"The profitability of Bt cotton on a specific farm in a given year is an absolute function of the infestation level of the tobacco budworm and, to a lesser extent, the cotton bollworm," says Fred Cooke, agricultural economist at Delta Research and Extension Center at Stoneville.
An on-farm study conducted from 1997 to 2000 and involving 54 Mississippi farms revealed no significant differences in the costs and yields of a Bt cotton insect system and a conventional system.
Over the four years, the Bt system averaged 872 pounds with insecticide costs of $88.08 per acre. The non-Bt system averaged 881 pounds at a cost of $90.73, according to Steve Martin, agricultural economist at Delta Research and Extension Center in Stoneville, Miss. A similar study conducted by the University of Arkansas’ Kelly Bryant found a break-even situation in the cost of Bt versus conventional cotton.
Biotechnology adoption rates continue to increase for several reasons, says Martin, including the convenience of the biotech systems and the available varieties. "Bankers, especially in marginal cash-flow situations, may prefer transgenic varieties for risk management reasons.
“Those insurance and risk reduction factors are difficult to measure economically," he says. "Increased competition hopefully will bring down the cost of transgenic crops."
The economics of transgenic varieties, Martin says, depend, for the most part, on pest pressure. "If you look at it strictly from a budget standpoint, it's a break-even situation. But, the transgenic systems may provide more intangible benefits that are valuable to growers," he says.
Although consumers think of corn more than soybeans as a food item, the bigger issue with biotech crops may be consumer acceptance. "Remember – cotton is something we put on the outside, not in our mouths," Martin says.
Transgenic crops are nothing more than an excellent risk management tool, says Roger Carter of Agricultural Management Services in Clayton, La. It's difficult to compare the costs of transgenic and conventional cotton varieties because of variables such as yield, loan value, labor and other expenses, he says.
"We know – but we can't prove – that there has been a yield and quality drag with transgenics, but I believe that will be overcome in the future,” he says. “Transgenic varieties are a good tool, but it's a tool that can be mismanaged.”
The introduction in 1996 of biotechnology in the United States spurred a "huge amount" of soybean production, says Jerry Slocum, a Tate County, Miss., soybean grower and member of the United Soybean Board.
Biotechnology lowered the cost of inputs by decreasing labor and the time needed to control weeds in soybeans, he says. "Roundup Ready soybeans have been a primary factor in America's increase of no-till soybean acres since 1996. As a result of the large amount of U.S. soybean acres in no-till during 2002, the drought caused a smaller reduction in total production than previous U.S. droughts of the same severity."
In Argentina, says Slocum, a professor of plant biotechnology says his country has decreased pesticide use by one-third and doubled production since the adoption of Roundup Ready technology.
Biotechnology, Slocum believes, enhances the quality of the crops marketed and creates future opportunities for new value-added crops. He plants all Roundup Ready soybeans on his farm.
"In our Delta soils, Roundup Ready technology lets us get into the field and plant in a more timely manner,” he notes. “We've adopted Roundup Ready technology because it makes sense for our operation. The real economics of agriculture includes the price for which you can sell your commodity, and whether you can sell it at all. The cost of growing a crop doesn't matter if you can't sell it."
Soybeans cannot be kept segregated, says Slocum, so the industry took a proactive role in educating the public and guaranteeing future markets. The overseas biotechnology communications effort costs about $1 million per year and covers all biotech crops. The results have been impressive with three years of record soybean exports and 2003 currently running at a record pace.
Other crops are also reaping the benefits of the soybean industry’s educational efforts. For example, the industry has showcased the reduction in pesticide use with Bt cotton and the quality improvement due to less damage in Bt corn.
Commodity groups can’t do it all, though. "Companies must be responsible in their development of transgenic crops," says Slocum. "They should insure that only approved varieties are released to the marketplace, which has been the case with soybeans but not with corn.”
A failure to heed that caution, he says, resulted in a decrease in corn exports, losing the European Union market and reducing marketing in places like Japan and South Korea. Taiwan now is buying Chinese corn, he adds.
"Some of these market problems are because of cost, but a lot of it is due to non-approved varieties,” he says. “Growers are so production-oriented that we'll give it a try sometime even to our detriment."
The biotechnology industry is continuing to move forward in the farm commodities arena, says John Anderson of Monsanto. The benefits of biotech crops, he says, include increased yields, lower operating costs, enhanced water conservation, reduced soil erosion and decreased pesticide spraying. In addition, biotechnology has enabled growers to adopt conservation tillage at a faster rate.
"The value is in the time you save by using this technology. That's why people adopt biotechnology. It creates values that may never show up in a budget analysis," says Anderson.
Adds Carter, “Transgenics are here to stay, so we might as well get used to it and learn to work around it. But until the price of cotton goes up, it'll be difficult no matter which production system you choose. The bottom line is that we've got to pick, gin, sell and deliver a profitable crop."