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Economic Impact

Page history last edited by Tyson 15 years, 4 months ago

  

The economic effects of Bt. corn can be divided into:

 

- Impact on Farmers

- Impact on Chemical/Seed Cpmpanies

- Impact on Consumers 

 

Impact on the Grower

 

Economic advantages of growing Bt. variety crops are two fold. First, fewer insecticide purchases are required. Secondly is the phenomenon that Bt. varieties yield better than conventional crops; even those treated with insecticides. Bt. technology does come at a price though. It is typical to pay a "technology fee" for any genetically modified trait. However, in the case of Bt. corn these costs are worth the investment. From 1996-2001 increased yields from Bt. corn, "earned farmers about $567 million, for a net loss of $92 million (due to higher seed price)- about $1.31 per acre planted" (Benbrook). With many farms having several thousand acres of Bt. corn, it is easy to see how it is an economic advantage to the farmer to grow these varieties. 

 

 

This study includes data on insecticide and Bt corn performance from several states.

Table 1. Projected value ($ per acre) of yield protection provided by Bt corn in southern Minnesota during endemic and outbreak infestations of European corn borer ( K. Ostlie, B. Potter & D. Sreenivasam).

Corn Price

($/bushel)

Infestation Level Expected Yield (bushels per acre)
100 120 140 160 180
3.40
Endemic $8.74* $11.22 $12.23 $14.96 $16.77
Outbreak $42.74 $47.88 $59.83 $68.37 $76.91
3.00 Endemic $7.71 $9.90 $10.79 $13.20 $14.20
Outbreak $37.71 $42.25 $52.79 $60.33 $67.87
2.60 Endemic $7.15 $8.58 $10.01 $11.44 $12.87
Outbreak $32.68 $39.21 $45.79 $52.29 $58.82
2.20 Endemic $6.05 $7.26 $8.47 $9.68 $10.89
Outbreak $27.65 $33.18 $38.17 $44.25 $49.77
1.80 Endemic $4.95 $5.94 $6.93 $7.92 $8.91
Outbreak $22.62 $27.15 $31.67 $37.20 $40.72
*Bt corn yield protection will differ among hybrids because hybrids vary in their tolerance to European corn borer infestations

 

Table from 2002 study concucted by Minnisota State University entitled "Bt Corn & European Corn Borer

Long-Term Success Through Resistance Management"

 

Impact on Chemical/Seed Companies

 

From 1996-2001 technology fees from Bt. corn in the US totaled $92 million (Benbrook). That is an average of $18.4 million per year just for Bt. technology. Since 2001, acerage of Bt. corn has only expanded, and with it so have returns to seed companies. Chemical companies (although usually the same company as the seed company) also increase profits from Bt. corn.  Bt. is not a safeguard from all types of insects, or other pests in corn. Additionally Bt. corn is one of the few Bt. crops that does not decrease the use of insecticides. So chemical companies can still market herbicides, fungicides, and additional insecticides to growers of Bt. corn.  

 

Impact on Consumers 

 

On average Bt. corn yields 3.9 bushels more per acre than other types of corn (Benbrook). Basic economics tells us that a higher supply leads to lowered prices. Due to the recent ethanol craze, corn prices are higher now than ever before. In nations like Mexico where corn is a staple of the diet and income is low, this is more than an additional cost, it is hunger. The higher yielding Bt. varieties are helping to put food on everyones plates. 

 

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Comments (2)

Jen Scott said

at 1:13 pm on Nov 15, 2008

Make sure all your pages look the same; the center alignment at the top of this page is a little strange.

Tyson said

at 7:57 pm on Nov 16, 2008

Hey Javier ... we should collaborate on what type of formatting changes we're making .. as to avoid an editing battle lol

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