Impacts of adoption

Studies on the impacts of adoption of GMVs in developed countries support our conceptual results that pesticide use declines. Hubble, Marra, and Carlson (2001) found that adoption of Bt cotton in the United States results in a reduction of about two pesticide applications per acre, with most of the reduction occurring in the lower South. They note that Bt adopters not only use less insecticide, but they also use proportionately less of the predominant type of cotton pesticide, potentially reducing pesticide resistance to these pesticides. In fact, studies by Frisvold, Sullivan, and Raneses (2003) as well as Marra, Hubble, and Carlson suggest (2001) that adoption of Bt cotton has drastically reduced pesticide applications in cotton (60% and more), though the yield effects were on average small (below 10%). Given that adoption of pest-resistant varieties reduces pesticide use, not only do farmers' input costs decline, but environmental health and farmworker health may also improve.

The benefits of adopting GMVs vary across farmers, consumers, and seed companies as well as countries. Falck-Zepeda, Traxler, and Nelson (2000) studied the yield-increasing and pesticide-reducing benefits associated with adoption of Bt cotton in the United States. They found that U. S. farmers benefit the most, receiving approximately 59% of the estimated $240 million in benefits per year. Benefits to U. S. consumers are approximately 9%, while seed companies and Monsanto, the seed developer, received 5% and 21%, respectively. Moschini, Lapan, and Sobolevsky (2000) analyzed the impact of adoption of herbicide-resistant soybeans. They found that farmers in the United States gain substantially relative to farmers in other countries, and that this advantage is reduced as exports of the technology increase. In addition, they found that the innovating company receives much of the welfare gain, and consumers benefit globally. In contrast, in their study of the adoption of herbicide-resistant soybeans and Bt and herbicide-tolerant cotton, Price, Lin, and Falck-Zepeda (2001) find that U. S. farmers realized much less that half of the total benefits. Most of the benefits went to the gene supplier, seed companies, U.S. consumers, and the rest of the world. Price, Lin, and Falck-Zepeda also note that results from these studies vary greatly depending on the farm-level effects and supply and demand elasticities for domestic and world markets.

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