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Global Impacts of BT Cotton

George B. Frisvold and Russell Tronstad

ABSTRACT

This study combines a quadratic programming model of U.S. cotton production with a two-region trade model to estimate economic impacts of Bt cotton adoption in the United States and the Rest of World (ROW). Estimated global economic benefits of Bt cotton adoption were $580 million in 2001. U.S. producers captured $296 million of this gain, while U.S. cotton purchasers captured $40 million. Higher cotton production from Bt cotton adoption led to a 1.2 cent per pound reduction in the world cotton price. Commodity program payments sheltered U.S. producers from the effects of this price reduction. Lower prices resulted in significant gains for ROW cotton purchasers, but net losses for ROW producers, primarily those that did not adopt Bt cotton.





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Document last modified April 16, 2003