A methodology to assess the profitability of Bt-cotton: case study results from the state of Karnataka, India

Abstract Bt-cotton varieties can control lepidopterous pests, hence offering the possibility to reduce chemical pesticide use. India, with the largest cotton-growing area globally, gave commercial approval for Bt cotton in 2002 and a rapid adoption of the technology is expected. This paper uses a stochastic partial budgeting approach that captures the key pest control properties of Bt cotton taking into account uncertainty of pest pressure, control effectiveness and prices to assess the profitability effects of Bt varieties and hence complements previous studies that generally excluded such issues. Results of the simulation model reveal that under the current price situation a prophylactic chemical control strategy dominates the use of Bt varieties in both, irrigated and non-irrigated cotton. The effect of a higher cotton price is assessed in a second scenario that depicts a Bt cotton variety with improved fiber quality than varieties currently approved for commercial planting. Under this assumption, the Bt strategy would be slightly better than the prophylactic use of chemical pesticides. The model can be extended to include pests other than the bollworm and correlations among variables, e.g. prices and yield, provided sufficient evidence for such correlation exists. Results of this analysis show the impact of uncertainty in the main variables that influence the profitability of Bt cotton and alternative crop protection methods.