CONVENTIONAL VS. TRANSGENIC: THE SHOWDOWNRobert Hogan, Texas AgriLife Extension; Jason L. Johnson, Texas AgriLife Extension; Jeanne Reeves, Cotton, Incorporated; Warren L. Multer, Texas AgriLife Extension; Gary Earhart Texas AgriLife Extension

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GMO Area 1 GMO Area 2 Non-GMO Area 1 Non-GMO Area 2

References

Bryant, Kelly J., William C. Robertson, Gus M. Lorenz, Rob Ihrig, George Hackman. 2002. Six years of transgenic cotton in Arkansas. In Proc. Beltwide Cotton Conf., Atlanta, GA. 9-12 Jan. 2002. Natl. Cotton Counc. Am., Memphis, TN.

Cooke, Fred T. Jr., William P. Scott, Steven W. Martin, and David W. Parvin. 2001. The economics of Bt cotton in the Mississippi delta: 1997-2000. p. 175-177. In Proc. Beltwide Cotton Conf., Anaheim, CA. 9-13 Jan. 2001. Natl. Cotton Counc. Am., Memphis, TN.

Introduction

The development of transgenic cotton cultivars gave cotton producers more risk management options for insect control and weed suppression. Pest suppression characteristics of transgenic cotton provide the potential to greatly reduce common sources of production risk for all cotton producers. As production risk is reduced, yield and production costs become less variable and net returns become more predictable and estimable. Studies showing a higher probability of positive net revenues were conducted in Arkansas (Bryant et al., 2002) and Mississippi (Cooke et al., 2001). With the built-in Bacillus thuringiensis (Bt) gene which expresses one or more endotoxins produced by the soil bacterium, cotton was now able to defend itself from depredations of pests. In addition, weed control became much more straightforward and less expensive as Roundup® could be applied over the top of growing cotton plants to kill weedy pests. The objective of this research is to determine if it is still economically feasible to use the transgenic production system for dryland cotton production in West Texas.

Methods

Model production budgets for both a generic transgenic Bollgard II Roundup Ready Flex (B2RRF) cultivar and a conventional cotton cultivar, i.e. not genetically modified cotton or “brown bag” cotton were constructed. Two area-specific interactive focus groups (Area 1 and Area 2) were formed to modify and amend these model budgets so they represented actual cultural practices used by dryland cotton producers in West Texas.

These budgets then became the foundation of a mathematical model which describes both the physical and economic production processes for dryland cotton. Both stochastic price and yield generating functions were developed and tested against means and variances of the original data series to validate the accuracy of the generating functions.

This model computes net returns after direct and total specified costs were deducted from gross revenue. Crop insurance indemnities, program payments (direct and countercyclical payments), and a deduction for cash cropland rent are also considered. The model is then simulated through 500 stochastic iterations using the Excel add-in Simetar®. The simulated results of net returns after total specified costs are graphed as cumulative distribution functions (CDFs) in Figure 1.

Results

Net returns were calculated for each iteration of the production period for each producing area with revenue provided from the sale of cotton lint, cotton seed, insurance indemnities, and program payments minus each period’s total specified costs. The two production alternatives of the cotton cultivars B2RRF (GMO) and brown bag (non-GMO) were then analyzed using both stochastic dominance and confidence premiums. The CDFs in Figure 1 show the brown bag alternative is more preferred in both areas. In Area 1 producers growing the GMO variety would need to be subsidized at a rate of $25.08 per acre to be as well off as the non-GMO producer and in Area 2 the GMO producer would have to be subsidized $3.55 per acre to be as well off as the non-GMO producer.

Figure 1. CDF Comparison of Four Net Revenue Streams.

Acknowledgement

The authors want to thank Cotton Incorporated who provided funding and technical assistance for this research. We would also like to thank the numerous West Texas cotton producers for their time and effort that made this study possible.

Conclusions

Cotton production using conventional or brown bag cultivars is more economically feasible for West Texas dryland cotton producers than transgenic cultivars at the current production cost and revenue levels.