Village-wide Effects of Agricultural Biotechnology: The Case of Bt Cotton in India

Abstract

Previous studies on impacts of agricultural biotechnology have mostly focused on direct effects. We suggest an economy-wide framework to analyze income distribution aspects more carefully. For a village in India, a micro-social accounting matrix (SAM) is developed and used to simulate the effects of Bt cotton adoption. Overall, the technology is employment generating, although family labor in cotton production is saved. While substantial benefits are observed for small and large farmers, total household income effects are bigger for larger farms. This is mostly due to differential opportunity incomes of saved family labor. Some research and policy implications are discussed.