The Diffusion of BT Cotton and its Impact on the Use of Conventional Pesticides in Cotton Production

Abstract

This study examines diffusion of Bt cotton in 27 U.S. cotton-producing regions from 1996 to 1999. First, a dynamic logistic diffusion function is estimated to explain regional differences in both the rate and extent of Bt cotton adoption. The function's flexible specification allows for accelerated adoption as well as deadoption. Second, a pesticide use equation is estimated to test whether or not Bt cotton has reduced traditional pesticide use. The two equations are estimated independently and then as part of a simultaneous system to account for potential endogeneity of Bt adoption in the pesticide use equation. Results suggest that demand-side factors, such as pest damage, input costs, output price and government policy significantly influence diffusion, as do supply-side constraints on Bt seed variety availability. The hypothesis that use of Bt cotton does not reduce the use of traditional pesticides is solidly rejected in all of the econometric specifications tested. Results concerning farmers' overall costs, however, are more ambiguous. Estimates suggest that, in many regions, overall costs have not decreased and in several regions, may have increased, Cost-savings alone may not explain the widespread adoption of Bt cotton. Future research on the impacts of Bt cotton on yields would be useful.