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1, 2005
1473-5903/05/01 0044-13 $20.00/0 # 2005 D. Pemsl et al.

Why Do Some Bt-Cotton Farmers in China Continue to Use

High Levels of Pesticides?
D. Pemsl,1 H. Waibel1 and A.P. Gutierrez2
Department of Economics and Business Administration, University of Hannover, Germany; 2Department of
Environmental Science, Policy & Management, University of California, Berkeley, USA

China was the first developing country to introduce Bt perspective, it needs to be pointed out that cur-
cotton on a large scale. This paper provides an in- rently, on a global scale, only a small share of
depth economic analysis of Bt cotton production by about 1.5% of the crop land2 is planted to trans-
small-scale farmers in China. Data were collected in genic crops, of which an estimated two-thirds is
2002 in Linqing County, in Shandong Province and
in industrialised countries. Over 99% of today’s
comprised a season-long cotton production monitoring
with 150 farmers and complementary household inter-
agricultural biotechnology products are in pest
views. For quality assessment, the Bt toxin concen- management with 70% in the form of herbicide
tration of the various Bt varieties used by the farmers tolerance and the remainder being insect resist-
was determined for each plot. All farmers were ance in the form of Bt crops, namely cotton and
growing insect resistant Bt cotton varieties. Yet, they corn (James, 2004). Among the developing
sprayed high amounts of chemical insecticides, out of countries, China is the only one that has intro-
which 40% were extremely or highly hazardous. The duced Bt-cotton on a large scale. In 2004, an esti-
paper reviews methodological issues inherent to mated 3.7 million hectare or about 65% of the
impact assessment of crop biotechnology and identifies national cotton area were planted with Bt var-
market and institutional failure as possible reasons for ieties (James, 2004).
continued high pesticide use. Using the damage func-
Since commercial approval of biotechnology
tion methodology the coefficients for both damage
control inputs, i.e., Bt varieties (measured as toxin con-
products is granted by province, diffusion shows
centration), and insecticide quantity were not signifi- a distinct regional distribution. For example,
cantly different from zero. Results show that absence Bt-cotton has spread rapidly in Shandong and
of enabling institutions and lack of farmer knowledge Hebei Province while in other provinces these
can considerably limit the benefits of Bt cotton for varieties are not grown at all or to a much lesser
small-scale farmers. The paper points out the import- extent. Two years after the introduction of
ance to include the institutional conditions in the evalu- Bt-cotton varieties in China in 1997, economists
ation of agricultural biotechnology in developing have carried out impact assessment studies
countries. (Pray et al., 2001, 2002). These studies, which
Keywords: Bt-cotton, biotechnology, pesticide compared farmers growing Bt-cotton with those
use, China growing conventional varieties, found that Bt
varieties reduced the quantity of chemical pesti-
cides by around 80%, with 67% fewer sprays
and an 82% reduction in pesticide costs (Huang
Introduction et al., 2002). Reduction of toxic chemical pesti-
cides in developing country agriculture is an
The discussion of whether modern biotechnol- important development issue, especially in view
ogy1 can help agriculture in developing countries of their negative effects on the health status of
to overcome some of its most pressing problems the rural population (Antle & Capalbo, 1994;
is controversial. The advocates for biotechnology Crissman et al., 1994; Pingali et al., 1994; Rola &
stress the great potential for yield increase and Pingali, 1993). Hence, the benefits of Bt crops to
pesticide reduction while others point out the a large extent depend on their potential to
potential risks for biodiversity and human reduce external costs by substituting chemical
health as well as institutional problems for pesticides, while in China yield increase due to
implementation. To put this debate into Bt-cotton is minor (Huang et al., 2002).

Bt-Cotton Farmers Use High Levels of Pesticides 45

When looking at the methodology of past production in all three years (Pray et al., 2002).
impact studies a number of factors can be found This questions whether the chosen counterfactual
that could have pre-determined the unanimously is valid. Also, since no baseline data were col-
positive results. One common problem is the lected it cannot be shown whether adopters and
reference group used to measure the impact of non-adopters had similar socioeconomic con-
Bt varieties. The concept of Pray et al. (2002) ditions before Bt introduction. Thus, the classic
was to follow the path of Bt-introduction over a ‘difference in difference model’ that is often
period of three years and interviewing adopters demanded for scientific impact assessment was
and non-adopters in different provinces. not applied and the observed differences in yield
However, non-adopters were not available and pesticide use are therefore not necessarily
anymore in subsequent years in the provinces attributable to the introduction of Bt varieties.
where early introduction of the technology A second factor that deserves close scrutiny is
occurred. Instead, non-adopters were sampled the data collection protocol used in impact
in other provinces where climatic, ecological or studies. Since in China the economic benefits of
socio-economic conditions can be different. Bt-cotton are mainly determined by pesticide
Figure 1 depicts the sampling scheme used by reduction, accurate measurement of these inputs
Pray et al. (2002) and the average cotton yield in is critical. Among all crop production inputs
kilogram per hectare by year and province. The chemical pesticides are among the most difficult
graph shows that first, the sample size for adop- to quantify especially under the conditions of
ters exceeds by far those of non-adopters. developing countries. High frequency of appli-
Second, Bt-cotton plots were included without a cations with a large number of different product
corresponding non-Bt sample from the same pro- names and mixtures of different products make
vince. Comparing average yields between Bt and it extremely difficult to measure pesticide quan-
non-Bt over the whole sample can bias the results tity especially by recall surveys. Also, the practice
since yields (and inputs) vary considerably of spot treatments poses a source of error when
among the provinces. The average yield by year farmers do not keep records and when data are
and province for Bt and non-Bt differs from the collected months after pesticide application has
averages for all samples (numbers on top of each taken place.
bar in Figure 1). Furthermore, on average, non- Finally, a question that emerges from previous
adopters had negative net returns from cotton studies is that, regardless of whether farmers use
Bt or non-Bt varieties, the actual level of pesticide
use dramatically exceeded its economically opti-
mal level as computed from estimated factor
productivity by Huang et al. (2002). These
authors attribute this overuse to anecdotal evi-
dence about misguided extension advice. Since
part of the income of extension workers stems
from pesticide sales they have no incentive to
encourage farmers to use less pesticides. In a
recent study, Yang et al. (2005) found that the
use of pesticides in Bt-cotton production in Shan-
dong Province was on average 12.7 applications
with average amounts of 18.9 kg per hectare. A
majority of farmers still considered the cotton
bollworm as a problem although all were using
Bt-cotton. Such observations show that although
the economic benefits of Bt-cotton in China
Figure 1 Sampling scheme and average yield by
were demonstrated at an early stage of adoption,
province and year for Bt and non-Bt cotton
Note: Bars indicate the number of plots by treatment
the sustainability of these benefits can be ques-
(Bt versus non-Bt) and year and show the proportion tioned. They also indicate that pesticide
sampled in the different provinces. The numbers are the reduction requires other (supplementary) means
average seed cotton yield (kg per hectare) by province such as a policy change.
as well as for all samples per treatment and year. The prevailing institutional conditions are
Source: Based on Pray et al. (2002) crucial to the realisation of potential benefits of
46 International Journal of Agricultural Sustainability

new technologies especially those aiming at Methodology and Data

pesticide use reduction. The lessons learned
from the introduction of integrated pest manage- Data collection
ment (IPM) that showed high benefits in exper-
iments and pilot projects are that institutional as One major problem when assessing the impact
well as socio-economic and technical constraints of Bt-cotton on input use and crop productivity
can considerably limit farm-level benefits and amongst small holders in developing countries
even prevent technology adoption (Beckmann & is the collection of data. As pointed out above,
Wesseler, 2003). the validity of pesticide use information is
The objective of this paper is to investigate the crucial when measuring the benefit of Bt-cotton,
effect of growing Bt-cotton varieties on pesticide which is mainly attributed to a reduction in
use and productivity in China several years pesticide use (see also Falck-Zepeda et al., 1999;
after these varieties were introduced. A case Pray et al., 2001). Measuring pesticide use under
study was conducted in Linqing County in Shan- the conditions of small-scale farming in develop-
dong Province, where Bt-cotton varieties obtained ing countries poses a great challenge and requires
commercial approval in 1997. In particular, we carefully planned studies with well-designed
address the following questions: data collection protocols (Waibel et al., 2003).
A large array of pesticides is available on
Chinese markets. The type of active ingredients
(1) What is the status of chemical pesticide use in and the concentration of the product are often
Bt-cotton production? labelled improperly or not at all and hence are
(2) Is Bt-cotton an effective and efficient method unknown to the farmer. Also, when pesticide
under the prevailing on-farm and insti- application frequency is high or when mixtures
tutional conditions in the study area? of products are applied, farmers, when surveyed
(3) Under the institutional conditions of China, is at the end of the season, can hardly remember the
Bt-cotton likely to lead to sizeable reduction pesticide quantities they used in individual
in chemical pesticide use and therefore gener- sprays. Table 1 gives an overview of the main
ate the expected health and environmental problems in measuring pesticide inputs and
benefits? explains how these problems are addressed by
data collection through monitoring used in this
The remaining text is organised as follows: the study.
next section gives a brief description of the data In this study, we collected data from farmers
collection methodology and the analytical pro- growing Bt-cotton in five villages in Shandong
cedure. The third section shows the pesticide Province.3 A total of 150 farm households were
use practices in the study area and provides interviewed three times during the 2002 cotton
an assessment of the productivity impact of season. Data comprised socio-economic para-
Bt-cotton. In the last section of the paper we meters, cropping pattern, farmers’ perception of
draw conclusions and make some suggestions pest pressure, and data on production input
on how the methodology for impact assessment and yield of cotton. During an orientation phase
of genetically modified crops could be advanced. in the same area (interviews with 60 farm

Table 1 Problems of measuring pesticide use and monitoring response

Aspect of pesticide use Measurement problem Monitoring response
Dosage Dosage changes during the season, difficult to Farmers record immediately after each
remember since mixtures and many applications application
Treatment frequency Long cotton season and high number of pesticide Farmers record immediately after each
applications application
Mixture Widespread application of mixtures (two or more Farmers record immediately after each
pesticides) application
Names of pesticides About 500 different products used by the sampled Farmers can copy names from bottles,
farmers, often very similar names interviewer can check bottles
Price of pesticides Only person who purchases pesticides may know Farmers record directly, possibility to
the price; prices change during the season check with the purchaser
Bt-Cotton Farmers Use High Levels of Pesticides 47

households in 2001) we found that when asked Therefore, in order to obtain a measure of the
after the crop was harvested, respondents were effect of Bt, we include the Bt concentration as a
generally not able to remember the amounts continuous variable in the damage control
and names of pesticides applied in cotton function.
production (Pemsl, 2002). Particular care was A general problem in estimating production
therefore taken in collecting pesticide use functions that include pest control variables is
information. To increase data accuracy, each of that regressors (independent or explanatory vari-
the 150 farmers recorded all cotton production ables) are correlated with the production function
inputs (labour, irrigation, type and amount of fer- error term 1 (see also Huang et al., 2002) because
tiliser and pesticide products) for one representa- unobserved factors, such as climate, may result in
tive plot over the whole season (April to late high input levels of insecticide use and at the
October 2002). The monitoring also captured same time low yields. However, if regressors
financial information (expenditures for inputs) are correlated with the error term, parameter esti-
as well as the timing of all farming activities mates of ordinary least squares (OLS) procedures
and detailed information of each pesticide are biased and the results are inconsistent
product even if mixtures were applied. Record- (Johnston & DiNardo, 1997). To overcome this
ing forms were collected every second week problem, an iterative three stage least square
and immediately checked for consistency and (3SLS) procedure using instrumental variables
completeness together with the farmer and to estimate the predicted value of insecticide
added to if required. In addition, information use can be applied (Wooldridge, 2002). Thus,
on active ingredients of pesticide products were the insecticide use function (with the dependent
collected from pesticide containers, local shops variable ‘amount of insecticides’) and the pro-
and from product registration lists. duction function with the damage control func-
In order to obtain a measure of the trait ‘Bt’, tion (dependent variable ‘log yield’) were
cotton leaf tissue from each respondent’s plot estimated simultaneously.
was sampled and analysed to assess the Assuming a Cobb –Douglas type production
Bt-toxin concentration (ng toxin g21 fresh leaf).4 function with an integrated damage control
The sample was collected in parallel to the function the cotton yield Y can be described as:
fourth generation of the cotton bollworm. Term-
inal leaves from five different points in the plot " #
and for each point for three plants in a row Yn
Y ¼ a0 (xD
i )  G(xP )g (1)
were collected and mixed to obtain the plot
sample. Leaves were flash-frozen with liquid
nitrogen and kept frozen until laboratory
analysis. where xD i , i ¼ 1, 2, . . . , n are explanatory variables
(independent production inputs like labour, ferti-
liser and farmer-specific and location-specific
Analytical procedure
factors), bi are the respective coefficients to be
One possibility to assess the input substitution estimated and xP is a vector of damage control
and productivity effects of Bt varieties as pest agents within the damage control function G.
control agents is to apply the damage control Following Carrasco-Tauber and Moffitt (1992)
framework of Lichtenberg and Zilberman (1986). who refer to a working paper by Babcock,
In previous studies (e.g. Huang et al., 2002; Lichtenberg and Zilberman, the parameter
Qaim & Zilberman, 2003) the effect of the Bt restriction g ¼ 1 was imposed on (1) to facilitate
trait was captured through a variety dummy the estimation.
using data from the fields of adopters and non- With the introduction of the Bt trait there are
adopters of Bt-cotton. The problem with this two externally supplied damage control agents
approach is that such a variety dummy may in cotton production, namely ‘insecticides’ and
include also non-pest control effects if other ‘Bt-toxin’5. Hence, the specification of the (expo-
factors cannot be adequately controlled. In our nential) damage control function6 reads as
sample we only included farmers who use Bt var- follows:
ieties since in Shandong Province no convention-
al (non-Bt) seed is available on local markets and
therefore adoption must be considered as 100%. G(xP ) ¼ 1  exp(l1 xP1  l2 xP2  l3 xP1 xP2 ) (2)
48 International Journal of Agricultural Sustainability

where xP1 is the Bt-toxin concentration in leaf about US$1200– 1800 per hectare and returns to
tissue [ng toxin g21 fresh leaf], xP2 the amount of labour are approximately US$4 per person per
chemical insecticides [kg ha21], and xP1 xP2 an inter- day, which is higher than the local wage rate for
action term for both control agents. The coeffi- unskilled labour of US$1.7 per person per day.
cients l1 – l3 are to be estimated by non-linear Interestingly, neither yield nor gross margin
regression methods. For the estimation of the par- seems to bear much relation with pesticide use.
ameters the logarithmic form of the production In fact, farmers in the village with the lowest
function is used and an error term 1 is added to average number of pesticide applications (V3)
the equation. The specification of the damage had the highest average gross margin.
control function ensures that, in principle, the Bt As is commonly the case in cotton production,
trait and chemical insecticides are substitutes. the vast majority of pesticides used are insecti-
However, complete substitution is unlikely to cides. In the sample of 150 farmers in Shandong
occur, since the Bt-toxin is only poisonous for Province, on average 96% of pesticides used
lepidopterous pests but does not control other were insecticides. Based on their active ingredi-
pests e.g. red spider mite (Tetranychus spp.) and ents more than half of the insecticides used by
aphid (Aphis gossypii) that are also important in farmers in our case study in 2002 can be
cotton production in North East China. assumed to be effective against the cotton boll-
worm (Helicoverpa armigera), the very pest that
Bt varieties intend to control. On average some
30% of all sprays applied by respondents directly
Results target this pest. The range of this share was very
high with some farmers not spraying against the
Analysis of pesticide use
bollworm at all and others using as much as 85%
The main parameters of cotton production in of all sprays against this pest. About 60% of the
our sample are displayed in Table 2. With farmers named the cotton bollworm among the
around four tons per hectare the cotton yield three main pests along with red spider mite and
level is among the highest globally.7 Cotton pro- aphid. Such decision behaviour of farmers who
duction in the Yellow River Area to a very large already invested in Bt control through their
extent is still manual work, very labour intensive choice of variety prior to the actual field occur-
and mainly relies on family labour. Gross rence of the pest indicates that farmers remain
margins excluding labour costs range from diffident about the effectiveness of Bt control.

Table 2 Indicators of Bt-cotton production in the study area

V1 V2 V3 V4 V5 All
Yield, seed cotton (t ha21) 4.0 (0.88) 3.7 (0.92) 4.3 (0.68) 3.8 (0.73) 3.5 (0.75) 3.9 (0.84)
Farm size (ha) 0.68 (0.25) 0.51 (0.17) 0.56 (0.18) 0.57 (0.24) 0.59 (0.15) 0.58 (0.21)
Plot size (ha) 0.22 (0.16) 0.12 (0.05) 0.18 (0.08) 0.25 (0.14) 0.21 (0.08) 0.20 (0.12)
Pesticide applications 12.4 (3.3) 12.9 (3.4) 7.7 (1.8) 10.5 (3.6) 10.7 (2.5) 10.8 (3.5)
Pesticide use (kg ha21) 20.5 (10.6) 16.9 (8.7) 8.4 (4.2) 14.3 (6.2) 18.9 (8.2) 15.8 (8.9)
Average pesticide price 4.8 (1.4) 3.2 (0.6) 4.6 (1.9) 4.0 (1.5) 4.0 (1.0) 4.1 (1.4)
(US$ kg21)
Production costsa 411 (136) 373 (104) 379 (102) 400 (114) 608 (207) 434 (162)
(US$ ha21)
Labour input 432 (155) 436 (165) 394 (107) 425 (122) 378 (112) 413 (134)
(person days ha21)
Gross margin (US$ ha21) 1626 (381) 1477 (458) 1791 (313) 1640 (458) 1169 (386) 1541 (449)
Costs for family labour are not included. Local wage level for unskilled labour is around US$1.7 per day.
Note: The sample size is 150, i.e. 30 farmers per villages. Data were collected during May – October 2002.
Figures in brackets are standard deviations.
Bt-Cotton Farmers Use High Levels of Pesticides 49

The authors of previous economic studies on Bt- Bt varieties. Hence, we first examined the possi-
cotton (e.g. Pray et al., 2001; Qaim, 2003) found bility of resistance of bollworm to the Bt-toxin.
that Bt varieties not only reduced the amount of For this purpose, bollworm caterpillars (second
chemical pesticides but also the share of highly or third instar larvae) were collected from the
toxic products and therefore generate additional plots where input data collection took place and
health benefits. In our study the share of extre- were analysed for resistance to Bt-toxin.9 The
mely and highly hazardous pesticides (WHO bioassay found that compared to a control
toxicity classification Ia and Ib) was almost 40% strain reared under laboratory conditions, boll-
on average with some variation across villages worm larvae collected at the study site in 2002
(Table 3). It must be noted that in China product did not show increased resistance against
adulteration of pesticides is a major problem Bt-toxins. Therefore, the application of high
(e.g. Liu & Qiu, 2001). As mentioned above, label- amounts of chemical insecticides cannot be attrib-
ling, more often than not, is improperly done, uted to pest resistance against the Bt-toxin. In
i.e. no or insufficient information on, for example, China, no refuge scheme is implemented but the
active ingredients, concentration and recommen- multi-cropping system with a wide variety of
ded dose is printed on the product container. In CBW host crops can function as a natural refuge
the sample, 15% of products could not be identified by producing enough susceptible individuals
and are therefore not attributable to a toxicity class. that mate with resistant insects from Bt-cotton
We also checked for evidence of negative plots and hence dilute the build-up of resistance
human health effects from pesticides in the five (Gould & Cohen, 2001; Jia & Peng, 2002). In
villages during the reporting season. We found addition, the frequency of resistance alleles can
that most of the poisoning cases were minor be reduced by late-season CBW control with
health hazards, such as skin irritations after pes- chemical insecticides (Wu & Guo, 2005).
ticide spraying (Table 4). These were generally A second factor that could help to explain the
not treated beyond washing and the affected continued high use of insecticides and the see-
person having to rest after spraying. However, mingly small substitution effect of Bt varieties
13 out of 150 farmers experienced medium or for insecticides is the situation in the local seed
severe8 poisoning in the 2002 season during or markets. A vast number of different Bt varieties
after applying pesticides to Bt-cotton. This is a are available on local markets, with striking
high incidence on negative human health effects differences in price. The price for the Monsanto
of pesticides on farmers using Bt-cotton varieties. Bt-cotton variety 33B is around US$10 per
The prevailing high level of insecticide use, kilogram, but, as depicted in Figure 2, most
despite Bt-cotton adoption, raises some questions farmers actually spent considerably less. Cotton
regarding the effectiveness of both types of seed is available for less than US$2 per kg and
damage control agents, chemical pesticides and shops10 sell different qualities even for the

Table 3 Toxicity of pesticides used in Bt-cotton production (WHO classification)

V1 V2 V3 V4 V5 All
Unidentified pesticides (% of total) 13.8 (9.8) 27.2 (14.1) 4.2 (6.7) 15.7 (13.1) 16.5 (12.9) 15.5 (13.6)
WHO toxicity group (% of identified pesticides)
Ia 1.1 (2.2) 8.6 (11.1) 8.9 (10.8) 11.2 (12.3) 26.2 (14.6) 11.2 (13.7)
Ib 37.4 (18.3) 14.8 (17.7) 39.7 (14.5) 23.4 (13.7) 24.6 (18.1) 28.0 (18.8)
II 23.0 (14.9) 38.3 (22.4) 20.1 (14.3) 31.3 (16.2) 32.4 (16.5) 29.0 (18.1)
III 36.2 (13.9) 29.0 (17.2) 26.8 (16.6) 30.1 (16.3) 8.6 (8.2) 26.1 (17.4)
U 1.3 (3.7) 0.6 (1.5) 0.7 (3.2) 0.7 (1.6) 0.5 (2.5) 0.8 (2.6)
nl 1.0 (2.8) 8.6 (7.9) 3.8 (6.3) 3.2 (5.3) 7.8 (10.2) 4.9 (7.4)
Ia – extremely hazardous, Ib – highly hazardous, II – moderately hazardous, III – slightly hazardous, U – unlikely to
pose an acute hazard in normal use, nl – not listed.
Standard deviations in parentheses.
50 International Journal of Agricultural Sustainability

Table 4 Pesticide poisoning in the sample (2002 season) in Bt-cotton production

V1 V2 V3 V4 V5 All
Poisoning cases (% of farmers) 17 23 13 27 43 25
Slight poisoning (% of total) 100 71 100 50 46 65
Medium poisoning (% of total) 0 29 0 50 46 32
Severe poisoning (% of total) 0 0 0 0 8 3

Poisoning symptoms after/during pesticide application in Bt-cotton in 2002
Skin irritation (% of farmers) 17 17 13 13 17 15
Nausea (% of farmers) 0 0 0 7 7 3
Vomiting (% of farmers) 0 3 0 7 13 5
Headache (% of farmers) 0 0 0 10 7 3
Dizziness (% of farmers) 0 7 0 0 13 4

Some respondents stated more than one poisoning symptom.

Monsanto varieties indicating that counterfeit analysis of cotton leaf tissue huge variation in
products exist. Also, before Bt-cotton introduc- the Bt-toxin concentration was revealed. Com-
tion, it was common practice to select seed from paring all farmers that used seeds saved from
the field and keep them for sowing in the next their previous production and those farmers
season. As shown in Figure 2, most farmers still who paid US$2.4 or less per kg of seed with
continue this practice when using Bt varieties. those paying more shows a significant difference
Cotton is not included in the variety protection in the average Bt-toxin concentration (Table 5).
list in China and consequently intellectual This means that when farmers use their own or
property rights for Bt-cotton varieties are not cheap Bt seed the plant tissue is more likely to
enforced. Most cotton varieties (including the contain lower toxin levels and hence bollworm
first Bt varieties) used are not hybrids and thus control effectiveness could be impaired.
crossbreeding (with local varieties) and on-farm Although a higher probability of high toxin
propagation is relatively easy. Own seed is concentration would suggest higher control effec-
cheaper but might show lower control effective- tiveness, it was found that farmers, who pay
ness and hence the choice of seeds may influence more for their seed, also spend more money on
the use of chemical pesticides. insecticides and other inputs (Table 5). The
To investigate the presumption that the seed mean values for the amount and number of insec-
price is related to the control effectiveness, we ticide applications are all significantly higher for
grouped the sample by seed price. From the farmers using high priced seed while yield
difference is insignificant.
Potential reasons why farmers do not substi-
tute Bt-toxin for chemical insecticides can be
multifarious, including continued promotion of
chemical pesticides by village leaders or exten-
sion agents, fear of bollworm outbreaks, per-
ceived unsatisfactory control by Bt varieties and
farmers’ lack of knowledge to assess the control
effectiveness of Bt varieties. Although, in theory,
the effect of Bt toxin on pests is linearly additive
and even at low concentration ought to have
an impact, e.g. by slowing pest development
(Adamcyzk et al., 2001), this is unlikely to be the
Figure 2 Price and source of Bt-cotton seed of the base of farmers’ decision-making. Rather, if they
sampled farmers in 2002 observe that larvae continue feeding on the
Bt-Cotton Farmers Use High Levels of Pesticides 51

Table 5 Pest control measures and yield of farmers grouped by seed price
Type of seed
On-farm Low price High price
propagation (, US$2.4 kg21) ( US$2.4 kg21)
Number observations n ¼ 85 n ¼ 29 n ¼ 33
a b
Seed price (US$ kg 21
) 0.48 1.99 5.65c
a a

Toxin concentration (ng g 21
fresh leaf) 522 533 652b
Yield (t ha21) 3.88a 4.04a 3.70a
a a
Amount pesticides (kg ha 21
) 14.7 14.3 20.4b
Pesticide applications (number) 10.0a 10.8a 13.0b
a a
Insecticides targeting CBW (kg ha 21
) 4.1 4.4 7.4b
Different letters a, b, c indicate significant difference of means (a ¼ 0.05).  At the end of August.

plant, farmers may consider the toxin as not effec- Moreover, reduced control effectiveness due to
tive and therefore apply additional insecticides. low toxin levels is difficult to assess for farmers.
We used the results from our cotton growth Therefore, in trying to avoid yield losses,
experiment11 as standard and found that close farmers may continue to rely on chemical insecti-
to 60% of the leaf samples collected in farmers’ cides. Antle (1983) has pointed out that in a situ-
fields had toxin concentrations below this stan- ation with input uncertainty, economically
dard (Figure 3). There is a high variation in optimal resource allocation is hindered because
toxin concentration regardless of the seed price changes in the (environmental) conditions after
but the probability that a farmer has planted input decisions have been taken can render
sub-standard Bt-cotton is higher if own seed or these decisions suboptimal. Hence, under the
lower priced seed were used. However, low conditions prevailing in Shandong Province, a
toxin levels were also found for more expensive substitution of insecticides with Bt varieties,
seed, hence the price is not a sufficient indicator even those explicitly targeting the cotton boll-
of control effectiveness of Bt varieties and thus worm, is questionable. The continuation of
farmers face uncertainty. using high levels of insecticides is an indicator

Figure 3 Cumulative distribution of Bt-toxin concentration of monitored plots (sampled at the end of August)
52 International Journal of Agricultural Sustainability

of a high degree of uncertainty about the damage figures do not include time spent for spraying
abatement effectiveness of Bt seeds. Such beha- pesticides) as well as high yield levels increase
viour could also be a hint that farmers are the insecticide use while more experience and
unaware of the true pest control properties of Bt higher price of insecticides (that might be corre-
varieties and instead may associate the higher lated with better quality) negatively influence
seed price with other traits, which in reality Bt the amount of applied insecticides. Farmers also
varieties do not possess. The next section there- used more insecticides if tree cotton (a very tall,
fore investigates the effectiveness of damage bushy variety) was planted. As shown in the
control agents by applying the damage control descriptive analysis above, insecticide use is
function methodology. higher in the plots where high Bt toxin concen-
trations were measured. Since insecticide use
differed among villages (Table 2), we included a
Production function estimation
location dummy for the villages. Yield differences
The coefficients of the insecticide use function between villages might also be attributed to, for
(Table 6) show the expected signs. The number example, different soil, microclimate or infra-
of continuous years of planting cotton on the structure conditions (e.g. access to wells for
plot (crop rotation) and high intensity of pro- irrigation) as well as distinct policies of the
duction (indicated by high labour input; these village leader or specific agronomic practices.

Table 6 Simultaneously estimated insecticide use and production function (using 3SLS)
Parameter Insecticide use function Production function with exponential
damage control
Coefficient t statistic Coefficient t statistic
Constant 10.065 2.73 0.165 0.26
Labour 0.019 4.36 0.073 0.60
Herbicide 23.095 21.83 0.107 1.80
Experience 20.128 22.22 0.023 0.73
Crop rotation 0.322 2.41 20.091 23.17
Input costs2 – – 0.121 2.47
Village 1 (dummy) 1.046 0.48 0.129 1.42
Village 2 (dummy) 24.865 22.44 0.142 1.54
Village 3 (dummy) 29.287 24.10 0.293 2.01
Village 4 (dummy) 24.977 22.37 0.140 1.34
Insecticide price 20.176 23.02 – –
Pest pressure (dummy) 0.374 0.30 20.101 21.97
Variety (dummy) 4.742 2.09 20.046 20.54
Cotton yield 2.419 3.64 – –
Bt-toxin concentration 20.001 20.42 – –
Damage control function
Bt-toxin l1 – – 0.003 0.71
Insecticide l2 – – 0.216 1.16

Bt-toxin Insecticide l3 – – ,20.001 21.43
Adjusted R 2 0.413
Note: T statistics larger than 1.98 indicate coefficients that are significantly different from zero, a ¼ 0.05.
Without labour used for pesticide application or manual pest control.
Production costs include expenditures for irrigation, fertiliser, mulching and machinery. Costs for labour (entirely
family labour), seed costs (due to possible interdependence of seed quality and toxin concentration) and pesticides
were not included.
Bt-Cotton Farmers Use High Levels of Pesticides 53

Following the findings of Huang et al. (2002), an appropriateness of farmers’ complementary

important factor might also be a varying extent control methods and the severity of bollworm
of pesticide promotion. Farmers generally pest pressure. Fourth, given the imperfections
consult the owner of the pesticide shop as well in the markets for agricultural inputs and the
as extension staff when they observe pests in sometimes dysfunctional agricultural extension
the field and tend to follow the advice obtained. system in China, the effect of Bt crops to reduce
The parameter results of the production/ the use of toxic chemicals in a sustainable way
damage control function are in line with pro- and therefore realise the potential economic,
duction theory, i.e. expenditures for inputs other health and environmental benefits are limited.
than pest control have a significant positive effect Unless these problems are solved the technology
on yield while the absence of crop rotation tends may fail to live up to its potential. Fifth, and
to decrease yields. Also, the dummy for Village 3 perhaps equally important, there is a knowledge
is significant as yields are higher in this village. issue with the use of Bt varieties by small-scale -
The most remarkable result however, is that farmers in developing countries. If farmers are
neither the coefficient for insecticides nor for Bt unaware of the true properties of Bt varieties,
toxin concentration was statistically significant. especially in an atomistic and largely unregulated
Considering the high variability in input quality seed market, one can hardly expect that they
and the generally low variation in pesticide use reduce their levels of insecticide use. By and
at generally high levels, these results are plausible large, these are also the simple lessons learned
although they contradict some other studies who from the economics of pesticides (Zadoks &
found significant coefficients for the Bt-dummy Waibel, 2000). We submit that these lessons
and the applied pesticide quantity (e.g. Huang should not be ignored when drawing conclusions
et al., 2002; Qaim & Zilberman, 2003). about the prospects of Bt crops to contribute to
agricultural productivity growth.
In addition, we also see some problems with
Conclusions the damage control function methodology that
has been used to assess the productivity effects
The case study comprised data from only one of Bt crops when applied to the conditions of
county in Shandong Province, China and one developing countries. For example, even though
cropping season and therefore we draw our con- the parameter estimates of the production func-
clusions with care. Clearly, time series and panel tion are in line with production theory, the
data are preferable to investigate the farm-level inclusion of pest control variables in this frame-
impact of Bt-cotton. However, despite these limit- work remains problematic under the conditions
ations, our results suggest that the economic of input uncertainty. Under such conditions,
benefits of Bt-cotton in developing countries quantity or value of pest control inputs may not
could be more limited than concluded in pre- describe the biological processes underlying the
vious papers (e.g. Huang et al., 2003; Pray et al., input output relationship sufficiently.
2001, 2002; Qaim, 2003; Qaim & Zilberman, Overall, our research suggests that the discus-
2003; Thirtle et al., 2003). As revealed by this sion on the prospects of Bt-cotton and other GM
study, the reasons are that there are some funda- crops in developing countries could benefit
mental problems with the introduction of the from more and better trans-disciplinary com-
Bt-cotton varieties in China, and perhaps in munication with regard to the assumptions for
other developing countries too. First, lack of stan- economic models but also for the interpretation
dards and unreliable quality limit the potential of results. To realise the potential of pest resistant
benefits of all input-based technologies including transgenic varieties these should be treated as a
Bt seeds and pesticides. Second, there is a component of integrated production and pest
problem of collecting and using pesticide data management (IPPM) and not as single solutions.
from small-scale farmers in developing countries To effectively incorporate the Bt technology into
as a base for estimating pesticide reduction an IPPM scheme two things are required. First,
benefits from Bt crops. Third, the economics of the institutional environment is an important
Bt varieties, which are nothing but a new pest determinant of the resulting benefits of technol-
control option for some lepidopterous pests, cru- ogy introduction. As pointed out by de Janvry
cially depend on control effectiveness. The latter et al. (2005), putting into place the necessary
is influenced by the quality of seeds, the public and private institutions is a major
54 International Journal of Agricultural Sustainability

precondition and challenge for the effective feedback is highly appreciated, while all
implementation of agricultural biotechnology in remaining errors are solely our responsibility.
developing countries. Like previous technologies
in crop protection, biotechnology alone is unli-
kely to ultimately solve the pest (and the pesti-
cide) problem. Unfortunately, the belief in
technologies per se is strong. For example, the Any correspondence should be directed to
need for the introduction of transgenic cotton H. Waibel, Königsworther Platz 1, D-30167
expressing insecticidal genes other than Cry1Ac Hannover, Germany (waibel@ifgb.uni-hannover.de).
and CpIT for future pest management was
recently emphasised by Wu and Guo (2005).
However, in light of the results of this case Notes
study it seems more important to take into
account the causes and possible remedies for 1. The term biotechnology in this paper refers to the
market failure in agricultural input markets genetic engineering of plants where genes from
other organisms are inserted into agricultural
before introducing additional transgenic crops crops to obtain transgenic plants with altered
in China. traits.
The second challenge that needs to be over- 2. As figure for total global agricultural land the 5020
come is that contrary to the popular belief that million hectare stated for 2002 in the FAOSTAT
the solution lies in the seed, the introduction of database were used.
Bt varieties should not be taken as a substitute 3. All five villages are located in Linqing County and
of enabling farmers to make informed decisions. village names can be obtained from the authors.
The farmers were selected together with the
If farmers understand the true properties of Bt respective village chiefs based on the criteria
varieties and if they know what questions they (1) cotton growers, (2) willingness to participate
should ask the dealers who offer them an array in the study and (3) representative sample of
of new varieties, the chance that fewer pesticides farmers with regard to socio-economic conditions.
will be used in the production of cotton and other 4. Testing was conducted by Dr Zhang Yongjun,
crops can be increased. Another recent study CAAS (Chinese Academy of Agricultural Sciences,
from Shandong province confirms these finding, Beijing).
5. A range of cultural practices can also be con-
i.e. farmers who use Bt-cotton and in addition sidered as damage control factors but due to the
receive training in IPPM decreased their pesticide dominance of chemical insecticides and Bt-toxin
use significantly more than untrained farmers these factors are ignored in the analysis.
(Yang et al., 2005). 6. Other functional forms (logistic and Weibull) of
We believe that the lessons drawn from this the damage control function were applied (see
case study in China are also important to other Pemsl et al., 2003), and did yield similar results.
developing countries with similar conditions 7. Yield figures are seed cotton (lint with seed).
Farmers sell produce as seed cotton without
that consider the introduction of transgenic ginning. The weight ratio of seed to lint in seed
crops. cotton is about 2 : 1.
8. Grouping of poisoning into slight (symptoms such
as skin irritation), medium (symptoms such as
vomiting and dizziness) and severe (where the
Acknowledgements farmer needed medical treatment in a hospital).
The experiments (leaf tissue analysis and the 9. Prof Wu Kongming at CAAS, Beijing, conducted
the bioassay of cotton bollworm larvae.
bioassay of bollworm larvae) were enabled by 10. There was at least one small shop in each of the
Prof. Dr Wu Kongming and Dr Zhang Yongjun villages that sold agricultural inputs (pesticides,
from the Chinese Academy of Agricultural fertiliser and seed) besides a multitude of other
Sciences (CAAS, Beijing). We thank them for items. Farmers also go to the local town to buy in
their expertise, motivation and smooth collabor- larger shops that are specialised in agricultural
ation. The fieldwork was partly funded by FAO inputs.
and this support as well as help from local staff 11. A cotton growth experiment following the rec-
ommendations and advice from Prof A.P. Gutierrez
during the fieldwork is gratefully acknowledged. was conducted close to the five survey villages. A
Helpful comments were provided by Alain de Bt (33B) and a non-Bt cotton variety (Zhong mian
Janvry, Lukas Menkhoff, Max Whitten, Jan 12) were planted on 108 m2 plots (three replicates
Zadoks and three anonymous reviewers. Their each). During the whole season, plants were
Bt-Cotton Farmers Use High Levels of Pesticides 55

mapped weekly and the dry weights of stem, leaf, pesticides: A case study of Bt cotton in China. Agri-
roots and fruit/flowers were determined for five cultural Economics 29 (1), 55 –67.
sample plants per plot. Toxin concentration was James, C. (2004) Global Status of Commercialized Biotech/
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