The distribution of benefits from the introduction of transgenic cotton varieties

Abstract

Some concern has been expressed about the potential for abuse of monopoly power in the marketing of genetically modified (GM) seeds in the United States (U.S.). Are the firms marketing GM seeds extracting all of the benefits generated by their products? We attempt to partition the benefits from the introduction of Bacillus thuringiensis (Bt) cotton in the United States among United States domestic and rest of the world consumers of cotton lint, the genesupplying firm, the germplasm-supplier, and U.S. cotton farmers. The benefit calculations were based on comparisons of pest control costs and yields for Bt and conventional cotton varieties. We estimate that an average of more than $200 million per year in benefits were generated by the use of Bt cotton. In each year, U.S. farmers received the largest single share of benefits, ranging from 42% to 59% of total surplus generated. The combined share of Monsanto and the seed firms ranged from 26% to 44%.