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Diffusion of Bt Cotton in India: Impact of Seed Prices and Technological Development

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  • Arora, Anchal
  • Bansal, Sangeeta

Abstract

Recent studies in the literature examining impact of government seed price intervention on adoption of Bt cotton get different results depending on the specifics of the situation analyzed. According to one study, reduction in seed prices enables farmers to buy seeds at lower prices and this can result in surge of area sown under Bt cotton. The other view holds that seed price interventions have little impact on the adoption rates rather these interventions may adversely affect firms’ incentives to innovate. Which of the two views characterize adoption of Bt cotton in India? Using three variations of dynamic logistic model, this paper analyzes the impact of certain economic factors like seed prices, technological development, and cotton prices on the diffusion of Bt cotton in India. It uses panel data set covering 9 major cotton growing states over the years 2002 to 2008 and finds that although seed prices were significant in impacting the diffusion rates, its impact was limited. The study also sheds light on the significance of technological development in impacting diffusion rates.

Suggested Citation

  • Arora, Anchal & Bansal, Sangeeta, 2011. "Diffusion of Bt Cotton in India: Impact of Seed Prices and Technological Development," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 104154, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:104154
    DOI: 10.22004/ag.econ.104154
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    References listed on IDEAS

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    1. Lalitha, N., 2004. "Diffusion of agricultural biotechnology and intellectual property rights: emerging issues in India," Ecological Economics, Elsevier, vol. 49(2), pages 187-198, June.
    2. Matin Qaim & Alain de Janvry, 2003. "Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 814-828.
    3. Krishna, Vijesh V. & Qaim, Matin, 2007. "Estimating the adoption of Bt eggplant in India: Who Benefits from public-private partnership?," Food Policy, Elsevier, vol. 32(5-6), pages 523-543.
    4. Arnab K. Basu & Matin Qaim, 2007. "On the Adoption of Genetically Modified Seeds in Developing Countries and the Optimal Types of Government Intervention," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 784-804.
    5. N. Lalitha & Carl E. Pray & Bharat Ramaswami, 2008. "The Limits of intellectual property rights: Lessons from the spread of illegal transgenic seeds in India," Discussion Papers 08-06, Indian Statistical Institute, Delhi.
    6. Gandhi, Vasant P. & Namboodiri N V, 2006. "The Adoption and Economics of Bt Cotton in India: Preliminary Results from a Study," IIMA Working Papers WP2006-09-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    7. Fernandez-Cornejo, Jorge & McBride, William D., 2002. "Adoption Of Bioengineered Crops," Agricultural Economic Reports 33957, United States Department of Agriculture, Economic Research Service.
    8. Lovell S. Jarvis, 1981. "Predicting the Diffusion of Improved Pastures in Uruguay," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 495-502.
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    Cited by:

    1. Shah, Deepak K., 2012. "Bt Cotton in India: A Review of Adoption, Government Interventions and Investment Initiatives," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 67(3), pages 1-11.
    2. Sarthak Gaurav & Srijit Mishra, 2012. "To Bt or not to Bt? Risk and uncertainty considerations in technology assessment," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-001, Indira Gandhi Institute of Development Research, Mumbai, India.

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    More about this item

    Keywords

    Agribusiness; Crop Production/Industries; Land Economics/Use; Research and Development/Tech Change/Emerging Technologies;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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