acre-treatments across the three estimation methods. Reductions in pounds of active ingredients vary more widely, from a net drop of just 0.3 million pounds in 1997 (using the same-year method) to 8.2 million pounds (using the year-to-year method), which represents roughly a 3-percent reduction in use. Because the results include only statistically significant differences in pesticide use by adopters and nonadopters, many relatively small differences in particular regions were not included, thus underestimating overall differences.

Measuring pesticide use in pounds of active ingredient implicitly assumes that a pound of any two ingredients has equal impact on human health and/or the environment. However, the more than 350 pesticide active ingredients vary widely in toxicity per unit of weight and in persistence.

Consider, for example, the adoption of herbicide-tolerant soybeans, which leads to the substitution of glyphosate herbicides for previously used herbicides. Based on regression results, an estimated 5.4 million pounds of glyphosate is substituted for 7.2 million pounds of other synthetic herbicides, such as imazethapyr, pendimethalin, and trifluralin. Glyphosate has a half-life in the environment of 47 days, compared with 60-90 days for the herbicides it commonly replaces. The herbicides that glyphosate replaces are 3.4 to 16.8 times more toxic, according to a chronic risk indicator based on the EPA reference dose for humans. Thus, the substitution enabled by genetic modifications conferring herbicide tolerance on soybeans results in glyphosate replacing other synthetic herbicides that are at least three times as toxic and that persist in the environment nearly twice as long as glyphosate. 

for more information, contact: Jorge Fernandez-Cornejo
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page updated: May 31, 2001

source: http://www.ers.usda.gov/Briefing/biotechnology/chapter1.htm 9jul01