Working Paper: CEPR ID: DP5568
Authors: Kym Anderson; Ernesto Valenzuela; Lee Ann Jackson
Abstract: This paper provides estimates of the economic impact of initial adoption of genetically modified (GM) cotton and of its potential impacts beyond the few countries where it is currently common. Use is made of the latest version of the GTAP database and model. Our results suggest that by following the lead of China and South Africa, adoption of GM cotton varieties by other developing countries ? especially in Sub-Saharan Africa ? could provide even larger proportionate gains to farmer and national welfare than in those first-adopting countries. Furthermore, those estimated gains are shown to exceed those from a successful campaign under the WTO?s Doha Development Agenda to reduce/remove cotton subsidies and import tariffs globally.
Keywords: computable general equilibrium modeling; cotton; biotechnology; economic welfare; GMOs; subsidy and tariff reform
JEL Codes: D58; F17; Q16; Q17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GM cotton adoption (Q16) | productivity (O49) |
| GM cotton adoption (Q16) | welfare (I38) |
| GM cotton adoption (Q16) | trade dynamics (F14) |
| GM cotton adoption (Q16) | negative output effect in non-adopting countries (F69) |
| GM cotton adoption (Q16) | decline in net income from cotton farming (Q12) |
| If all developing countries adopt GM cotton (Q16) | global welfare increase (D69) |
| Removal of cotton subsidies and tariffs (F13) | global welfare gain (D69) |
| GM cotton adoption (Q16) | larger gains than subsidy removal (H23) |
| Developing countries GM adoption (O10) | enhanced welfare (I38) |