Biotechnology in Indian Agriculture Evidence from Panel Studies on Bt Cotton

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Biotechnology in Indian AgricultureEvidence from
Panel Studies on Bt Cotton

• N.Chandrasekhara Rao, S.Mahendra Dev
• Presented at
• The Institute of Economic Growth
• New Delhi
• September 24, 2008

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Plan of the Presentation

• Agricultural biotechnology- Relevance and salient
  features
• What can it do to bring about pro-poor
  agricultural development?
• Pattern of commercialisation
• Performance of Bt cotton- results from two
  surveys
• Conclusions and policy suggestions

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Agricultural Biotechnology - Relevance

• Technical change increases production at the same
  level of input use. Avoids a trap into Ricardos
  LDR.
• Seed-fertiliser technology in 1960s increased
  TFP. Played important role in self-sufficiency
• TFP has gone down by late 1980s or early 1990s in
  most crops. Yield levels stagnated
• Demand side for new technology Besides yield,
  saving environment, saving inputs especially
  water and catering to food safety and quality
  concerns of consumers

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Yield Levels in Rice and Wheat since 1950
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Yield Levels in Jowar, Bajra and Maize
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Yield Levels in G.Nut, Cotton and Rapeseed
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Agricultural Biotechnology- Salient features

• Encompasses a range of tools to understand and
  manipulate organisms for use in crops,
  livestock, fisheries and forestry.
• Collection of diverse reinforcing technologies.
  Not stand alone.
• Can increase speed and precision of plant
  breeding
• Not a substitute, but complements CPB methods.
• Apart from genetic engineering, genomics and
  bioinformatics, marker-assisted selection,
  diagnostic procedures, micro propagation, tissue
  culture, cloning, artificial insemination, embryo
  transfer and other technologies.

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Three Main Research Tasks for Improving Crop
Yields
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Agricultural Biotechnology contd

• Can target both biotic and abiotic stresses.
  Provide diagnostic tools and vaccines for animal
  diseases
• Can reduce the usage of chemical inputs.
• Can also benefit dry lands and marginal farmers
  in environmentally fragile areas unlike GR
  technology
• Seed is central to biotechnology. So, becomes
  more convenient for the smallholder cultivators.
• Nature of this technology allows it to be used
  for any purpose. Therefore, proper utilisation is
  important

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Transgenic Breeding Objectives
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Can it lead to pro-poor agricultural development?

• Poverty reduction mechanism
• Lowering food prices
• Targeting crops grown by poor
• Increasing uses for those crops
• Mostly by the private sector companies of
  developed countries. Entangled with patents
• So, tend to focus on crops and traits of
  importance to those countries. Market failures

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Pro-poor Agricultural Development..

• Already evident that the poor and agricultural
  common goods are neglected.
• So, role of public sector becomes crucial.
• The public sector research is limited and mostly
  imitates private sector. No policy to prioritise.
  
• However, NARS in India strong. Capable of
  upstream research. Part of consortium effort
• Vibrant seed market in private sector. It can
  encourage MNC research on local needs

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Pattern of Commercialisation
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Pattern of Commercialisation contd..

• Commercialised biotechnology- limited to input
  traits like herbicide tolerance (70), insect
  resistance etc.
• Four crops soybean, maize, cotton and canola.
• Research on food crops insignificant
• Most of the research in private sector is on
  these crops and traits only.

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Transgenic crop research in developing countries,
1987-2000
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Commercialisation in India
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Performance of Bt Cotton

• Two surveys in Andhra Pradesh in 2004-05 and
  2006-07
• Double difference method with and without as
  well as before and after adoption
• Multi-stage stratified random sampling.
• Four different agro-climatic zones
• n 623 (30 per cent non-adopters)
• Followed standard farm management studies.

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Hypotheses

• There can be significant yield gains with Bt
  cotton grown in tropical conditions like India
• Smallholder cultivators can participate and get
  benefited along with large farmers
• Employment can increase where harvesting of
  cotton is done manually.

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Costs in Bt vis-à-vis Non-Bt in 2004-05

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Costs and Returns in Bt vis-à-vis non-Bt
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Costs after Bt adoption in 2006

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Returns after Bt Adoption in 2006

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Estimated Density Functions for Yield
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(No Transcript)
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Percentage Change in Yield and Pesticides in Bt

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Per cent Changes after Bt Adoption in 2006
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Yield Levels Relative to Bt Average
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Net Income from Bt Cotton in 2004

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Net income from Bt Cotton in 2006

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Human Labour Utilisation in 2004
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Economic and Environmental Benefits of Bt Cotton

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A Survey of Studies on Bt Cotton
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Overall impact on Cotton Productivity at
National Level

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Overall Impact contd..

• Overall gains 2007-08 -Rs. 11,620 crores
• 2006-07 Rs.7122
  crores
• Sharing of gains 2006-07 Farmers 96
• 
  Companies 4
• 2004-05
  Farmers 74
• 
  Companies 26

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Sum-up on Bt Performance

• Biotechnology helped in closing the yield gap by
  reducing damage due to bollworms.
• All size and social categories of farmers
  benefited
• Farmers asked for varieties and resistance to all
  bollworms.
• Research on drought tolerance important
• Sustainability of resistance is the major issue
• Biosafety and environmental impacts to be seen

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Conclusions and Policy Suggestions

• Biotechnology has the potential to take the
  Indian agriculture forward
• Market failures are endemic to product
  development in biotechnology
• Role of public sector research institutions
  becomes crucial
• It must complement private sectors efforts with
  well defined set of priorities
• Biotechnology to be made part of a comprehensive
  and integrated agricultural research system

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Conclusions and Policy Suggestions contd..

• India can gain by investing more in
  biotechnological research. Take up collaborations
  and upstream research
• Forge creative public private partnerships to
  access proprietory technologies
• Create enabling environment for private sector
• Strengthen regulatory framework
• Assess biosafety and environmental issues on a
  case-by-case basis

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Conclusions and Policy Suggestions contd..

• Participation in technology development to be
  encouraged
• Education and capacity building on biotechnology
• Social scientists need to play active role in
  priority setting and need based technology
  development

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• THANK YOU