DP5568 GM Cotton Adoption, Recent and Prospective: A Global CGE Analysis of Economic Impacts

Author(s): Kym Anderson , Lee Ann Jackson , Ernesto Valenzuela

Publication Date: March 2006

Keyword(s): GMOs , cotton biotechnology , computable general equilibrium modeling , economic welfare , subsidy , tariff reform

JEL(s): D58 , F17 , Q16 , Q17

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP5568.asp

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.