The Economic Impacts of Introducing Bt Technology in Smallholder Cotton Production Systems of West Africa : A Case Study from Mali

Abstract

Africa has been slow to respond to biotechnology even as its pest management grows increasingly obsolete and insects remain a major adversary of its farming. Opponents of biotechnology cite concerns over the scientific boundaries and potential North-South domination that transgenic crops could bring. This paper reports on the positive aspects of introducing biotechnology in Africa. An economic model was developed to predict the economic impacts to consumers and producers from the introduction of Bt crops in the smallholder cotton farms of Mali. Since farmers rotate cotton and maize in three-year rotations, the analysis considered the introduction of both Bt cotton and Bt maize. Results from an economic model indicate that the potential economic impacts to West African consumers and producers would be significant, potentially reaching $89 million in an average year. For Bt cotton, the benefits would primarily accrue to producers. At a technology premium of $60 per hectare, where seed company revenue is maximized, Malian producer would capture 74% of the benefits and the seed company would capture the other 26%. The model found that the adoption of Bt maize was weaker than Bt cotton. If Malian maize producers were charged the same technology premium as South African producers, the model found that adoption would be less than 10%. The introduction of Bt maize in the region is likely to require complementary changes in maize markets and technology in order to boost profitability.