Socioeconomic Impact of Bt Cotton · 2019. 10. 16. · Categorywise 4.10 Costs and Returns in Official and Unofficial BT Cotton 63 4.11 Costs and Returns in BT and Non-BT Cotton in

CESS MONOGRAPHS 3

Socioeconomic Impact ofBt Cotton

S.Mahendra DevN.Chandrasekhara Rao

CENTRE FOR ECONOMIC AND SOCIAL STUDIESHYDERABADNovember, 2007

CENTRE FOR ECONOMIC AND SOCIAL STUDIES MONOGRAPH SERIES

Number - 3 November, 2007

ISBN 81-88793-03-5

Series Editor : V. Ratna Reddy

© 2007, Copyright Reserved

Centre for Economic and Social Studies

Hyderabad

Rs. 200/-

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Foreword

In the last 27 years of its existence, the Centre for Economic and Social Studies(CESS) has always been aware of its role and commitment to society through itsresearch and publication activities. The main objective of the Centre is to undertakeresearch, documentation and training activities in the field of economic andsocial development in general and with reference to the state of Andhra Pradeshin particular. The Centre recognizes that a comprehensive approach to developmentrequires an interdisciplinary approach and tries to involve researchers from variousdisciplines. In keeping with the interests of the faculty, CESS has developedexpertise on several themes such as agriculture and livestock development, foodsecurity, poverty measurement and poverty alleviation programmes, unemployment,district planning, resettlement and rehabilitation, state finances, economics ofhealth and demography. The Centre has made important contributions to researchin these areas.

Social science research has to respond to the challenges posed by the changes inthe development paradigms such as economic reforms and globalization. Sinceresearch is the primary activity at the Centre, it is important to recognize the needto redefine/refocus the priority areas of research taking into account thecontemporary challenges. While the main focus of research on poverty relatedissues remained the same, since the mid 1990s, the area of research of the Centrebecame more diversified. New research areas related to broader national andfrontier research issues such as evaluation of the economic reform process andits impact on different sectors of the economy, environmental and natural resourceeconomics, livelihoods, health and education, biotechnology etc are added.

The Centre has always tried to ensure that its research is theoretically sound andmethodologically rigorous, so that it can directly or indirectly contribute to policyformulations or prescriptions. In the last two and half decades, CESS has publishedseveral books and working papers. The Centre has decided to start its monographseries in this year. The monographs are basically research studies and projectreports done at the Centre. It provides an opportunity for CESS faculty, visitingscholars and students to disseminate their research work.

The biotechnology has been knocking the doors of Indian agriculture for quitesome time now. However, the commercialization of the technology started onlyin 1996 in the world. In India, the trajectory of biotechnology in agriculturestarted with the approval by the Genetic Engineering Approval Committee (GEAC)in 2002-03 of three cotton hybrids suitable for the central and southern India

CESS Monograph - 3 iv

belonging to Monsanto Mahyco Biotech Limited, having in-built resistance tobollworms with the introduction of a gene from the soil bacteria Bacillusthuriengensis (Bt). The number of such hybrids approved by GEAC increasedrapidly over the last five years to reach 137 as of now. There are very fewempirical studies on the impact of biotechnology in India or Andhra Pradesh. Itis noteworthy that all the BT hybrids are brought out by the private sector seedcompanies including multinational companies unlike in the green revolution dayswhen the public sector research institutions were responsible for bringing outseeds of new high yielding varieties. Further, the role of public research institutionswas also minimized in the case of Bt hybrids unlike in the case of other cropvarieties, where they used to conduct regionwise agronomic trials and advisefarmers on the best ones. This has left the farmers 'susceptible to any biasedclaims from the various companies involved, and more exposed to the vagariesof market forces'. Further, public reservations and uncertainties about impactsadd to the danger that appropriate biotechnologies will remain inaccessible tothose who stand to benefit the most. Therefore, an ex-post, farm level study onthe impact of Bt cotton introduced in the state is highly relevant.

Two hypotheses are particularly relevant and need to be tested in the Indianconditions. They are - the hypothesis that the cultivation of Bt cotton can havesizeable yield effects in India as the pest population is not effectively controlledotherwise; and the hypothesis that there can be positive labour effects in countrieswhere cotton is picked manually. In this background, the present study isundertaken with the specific objectives of finding out the impact of BT cottoncultivation on cost of pesticides, cost of production and profitability across farmersbased on social categories and size groups; finding out the impact on employmentacross social categories and size groups; and finding out the problems and prioritiesas perceived by the farmers.

The results of the study validate both the above hypotheses. It was found that theBt cotton technology is superior to the conventional cotton hybrids in terms ofyield, net returns and employment opportunities. Also, it was found from theproduction functions that Bt cotton impacts the yield significantly and positively.The Bt farmers from all social groups, size categories and all agro-climatic zonesbenefited from its cultivation compared to non-Bt farmers from the same categories.The study also proved that many of the small farmers and SC farmers participatedin using the technology and improved their position with regard to profitabilityby growing Bt cotton. While most of the increase in employment is accountedfor by the hired labourers, the female labourers are the major beneficiaries amongthem. The major issues in further adoption and popularization of the technologyinclude making quality seeds available at affordable prices, creating awarenessabout BT cultivation, state intervention for seed supply and developing seeds

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resistant to all bollworms and rainfed conditions. It is also suggested that thepublic research institutions may bring in varieties instead of hybrids so that thefarmers can recycle the seeds for some years instead of going to the market everyyear.

The results of the study seem to explain the very high rates of adoption of thetechnology in a matter of five years in India. When we look at the figures, thearea under Bt cotton increased from a mere 44500 hectares in 2002-03 to 3.8million hectares in 2006-07 forming 40 per cent of the cotton area in the countryand it is estimated that this might have already gone up to 55 per cent in 2007.The results of the study assume significance in this background. However, furtherresearch is needed to ascertain any adverse impact on environment and othernatural resources including fauna and flora.

I hope that this monograph on the socioeconomic impact of Bt cotton will beuseful for research community, civil society and policy makers.

S. Mahendra Dev Director, CESS.

CESS Monograph - 3 vi

CONTENTS

List of Tables ix-xii

Acknowledgements xiii

Executive Summary 1-7

I: Agricultural Biotechnology and Transgenic Cotton 9-14

1.1. Pattern of Commercialization of Transgenics in the World 91.2. Bollgard Technology 11

II: Methodology 15-18

III: Profile of Growers and Details of Cotton Cultivation 19-38

IV: Costs and Returns 39-66

4.1. Costs and Returns in BT and Non-BT Cottons 394.2. Impact across Groups of Farmers 47

V: Employment and Perceptions 67-795.1 Impact on Employmen 675.2. Perceptions of Farmers 73

VI: Conclusions 80-82

References 83-85

Appendices 87-93

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LIST OF TABLES

Table No Page No

2.1 Sample Units for the Study 17

3.1 Sample Farmers from Different Districts 19

3.2 Number and Percent of Sample Farmers Growing BT 20

Cotton

3.3 Sample Farmers By Religion 20

3.4 Sample Farmers By Social Categories 21

3.5 Type of Family in BT Cotton and Non-BT 22

Cotton Farmers

3.6 Land Ownership Pattern in BT Cotton and Non-BT 22

Cotton Farmers

3.7 Sizewise Distribution of Sample Farmers 23

3.8 Education and Occupational Pattern of BT Cotton and 24

Non-BT Cotton Farmers

3.9 Basic Details of Cotton Cultivation in BT Cotton and 26

Non-BT Cotton

3.10 Basic Details of Cotton Cultivation across Social Categories 27-28

3.11 Irrigation Inventory for BT-Cotton and Non-BT Farmers 29

3.12 Irrigation Inventory for BT and Non-BT Farmers 29

Across Social Categories

3.13 Percentage of Actual Rainfall to Normal Rainfall 31

Monthwise in the Selected Mandals

3.14 Rainfall in the Selected Districts in 2004-2005 32

3.15 Average Area in BT and Non- BT Cotton in Acres 33

3.16 Particulars of Area under BT Cotton and non-BT 34-35

Cotton and Other Details in Selected Districts

3.17 Official and Unofficial BT Cotton in Selected Districts 36

3.18 Details of Refuge, Barrier and Trap Crops in 38

BT Cotton Farmers

4.1 Costs and Returns in BT Cotton and Non-BT Cotton 41

4.2 Estimated Production Functions 43

4.3 Farm Harvest Prices for Raw Cotton 46

4.4 Imports and Exports of Cotton (lakh bales of 170 kgs each) 47

4.5 Per Cent Changes Across Different Categories of Bt 48

Farmers Over Non-Bt Cotton

4.6 Costs and Returns in Warangal and Nalgonda Districts 52-53

4.7 Costs and Returns in Guntur and Kurnool Districts 54-55

4.8 Costs and Returns in BT and Non-BT Cotton Social 57-58

Categorywise

4.9 Costs and Returns in BT and Non-BT Cotton Size 60-61

Categorywise

4.10 Costs and Returns in Official and Unofficial BT Cotton 63

4.11 Costs and Returns in BT and Non-BT Cotton in 64

Irrigated and Rainfed Conditions

4.12 Costs and Returns in BT and Non-BT Cotton in Different 66

Soils

5.1 Human Labour Utilisation in BT Cotton and Non-BT 67

Cotton

5.2 Wages Paid to Hired Labour in BT Cotton and Non-BT 68

Cotton

5.3 Human Labour Utilisation Districtwise in BT Cotton 70

5.4 Employment Elasticities in BT Cotton over Non-BT 71

Cotton

5.5 Human Labour Utilisation in Irrigated and Rainfed Cottons 72

5.6 Human Labour Utilisation Among Different Social and 74

Size Categories of Farmers

5.7 Perceptions of BT Farmers in Selected Districts 75

5.8 Perceptions of BT Farmers Across Social Categories 77

5.9 Perceptions and Some Features of Cultivation in BT and 78

Non-BT Cotton

5.10 Perceptions and Some Features of Cultivation of BT and 79

Non-BT Cotton Farmers

Appendices

A - 1 Labour Requirement and Wages for Cotton in 87

2004-2005 Per Acre

A - 2 Labour Requirement and Wages for BT Cotton in 88

2004-2005 Per Acre

A - 3 Labour Requirement and Wages for Non- BT Cotton in 89

2004-2005 Per Acre

A - 4 Study Mandals in Warangal District 90

A - 5 Study Mandals in Nalgonda District 91

A - 6 Study Mandals in Guntur District 92

A - 7 Study Mandals in Kurnool District 93

Figures

2.1 Sample Districts in Andhra Pradesh 16

4.1 Per Cent Yield Levels of Different Bt Farmers 49

Relative to Total Bt Sample

4.2 Net Income from BT Cotton to Different

Categories of Farmers 50

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Acknowledgements

This study is sponsored by the Andhra Pradesh Netherlands BiotechnologyProgramme (APNBP) of the Institute of Public Enterprise, Hyderabad. We aregrateful to Dr. M.V.Rao and Prof.G.Pakki Reddy of the APNBP for usefulcomments at all stages of the study. We are also grateful to Prof. S.Galab, Dr.P.Prudhvikar Reddy, Prof. Subrahmanyam, and Dr.Sivaprasad for suggestions inthe formulation of field study. Finally, thanks are due to Mr. A. Prasanna KumarMr. K. Prasada Rao, and Ms. K. Anita for their help in collection and processingof the data. Last but not the least, we are indebted to all the cotton farmers, whoungrudgingly shared their experiences with us on the various aspects of cultivationof the Bt cotton as well as the conventional hybrid cotton.

Authors

Executive Summary

The agricultural biotechnology has created high expectations on breaking yieldbarriers, technical change, and promise of benefiting dry lands and ecologicallyfragile areas. The controversies regarding biotechnology revolved mainly aroundgenetic modification in agricultural crops. The transgenic crops were commercialisedin 1996 in the world and in 2002 in India. The area has been increasing steadily ata double-digit growth rate of 11 percent per annum and the area reached 102.0million hectares in 2006 in the world in 22 countries. It is estimated that Bollgardcotton was grown in five lakh hectares in the country and in 72786 hectares inAndhra Pradesh in the year 2004-2005. In 2005-2006, it increased to 1.3 millionhectares in the country and it reached 3.8 million hectors in 2006-07. The Bollgardcotton was cultivated in 28 per cent of world cotton area or 9.8 million hectares in2005 mainly in the U.S.A and China. In our country, nearly 50 percent of the Rs.3000crores of pesticides is sprayed on cotton for the control of the bollworms, whichaccount for major damage for the crop. Several farmers committed suicides due tocrop failure as a result of pest attack in 1987 and 1997 in Andhra Pradesh and in2000 in Maharashtra. The introduction of BT cotton assumes a lot of importance inthis situation. This can help the farmers, who are mainly small and marginal, if itresists American bollworm and raise productivity. There are very few empiricalstudies on the socio economic impacts of biotechnology in India or Andhra Pradeshand an ex-post, farm level study on the socio-economic impact of BT cottonintroduced is highly relevant. Two hypotheses are particularly relevant and need tobe tested in the Indian conditions. They are - the hypothesis that the cultivation ofBt cotton can have sizeable yield effects in India as the pest population is noteffectively controlled otherwise; and the hypothesis that there can be positive laboureffects in countries where cotton is picked manually. In this background, the presentstudy is undertaken with the specific objectives of finding out the impact of BTcotton cultivation on cost of pesticides, cost of production and profitability acrossfarmers based on social categories and size groups; finding out the impact onemployment across social categories and size groups; and finding out the problemsand priorities as perceived by the farmers.

The study adopted multi-stage stratified random sampling method to achieve theobjectives. The districts of Warangal, Nalgonda, Guntur and Kurnool in AndhraPradesh are selected to represent the four agro-climatic zones. The selection ofMandals and villages is done based on the area under BT cotton. The number ofMandals selected for the study was nine from the four districts and the villages

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from them are fourteen. The sample selected was proportional to the area under BTcotton in each agro-climatic zones. The farmers were selected after stratificationbased on farm size and social category. The sample size is 623. The proportion ofadopters and non-adopters was around 70 and 30 percent. Primary survey wasundertaken with pre-tested schedules and participatory methods like focused groupdiscussion were used as supplementary. The data collected pertains to 2004-2005and to be specific Kharif 2004-2005. The results of the study are presented in briefhere.

The cost of production in an acre of BT cotton at Rs.16975 is higher by 17 per centcompared to Rs.14507 for non-BT cotton. The cost A2, which mainly shows thepaid out costs, is Rs.11445 and higher by 11.8 per cent over non-BT cotton. Theexpenditure on insecticides decreased by 18.2 per cent in BT cotton over non-BTcotton. The number of pesticidal sprays have come down from 12 in non-BT cottonto 9 in BT cotton, on an average. The decrease in cost on insecticides by Rs. 594 ismore than matched by increased costs on seed (Rs.804), labour costs (Rs.801),fertilizers (Rs.86) and irrigation charges (Rs.45). The cost of seed increased by134.4 per cent from Rs.598 in non-BT cotton to Rs.1402 in BT cotton, whereaslabour costs increased by 20.58 per cent in BT cotton. Out of the Rs.801 increaseon labour, human labour accounted for the major portion viz., Rs.676. The BTfarmers on an average hired human labour more than non-BT farmer by an amountof Rs.303 and utilized family labour more intensively. This increase in employmentopportunities due to the new BT technology is a big gain for the rural economy asa whole, since the rural employment growth has been the biggest concern in thestate in the past decade. This creation of employment opportunities is typical ofbiological technology as was the case during the green revolution days.

The physical yield obtained in BT cotton is 9.49 quintals per acre compared to 7.21quintals per acre for non-BT cotton and 32 per cent higher than non-BT. This clearlyshows the superiority of BT cotton in increasing yields over non-BT cotton andgives us a clue as to why the non-BT cotton seed manufacturers are going out ofbusiness. Then, the question to be answered is whether the increase in yield isattributable to BT technology alone or are there any other factors that may be leadingto the increase in yield. It was found that relatively irrigated and better soils are putunder BT cotton cultivation and relatively upper social and size category farmersare cultivating it. But the difference is not sizeable and it happens like that in caseof all the new technologies. The green revolution technologies have been utilizedby upper stratum of farmers and later gradually spread to the other stratum. But inthis case of biotechnological application, the small farmers and SC and ST farmersalso made use of the technology well. On the other hand, this small difference inirrigation, quality of soil and social and economic background of farmers could nothave lead to a 32 per cent increase in yield. The analysis using production function


indicated that there can be a 36 per cent increase in yield due to Bt cotton cultivation.The results of the study clearly validate the hypothesis that there can be considerableyield effects in developing countries like India. The positive yield effects can alsobe explained in damage control framework.

The immediate fall out of the higher yield in BT cotton is that all its per quintalcosts are lower over non-BT cotton though the absolute costs are higher. The perquintal Cost A2, Cost B2 and Cost C2 are lower by 15 per cent, 12 per cent and 11per cent, respectively in BT cotton over non-BT cotton. It is well known that theeconomic theory states that the average costs matter in decision-making and decidingthe profitability rather than absolute costs.

Ultimately, returns to farming matter in deciding whether the technology is superiorover the non-BT cotton hybrids. In case of farming, the necessary business measuresare gross income, net income, farm business income, family labour income andfarm investment income. These are worked out for both BT cotton and non-BTcotton. The average price per quintal in case of BT cotton could cover Cost B2 andfalls short of Cost C2 by a small margin viz., Rs.39. But, in case of non-BT cotton,average price per quintal could not cover even B2. The net income viz., grossincome over Cost C2 is negative in both BT and non-BT cotton. This may beindicative of the farming crisis. But BT performed better here also by being able tocover all the imputed costs along with paid-up costs except a minor portion andimproved over non-BT by 83 per cent. The net income, farm business income,family labour income and farm investment income in BT cotton improved by Rs.1806(83%), Rs.3067 (146%), Rs.2088 (158 per cent) and Rs.2785 (222%), respectivelyover non-BT cotton. This clearly shows that BT cotton outperformed non-BT cottonin regard to all the measures. The farm business income, which shows us the excessof gross income over paid-up costs (Cost A2), is Rs.5166 per acre in case of BTcotton and 146 per cent higher comparatively.

There may be two reasons for the negative net income for both BT and non-BTfarmers. The first one is the fact that the actual rainfall in 2004-2005 in the studyarea is 33 per cent lower than the normal. This might have reduced the physicalyield. The other factor is the drastic decline in prices for raw cotton during the year.These low prices seems to have affected the net income of both BT and non-BTcotton farmers during the year. It is noteworthy that the average price realized forthe sample farmers at Rs.1739 per quintal is 13 per cent lower than the previousseven-year average of farm harvest prices, which was Rs.2000/- per quintal.

The performance of BT cotton across the four districts studied to represent fourdifferent agro-climatic situations show that the performance in Guntur and Warangalis quite well compared to Nalgonda and Kurnool. The physical yield in quintals per


acre in BT cotton in Warangal and Guntur is 11, followed by 8 in Nalgonda and 6 inKurnool. However, the difference over non-BT cotton was 40, 30, 18, 86 per centin Warangal, Nalgonda, Guntur and Kurnool districts, respectively. The BT farmershave covered even the Cost C2 and achieved positive net income in Warangal andGuntur. On the other hand, the non-BT farmers in Nalgonda and Kurnool could notcover all costs. In fact, they could cover only paid-up costs represented by Cost A2.These findings also suggest that the performance of BT cotton may be hindered byagro-ecological conditions, as the low performing districts of Kurnool and Nalgondafall under low rainfall districts and also very low percent of cotton area underirrigation. The percent area irrigated of BT cotton in Kurnool (27%) and Nalgonda(25%) are very low compared to Guntur (85%) and Warangal (54%). In Kurnool,the drought situation as a result of deficient rainfall was more acute. But then this istypical in scanty rainfall region. These factors may explain the low performance ofBT cotton.

The BT cotton farmers from SCs obtained 10 per cent lesser yield than their counterparts from OCs with a two per cent lower cost of production. The BT farmers fromSCs incurred 9 per cent higher cost per quintal than the OC farmers, as their yield islower. The OC-BT farmers could cover all the costs and get a net income of Rs.711per acre, while BT farmers from SCs could not cover Cost C2 and get a net loss ofRs.1275 per acre. But this happened not only with the SCs, but also with the BCs.When we consider the paid-up costs represented by Cost A2, the SC BT farmersgot an income of Rs.4162 per acre and this is lower than BT farmers from OCs by30 per cent.

Then, if we compare the BT farmers from SCs with non-BT farmers from the samecommunity, a different picture emerges. The BT farmers from SCs got 40 per centhigher yield than non-BT SC farmers with 17 per cent lower cost per quintal. Thishas led to improving the net income by 59 per cent. The farm business income,which shows the excess of gross income over paid-up costs, is higher by threetimes than non-BT farmers from SCs. Therefore, it is very clear that the farmersfrom SCs, who are also generally small farmers, got benefited from growing thistechnology, though not on par with the OCs and BCs. On the whole, all socialcategories of farmers are better off with BT cotton than without the BT cotton.

The BT farmers from small farmers obtained 23 per cent lower yield compared tothe BT farmers from the large farmers with a 20 per cent lesser total cost of productionand 3 per cent higher cost per quintal. The small farmers spent lower amounts onalmost all items of production. They also spent 18 per cent less on insecticidescompared to large farmers growing BT cotton. The small farmers got lower netincome by four times compared to the large farmers in BT cultivation. The farmbusiness income is also lower by 37 per cent in case of small farmers growing BT


cotton compared to the LFs growing the same cotton. On the other hand, the SFsgrowing BT cotton have significantly improved their position compared to the non-BT growing SFs. They got a 10 per cent higher yield compared to SFs growingnon-BT cotton and average cost per quital is also lower by12 per cent. The netincome improved by 69 per cent and farm business income improved by 108 percent. This clearly shows that the small farmers are better off with BT cotton thanwithout BT cotton. However, the small farmers are doing worse compared to thelarge farmers vis-à-vis SC farmers against OC farmers.

The official BT cotton yielded 24 per cent more than unofficial BT cotton. But, thecost of production in official BT cotton was higher by 37 per cent than the unofficialBT cotton. The farm business income, which indicates the excess of gross incomeover paid-up costs, is 26 per cent higher in official BT cotton. The performance ofBT cotton under irrigated conditions is much better compared to BT cotton inunirrigated conditions expectedly and yielded 35 per cent higher than the latter.While the BT cotton in irrigated conditions yielded 35 per cent higher than non-BTcotton in the same conditions, the BT cotton in unirrigated conditions gave 28 percent higher yield compared to the non-BT in similar unirrigated conditions. Thereis no considerable difference between BT cotton grown in black and other soils.However, the BT cotton in black soils performed slightly better.

Employment: While additional income generation is very important for the farmingcommunity as a result of new technologies like Bollgard cotton, the creation ofadditional employment for the labour is no less significant for the rural economy asa whole and landless labourers in particular. The total man-days equivalent (TMDE)for human labour (including casual, family and attached labour) are 66.29 for BTcotton and are 21 per cent higher than non-BT cotton. Out of this increase, hiredlabour, family labour and attached labour accounted for 63 per cent, 27 per centand 10 per cent, respectively. While the major beneficiary of this increase is hiredlabour, there is also increase in the use of family labour and attached labour to acertain extent. The female labourers are the major beneficiaries among casuallabourers. They got 10.05 days more of employment due to BT cotton cultivation.The employment elasticity for BT cotton is found to be 0.65, meaning that onepercent growth in BT cotton yield over non-BT cotton increases employment by0.65 per cent. This validates the hypothesis that there can be considerable positiveyield effects in countries where the cotton is picked manually.

It was found that only 63 per cent of the BT cotton farmers have grown refugecrops. Though good percent of BT farmers have grown refuge in Warangal (84%)and Nalgonda (78%), the farmers in Guntur (27%) and Kurnool (2%) have notcared to grow it. This practice is almost non-existent in Kurnool. The farmersrevealed that they have now stopped growing refuge, though they cultivated it in


some rows in the first year. They feared losing some portion of their land and furtherthey observed that the bollworm attack is very heavy for the refuge rows, which inturn makes it necessary to spray some chemicals. If this trend on non-observance ofrefuge rows increases further in BT cotton cultivation, the selection pressure forthe pest may increase, as it faces BT cotton in thousands of acres in contiguousareas. Finally, it may lead to development of full resistance in 8-10 years as thescientists warned.

While 83 per cent of the farmers in the sample have grown BT cotton for the firsttime in 2004-2005, 84 per cent of the farmers have grown BT cotton again in 2005-2006 and another 5 per cent are willing to use the BT cotton. It was found thatmajor traits, the adopters expected in the BT cotton, are higher yield (79%), lowerexpenditure (43%) and low insecticidal sprays (16%). There was no resistance atall from the neighbouring farmers for growing BT cotton. Among the adopters,very few (2.1%) knew about other possible transgenic crops. The major problemsin the cultivation of BT cotton according to the adopters are high cost of seeds(41%), lower yield than expected (21%), unavailability of quality BT seeds (18%)and lack of awareness (11%) and non-control of the target pest (5%). It can beconcluded from this that the cost and availability of seeds are the major problems.The suggestions according to them are making quality seeds available at affordableprices (70%), creating awareness about BT cultivation (27%), state intervention inthe supply of seeds (10%) and finally developing seeds resistant to all bollworms(5%). The farmers of BT and non-BT are alike in respect of certain non-pesticideand agronomic measures like phermone traps, bird perches, spray of NPV solutionetc. The major problem seems to be that majority of the farmers in both BT andnon-BT category apply pesticides either as a precautionary measure or immediatelyafter the pest is observed in the field without any regard to the intensity of thedamage and cost-benefit ratios.

Conclusion: The results of the study prove that the BT cotton technology is superiorto the conventional cotton hybrids in terms of yield and net returns. The expenditureon insecticides decreased by 18 per cent and still the cost of production is 17 percent higher. The yield is also higher by 32 per cent. As a result of this, the cost perquintal is lower by Rs.223 and 11 per cent in BT cotton. Though both BT and non-BT cottons could not cover all costs of the farmers, viz., paid-up and imputed, theBT cotton farmer could improve his net income by 83 per cent. This may be due toscanty rainfall and lower price realization compared to the previous years. Thedistricts of Warangal and Guntur performed better compared to Nalgonda andKurnool in the same order. But, in all these districts, BT outperformed non-BTcotton. The BT cotton farmers from SCs obtained 10 per cent lesser yield and 9 percent higher cost per quintal than the OC-BT farmers and could not cover cost C.But the BT-SC farmers got 40 per cent more yield than their non-BT counter parts.


The small farmers are also better off with BT cotton than without BT cotton situation.On the whole, the small farmers are doing worse compared to the large farmers vis-à-vis SC farmers against OC farmers. The study also found that many of the smallfarmers and SC farmers participated in using the technology and improved theirposition with regard to profitability by growing BT cotton. .

The total man-days equivalent for human for BT cotton is 21 per cent higher thannon-BT cotton and out of this increase, hired labour, family labour and attachedlabour accounted for 63,27 and 10 per cent, respectively. While the major beneficiaryof this increase is h ired casual labour, there is also increase in the use of familylabour and attached labour to a certain extent. The female labourers are again themajor beneficiaries among casual labourers. They got 10.05 days more ofemployment due to BT cotton cultivation.

It was found a very high percent (84%) of BT cotton growers have grown it in2005-2006 and another 5 per cent willing to take up the new BT hybrid. The majorproblems in cultivation of BT, as perceived by the growers are high cost of seeds,lower yield than expected, unavailability of quality BT seeds, lack of awarenessand non-control of target pest. The suggestions of the adopters include makingquality seeds available at affordable prices, creating awareness about BT cultivation,state intervention for seed supply and developing seeds resistant to all bollworms,and rainfed conditions. The adoptors also asked for varieties instead of hybrids tobe able to recycle the seeds for some years without going to the market. Theseissues may be considered by the policy makers at the governmental level.


1. Agricultural Biotechnology and Transgenic Cotton

The agricultural biotechnology has created high expectations on breaking yieldbarriers, technical change, and promise of benefiting dry lands and ecologicallyfragile areas. The controversies regarding biotechnology revolved mainly aroundgenetic modification in agricultural crops. In the process, low-end biotechnologicaltools like biofertilisers, biopesticides and tissue culture are getting less attentionand the focus is on transgenics mainly from both protagonists and the antagonists.The potential of agricultural biotechnology is unquestionable, considering the factthat even the strongest critics also ask for more studies before commercialization.There are three broad arguments in this regard on the usefulness of agriculturalbiotechnology. Some question the genetic manipulation itself, as contrary to therules of nature (For e.g. Shiva and Crompton, 1999). Many scholars accept geneticmodification tools and question the technology developed by multinationalcompanies and others. The last strand holds that biotechnology is good as scienceas well as technology. The good approach may be the second one, which givesscope for case-by-case study. The risks associated with agricultural biotechnologyare widely documented in many studies. It will be suffice to briefly mention themhere. The unpredictable risks relate to the process of genetic modification itself.The theory of substantial equivalence, which states that the genetically modifiedorganisms behave like their naturally occurring counterparts, may not work inpractice and there is the possibility of mutations. An example is that the Bacillusthuringensis, which has been effective against bollworms in nature since ages maydevelop resistance in a host plant in a very short period. Some of the importantpredictable risks are the loss of biodiversity through horizontal and vertical genetransfer; development of super weeds; and food safety issues. The possibility oftransgenes escaping into wild is higher in the developing countries.

1.1. Pattern of commercialization of Transgenics in the World

The commercialised agricultural biotechnology is limited to input traits like herbicidetolerance, insect resistance etc., in four crops viz., soybean, cotton, maize and canola.The crops with modified output traits like Golden Rice, soybean with high lysine,protein rich potato etc., require expression of more than one gene and aretechnologically more complex. It may take quite a few years for them to come outof the experimental stage1 . The single largest input trait of the commercialized

1 Please see Rao (2004b) and Pingali and Raney (2005) for detailed discussion.


2 The Andhra Pradesh Netherlands Biotechnology Programme for Dry Land Agriculture(APNLBP), Hyderabad is a good example. Detailed exposition can be seen in Krishna andReddy (2005)

transgenics is herbicide tolerance accounting for more than 8 percent of the 90.0million hectares in 2005. Most of the transgenics have hybrids as their carriers andthe commercialised transgenics are non-food crops in the sense that they do notdirectly enter the food chain.

The stiff opposition to imports and permissions for cultivation of geneticallymodified crops in the world for the past few years eased in 2004. The EuropeanUnion has allowed import of genetically modified maize and also permitted growingtransgenics during the year, ending four years of moratorium after the United Statesof America approached the Appellate body of the World Trade Organisation.Therefore, the area under transgenics is likely to increase at a still higher growthrates in future. On the other hand, the extension of transgenics area to food cropsdoes not seem to be possible in the immediate future.

Round up ready wheat of Monsanto met with a lot of resistance from all the quartersin the U.S.A and the company had to withdraw it in May 2004. In this context,innovative technology development programmes taking the aspirations and needsof people is very important and it will go a long way in developing appropriatetechnologies and getting accepted by the stakeholders2 .

The transgenic crops were commercialised in 1996 in the world and in 2002 inIndia. The area has been increasing steadily at a double-digit growth rate of morethan 10 percent per annum and the area reached 102.0 million hectares in 2006 inthe world in 22 countries (ISAAA, 2006). The trajectory of transgenics started inthe country with three cotton hybrids suitable for the central and southern Indiabelonging to Monsanto Mahyco Biotech Limited, having in-built resistance to bollworms with the introduction of a gene from the soil bacteria Bacillus thuringiensis(Bt). The number of BT cotton hybrids approved by the Genetic EngineeringApproval Committee of the Government of India has been 137 as of now. The areaunder this cotton increased from 44500 hectares in 2002-2003 to 1.3 million hectaresin 2005-2006 and it reached 3.8 million hectares in 2006-2007, which is more than40 per cent of the total cotton area in the country. On the other hand, the Bt cottonwas already cultivated in 28 percent of world cotton area or 9.8 million hectares in2005 mainly in the U.S.A and China. India became the fifth principal adopter ofgenetically modified crops after the U.S.A (58 m. ha), Argentina (18 m.ha), Brazil(11.5 m.ha) and Canada (6.1 m.ha) and went ahead of China (3.5 m.ha) in 2006(ISAAA, 2006).


1.2. Bollgard Technology

The incorporation of BT gene from the soil bacterium Bacillus thuringiensis Kurstakiin any crop can effectively control bollworms. These bollworms are polyphagousviz., they attack many crops like cotton, chillies, brinjal, tomato, red gram, blackgram, green gram, etc. This makes the BT technology very lucrative and offershuge market around the globe. The gene supplier for many of the approved BThybrids is Mahyco Monsanto Biotech Limited. In fact, more than 50 percent ofresearch on agricultural biotechnology is accounted by the Bollgard cotton hybridsin the country. Some of the private firms are trying to release hybrids with a nativeBT gene and for which no royalty needs to be paid to Monsanto. The public researchinstitutions like Central Institute of Cotton Research in Nagpur are trying to releaseindigenous varieties. These efforts may reduce cost of the seed in the long run.

The empirical evidence across the countries shows that Bt cotton impacts thepesticide use, yield, labour use and thereby the income distribution patterns. Thereare variations across the countries on the impact on each of these things. It is emergingfrom the literature that the reduction in pesticide consumption is high in countrieswhere the pesticide use is already very high like in Mexico and China. The literatureon the yield effects clearly point to an increase in yield in all the countries studied.However, the positive yield effects in temperate climates like in the U.S.A andChina are lower than those observed in tropical and sub-tropical climates where thepest population is severe. Based on this, Qaim (2003) hypothesizes that thecultivation of Bt cotton can have sizeable yield effects in India as the pest populationis not effectively controlled otherwise. Further, Qaim and Matuschke (2004) alsohypothesize that there can be positive labour effects in countries where cotton ispicked manually. A brief review on the empirical experience of Bt cotton cultivationis presented here.

Experience Across Countries

The cost of production per kilogram of cotton was reduced by 28 per cent in 1999in China (Huang et al, 2002). The average yield effect is 10 per cent in China,while the labour use declined by 5-7 per cent. It was also concluded that the pesticidalsprays have come down by 67 per cent and the expenditure on pesticides was reducedby 82 per cent in China (Huang et al, 2004). In the U.S.A, 11.4 percent increase inyields and 72 percent decrease in sprays led to increase in profits in Southeast to atune of $ 51 per acre. On the other hand, there was a 8 per cent increase in thenational average yield of cotton in the U.S.A. (Hubbel et al 2000). There were alsoregional winners and losers in the U.S.A due to lack of adopted varieties (Zepeda etal, 2000). Contrary to small increases in yield in the U.S.A and China, the yieldeffects are sizeable with 33 per cent3 and 22 per cent4 respectively in developingcountries like Argentina and South Africa.


The performance of Bt cotton in India is highly controversial. Qaim (2003) reportedyield increase of 80 per cent using trial plot data. There were also refutations ofclaims of cost reduction and yield increase by some scholars. Based on field trialsconducted in India, Shiva and Others concluded that the yield in all the trial plotswere found to be low and a comparison of the local hybrid variety cultivated andBT showed that the yield from both the crops was more or less same. Farmers ofthe trial plots reported that except for the protection from bollworm, nothing muchhas benefited them. The cost of cultivation has also worked out to be same for allthe farmers. They further explained that from the various studies (like Sutton, 1998;Bryant et al, 1997), it is clear that wherever the bollworm pressure is not high, BTcotton might not be economically suitable. A survey in Mississippi for two years byGibson et al (1997) revealed that there was no difference in the total cost ofproduction, but better yields were reported in case of BT cotton. However, BTcotton required more expenses in the form of fertilizers, fungicide treatments andthe technology fees (Shiva et al, 1999).

The first year of Bt cotton cultivation was a disaster in many of the cotton growingstates like Andhra Pradesh, Maharashtra, Madhya Pradesh, Karnataka and Gujarat(Krishnakumar, 2003). In 2002-03, small saving in pesticide sprays (Rs.217/ac),less profits and susceptibility to pink bollworm were reported in a study conductedin Maharashtra and Andhra Pradesh (Sahai and Rehman, 2003). Similar resultswith more attack of sucking pests were also reported from a season long study onBT cotton in Andhra Pradesh (Qayum and Sakkari, 2003). In another field surveyin the first year of commercialization in Tamil Nadu, Karnataka, Maharashtra andAndhra Pradesh, it was found that the yields increased by 34 per cent in BT cottonover conventional cotton and that the farmers of Andhra Pradesh suffered a loss inaverage incomes (Naik et al, 2005). However, the unauthorised BT cotton in Gujaratwas also reported to have given higher yields (Bunsha, 2002). The performance in2003-2004 seemed to be slightly better compared to the previous year. In a studyconducted in two districts of Maharashtra, it was found that the yield increased by52 per cent in Bt cotton from 15.77 quintals per hectare in non-BT cotton to 24.00quintals in BT cotton and the same study concluded that the profit per hectare wasRs.31883 in BT cotton as against Rs.17797 in non-BT cotton implying an increaseof 79 per cent, though the cost of pest control increased slightly (Narayanamoorthyand Kalamkar, 2006). A nationwide survey by Nielson and ORG MARG for 2003-04 season concluded that there was a 60 percent reduction in pesticide use and 29percent increase in yield leading to 78% increase in net profit. The critics of Btcotton questioned the objectivity of this survey, as Monsanto commissioned thesurvey. Further, these two studies did not take fixed costs into account while workingout changes in costs and returns from Bt cotton cultivation over non-Bt hybrids.Qayum and Sakkari (2004) made another season-long survey and negated theseclaims. The attack of bollworms in 2003-2004 was below normal. It is also alleged


that the cotton from the Bt hybrids is of inferior quality and that it cannot standheavy rainfall conditions etc. It is possible that the negative traits like short-stapledcotton, low yield etc., may be of the hybrids used to incorporate the Bt gene thanthe gene (Cry 1ac) itself. Therefore, the evidence on the usefulness of this cotton inreducing the attack of bollworms is inconclusive and there is a need for empiricalstudies in three or four consecutive years.

Employment

The new technologies will have a certain impact on employment of human labour.These technologies generally are expected to have a positive impact on employment,as there is always a huge under-employment and disguised unemployment in thecountry. The green revolution in the early sixties introduced biological andmechanical technologies in agriculture. While the introduction of new high yieldingvarieties of seeds, fertilizers, pesticides, multiple cropping etc., are a part of thebiological technologies, the use of tractors, harvesters, threshers etc., formed themechanical technology. Several studies conducted after the green revolution foundthat the biological technology favoured employment creation and the mechanicaltechnology displaced labour (Rao, 1975).

It can be said with certainty that the introduction of biotechnological seeds in theform of transgenics in crops is the next major change contemplated in Indianagriculture after the green revolution. Therefore, it will be very important to analyseits impact on the use of human labour, with a particular emphasis on its gender bias.As already mentioned earlier the Bt cotton cultivation is expected to increase labouruse in India, though it is labour saving in countries like U.S.A, where most fieldoperations are mechanized.

It seems from the brief review, that transgenic cotton crop varieties restrictedbollworm attack well and a certain increase in yield in almost all the studies. In theIndian context, cotton accounts for 45 percent of the Rs.3000 crores of agro-chemicals used, though it is cultivated in only 5 percent of gross cropped area andAndhra Pradesh alone accounts for 33 percent of off-take of these chemicals. Theloss due to insect pests is about 50 percent of cotton output because some insectssuch as Helicoverpa armigera and whitefly have developed resistance to chemicalpesticides (Birthal et al, 2000). Andhra Pradesh ranks third in area and productionof cotton in the country with around 10 lakh hectares. The state has recorded suicidedeaths of farmers in 1987 and 1997 due to failure of cotton crop because of pestmenace (Rao, 2004a). The cotton farmers spend around Rs.5000 per acre on pesticidespray and use 10 to 12 varieties of pesticides and spray cocktailed pesticides for 15to 25 times (Parthasarathy and Shameem, 1998). The state has the productivity of316 kgs of lint per hectare as against 417 in Gujarat and 556 in Punjab in 2004-2005 and an all-India average of 332 kgs per hectare.


In this background, the introduction of Bt cotton in the state assumes a lot ofimportance. The variety can help the farmers, who are mainly small and marginal,if it resists American bollworm and raise productivity. Further, raising theemployment is also crucial in the background of low employment growth inagriculture and other sectors. There are very few empirical studies on the impact ofbiotechnology in India or Andhra Pradesh. The role of Indian Council of AgriculturalResearch (ICAR) was minimized in the case of Bt hybrids unlike in the case ofother crop varieties, where ICAR used to conduct regionwise agronomic trials andadvise farmers on the best ones. This has left the farmers ‘susceptible to any biasedclaims from the various companies involved, and more exposed to the vagaries ofmarket forces’ (Chaturvedi, et al 2007). Further, public reservations anduncertainties about impacts add to the danger that appropriate biotechnologies willremain inaccessible to those who stand to benefit the most (Lipton, 2001). Therefore,an ex-post, farm level study on the impact of Bt cotton introduced in the state ishighly relevant.

Organisation of the Presentation and Limitations

The study is organized in to six Chapters. The second Chapter brings out themethodology of the study and the third Chapter gives profile of the farmers anddetails of cotton cultivation. The fourth Chapter brings out the costs and returnsand the fifth Chapter gives the employment and perceptions. The final Chapterconcludes. The major limitation of the study is the limitation of the field survey atsingle point. It is assumed that the farmers remember the details of their cultivation.Then, the rainfall in the study area is found to be 33 per cent less than the normalrainfall. The low prices prevailing in 2004-2005 for raw cotton also was a limitation.These also might have affected the profitability of the farmer.

2. Methodology

Against the expectations, claims and experience across different countries presentedin the previous Chapter, the study aims to bring out the socioeconomic impact ofthe introduction of Bt cotton in Andhra Pradesh. The specific objectives of thestudy are to:

1. To find out the impact of BT cotton cultivation on cost of pesticides,cost of production and profitability across farmers based on socialcategories and size groups;

2. To find out the impact on employment across social categories andsize groups; and

3. To find out the problems and priorities as perceived by the farmers.

The study adopted multi-stage stratified random sampling method to achieve theobjectives. The study was done in the districts where BT cotton is grown with anintention to cover different agro-climatic zones in the state by taking one districtfrom each ecological zone, where the BT cotton hybrids were introduced. Thereare five agro-climatic zones in the state, according to the Cost of Cultivation Schemeof the Government of India. The North Coastal, South Coastal, Rayalaseema, NorthTelangana and South Telangana are the five zones. Among these zones, the cultiva-tion of cotton in North Coastal zone is negligible and therefore no district wastaken in this zone. The area under cotton in 2004-2005 in all the other four zoneswas collected and one district from each zone selected randomly. Thus, Warangal,Nalgonda, Guntur and Kurnool were selected to represent the four zones (Figure2.1).

The selection of Mandals was done based on the area under BT cotton. The areasown of BT cotton was made available by the Commissioner and Director of Agri-culture. This data were used to select the Mandals with highest areas under BTCotton for the study. We have chosen more than one Mandal from each district tosee that the sample is well spread out and more representative (Appendices 4 to 7).The number of Mandals selected for the study was nine from the four districts. Thevillages were selected based on the area under BT cotton. The number of villagesselected for the study was fourteen (Table 2.1).


The sample selected was proportional to the area under BT cotton in each agro-climatic zone. The area under BT cotton in these four districts representing fouragro-climatic zones was in the proportion of 52.1 per cent, 30.46 per cent, 16.36per cent and 1.1 per cent respectively. The size of the sample was selected in theseproportions by taking maximum number from Warangal followed by Nalgonda,Guntur and Kurnool. Though the area under BT cotton in the Rayalaseema zone invery low in 2004-2005, some farmers are selected from Kurnool district also as it isa potential cotton belt.

Figure 2.1: Sample Districts in Andhra Pradesh

The farmers were selected after stratification based on farm size and social category.The farmers are stratified as small, medium and large based on size of owned landholding. The farmers owning less than 4.99 acres are considered small; who ownland holding between 5 acres and 9.99 are considered medium and those whopossessed 10.0 acres and more are considered as large farmers. The sample size is


623. Besides adopters, some non- adopters were also surveyed. The proportion ofadopters and non-adopters was around 70 and 30 percent. Primary survey wasundertaken with pre-tested schedules and participatory methods like focused groupdiscussion were used as supplementary. The data collected pertain to 2004-2005and to be specific Kharif 2004-2005.

Table 2.1: Sample Units for the Study

District Mandal Village BT Non-BT TotalFarmers Farmers

Warangal Gisugonda Ookal 22 17 39 Dharmaram 42 8 50 Sayampet Pattipaka 42 16 58 Mailaram 20 9 29 Parkal Nagaram 42 21 63 Puligilla 19 4 23 187 75 262Nalgondda Mungode Velmakanne 56 22 78 Kompalle 7 8 15 Shaligowraram Chittaloor 50 25 75 Nakrekal Vogodu 14 6 20 127 61 188Guntur Gurajaala Ambapuram 36 14 50 Prattipadu Koyavaripalam 34 7 41 Kondepadu 4 8 12

74 29 103Kurnool Kautalam Badhinihal 49 21 70

TOTAL 437 186 623

Cost Concepts: The cost concepts viz., Cost A1,

Cost A2,

cost B1,

Cost B2,

Cost C1

and Cost C2

were followed in the analysis as is done by the Commission forAgricultural Costs and Prices for better comparison. These concepts are given belowin detail.

Cost A1: Value of hired human labour + attached labour, value of owned and hiredbullock labour + charges on owned and hired machinery + value of seed (both farmproduced and purchased) + value of owned and purchased manures + value offertilizers + value of plant protection chemicals used + depreciation + repairs andmaintenance of farm machinery and farm implements and farm buildings + landrevenue, cesses + interest on working capital.


Cost A2 : Cost A1 + rent paid on leased in land.

Cost B1

: Cost A2 + imputed interest on owned fixed capital excluding land.

Cost B2 : Cost B1 + imputed rental value of owned land (less land revenue paid

thereon).Cost C1 : Cost B

1+

imputed value of family labour

Cost C2 : Cost B2 + imputed value of family labour.

Farm Business Measures: The farm business measures are gross income, netincome, farm business income, family labour income and farm investment income.They are used in the study to arrive at the gains to the BT and non-BT farmers aswell as different social and size categories of farmers. They are calculated using thestandard formulae as follows.

Gross income … Value of total output(Main + by - product)

Net income … Gross income – Cost C2

Farm business income … Gross income – Cost A1 or Cost A

2

Family labour income … Gross income – Cost B2

Farm investment income … Farm business income – imputed value of familylabour

3. Profile of Growers and Details of Cotton Cultivation

It is necessary to know the profile of the growers of BT cotton and also non-BTcotton for assessing the exact impact of new technology. Therefore, the profile ofgrowers, their education status, irrigation inventory, basic details of cotton cultivationetc are presented here in this chapter. These are later used in chapter 4 to analysethe impact of BT cotton on yield and income.

The number of selected farmers in the state was 623, of which BT cotton farmersformed 70 per cent viz., 437 and non-BT cotton farmers formed the rest with a totalnumber of 186 (Table 3.1). As per the proportion to area under BT cotton, Warangaldistrict with a sample size of 262 BT and non-BT farmers formed the major portionof the sample followed by Nalgonda, Guntur and Kurnool.

Table 3.1: Sample Farmers from Different Districts

BT / Non-BT Warangal Nalgonda Guntur Kurnool Total

BT 187 (43) 127 (29 ) 74 (17 ) 49 (11 ) 437 (100 )Non-Bt 75 (40 ) 61 (33 ) 29 (16 ) 21 (11 ) 186 (100 )Total 262 (42 ) 188 (30 ) 103 (17 ) 70 (11 ) 623 (100 )

Note: Figures in the parentheses are percentages.

The sample mainly consisted of male farmers in both BT and non-BT cottoncategories (Table 3.2). They are also mostly Hindus in both BT and non-BT cottoncategories except in Kurnool, where 12 per cent and 19 per cent are Christians inBT and non-BT categories respectively (Table 3.3).


Table 3.3: Sample Farmers by Religion

Religion Warangal Nalgonda Guntur Kurnool Total

Bt Cotton

Hindu 184 (98.4) 122 (96.1) 71 (95.9) 43 (87.8) 420 (96.1)Muslim 0 2 (1.6) 0 6 (12.2 ) 8 (1.8 )Christian 3 (1.6 ) 3 (2.4 ) 3 (4.1 ) 0 9 (2.1 )

Total 187 (100 ) 127 (100 ) 74 (100 ) 49 (100 ) 437 (100 )

Non-BT Cotton

Hindu 73 (97.3) 56 (91.8) 27 (93.1) 17 (81.0) 173 (93.0)Muslim 0 4 (6.6) -- 4 (19.0) 8 (4.3)Christian 2 (2.7) 1 (1.6) 2 (6.9) 0 5 (2.7)

Total 75 (100) 61 (100) 29 (100) 21 (100) 186 (100)

Social Categories

The farmers from SCs and STs comprised 25 per cent and 26 per cent respectivelyin BT and non-BT categories (Table 3.4). The BCs and OCs fomed 40 per cent and35 per cent in BT cotton and 41 per cent and 33 per cent respectively in non-BTcotton. The proportion of SCs is quite low in Guntur (19%) and Warangal (20%)and higher in Kurnool (41%) and Nalgonda (28%) in BT cotton. In non-BT cottoncategory also, the same pattern can be observed. The farmers from OCs formedmore than 50 per cent in Guntur district under both BT and non-BT category.

Table 3.2: Number and Percent of Sample BT Cotton Farmers

Sex Warangal Nalgonda Guntur Kurnool Total

Bt Cotton

Male 184(98.4 ) 127(100.0 ) 74(100.0 ) 49(100.0 ) 434(99.3 )Female 3(1.6 ) 0 0 0 3(0.7 )Total 187(100 ) 127(100 ) 74(100 ) 49(100 ) 437(100 )

Non-BT Cotton

Male 74(98.7 ) 61(100.0 ) 29(100.0 ) 21(100.0 ) 185(99.5 )Female 11.3 ) 0 0 0 1.5 )Total 75(100 ) 61(100 ) 29(100 ) 21(100 ) 186(100 )


Table 3.4: Sample Farmers By Social Categories

Community Warangal Nalgonda Guntur Kurnool Total

Total sample

SC 51 (19.5) 53 (28.2 ) 21 (20.4 ) 22 (31.4 ) 147 (23.6 )ST 4 (1.5 ) 1 (.5 ) 0 4 (5.7 ) 9 (1.4 )BC 123 (46.9 ) 83 (44.1 ) 26 (25.2 ) 20 (28.6 ) 252 (40.4 )OC 84 (32.1 ) 51 (27.1 ) 56 (54.4 ) 24 (34.3 ) 215 (34.5 )

BT Cotton

SC 35 (18.7) 35 (27.6 ) 14 (18.9 ) 15 (30.6 ) 99 (22.7 )ST 3 (1.6 ) 1 (0.8 ) 4 (8.2 ) 8 (1.8 )BC 86 (46.0 ) 57 (44.9 ) 19 (25.7 ) 14 (28.6 ) 176 (40.3 )OC 63 (33.7 ) 34 (26.8 ) 41 (55.4 ) 16 (32.7 ) 154 (35.2 )

Non-BT Cotton

SC 16 (21.3 ) 18 (29.5 ) 7 (24.1 ) 7 (33.3 ) 48 (25.8 )ST 1 (1.3) 0 0 0 1 (0.5)BC 37 (49.3 ) 26 (42.6 ) 7 (24.1 ) 6 (28.6 ) 76 (40.9 )OC 21 (28.0 ) 17 (27.9 ) 15 (51.7 ) 8 (38.1 ) 61 (32.8 )

Family Type

The sample farmers have joint and nuclear families in a proportion of 25 per centand 75 per cent in both BT and non-BT cotton categories (Table 3.5). However, wecan find higher proportion of joint families (30%) in BT cotton in Warangal and theleast proportion of joint families (16%) in Kurnool districts in BT cotton.


Table 3.5: Type of Family in BT Cotton and Non-BT Cotton Farmers

Type of Family Warangal Nalgonda Guntur Kurnool Total

BT Cotton

Joint 55 (29.4 ) 32 (25.2 ) 16 (21.6 ) 8 (16.3 ) 111 (25.4 )Nuclear 132 (70.6 ) 95 (74.8 ) 58 (78.4 ) 41 (83.7 ) 326 (74.6 )

Total 187 127 74 49 437

Non-BT Cotton

Joint 17 (22.7 ) 17 (27.9 ) 8 (27.6 ) 5 (23.8 ) 47 (25.3 )Nuclear 58 (77.3 ) 44 (72.1 ) 21 (72.4 ) 16 (76.2 ) 139 (74.7 )

Total 75 (100 ) 61 (100 ) 29 (100 ) 21 (100 ) 186 (100 )

Type of Land Ownership

The sample farmers are mainly owner cultivators and they constitute 68 per centand 67 per cent respectively in BT and non-BT categories and the rest are tenantsand owner-cum-tenants (Table 3.6). Among the latter two, the owner-cum-tenantsis the bigger one containing 28 per cent and 31 per cent under BT and non-BTcategories. The tenants are the maximum in Kurnool with 12 per cent of the BTfarmers. The land lease market seems to be highly active in Guntur with 57 per centof the BT farmers and 48 per cent of the non-BT farmers being owner-cum-tenants.

Table 3.6: Land Ownership Pattern in BT Cotton and Non-BTCotton Farmers

Type of Family Warangal Nalgonda Guntur Kurnool Total

BT Cotton

Owners 140 (74.9 ) 97 (76.4 ) 31 (41.9 ) 31 (63.3 ) 299 (68.4 )Tenants 2 (1.1 ) 5 (3.9 ) 1 (1.4 ) 6 (12.2 ) 14 (3.2 )Owner-cum-tenants 45 (24.1 ) 25 (19.7 ) 42 (56.8 ) 12 (24.5 ) 124 (28.4 )

Total 187 (100 ) 127 (100 ) 74 (100 ) 49 (100 ) 437 (100 )

Non-BT Cotton

Owners 55 (73.3 ) 44 (72.1) 13 (44.8 ) 13 (61.9 ) 125 (67.2 )Tenants 1 (1.3 ) 0 2 (6.9 ) 1 (4.8 ) 4 (2.2 )Owner-cum-tenants 19 (25.3 ) 17 (27.9 ) 14 (48.3 ) 7 (33.3 ) 57 (30.6 )Total 75 (100 ) 61 (100 ) 29 (100 ) 21 (100 ) 186 (100 )


Size Categories

The sample on the whole consisted small, medium and large farmers in the proportionof 43.34, 32.91 and 32.76 per cent respectively (Table 3.7). There is a slightlyhigher proportion of small farmers in the non-BT category (47%). The majorexception is Kurnool, where the small farmers constituted 54 per cent and 52 percent in BT and non-BT categories.

Table 3.7: Sizewise Distribution of Sample Farmers

Size category Warangal Nalgonda Guntur Kurnool Total

Total sample

Small farmers 108(41.22) 79(42.02) 45(43.69) 38(54.29) 270(43.3)Medium farmers 93(35.5) 61(32.45) 31(30.1) 20(28.57) 205(32.91)Large farmers 61(23.28) 48(25.53) 27(26.21) 12(17.14) 148(32.76)

BT Cotton

Small farmers 72(38.71) 54(42.19) 32(43.24) 25(52.08) 183(41.88)Medium farmers 70(37.63) 40(31.25) 22(29.73) 15(31.25) 147(33.64)Large farmers 44(23.66) 34(26.56) 20(27.03) 8(16.67) 106(24.26)

Non-Bt cotton

Small farmers 36(47.37) 25(41.67) 13(44.83) 13(59.09) 87(46.77)Medium farmers 23(30.26) 21(35) 9(31.03) 5(22.73) 58(31.18)Large farmers 17(22.37) 14(23.33) 7(24.14) 4(18.18) 42(22.58)

Age, Family Size, Education and Occupation

There are no differences as far as family size and average age of the farmers areconcerned in BT and non-BT categories. The average size is 5 and average age is44 years in both the cases (Table 3.8). However, the Warangal farmers are theyoungest with 41 years and the farmers of Kurnool oldest with 49 years. The literacypercentage is 77 per cent in both BT and non-BT categories. Here again, the illiteratesare higher in Kurnool with 39 per cent compared to a lower percent of 29 in Warangalin BT and 81 per cent in Kurnool and 18 per cent in Warangal in non-BT. The BTfarmers and non-BT farmers have agriculture as the main occupation with 93.4 percent and 96.8 per cent being engaged in it, respectively. Among the BT farmers, 20per cent depend on casual labour as the subsidiary occupation. This proportion isslightly high in Kurnool with 39 per cent in BT cotton category depending on casuallabour as subsidiary occupation. In non-BT category as a whole also, higherproportion of farmers (25%) depend on casual labour as a subsidiary occupation.


Table 3.8: Education and Occupational Pattern of BT Cotton and Non-BTCotton Farmers

Sl.No Item Warangal Nalgonda Guntur Kurnool Totalsample

BT Cotton

I Average family size 5 5 5 5 5II Average age of farmer 44 46 43 42 44

III Education LevelsPrimary 31 21 15 14 81

(16.5 ) (16.7 ) (20.3 ) (28.6) (18.5)

Secondary 19 18 17 5 59(10.1 ) (14.3 ) (23.0 ) (10.2) (13.5)

Higher Secondary & 68 34 13 10 125above (36.2 ) (27.0 ) (17.6 ) (20.4) (28.6)

Technical 2 1 3(1.1 ) (2.0) (0.7)

Illiterate 55 44 28 19 146(29.3 ) (34.9 ) (37.8 ) (38.8) (33.4)

IV Main Occupation 178 114 72 44 408Agriculture (94.7 ) (90.5 ) (97.3 ) (89.8) (93.4)

V Subsidiary Occupation 7 9 2 3 21Agriculture (3.7 ) (7.1 ) (2.7 ) (6.1) (4.8)Agri. Casual Labor 27 26 13 19 85

(14.4 ) (20.6 ) (17.6 ) (38.8) (19.5)

Non-BT Cotton

I Average family size 5 5 5 5 5II Average age of farmer 41 45 45 49 44

III Education LevelsPrimary 15 15 10 2 42

(20.3 ) (24.2 ) (34.5 ) (9.5 ) (22.6 )

Secondary 7 3 3 1 14(9.5 ) (4.8 ) (10.3 ) (4.8 ) (7.5 )

Higher Secondary & 32 13 3 1 49above (43.2 ) (21.0 ) (10.3 ) (4.8 ) (26.3 )

Technical 1 1(3.4 ) (0.5 )

Illiterate 13 21 11 17 62(17.6 ) (33.9 ) (37.9 ) (81.0 ) (33.3 )

IV Main OccupationAgriculture 72 61 27 20 180

(97.3 ) (98.4 ) (93.1 ) (95.2 ) (96.8 )

V Subsidiary OccupationAgriculture 3 1 4

(4.1 ) (3.4 ) (2.2 )

Agri. casual Labor 16 19 6 6 47(21.6 ) (30.6 ) (20.7 ) (28.6 ) (25.3 )


Irrigation and Soils

The percent of irrigated land in the BT cotton category is 47.6 and 7 percent higherthan the non-BT category (Table 3.9). Among the four districts BT farmers in Gunturand Warangal have higher percent of their land under irrigation with 85 and 54 percent respectively. The non- BT farmers in these two districts also have higher per-cent of land under irrigation. It can be clearly observed from the table that thepercent of irrigation in Kurnool and Nalgonda is very low at around 26 per cent inboth BT and non-BT categories of farmers.

While 80 per cent of the BT cotton land is under black soil in the sample, 73 percent is under black soil in non-BT cotton. This is 10 per cent higher than non-BTcotton. With regard to the problems in soils, 91 per cent of BT cotton soils and 88per cent of non-BT soils are normal soils. The main problem in the rest of the soilsis salinity.


Table 3.9: Basic Details of Cotton Cultivation in BT Cotton and Non-BT Cotton

Sl.No Item Warangal Nalgonda Guntur Kurnool Total sample

BT Cotton

1 Type of irrigation Irrigated 53.8 25 85.1 26.5 47.6 Un irrigated 46.2 75 14.9 73.5 52.4

2 Type of soil Black soil 76.3 73.4 91.9 100 80 Red soil 18.3 23.4 8.1 16 Other soil 5.4 3.1 4.0

3 Problem in soil Salinity 9.7 12.5 1.4 8 No problem 88.7 86.7 97.3 100 90.8

4 Source of irrigationIrrigated from canal 3.8 2.3 77 16.3 17.2 Lift irrigation 1.1 3.9 2.7 10.2 3.2 Bore well 5.4 13.3 4.1 6.9 In well bore 7 0.8 3.2 Dug well 31.7 2.3 14.2 Tank 3.2 1.4 1.6

Non-BT Cotton

1 Type of irrigation Irrigated 50.1 26.7 79.3 28.6 44.6 Un irrigated 50.0 73.3 20.7 71.4 55.4

2 Type of soil Black soil 65.8 63.3 96.6 95.2 73.1 Red soil 30.3 25 3.4 21 Others 3.9 11.7 4.8 5.9

3 Problem in soil Salinity 9.2 15 8.6 No problem 84.2 83.3 100 100 88.2

4 Source of irrigation Irrigated from canal 2.6 79.3 14.3 15.1 Lift irrigation 3.3 14.3 2.7 Bore well 10.5 15 9.1 In well bore 3.9 1.7 2.2 Dug well 28.9 11.8 Tank 3.9 1.7 2.2


The percent of irrigated land in the BT and non-BT categories according to socialand size categories is shown in Table 3.10. The large farmers and OC farmers with61.4 per cent and 57.5 per cent of their BT cotton land being irrigated, respectivelyare obviously at an advantageous position. The small farmers with 34.4 per centand SCs with 39.3 per cent of their BT cotton land under irrigation are laggingbehind the sample average percent irrigation of 47.6 per cent. In case of non-BT,the position is better for LFs (71.9%) and OCs (58.3%) and worse for SFs (37.2)and SCs (38.8%). The BCs and medium farmers’ position with regard to irrigationis also slightly less than the sample average in both BT and non-BT cotton catego-ries. The LFs and OCs also have relatively higher percent of land under BT cottoncultivation in the sample.

Table 3.10: Basic Details of Cotton Cultivation Across Social Categories

Sl.No Item SC & BC OC SF MF LF TotalST sample

BT Cotton

1 Type of irrigation Irrigated 39.3 44 57.5 34.4 42.3 61.4 47.6 Un irrigated 60.7 56 42.5 55.6 57.7 38.6 52.4

2 Type of soil Black soil 81.3 78.9 82.6 77.5 81.2 86.1 80 Red soil 15.9 17.7 14.2 19.8 15.4 9.9 16 Other soils 2.8 3.4 3.2 2.7 3.3 4 4.0

3 Problem in soil Salinity 7.5 6.3 10.3 9.6 8.7 4 8 No problem 91.6 92 89 88.8 89.9 96 90.8

4 Source ofirrigation Irrigated from canal 12.1 13.7 24.5 17.6 12.1 23.8 17.2 Lift irrigation 1.9 3.4 3.9 2.1 3.4 5 3.2 Bore well 3.7 8 7.7 4.8 8.7 7.9 6.9 In well bore 3.7 2.9 3.2 3.2 2.7 4 3.2 Dug well 13.1 13.1 16.1 12.3 14.1 17.8 14.2 Tank 2.8 1.7 0.6 2.1 1.3 1.0 1.6


Table 3.10: Contd...

Sl. Item SC& BC OC SF MF LF TotalNo ST sample

Non-BT Cotton

1 Type of irrigation Irrigated 38.8 37.7 58.3 37.2 41.7 71.9 44.6 Un irrigated 61.2 62.3 41.7 62.8 58.3 28.1 55.4

2 Type of soil Black Soil 67.3 75.3 75.0 73.4 66.7 84.4 73.1 Red Soil 22.4 20.8 20 19.1 26.7 15.6 21 Other soils 10.2 3.9 5.0 7.5 6.6 0 5.9Problem in soil Salinity 12.2 9.1 5 13.8 5 8.6 N.A 83.7 87 93.3 84 88.3 100 88.2

3 Source of irrigation Irrigated from canal 8.2 9.1 28.3 8.5 15 34.4 15.1 Lift irrigation 6.1 2.6 5.3 2.7 Bore well 8.2 10.4 8.3 8.5 8.3 12.5 9.1 In well bore 2 1.3 3.3 3.3 6.3 2.2 Dug well 8.2 11.7 15 9.6 13.3 15.6 11.8 Tank 2 2.6 1.7 3.2 3.1 2.2

Irrigation Inventory

The irrigation inventory with both BT and non-BT farmers is brought out in Tables3.11 and 3.12 in different districts and social and size categories respectively. Thefarmers cultivating BT cotton have more borewells with water than the farmerscultivating non-BT cotton. There are also very few of them in Guntur, may bebecause the farmers could irrigate with canals. On the other hand, in Kurnool, theextent of irrigation is very low. Across social categories, it is the BCs , who pos-sessed more number of borewells with water followed by OCs. The LFs also pos-sessed only 35 borewells. The non-BT cotton farmers among all social categoriesand size categories have few number of borewells as compared to their counter-parts in BT cultivation. This may definitely have positive impact on physical yieldin the BT cotton.


Table 3.11: Irrigation Inventory for BT-Cotton and Non-BT Farmers

Sl. Item Waran- Nal- Guntur Kurnool A.PNo gal gonda

BT Cotton

1 No.of farmers withbore wells having water 30 50 7 0 87

2 No.of farmers withbore wells having failed 22 26 15 0 63

Non-BT Cotton

1 No.of farmers withbore wells having water 13 25 1 0 39

2 No.of farmers withbore wells having failed 13 15 0 0 28

Table 3.12: Irrigation Inventory for BT and Non-BT Farmers Across SocialCategories

Sl.No Item SC&ST BC OC SF MF LF

BT Cotton

1 No.of farmers withbore wells having water 11 46 30 17 35 35

2 No.of farmers withbore wells having failed 2 27 34 12 17 34

Non-BT Cotton

1 No.of farmers withbore wells having water 6 16 17 12 16 11

2 No.of farmers withbore wells having failed 6 13 9 8 13 7


Rainfall Received in the Selected Mandals

The state received an average rainfall of 704 mm. during the year 2004-2005, whichis lower by 25 per cent over the normal rainfall of 940 mm. The rainfall in theselected Mandals and averages for the districts are shown in Tables 3.13 and 3.14.It can be observed from the tables that the study Mandals in Warangal, Nalgonda,Guntur and Kurnool received 41 per cent, 29 per cent, 17 per cent and 45 per centless than the normal rainfall, respectively in 2004-2005. The study area in all thefour districts had a combined deficit of 33 per cent in the actual rainfall comparedto the normal rainfall during the year. The situation in Guntur seems to be muchbetter compared to other districts with minimum gap between the actual and thenormal compared to other districts and also the actual rainfall of 682 mm beinghigher than that in any other districts. In Kurnool, the gap between the actual andthe normal is higher at 45 per cent and the actual rainfall is much lower viz., 351mm, typical of a scanty rainfall zone. On the other hand, in Warangal, though thegap is higher, the actual rainfall is 607 mm and reasonably good.

Average Area of Cotton

The average area under BT cotton in the sample is found to be 2.77 acres and 20 percent less than that under non-BT cotton, which is 3.45 acres (Table 3.15). This maybe because the farmers are in a way trying BT cotton in parts of their fields in 2004-2005 before they can totally replace the non-BT cotton with BT cotton. This relativelylower area under either BT or non-BT cotton also reminds us the need to study theissues of adoption of the Bollgard technology from a different perspective comparedto either U.S.A or any other developed country, where each farmer cultivatesthousands of acres. Among districts, Guntur and Kurnool have relatively higherarea under BT cotton, whereas Warangal farmers have very low average area underBT cotton. The farmers from SCs expectedly are the ones with the lowest acreagewith 1.88 acres under BT cotton.


Tabl

e 3.

13:

Per

cent

age

of A

ctua

l Rai

nfal

l to

Nor

mal

Rai

nfal

l Mon

thw

ise

in t

he S

elec

ted

Man

dals

War

anga

lN

algo

nda

Gun

tur

Kur

nool

Mon

thG

eesu

-Sa

yam

pet

Park

alM

un-

S.G

ow-

Nak

reka

lG

uraj

ala

Prat

ti-

Kau

tala

mgo

nda

gode

rara

mpa

du

June

33.4

847

.44

55.0

460

.78

71.1

570

.48

58.9

612

2.5

55.7

7

July

75.9

255

.89

40.2

812

2.8

80.6

353

.47

145

115.

4562

.39

Aug

ust

33.4

442

.81

55.4

19.8

716

.99

24.3

522

.65

24.4

47.8

9

Sept

embe

r53

.520

083

.13

98.0

710

1.2

34.6

713

3.5

138.

7380

.34

Oct

ober

161

75.7

363

.95

159.

310

2.4

158.

587

.54

67.8

155

.87

Nov

embe

r24

.67

34.4

836

.35.

714

00

21.5

324

0

Dec

embe

r0

00

00

00

00

Tto

tal

rain

fall

in m

m64

559

758

064

4.7

577

510.

464

571

935

1

Nor

mal

rai

nfal

l in

mm

.10

1410

2110

4274

580

591

578

386

363

6

Per

cent

of

actu

al to

nor

mal

63.6

158

.51

55.7

086

.54

71.6

955

.78

82.4

183

.27

55.2

0


Table 3.14: Rainfall in the Selected Districts in 2004-2005

Month Warangal Nalgonda Guntur Kurnool

June* 45.32 67.47 90.73 55.77

July* 57.36 85.63 130.23 62.39

August* 43.88 20.4 23.53 47.89

September* 112.2 77.98 136.12 80.34

October* 100.2 140.1 77.675 55.87

November* 31.82 1.905 22.77 0

December* 0 0 0 0

Total rainfall in mm 607.3 577.4 682 351

Normal rainfall in mm. 1026 821.7 823 636

Per cent of actual to

normal 59.27 71.34 82.84 55.20

Note: * indicates percentage of actual rainfall to the normal rainfall

Details of BT and non-BT Cotton Cultivation

It can be observed from Table 3.16 that RCS-2 is the most popular of BT cottonhybrids among the farmers in the selected districts except in Kurnool, whereunofficial BT cotton growers outnumber all other BT hybrids like MECH- 12 andRCS-2. Here it needs to be mentioned that even Bunny is not officially approvedfor commercial cultivation by the Genetic Engineering Approval Committee of theCentral Government for 2004-20053. The unofficial BT cotton seeds are grown by20 per cent of farmers in the state. Among the non-BT cotton hybrids, Bunny is themost popular among farmers in all the districts and as a whole except in Kurnool,where H-44 is the dominant one. In fact, there are large numbers of hybrids in themarket for cotton making it almost impossible to know the traits and yield potentialsof all the hybrids. In the present study, we have found that the 186 non-BT cottonfarmers have grown 73 hybrids. It can be observed from Table 3.16 that the percentof non-BT farmers growing other hybrids is 56. This is a troublesome situation asthe textile industry is asking for reduction of the number of hybrids so that there arenot huge variations in the quality of cotton and contamination is minimised4.

3 It has become customary for the companies to market BT hybrids in advance of the approvalby the Genetic Engineering Approval Committee of the Government in anticipation of theapproval.4 However, the scientists of ICAR disagree with this saying that the biodiversity has to bemaintained. There should be reconciliation between these two arguments and the numberhas to be minimized.


Table 3.15: Average Area in BT and Non- BT Cotton in Acres

BT Cotton Non-BT Cotton Total sample

Districts

Warangal 2.12 3.37 2.48Nalgonda 2.92 3.67 3.16Guntur 3.62 3.83 3.68Kurnool 3.55 2.52 3.24

Social Category

SC 1.88 2.57 2.1BC 2.54 3.41 2.8OC 3.64 4.2 3.8

Size Category

SF 2.48 2.52 2.49MF 2.61 3.89 2.97LF 3.48 4.76 3.84

Type of irrigation

Irrigated 2.75 3.47 2.96Unirrd. 2.78 3.43 2.98

Source of Seed

Official 2.4 - -Unofficial 3.83 - -Soil TypeBlack soil 2.79 3.42 2.96Other soil 2.67 3.52 2.99

2.77 3.45 2.97

CESS Monograph - 3 34Ta

ble

3.16

: P

arti

cula

rs o

f Are

a un

der

BT

Cot

ton

and

non-

BT

Cot

ton

and

Oth

er D

etai

ls in

Sel

ecte

d D

istr

icts

Sl.N

oIt

emW

aran

gal

Nal

gond

aG

untu

rK

urno

olTo

tal

sam

ple

BT

Cot

ton

1Pe

r ce

nt o

f fa

rmer

s gr

owin

g M

EC

H-1

224

.155

.925

.72.

031

.12

Per

cent

of

farm

ers

grow

ing

RC

S-2

72.7

26.8

24.3

4.1

43.5

3Pe

r ce

nt o

f fa

rmer

s gr

owin

g B

anni

-12

2.1

3.1

18.9

4.1

5.5

4Pe

r ce

nt o

f fa

rmer

s gr

owin

g U

noff

icia

l BT

1.1

14.2

31.1

89.8

19.9

5Pe

r ce

nt o

f fa

rmer

s, A

grl.

Off

icer

rec

omm

ende

d5.

92.

40

03.

26

Per

cent

of

farm

ers,

see

d de

aler

rec

omm

ende

d18

.711

.816

.22.

014

.47

Per

cent

of

farm

ers

neig

hbou

ring

far

mer

s re

com

men

ded

40.6

48.0

52.7

53.1

46.2

8Pe

r ce

nt o

f fa

rmer

s M

onsa

nto/

Ras

i fie

ld s

taff

reco

mm

ende

d4.

83.

14.

10

3.7

9Pe

r ce

nt o

f fa

rmer

s, d

ecid

ing

to g

row

n on

ow

n se

lf29

.934

.627

.044

.932

.510

Mos

tly g

row

n pr

evio

us c

rops

(T

hree

) (%

)C

otto

n (5

5)C

otto

n (5

8)C

otto

n (4

2)C

otto

n (5

9)C

otto

n (6

8)C

hilli

es (

13)

Chi

llies

(15

)C

hilli

es (

53)

Chi

llies

(20

)C

hilli

es (

20)

Mai

ze (

9)M

aize

(14

)R

agi (

20)

S.Fl

ower

(20)

Mai

ze(3

6)11

Per

cent

of

farm

ers

getti

ng te

chni

cal a

dvis

e fr

omre

com

men

ding

age

ncy

3.2

0.8

00

1.6

12Pe

r ce

nt o

f fa

rmer

s ge

tting

see

ds o

n cr

edit

5451

1412

4113

Per

cent

of

farm

ers

getti

ng e

xpos

ure

visi

ts f

rom

reco

mm

endi

ng a

genc

y5

1647

1016


Tabl

e 3.

16:

Con

td...

Sl.N

oIt

emW

aran

gal

Nal

gond

aG

untu

rK

urno

olTo

tal

sam

ple

Non

-BT

Cot

ton

1Pe

r ce

nt o

f fa

rmer

s gr

owin

g B

unny

18.0

250

.54

30.7

719

.05

31.4

42

Per

cent

of

farm

ers

grow

ing

Tul

si1.

8011

.83

10.2

614

.29

7.58

3Pe

r ce

nt o

f fa

rmer

s gr

owin

g 44

0.0

2.15

0.0

52.3

84.

924

Per

cent

of

farm

ers

grow

ing

Oth

ers

80.1

835

.48

58.9

714

.29

56.0

65

Mos

tly g

row

n pr

evio

us c

rops

(T

hree

) (%

)C

otto

n (6

8)C

otto

n (6

6)C

otto

n (3

4)C

otto

n (8

6)C

otto

n (6

4)B

ajra

(24

)R

agi (

54 )

Chi

llies

(59

)R

agi (

43)

Rag

i (59

)R

agi (

56)

Chi

llies

(13)

Rag

i (86

)S.

Flow

er(3

3) C

hilli

es(2

2)6

Per

cent

of

farm

ers

getti

ng te

chni

cal a

dvis

e fr

omre

com

men

ding

age

ncy

6.7

1.6

04.

83.

87

Per

cent

of

farm

ers

getti

ng s

eeds

on

cred

it fr

omre

com

men

ding

age

ncy

4726

1438

348

Per

cent

of

farm

ers

getti

ng s

eeds

on

cred

it47

2614

3834

9Pe

r ce

nt o

f fa

rmer

s ge

tting

exp

osur

e vi

sits

fro

mre

com

men

ding

age

ncy

6.7

3.3

410

10.2


The adoption of BT cotton is mainly on the advice of neighbouring farmers (46.2%)and own decision (32.5%). The role of neither the field staff of BT hybrid companies(3.7%) nor the Agricultural Department personnel (3.2%) is significant. The seeddealer could motivate 14.4% of the farmers to take-up BT cultivation. The previouscrops grown in case of BT cotton crop are mainly cotton (68%) and chillies (20%).The percent of BT cotton farmers getting technical advise from the recommendingagency is negligible. However, 16 per cent of them reported to have been taken onexposure visits.

Official and Unofficial BT Cotton

It was found that the unofficial BT cotton is more in the districts of Kurnool andGuntur (Table 3.17). The percent of farmers growing unofficial BT cotton in Kurnoolis the highest with 94 per cent and followed by Guntur with 50 per cent. The menaceof unofficial BT cotton seeds is the lowest in Warangal, probably because of thestrong farmers mobilization in the district unlike other districts. There is no particulartrend in the cultivation of unofficial BT cotton among social categories. However,among size groups, maximum number of small farmers (29%) cultivated them. Evenamong the unofficial BT, Guntur district cultivators (19% of BT farmers) have gonefor Bunny hybrid, which is definitely BT, though not officially approved for 2004-2005.

Table 3.17: Official and Unofficial BT Cotton in Selected Districts

District/Category Official BT cotton Unofficial BT cotton Total

Districts

Warangal 181 (96.79) 6 (3.21) 187 (100)Nalgonda 105 (82.68) 22 (17.32) 127 (100)Guntur 37 (50.00) 37 (50.00) 74 (100)Kurnool 3 (6.12) 46 (93.88) 49 (100)

Social categories

SCs 70 (65.42) 37 (34.58) 107 (100)BCs 146 (82.95) 30 (17.05) 176 (100)Ocs 110 (71.43) 44 (28.57) 154 (100)

Size categories

SFs 133 (71.12) 54 (28.88) 187 (100)MFs 117 (78.00) 33 (22.00) 150 (100)LFs 76 (76.00) 24 (24.00) 100 (100)

Total sample 326 (74.60) 111 (25.40) 437 (100)

Note: Figures in parentheses indicate respective percentages


Refuge, Barrier and Trap Crops

It is known that the bollworm can develop resistance to BT toxin, if it is feedingexclusively on the BT gene incorporated crop without any change. Therefore, thecompanies are trying to postpone the development of resistance agronomically bygrowing certain rows of non-BT cotton in the BT cotton crop. It will be interestingto see how many of the BT farmers have grown such refuge rows. The farmers arealso questioned about growing trap crops and barrier crops, recommended byscientists as agronomical ways of controlling bollworms. The details are presentedin Table 3.18.

It can be observed from the table that only 63 per cent of the BT cotton farmershave grown refuge crops. Though good percent of BT farmers have grown refugein Warangal (84%) and Nalgonda (78%), the farmers in Guntur (27%) and Kurnool(2%) have not cared to grow it. This practice is almost non-existent in Kurnool.The farmers revealed that they have now stopped growing refuge, though theycultivated it in some rows in the first year. They feared losing some portion of theirland and further they observed that the bollworm attack is very heavy for the refugerows, which in turn makes it necessary to spray some chemicals. If this trend ofnon-observance of refuge rows increases further in BT cotton cultivation, theselection pressure for the pest may increase, as it faces BT cotton in thousands ofacres in contiguous areas. Finally, it may lead to development of full resistance in8-10 years as the scientists warned5.

The practice of growing trap crops and barrier crops in BT cotton is almost same.While 14 per cent of the BT farmers have grown trap crops, which is 26 per centlower than that of non-BT, barrier crops are grown by 14 per cent of the farmers inboth BT and non-BT. This allays the fear that the new technology like BT may notbe conducive to non-pesticidal ways of controlling pest using agronomic measures.Therefore, Bollgard technology can be a supplement to the other measures like trapcrops, barrier crops etc at the field level. It may be altogether a different issue at themacro policy level, where the focus of research on environment friendly and costeffective ways of pest control may be lost.

5 A study at the Indian Agricultural Research Institute, New Delhi by Chandrasekhar andGujar in 2004 found that the resistance may not last longer than 7-10 years (Krishnakumar,2004). Similar results were reported by Prakash (1997) and Shiva et al (1999). On the otherhand scholars like Qaim (2001) opined that selection pressure in developing countries maybe low in view of the small land holding size and it may delay development of resistance.


ble

3.18

: D

etai

ls o

f R

efug

e, B

arri

er a

nd T

rap

Cro

ps in

BT

Cot

ton

Far

mer

s

Sl.N

oIt

emW

aran

gal

Nal

gond

aG

untu

rK

urno

olA

. P.

BT

Cot

ton

1Pe

r ce

nt o

f fa

rmer

s gr

owin

g re

fuge

cro

p84

.078

.027

.02.

063

.42

Ave

rage

num

ber

of r

ows

of r

efug

e gr

own

2.5

4.9

4.5

4.0

3.5

3Pe

r ce

nt o

f fa

rmer

s gr

owin

g tr

ap c

rops

26.7

1.6

2.7

12.2

13.7

4A

vera

ge n

umbe

r of

row

s of

trap

cro

ps g

row

n1.

95

1.5

5.0

2.3

5Fr

eque

ntly

gro

wn

trap

cro

ps w

ith %

of

Cas

tor

(54)

Cas

tor

(100

)R

ed g

ram

(10

0)M

arig

old

(67)

Cas

tor

(52)

farm

ers

grow

ing

them

Mar

igol

d (2

6)C

asto

r (3

3)M

arig

old

(28)

6Pe

r ce

nt o

f fa

rmer

s gr

owin

g ba

rrie

r cr

ops

18.2

14.2

4.1

12.2

14.0

7A

vera

ge n

umbe

r of

row

s of

bar

rier

cro

ps g

row

n4.

35.

11.

34.

74.

48

Freq

uent

ly g

row

n ba

rrie

r cr

ops

with

% o

fR

ed g

ram

(53

)R

edgr

am (

83)

Red

gra

m (

100)

Red

gra

m (

100)

Red

gra

m (

69)

farm

ers

grow

ing

them

Cas

tor

(27)

Cas

tor

(11)

Red

gra

m (

100)

Cas

tor

(18)

Non

-BT

Cot

ton

3Pe

r ce

nt o

f fa

rmer

s gr

owin

g tr

ap c

rops

33.3

6.6

3.4

23.8

18.8

4A

vera

ge n

umbe

r of

row

s of

trap

cro

ps g

row

n4.

54.

01

44.

35

Freq

uent

ly g

row

n tr

ap c

rops

with

% o

fC

asto

r (5

2)C

asto

r (1

75)

Red

gra

m (

100)

Mar

igol

d (1

00)

Cas

tor

(46)

farm

ers

grow

ing

them

Mar

igol

d (3

6)M

arig

old

(25)

Mar

igol

d (4

3)6

Per

cent

of

farm

ers

grow

ing

barr

ier

crop

s14

.721

.33.

44.

814

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Ave

rage

num

ber

of r

ows

of b

arri

er c

rops

gro

wn

3.5

6.0

16

4.8

8Fr

eque

ntly

gro

wn

barr

ier

crop

s w

ith %

of

Red

gra

m (

73)

Red

gram

(77

)R

ed g

ram

(10

0)G

inge

ly (

100)

Red

gra

m (

73)

farm

ers

grow

ing

them

Cas

tor

(36)

Cas

tor

(15)

Cas

tor

(8)

4.1. Costs and Returns in BT and Non-BT Cottons

The farmers incur costs directly and also indirectly. While the cash expenses aredirectly seen, the utilization of his fixed assets (like land, farm buildings, implementsetc) and owned inputs like family labour in production have also to be accounted togive a realistic picture of the total costs incurred. This is attempted in the study bytaking both the fixed and operational costs. Different cost concepts (Costs A, B, C)used in standard farm management studies are calculated in the study andcorresponding farm business measures like net income, farm business income, familylabour income and farm investment income are worked out. This is necessary to bemore scientific and also to be comparable6.

The cost of production in an acre of BT cotton is 17 per cent higher in BT cotton atRs.16975 compared to Rs.14507 for non-BT cotton in the state (Table 4.1). Thecost A2, which mainly shows the paid out costs, is Rs.11445 and higher by 11.8 percent over non-BT cotton. The expenditure on insecticides decreased by 18.2 percent in BT cotton over non-BT cotton. This decrease in cost on insecticides by Rs.594 is more than matched by increased costs on seed (Rs.804), labour costs (Rs.801),fertilizers (Rs.86) and irrigation charges (Rs.45). The cost of seed increased by134.4 per cent from Rs.598 in non-BT cotton to Rs.1402 in BT cotton, whereaslabour costs increased by 20.58 per cent in BT cotton. Out of the Rs.801 increaseon labour, human labour accounted for the major portion viz., Rs.676. The BTfarmers on an average hired human labour more than non-BT farmer by an amountof Rs.303 and utilized family labour more intensively. This increase in employmentopportunities due to the BT technology is a big gain for the rural economy as awhole, since the rural employment growth has been the biggest concern in the statein the past decade. This creation of employment opportunities is typical of biologicaltechnology as was the case during the green revolution days.

The fixed costs are also higher in BT cotton due to higher rent paid for leased-inland and imputed values of rental value of owned land, depreciation and interest onowned fixed capital. The rental value of owned land is higher due to higher grossincome whereas the latter two are higher due to higher inventory and fixed assets

6 The Commission for Agricultural Costs and Prices also presents the costs and returns inthis manner.

4. Costs and Returns


with the BT farmers compared to the non-BT farmers. On the whole the total costof production (cost C) in BT cotton is Rs.16975 per acre and is higher by 17 percent compared to non-BT cotton. This includes paid costs and imputed costs ofdepreciation, interest on owned fixed capital, rental value of owned land, familylabour etc. The cost per quintal in BT cotton is lower by Rs.223 and 11 per centcompared to non-BT. The farmer entrepreneur must be covering all these costs iffarming is to be termed profitable. If he could not cover all costs, then covering thepaid-up costs (Cost A1) is crucial to remain in business.

The reduction in insecticides is only 18 per cent, whereas Qaim and Matuschke(2004) showed from the review of studies that this reduction was to an extent of 77per cent in Mexico, 65 per cent in China. In the study area, farmers sprayed pesticideswith a fear of attack of Heliothes larvae from the adjoining fields, as they are stillnot fully aware of the nature of Bt technology. This may change later and moresavings in insecticides may result. Ismael et al (2002) also observed that during theearly stages of adoption, Bt growers use more insecticides than needed6. Severalstudies (See for e.g. Qaim and Matuschke, 2004; Huang et al 2002a) showed thatthe Bt technology adopting farmers also increase their input use. This also increasesthe cost of cultivation compared to non-Bt farmers. The study by Narayanamoorthyand Kalamkar (2006) also found a 34 per cent increase in the cost of cultivation ofBt cotton over non-Bt.

The physical yield obtained in BT cotton is 9.49 quintals per acre compared to 7.21quintals per acre for non-BT cotton and 32 per cent higher than non-BT. This clearlyshows the superiority of BT cotton in increasing yields over non-BT cotton andgives us a clue as to why the non-BT cotton seed manufacturers are going out ofbusiness.


Table 4.1: Costs and Returns in BT Cotton and Non-BT Cotton

Item BT NBT Change Per cent Totalover non-BT change

in Rs. over non-BT

Casual labour 1779.7 1476.31 303.39 20.55** 1674.58Attached labour 217.74 127.29 90.45 71.06** 186.46Family labour 1128 845.78 282.22 33.37** 1035.21Total human labour 3125.4 2449.38 676.02 27.6** 2896.25Bullock labour 859.48 855.36 4.12 0.482 858.05Machine labour 707.6 586.83 120.77 20.58** 665.75Seed 1402.2 598.17 804.03 134.4** 1123.57Chemical fertilisers 1579.2 1602.67 -23.47 -1.46 1587.36Manure 514.76 405.66 109.1 26.89** 478.31Total fertilizers 2094 2008.33 85.67 4.266 2065.67Insecticides 2673 3267.43 -594.43 -18.2** 2878.98Irrigation charges 98.25 53.61 44.64 83.27** 82.79Interest on working capital 411.83 378.83 33 8.711 400.47Miscellaneous 94.3 83.86 10.44 12.45* 94.5Operational cost 11466 10281.8 1184.2 11.52* 11066Rental value of owned land 3607.1 2715.94 891.16 32.81** 3298.22Rent paid for leased-in-land 753.41 522.7 230.71 44.14** 673.47Land revenue 77.92 55.23 22.69 41.08** 70.06Depreciation on impl&bldgs 276 225 51 22.67** 253Interest on fixed capital 794 706 88 12.46* 747Fixed cost 5508.5 4224.87 1283.63 30.38** 5041.75Cost of production 16975 14506.7 2468.3 17.01* 16107.8Cost A1 10692 9716.25 975.75 10.04* 10353.9Cost A2 11445 10239 1206 11.78* 11027.4Cost B1 12239 10945 1294 11.82* 11774.4Cost B2 15847 13660.9 2186.1 16* 15072.6Cost C1 13367 11790.7 1576.3 13.37* 12809.6Cost C2 16975 14506.7 2468.3 17.01* 16107.8Physical yield in quintals 9.49 7.21 2.28 31.62** 8.7Cost A1/quintal 1126.7 1347.61 -220.91 -16.4* 1190.1Cost A2/quintal 1206.1 1420.1 -214 -15.1* 1267.51Cost B1/quintal 1289.7 1518.02 -228.32 -15* 1353.37Cost B2/quintal 1669.8 1894.71 -224.91 -11.9* 1732.48Cost C1/quintal 1408.6 1635.33 -226.73 -13.9* 1472.36Cost C2/quintal 1788.7 2012.02 -223.32 -11.1* 1851.47Average price per quintal 1750.4 1711.19 39.21 2.291 1739.11Farm business measures 0Gross income in Rs. 16612 12337.7 4274.3 34.64** 15130.3Net income -363 -2169 1806 83.3** -977.52Farm business income 5166.1 2098.73 3067.37 146.2** 4102.91Family labour income 765.01 -1323.2 2088.21 158** 57.687Farm investment income 4038.2 1252.95 2785.25 222.3** 3067.7

Note: * and ** indicates significance at 1 per cent and 5 per cent respectively.


The immediate fall out of the higher yield in BT cotton is that all its per quintalcosts are lower over non-BT cotton though the absolute costs are higher. The perquintal Cost A2, Cost B

2 and Cost C

2 are lower by 15 per cent, 12 per cent and 11

per cent, respectively in BT cotton over non-BT cotton. It is well known that theeconomic theory states that the average costs matter in decision-making and decidingthe profitability rather than absolute costs. Then, the question to be answered iswhether the increase in yield is attributable to Bt technology alone or are there anyother factors that may be leading to the increase in yield? To answer this question,we go back to the background of the farmers and then take the help of productionfunction analysis.

The percent of irrigated land in BT cotton is 48 per cent compared to 45 per cent incase of non-BT cotton and 7 per cent higher over the latter (Table 3.10). While 80per cent of the BT cotton land is under black soil in the sample, 73 per cent is underblack soil in non-BT cotton. This is 10 per cent higher than the non-BT cotton. Theproblem in soils, as found in the study, is mainly salinity in an extent of 8 and 9 percent of soils in BT cotton and non-BT cotton respectively. The BT cotton farmerscomprises of 25 per cent of SC and STs and lower by non-BT farmers by 7 per centas they have higher proportion viz., 26.3 per cent of these category (Table 3.4).From a size category perspective also, the BT farmers have less number of smallfarmers by 10.5 per cent over non-BT (Table 3.7). As far as literary position isconcerned, there is not much difference as 77 per cent of the farmers are literate inboth BT and non-BT cotton farmers (Table 3.8). It can be inferred from this thatrelatively irrigated and better soils are put under BT cotton cultivation and relativelyupper social and size category farmers are cultivating it. But the difference is notsizeable and it happens like that in case of all the new technologies. The greenrevolution technologies have been utilized by upper stratum of farmers and latergradually spread to the other stratum. But in this case, the small farmers and SC andST farmers also made use of the technology well. Whether this small difference inirrigation, quality of soil and social and economic background of farmers couldhave led to a 32 per cent increase in yield? This question is examined by usingproduction function, which can conclusively reveal about the impact of Bt cottonon yield.

Results of Production Function

The yield in quintals is taken as the dependant variable and expenditure on fertilizers,expenditure on irrigation, expenditure on plant protection, education in years andage in years are taken as the independent variables. Apart from these, the Bt dummyis also included in the production function. The model is specified in double logform and analysed using the method of ordinary least squares. Therefore, thecoefficients are also elasticities. The results show that there is a significant impact


of Bt cotton hybrid on the yield of the farmers (Table 4.2). The coefficient for Btdummy indicated that there can be a 36 per cent increase due to Bt cotton cultivation.All the other variables contributed positively to the yield except education.Narayanamoorthy and Kalamkar also reported negative contribution of education.But, this may be due to the fact that some of the educated farmers in the samplecould not get good yield because of deficient rainfall.

Table 4.2: Estimated Production Functions (n = 623)

Item Coefficient t-Statistic

Constant -4.420 -12.151*Fertilizers (Rs./ac) 0.438 10.323*Irrigation (Rs./ac) .0003 0.195Pesticide (Rs./ac) 0.386 9.960*Education in years -0.089 -3.185**Age in years 0.062 0.915Bt dummy 0.355 8.561*Adjusted R2 0.581

* and ** indicates significance at 1 per cent and 5 per cent respectively.

The results of the study clearly validate the hypothesis that there can be considerableyield effects in developing countries like India. Other studies also reported increasein yield in the Indian conditions. It was reported that genetically modified cottonhybrids in India improved yields by 29 per cent over the traditional seeds (GoI,2005, P.155). Whereas Naik et al (2005) reported 34 per cent increase in yield fromthe field data from Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu in2002-2003, Narayanamoorthy and Kalamkar (2006) reported yield increase of 52per cent in Maharashtra in 2003-2004. The production function analysis of a similarkind by both the above authors showed that there was significant positive impacton Bt cotton yield in their sample studies. There is uncontrolled damage due to thebollworm attack in Andhra Pradesh and this pest pressure is high as cotton is grownin a typically tropical climate in the state. As explained in Qaim and Matuschke(2004), Bt cotton cultivation in this situation results in increase in yield due tobetter management of the pest problem and thereby enabling to reach the potentialof the variety/hybrid in question. Following Qaim and Matuschke (2004), the positiveyield effects can be explained in a damage control framework as below. If Y is theeffective cotton yield, and F (.) is potentital yield without insect damage, whichdepends on variable input, x., D (.) is the damage function determining the fractionof potential output being lost to insect pests. Crop losses depend on exogenous pest


pressure, N, and they can be reduced through application of chemical insecticides,z, and/or the use of Bt technology.

Y = F (x) [1-D (z, Bt; N) ]

If pest pressure is high and farmers use a lot of chemical insecticides in conventionalcotton, Bt adoption should lead to substantial insecticide reductions. On the otherhand, if there is uncontrolled pest attack with the chemical insecticides, Bt cottoncould increase the effective yield by controlling the damage function, D. This laterseems to have happend in the study area.

Returns in Bt and Non-Bt Cultivation

Ultimately, returns to farming matter in deciding whether the technology is superiorover the non-BT cotton hybrids. In case of farming the necessary business measuresare gross income, net income, farm business income, family labour income andfarm investment income. These are worked out for both BT cotton and non-BTcotton (Table 4.1). The average price realized for BT cotton is Rs.1750/- comparedto Rs.1711/- for non-BT cotton. It is two per cent more than the non-BT. It is contraryto some of the earlier studies, which mentioned that BT cotton is not purchased bytraders on par with the conventional hybrids. The farmers are combining all theirBT and non-BT cotton and selling. Therefore, the traders could not discriminatebetween the two. The small increase in the price for BT cotton reflects the bargainingpower of the BT cotton farmers, who are generally stronger, compared to non-BTfarmers. The average price per quintal in case of BT cotton could cover Cost B

2 and

fall short of Cost C2 by a small margin viz., Rs.39. But, in case of non-BT cotton,

average price per quintal could not cover even B2. The net income viz., gross income

over Cost C2 is negative in both BT and non-BT cotton. This may be indicative of

the farming crisis in the state. But BT performed better here also by being able tocover all the imputed costs along with paid-up costs except a minor portion andimproved over non-BT by 83 per cent. The net income, farm business income,family labour income and farm investment income improved by Rs.1806 (83%),Rs.3067 (146%), Rs.2088 (158 per cent) and Rs.2785 (222%), respectively. Thisclearly shows that BT cotton outperformed non-BT cotton in regard to all themeasures. The farm business income, which shows us the excess of gross incomeover variable costs (Cost A

2), is Rs.5166 per acre in case of BT cotton and 146 per

cent higher comparatively.


The Commission for Agricultural Costs and Prices (CACP) reported negative netreturns of Rs.656 per acre in 1996-97 in cotton in Andhra Pradesh, when the realizedprice per quintal of seed cotton was Rs.1707. The cotton farmers from Punjab arealso reported to have got negative returns in 1995-96 and 1996-97 (GoI, 2000).According to the Commission, in 2001-2002, the net returns are only Rs.120 peracre, when the realized price is Rs.1848. In Gujarat, for 2001-02, the net returnsare –1531 per acre. In the same year, cotton farmers from Maharashtra and TamilNadu also are reported to have got negative returns (GoI, 2005). Therefore, it is notuncommon for the cotton farmers to get negative net returns, if all the paid-out andimputed costs are properly accounted as is done systematically by the CACP.

There may be two reasons for the negative net income for both BT and non-BTfarmers. The first one is the fact that the actual rainfall in 2004-2005 in the studyarea is 33 per cent lower than the normal. This might have reduced the physicalyield. The other factor is the drastic decline in prices for raw cotton during the year.The low cotton prices seem to have affected the net income of both BT and non-BTcotton farmers during the year. The trade liberalization might have this effect. It isnoteworthy that the farm harvest price of cotton declined drastically in this year by21 per cent (Table 4.3). The average price realized for the sample farmers in thestate at Rs.1739/- is 13 per cent lower than the previous seven-year average of farmharvest prices, which was Rs.2000/-. The imports of cotton have increased afterliberalization and an average of 15 lakh bales of cotton was imported in this seven-year period, while only 1.87 lakh bales were imported on an average per annum inthe previous seven year period (Table 4.4). All this might have reduced theprofitability of cotton farmers including BT cotton farmers.


Tabl

e 4.

3: F

arm

Har

vest

Pri

ces

for

Raw

Cot

ton

in A

ndhr

a P

rade

sh

Yea

r19

94-

1995

-19

96-

1997

-19

98-

1999

-20

00-

2001

-20

02-

2003

-20

04-

9596

9798

9900

0102

0304

05*

Farm

har

vest

Pric

e21

6019

4317

5219

7319

8719

0221

4117

3719

0323

5617

39

* T

he p

rice

for

200

4-20

05 is

the

aver

age

pric

e re

ceiv

ed b

y th

e sa

mpl

e fa

rmer

s7 .

Sour

ce:

Dir

ecto

rate

of

Eco

nom

ics

and

Stat

istic

s, H

yder

abad

.

7 T

he c

orre

spon

ding

far

m h

arve

st p

rice

is

1855

. T

he p

rice

rec

eive

d by

BT

cot

ton

farm

ers

is R

s.17

50 p

er q

uint

al a

nd i

t w

asR

s.17

11 f

or n

on-B

T f

arm

ers.


Table 4.4: Imports and Exports of Cotton (Lakh bales of 170 kgs each)

Year Opening Stock Imports Exports

1990-91 33.04 - 11.91991-92 22.64 3.0 0.771992-93 32.78 1.15 13.771993-94 33.15 3.0 3.91994-95 26.75 5.89 1.081995-96 35.02 0.5 8.531996-97 39.16 0.3 16.821997-98 30.38 4.13 3.51998-99 30.0 7.87 1.011999-2K 36.5 22.01 0.652000-2001 40.5 22.0 1.02001-2002 29.00 25.0 1.02002-2003 40.00 16 1.02003-04 24 14.88* 10.57*2004-05 NA 11.50* 5.10*

Source: Different issues of Commission for Agricultural Costs and Prices, GoI* These are taken from CMIE-Agriculture, April 2007

In a study conducted in two districts of Maharashtra, it was found that the yieldincreased by 52 per cent in BT cotton from 15.77 quintals per hectare in non-BTcotton to 24.00 quintals in BT cotton and the same study concluded that the profitper hectare was Rs.31883 in BT cotton as against Rs.17797 in non-BT cottonimplying an increase of 79 per cent, though the cost of pest control increased slightly(Narayanamoorthy and Kalamkar, 2006). A nationwide survey by Nielson and ORGMARG for 2003-04 season concluded that there was a 60 percent reduction inpesticide use and 29 percent increase in yield leading to 78 per cent increase in netprofit. In this background, the results of the study seem quite justifiable.

4.2. Impact across Groups of Farmers

The biotechnology, as already stated at the beginning, is expected to benefit drylands and ecologically fragile areas. Then, what are the benefits of Bt cultivation tothe farmers in these areas? The gains due to the new technology are ideally to beshared among all sections of the farmers equally. But, this does not happen in thereal world due to differences in asset position as well as different positions due tosocial stratification in our society on caste lines. Therefore, one has to ask 'whetherthe new technology benefits the SCs & STs and small farmers on par with the OCsand large farmers?' At the least, are they getting any benefits from the technology toimprove their financial position? We try to find answers to these questions byanalyzing the field survey data of the study here (Table 4.5 and Figure 4.1 and 4.2).


It can be observed from Table 4.5 that all social groups viz., SC and ST, BC andOC, all size categories of farmers, farmers from all the districts representing differentagro-climatic zones, farmers from both irrigated and rainfed conditions could reducetheir expenditure on pesticides, and increase the yield in quintals per acre. Theincrease in yield over non-Bt cotton is significant in most of the cases at one percent level of significance and at five per cent level of significant for small farmersand un-official Bt farmers. The decrease in the expenditure on pesticides is alsosignificant in most of the groups of farmers. Therefore, it can be concluded that allcategories of farmers got benefited by cultivating Bt cotton. Then, the next question

Table 4.5: Per Cent Changes across Different Categories ofBt Farmers Over Non-Bt Cotton

Sl.No Category Per cent change in Percent change inexpenditure on yield in quintals

pesticides per acre

I SC & ST -7.95 39.62**

BC -18.2* 28.35**

OC -21.73* 29.87**

II Small farmers -26.4** 10.09*

Medium farmers -30.06** 20.56**

Large farmers 14.85* 83.04**

III Irrigated farmers -19.60** 34.86**

Rainfed farmers -17.38* 28.08**

IV Official Bt farmers -9.84 41.19**

Unofficial Bt farmers -33.68** 13.59*

V Warangal -9.71 40.05**

Nalgonda -24.9* 30.21**

Guntur -29.5** 18.85**

Kurnool 17.31* 85.85**

Total sample -18.2** 31.62**

* and ** indicates significance at 1 per cent and 5 per cent respectively.


0

20

40

60

80

100

120

140

Series1 93.57 97.79 104 86.2 105.1 111.5 117.8 87.46 107.3 86.3 117.9 83.56 119.6 63.65 100

SC & ST

BC OC SF MF LF IrrdUnirr

dOffici

alUnofficial

Warangal

Nalgonda

Guntur

Kurnool

Total sampl

e

that needs an answer is that 'are there not any differences in the extent to which thebenefits accrued to different groups of farmers?' Figures 4.1 and 4.2 answer thisquestion to some extent. It can be seen from Figure 4.1 that the farmers from Guntur,Warangal, irrigated category, large category and OCs got the maximum yield relativeto the total sample. The farmers from the scanty rainfall zone viz., Kurnool andNalgonda obtained very poor yields and of course, the small farmers too. The similarsituation can be observed in the case of net income also (Figure 4.2). The farmersfrom irrigated category (Rs.981/ac), OC category (Rs.711/acre), Guntur (Rs.695/ac.), Warangal (Rs.525/ac.) and large category alone could cover all costs. All theothers could not cover all costs, though they could get higher and positive farmbusiness income over non-Bt cotton. However, as already explained, the deficientrainfall might have affected yield and net income in Nalgonda and Kurnool andalso to other groups of farmers. These two districts basically fall in scanty rainfallzone, with the normal rainfall being 751 mm. in Nalgonda and 670 mm. in Kurnoolcompared to 993 mm. in Warangal and 852 mm. in Guntur. The area under irrigationin these two districts is also quite low with only 25 per cent of the Bt cotton areairrigated compared to a 54 per cent and 85 per cent irrigated areas in Warangal andGuntur respectively. The detailed costs and returns in the selected districts, differentand social categories of farmers, rain fed and irrigated conditions, official andunofficial Bt cottons, different soils are given in the following pages.

Figure 4.1: Per Cent Yield Levels of Different Bt Farmers Relative toTotal Bt Sample


Costs and Returns in Different Districts

The performance of BT cotton across the four districts studied to represent fourdifferent agro-climatic situations shows that the performance in Guntur and Warangalis quite well compared to Nalgonda and Kurnool (Table 4.6 and 4.7). The costs ofproduction in BT cotton increased by 29 per cent, 14 per cent and 26 per cent inWarangal, Nalgonda and Kurnool respectively over non-BT cotton, whereas itdeclined by one per cent in Guntur. The costs of production are quite high in Warangalat Rs.20307 per acre followed by Guntur (Rs.17830), Nalgonda (Rs.14832) andKurnool (Rs.11705). The costs of insecticides sprayed on BT cotton in all the districtsare lower over non-BT. They are lower by10, 25, 30 and 17 per cent respectively inWarangal, Nalgonda, Guntur and Kurnool, respectively in BT cotton over non-BT.The difference between cost of production between the two is the maximum inWarangal with higher cost of Rs.4600 and minimum in Guntur with a lower cost ofRs.100 in BT cotton.

The physical yield in quintals per acre in BT cotton in Warangal and Guntur is 11,followed by 8 in Nalgonda and 6 in Kurnool. However, the difference over non-BTcotton in these districts was 40, 30, 18, 86 per cent in Warangal, Nalgonda, Guntur

Figure 4.2: Net Income from BT Cotton to Different Categories of Farmers

-2000

-1500

-1000

-500

0

500

1000

1500

Series1 -1275 -839 711 -808 -295 254 981 -1284 -574 -68 525 -1722 695 -1671 -363

SC & ST

BC OC SF MF LF Irrd UnirrdOffici

alUnoffi

cialWaran

galNalgonda

Guntur

Kurnool

Total sampl

e


and Kurnool districts, respectively8 . The average costs were the least in Gunturfollowed by Warangal. But the average price realized is the highest in Warangal,which may be due to the existence of marketing yards in the district and alsocontinuous farmers’ movements for remunerative prices for their cotton. Becauseof this higher average price realization, the BT farmers have covered even the CostC

2 and achieved positive net income in Warangal. The BT farmers of Guntur district

could also cover all costs including Cost C2

and get positive net income. On theother hand, the non-BT farmers in these two districts could not cover all costs. Infact, they could cover only paid-up costs represented by Cost A

2. In Nalgonda, the

BT farmers could cover only Cost A2 and family labour costs, whereas the non-BT

farmers could not cover even the family labour costs. But the farm business incomeimproved from Rs.573 in non-BT to Rs.2816 in BT cotton. In case of Kurnool, thesituation is much worse. Though the BT cotton performed better than non-BT, itcould also cover only paid-up costs represented by Cost A

2 and could not cover any

other costs. On the other hand, the non-BT cotton in Kurnool could not cover anycosts and incurred a net loss of Rs.1611 per acre, even if paid-up costs are represented.The BT cotton wiped this loss to the farmers and gave a net profit of Rs. 889 peracre on paid-up costs. The district is also notorious for the unofficial BT cottongrown. The unofficial BT cotton seed accounted for 90 per cent of the total BTfarmers in the district. Among all the unofficial BT cottons grown across districts,the farmers in Kurnool revealed that their BT seed performed very poorly. Thismay be one reason.

These findings also suggest that the performance of Bt cotton may be hindered byagro-climatic conditions, as the low performing districts of Nalgonda and Kurnoolfall under low and erratic rainfall districts. The per cent irrigated land in BT farmersin Warangal and Guntur districts is 54 and 85 per cent respectively, whereas it aslow as 27 per cent in Kurnool and 25 per cent in Nalgonda. The per cent of SCs (40)and small farmers (52) are higher in Kurnool district than the Bt cotton farmeraverage. In Kurnool, the drought situation as a result of deficient rainfall was moreacute, as the gap between actual and normal rainfall is 45 per cent. But then this istypical in scanty rainfall region. These factors may explain the low performance ofBt cotton in these districts. Though Warangal and Guntur obtained similar yield,the costs are very high in Warangal. On the other hand in Guntur, the yields arehigher over non-Bt because of canal irrigation. The higher price realization inWarangal saved the farmers from incurring losses.

8 The performance of non-BT was very good in Guntur followed by Warangal and theleast in Kurnool district.


ble

4.6:

Cos

ts a

nd R

etur

ns in

War

anga

l and

Nal

gond

a D

istr

icts

War

anga

lN

algo

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BT

cot

ton

Non

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Cha

nge

Per

cent

BT

cot

ton

Non

-BT

Cha

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Per

cent

cott

onov

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Tch

ange

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over

non

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chan

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ver

in R

s.no

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Rs.

non-

BT

Cas

ual

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15.7

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20.8

494.

934

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1774

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1365

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409.

8630

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ched

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464.

722

5.35

239.

410

6.21

165.

211

4.4

50.8

44.4

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Fam

ily l

abou

r15

02.0

397

2.64

529.

454

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1009

.484

0.79

168.

6120

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Tota

l hu

man

lab

our

3882

.45

2618

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6448

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ble

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...)

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ble

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ble

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-108


Costs and Returns among Social Categories

The gains due to the new technology are ideally to be shared among all sections ofthe farmers equally. But, this does not happen in the real world due to differences inasset position as well as different positions due to social stratification in our societyon caste lines. Therefore, one has to ask ‘whether the new technology benefits theSCs & STs and small farmers on par with the OCs and large farmers?’ At the least,are they getting any benefits from the technology to improve their financial position?We try to find answers to these questions from analyzing the field survey data ofthe study here.

The BT cotton farmers from SCs9 obtained 10 per cent lesser yield than their counterparts from OCs with a two per cent lower cost of production (Table 4.8). Thoughtheir operational costs are more than OCs by 5 per cent, their overall cost ofproduction is lower due to 15 per cent lower fixed costs. The BT farmers from SCsincurred 9 per cent higher cost per quintal than the OC farmers. As a result of thehigher yield for the OCs, the average costs are relatively low for the OCs. Moreover,the BT farmers from OCs are also able to get higher price to their produce, whichmay be due to their better bargaining and social position. As a result of this, the OC-BT farmers could cover all the costs and get a net income of Rs.711 per acre, whileBT farmers from SCs could not cover Cost C

2 and get a net loss of Rs.1275 per acre.

But this happened not only with the SCs, but also with the BCs. When we considerthe paid-up costs represented by Cost A

2, the SC BT farmers got an income of Rs.4162

per acre and this is lower than BT farmers from OCs by 30 per cent.

Then, if we compare the BT farmers from SCs with non-BT farmers from the samecommunity, a different picture emerges. They benefited considerably from thecultivation of BT cotton as seen from the Table 4.8. The BT farmers from SCs got40 per cent higher yield than non-BT SC farmers with 17 per cent lower cost perquintal. This has led to improving the net income by 59 per cent. The farm businessincome, which shows the excess of gross income over paid-up costs, is higher bythree times than non-BT farmers from SCs. Therefore, it is very clear that the farmersfrom SCs, who are also generally small farmers, got benefited from growing thistechnology, though not on par with the OCs and BCs. On the whole, all socialcategories of farmers are better off with BT cotton than without the BT cotton.

9 The category of SCs in the text includes SCs and STs, unless otherwise stated.


ble

4.8:

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t A1

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t A2

1078

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Costs and Returns Among Size Classes of Farmers

The small farmer is the most vulnerable farmer to all kinds of problems in farming.Therefore, he must be the center of our analysis regarding introduction of a newtechnology and associated risks. An attempt is made to bring out this analysis inTable 4.9 and explained below. We need to remember here that farmers owning lessthan 4.99 acres of land are classified as small in the study as per the standard normin India. The large farmers are those who own 10 acres of above.

The BT farmers from SFs obtained 23 per cent lower yield compared to the BTfarmers from the LFs with a 20 per cent lesser total cost of production and 3 percent higher cost per quintal. The small farmers spent lower amounts on almost allitems of production. Surprisingly, the seed cost per acre of small farmers growingBT cotton is also lower by 27 per cent compared to the large farmers growing BTcotton indicating that the small farmers might have gone for unofficial BT seeds.They also spent 18 per cent less on insecticides compared to large farmers growingBT cotton.

The small farmers got lower net income by four times compared to the large farmersin BT cultivation. The farm business income is also lower by 37 per cent in case ofsmall farmers growing BT cotton compared to the LFs growing the same cotton.On the other hand, the SFs growing BT cotton have significantly improved theirposition compared to the non-BT growing SFs. They got a 10 per cent higher yieldcompared to SFs growing non-BT cotton and average cost per quintal is also lowerby12 per cent. The net income improved by 69 per cent and farm business incomeimproved by 108 per cent. This clearly shows that the small farmers are better offwith BT cotton than without BT cotton. On the whole, the small farmers are doingworse compared to the large farmers vis-à-vis SC farmers against OC farmers.


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Costs and Returns in Official and Unofficial BT Cotton

The official BT cotton yielded 24 per cent more than unofficial BT. But, the cost ofproduction in official BT cotton was higher by 37 per cent than the unofficial BTcotton (Table 4.10). The costs of seed, pesticides, fertilizers, labour and all othersare lower in unofficial BT cotton. The fixed costs are also more in official BTcotton by 25 percent, as many of the farmers opting for unofficial BT cotton happenedto be small farmers and SCs. Therefore, the average costs are lower in unofficialBT cotton than BT cotton. Because of this the net income viz., gross income overCost C

2, is slightly higher in unofficial BT cotton than the official one. However,

the farm business income, which indicates the excess of gross income over paid-upcosts, is 26 per cent higher in official BT cotton. The farm investment income,which shows the excess of gross income over paid-up costs and family labour costs,is also higher by 18 per cent over unofficial BT cotton.

Costs and Returns in Irrigated and Unirrigated BT Cotton

The performance of BT cotton under irrigated conditions is much better comparedto BT cotton in unirrigated conditions expectedly and yielded 35 per cent higherthan the latter (Table 4.11). While the BT cotton in irrigated conditions yielded 35per cent higher than non-BT cotton in the same conditions, the BT cotton inunirrigated conditions gave 28 per cent higher yield compared to the non-BT insimilar unirrigated conditions.

The cost of production is higher by 14 per cent in BT cotton in irrigated conditionsover the non-Bt cotton under same conditions. On the other hand, the farmers underirrigated conditions have spent 9 per cent more than BT cotton in unirrigatedconditions. The cost of insecticides was lower by 20 per cent and 17 per centrespectively in irrigated and unirrigated BT cottons over their non-BT cottons. Onthe whole, the costs of production of both irrigated and unirrigated BT cottonexceeded that of their non-BT cotton by 14 per cent and 18 per cent.

The higher yield performance of BT cotton under both the conditions made theaverage total costs lower under both conditions and consequently average cost ofproduction is lower. The BT cotton in irrigated conditions covered all costs includingCost C2 and gained a net income of Rs.981 per acre and 176 per cent higher thanBT cotton under rain-fed conditions, whereas BT cotton in unirrigated conditionscould not cover all costs. It can be observed from the Table 4.11 that even theirrigated non-BT could not cover all costs. The farm business income in irrigatedBT is Rs. 6512 and 77 per cent higher than BT under rain-fed conditions.


Table 4.10: Costs and Returns in Official and Unofficial BT Cotton

Item Official Unofficial BT CottonBT Cotton BT Cotton

Casual labour 1863 1625 1779.7Attached labour 309.96 51.66 217.74Family labour 1291 826.26 1128Total human labour 3464 2502.9 3125.4Bullock labour 932 725 859.48Machine labour 751 627 707.6Seed 1623 993 1402.2Fertilisers 1685 1384 1579.2Total fertilisers 2405 1520 2094Manure 720 136 514.76Insecticides 2946 2167 2673Irrigation charges 138 24 98.25Interest on working capital 457.67 326.96 411.83Miscellaneous 149 117 94.3Operational cost 12866 9002.9 11466Rental value of owned land 3987.4 2809.4 3607.1Rent paid for leased-in-land 766.51 757.18 753.41Land revenue 80 74 77.92Depreciation on impl&bldgs 265 262 276Interest on fixed capital 720 750 794Fixed costs 5818.9 4652.6 5508.5Cost of production 18685 13655 16975Cost A1 11920 8512.6 10692Cost A2 12686 9269.8 11445Cost B1 13406 10020 12239Cost B2 17394 12829 15847Cost C1 14697 10846 13367Cost C2 18685 13655 16975Physical yield in quintals 10.18 8.19 9.49Cost A1/quintal 1170.9 1039.4 1126.7Cost A2/quintal 1246.2 1131.8 1206.1Cost B1/quintal 1316.9 1223.4 1289.7Cost B2/quintal 1708.6 1566.4 1669.8Cost C1/quintal 1443.7 1324.3 1408.6Cost C2/quintal 1835.4 1667.3 1788.7Average price per quintal 1779 1659 1750.4

Farm business measures

Gross income in Rs. 18110 13587 16612Net income -574.31 -68.27 -363Farm business income 5424.1 4317.4 5166.1Family labour income 716.71 757.99 765.01Farm investment income 4133.1 3491.2 4038.2


Table 4.11: Costs and Returns in BT and Non-BT Cotton in Irrigated andRainfed Conditions

Item BT Cotton Non-BT Cotton

Irrigated Rainfed Irrigated Rainfed

Casual labour 2022 1610 1821 1246Attached labour 206.6 206.64 148.23 122.4Family labour 1110 1161.9 856.57 840.1Total human labour 3339 2978.5 2825.8 2209Bullock labour 759 929 826 875Machine labour 755 674 619 565Seed 1475 1351 649 563Fertilisers 1640 1536 1660 1564Manure 480 539 418 398Total fertilisers 2120 2075 2078 1962Insecticides 3088 2382 3841 2883Irrigation charges 146 65 55 53Interest on working capital 443.2 389.75 421.38 350.3Miscellaneous 144 133 129 54Operational cost 12269 10977 11444 9514Rental value of owned land 4311 3112.2 3251.4 2359Rent paid for leased-in-land 807.3 715.8 490.05 539.2Land revenue 37 107 25 75Depreciation on impl&bldgs 288 256 256 231Interest on fixed capital 805 699 798 688Fixed cost 6248 4890 4820.4 3892Cost of production 18517 15867 16265 13406Cost A1 12178 10178 10869 8980Cost A2 12985 10894 11359 9519Cost B1 13790 11593 12157 10207Cost B2 18101 14705 15408 12566Cost C1 14206 12755 13013 11047Cost C2 18517 15867 16265 13406Physical yield in quintals 11.18 8.3 8.29 6.48Cost A1/quintal 1089 1226.3 1311.1 1386Cost A2/quintal 1161 1312.6 1370.2 1469Cost B1/quintal 1233 1396.8 1466.4 1575Cost B2/quintal 1619 1771.7 1858.6 1939Cost C1/quintal 1271 1536.8 1569.8 1705Cost C2/quintal 1656 1911.7 1962 2069Average price per quintal 1744 1757 1719.4 1704


Gross income in Rs. 19498 14583 14253 11040Net income 980.5 -1284.2 -2011 -2366Farm business income 6512 3688.9 2894.8 1521Family labour income 1397 -122.33 -1155 -1526Farm investment income 5402 2527 2038.2 681


Costs and Returns in Black and Other Soils

The cultivation of BT cotton in different soils affords us an opportunity to see if theperformance in black soils is significantly better than that in non-black soils viz.,other soils. The details are presented in Table 4.12 with this intention.

It can be observed from the table that there is no considerable difference betweenBT cotton grown in black and other soils. However, the BT cotton in black soilsperformed slightly better. The operational costs, total cost of production and costper quintal is higher by only 2 per cent in black soils over BT in other soils. Thephysical yield is almost same. But the farmers of BT cotton could get slightly higherprice (3%). Therefore, the net income improved by 17 per cent for farmers of BTcotton in black soils, though farmers of BT cotton in both types of soils could notcover all costs. The farm business income is higher by 4 per cent in black soilscompared to BT in other soils.

On the other hand, as is observed in all the other categories, the BT farmers in blacksoils as well as in other soils outperformed non-BT farmers in the respectivecategories. Whereas BT cotton in black soils yielded 30 per cent more than itscounterpart non-BT, BT cotton in other soils resulted in a 38 per cent hike in yield.The improvement in net income is 85 per cent and 83 per cent respectively in BTcotton in black soils and other soils compared over its respective non-BT cotton.


Table 4.12: Costs and Returns in BT and Non-BT Cotton inDifferent Soils


Black Soils Other Soils Black Soils Other Soils

Casual labour 1800 1689 1509 1385Attached labour 206.64 206.64 122.43 122.43Family labour 1136.1 1178.3 840.13 825.12Total human labour 3142.74 3074 2471.6 2332.6Bullock labour 849 860 851 867Machine labour 708 707 598 554Seed 1384 1490 614 555Fertilisers 1580 1580 1582 1661Manure 490 632 383 468Total fertilisers 2070 2212 1965 2129Insecticides 2737 2378 3343 3055Irrigation charges 103 77 51 60Interest on working capital 413.63 404.83 382.21 369.38Miscellaneous 138 137 73 98Operational cost 11545.4 11340 10349 10020Rental value of owned land 3628.06 3493.6 2758.3 2588.5Rent paid for leased-in-land 751.33 766.82 522.35 523.66Land revenue 83 54 38 104Depreciation on impl&bldgs 249 257 265 272Interest on fixed capital 768 728 775 756Fixed cost 5479.39 5299.4 4358.6 4244.2Cost of production 17024.8 16639 14707 14264Cost A1 10741.3 10472 9811.6 9570.8Cost A2 11492.6 11239 10334 10094Cost B1 12260.6 11967 11109 10850Cost B2 15888.7 15461 13867 13439Cost C1 13396.7 13146 11949 11676Cost C2 17024.8 16639 14707 14264Physical yield in quintals 9.49 9.48 7.31 6.91Cost A1/quintal 1131.85 1104.7 1342.2 1385.1Cost A2/quintal 1211.02 1185.6 1413.7 1460.8Cost B1/quintal 1291.95 1262.4 1519.7 1570.3Cost B2/quintal 1674.25 1630.9 1897 1944.9Cost C1/quintal 1411.66 1386.7 1634.6 1689.7Cost C2/quintal 1793.97 1755.2 2012 2064.3Average price per quintal 1758 1712 1709.6 1715.8


Gross income in Rs. 16683.4 16230 12497 11856Net income -341.34 -409.4 -2209.9 -2408.3Farm business income 5190.82 4990.5 2163.5 1761.4Family labour income 794.76 768.91 -1369.8 -1583.2Farm investment income 4054.72 3812.1 1323.3 936.24

5.1. Impact on Employment

While additional income generation is very important for the farming communityas a result of new technologies like BT cotton, the creation of additional employmentfor the labour is no less significant for the rural economy as whole and landlesslabourers in particular. If the new technology increases the net income to the farmerand at the same time reduces the need for labour, the net effect on the rural economymay not be positive. Therefore, the labour requirement for BT cotton and non-BTcotton are analysed and given in Table 5.1.

Table 5.1: Human Labour Utilisation in BT Cotton and Non-BT Cotton

Item BT Cotton Non-BT Cotton All sample

Casual labour

Male 2.61 3.09 2.77Female 48.80** 38.75 45.32Children 5.34* 3.46 4.69Total man-days equivalent 37.81** 30.65 35.33

Family labour

Male 14.71* 12.75 14.03Female 14.03* 12.36 13.45Children 0.37 0.36 0.36Total man-days equivalent 24.25** 21.17 23.18

Attached labour

Male 4.17* 2.98 3.76Female 0.09 0.22 0.14Children - - -Total man-days equivalent 4.23* 3.13 3.85

Total labour utilized

Male 21.49* 18.82 20.56Female 62.92** 51.33 58.91Children 5.71* 3.82 5.05Total man-days equivalent 66.29** 54.95 62.36

Note : * and ** indicates significance at 1 percent and 5 percent, respectively

5. Employment and Perceptions


The total man-days equivalent (TMDE) for human labour (including casual, familyand attached labour) for BT cotton are 66.29 and are 21 per cent higher than non-BT cotton (Table 5.1). Out of this increase, hired labour, family labour and attachedlabour accounted for 63, 27 and 10 per cent, respectively. While the major beneficiaryof this increase is hired labour, there is also increase in the use of family labour andattached labour to a certain extent. The female labourers are the major beneficiariesamong casual labourers. They got 10.05 days more of employment due to BT cottoncultivation. On the other hand, the increase in utilization of children in the labourforce in BT cotton is a cause of worry, as it is perpetuating the existing evil. Thedetailed operation-wise employment is shown in Appendices 1,2 and 3. It can beobserved from them that the increase in female labour participation is due toincreased utilization mainly in harvesting and weeding.

The wages paid to hired casual labour are shown in Table 5.2. The wages paid tothem increased by 17 per cent in BT cotton compared to non-BT cotton. The femalelabourers accounted for 81 per cent of this increase in wages followed by childrenwith 17 per cent and male labourers with 2 per cent. It can be concluded, from theforegoing analysis that the introduction of BT cotton has a positive impact onemployment. The major beneficiaries of this increase is for the hired labour andamong them women workers.

Table 5.2: Wages Paid to Hired Labour in BT Cotton andNon-BT Cotton

Sl.No Item BT Cotton Non-BT Cotton All Sample

1 Male 160.72 154 158.39

2 Female 1469.93 1225.25 1385.14

3 Children 149.08 97.06 131.05

Total 1779.73 1476.31 1674.58

The reduction of pesticidal sprays entails lower labour requirements and therefore,the utilization of labour declines on the whole in Bt cotton. This is the experiencein most of the countries where Bt is cultivated. But, in countries, where Bt is pickedmanually, higher yields with Bt leads to increased labour requirements. Therefore,Qaim and Matuschke (2004) hypothesized that the net effect on labour is ambiguous.In other studies on India [Qaim (2003) and Qaim et al., 2006)], it was found that thetechnology increased labour requirements. The present study also showed that theBt cultivation increases employment as there is yield increase to a tune of 32 percent and this cotton is plucked manually in the state.


Employment Across Districts

The employment opportunities to human labour increased with BT cotton cultivationin all the districts, though not uniformly (Table 5.3). The percent increase over non-BT is the highest in Warangal (40.22%) followed by Kurnool (22.29%), Nalgonda(18.69%) and Guntur (4.0%). The number of total man-days equivalent is also veryhigh in Warangal (88.41). The hired labour got a major share of this increase inhuman labour utilization in all the districts. The share of hired labour in Guntur,Kurnool, Nalgonda and Warangal is 115 per cent, 105 per cent, 74 per cent and 51per cent, respectively. In Warangal district, the increase in employment due to BTcultivation is also shared by family labour. The practice of attached labour is almostnon-existent in Guntur and Kurnool.

10 The employment elasticity is obtained by dividing the percent change in employment inBT cotton over non-BT cotton with percent change in agricultural output growth in BTcotton over non-BT cotton.


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411

.36

12.1

713

.84

11.0

111

.06

13.7

Chi

ldre

n0.

380.

300.

370.

490.

280.

121.

080.

21To

tal

man

-day

s eq

uiva

lent

32.3

720

.45

19.0

721

.85

23.8

418

.69

18.8

723

.58

Att

ache

d la

bour

Mal

e9.

243.

140.

01.

265.

412.

410.

00.

0Fe

mal

e0.

220.

060.

00.

010.

230.

00.

730.

0C

hild

ren

00

00

00

00

Tota

l m

an-d

ays

equi

vale

nt9.

393.

180

1.27

5.56

2.41

0.49

0

Tota

l lab

our

utili

zed

Mal

e32

.15

18.3

313

.73

15.8

922

.117

.15

16.4

615

.08

Fem

ale

79.8

261

.51

52.9

542

.858

.33

50.5

546

.14

32.0

4C

hild

ren

6.09

6.03

2.87

8.56

4.13

3.35

2.62

6.78

Tota

l m

an-d

ays

equi

vale

nt88

.41

62.3

550

.47

48.7

063

.05

52.5

348

.53

39.8

3


Table 5.4: Employment Elasticities in BT Cotton over Non-BT Cotton

District Per cent Change Per cent change Employmentin yield in BT cotton in employment in elasticityover non-BT cotton BT cotton over

non-BT cotton

Warangal 40.05 40.22 1.00

Nalgonda 30.21 18.69 0.62

Guntur 18.85 4 0.21

Kurnool 85.85 22.29 0.26

Total sample 31.62 20.64 0.65

The employment elasticities10 have been worked out and presented in Table 5.4. Itcan be seen from the table that the employment elasticity in BT cotton cultivation is0.65. It implies that one percent growth in yield due to BT cotton over non-BTcotton cultivation results in 0.65 per cent increase in employment. The employmentelasticity in Warangal is the highest with 1.00 meaning that one per cent growth inyield in BT cotton leads to one per cent increase in employment.

Employment in Irrigated and Rain-fed Conditions

There is no considerable difference in irrigated Bt cotton over rain fed BT cotton(Table 5.5). The increase in employment in irrigated BT is only 2.82 per cent.However, BT cotton in both irrigated and rain-fed conditions outperformed non-BT in the utilization of human labour. While the irrigated BT utilized 13 per centhigher human labour over irrigated non-BT, rain fed BT provided higher employmentby 26 per cent compared to rain fed non-BT. This increase in human labour utilizationis mostly for casual labour. The increase in casual labour accounted for 68 per centand 62 per cent in case of irrigated BT and rain-fed over their respective non-BTcotton crops.


Table 5.5: Human Labour Utilisation in Irrigated and Rainfed

Item BT Cotton Non-BT Cotton All sample

Irrd. Rain-fed Irrd. Rain-fed

Casual labour

Male 3 2 4 2 2.77Female 51 47 43 36 45.32Children 5 6 3 4 4.69Total man-days equivalent 39.5 36.33 34.17 28 .5.33

Family labour

Male 15 15 13 13 14.03Female 13 15 12 12 13.45Children 0 0 1 0 0.36Total man-days equivalent 23.67 25 21.5 21 23.18

Attached labour

Male 4 4 3 3 3.76Female 0 0 1 0 0.14Children 0 0 0 0 -Total man-days equivalent 4 4 3.67 3 3.85

Total labour utilized

Male 22 21 20 18 20.56Female 64 62 56 48 58.91Children 5 6 4 4 5.05Total man-days equivalent 67.17 65.33 59.33 52 62.36


Employment Across Social Categories and Size Groups

The maximum percent change in employment in BT cotton over non-BT cottoncultivation viz., 71.90, can be observed in large farmers followed by medium farmers(14.61%) among size groups (Table 5.6). There was no growth of employment incase of small farmers. In case of social categories, the per cent change is the highestin case of OCs with 23.69 per cent followed by BCs (20.65%) and SCs (17.43%).Among all these categories, the small farmers cultivated their BT cotton with theleast number of total man-days equivalent viz., 58.98, whereas the maximum (71man-days equivalent) could be observed in case of large farmers, medium farmersand BC farmers.

The increase in employment went mainly to the hired labour to an extent of 89 percent and 70 per cent in case of OC farmers and large farmers, respectively. Theincrease in employment in case of SCs (76.23%) and medium farmers (61.64%)went mainly to the family labour. They could better utilize their own family labourto undertake increased labour needs for agricultural operations in BT cotton. Thishelps them to get more of the returns from the cultivation of BT cotton. On theother hand, the maximum increase in labour utilization and major share of it goingto hired labourers in case of large farmers result in percolation of the benefits of theBT technology to the labourers also.

5.2. Perceptions of Farmers

While 83 per cent of the farmers in the sample have grown BT cotton for the firsttime in 2004-2005, 84 per cent of the farmers have grown BT cotton again in 2005-2006 and another 5 per cent are willing to use the BT cotton (Table 5.7). It wasfound that major traits, the adopters expected in the BT cotton, are higher yield(79%11), lesser expenditure (43%) and lower insecticidal sprays (16%). There is noresistance at all from the neighbouring farmers for growing BT cotton. Among theadopters, very few (2.1%) knew about other possible transgenic crops. The majorproblems in the cultivation of BT cotton according to the adopters are high cost ofseeds (41%), lower yield than expected (21%), unavailability of quality BT seeds(18%) and lack of awareness (11%) and non-control of the target pest (5%). It canbe concluded from this that the cost and availability of seeds are the major problems.The suggestions according to them are making quality seeds available at affordable

11 Figures in the parantheses in this sub-section indicated percent of farmers, expressing theperception.


ble

5.6:

Hum

an L

abou

r U

tilis

atio

n A

mon

g D

iffe

rent

Soc

ial a

nd S

ize

Cat

egor

ies

of F

arm

ers

BT

Cot

ton

Non

-BT

Cot

ton

Item

SC&

STB

CO

CS

FM

FL

FSC

&ST

BC

OC

SF

MF

LF

Cas

ual l

abou

r

Mal

e1.

522.

533.

062.

222.

413.

281.

554.

442.

492.

214.

952.

01Fe

mal

e36

.92

48.9

52.9

740

.52

51.8

755

.77

34.2

741

.31

38.3

641

.84

43.3

230

.28

Chi

ldre

n5.

845.

485.

064.

134.

947.

263.

473.

03.

923.

454.

262.

56To

tal

man

-day

s eq

uiva

lent

29.0

537

.87

40.9

031

.30

39.4

644

.09

26.1

333

.48

30.0

231

.83

35.9

623

.48

Fam

ily la

bour

Mal

e20

.98

16.5

910

.97

16.2

316

.72

10.7

415

.76

14.0

99.

916

.71

13.2

77.

79Fe

mal

e18

.92

16.7

810

.10

15.3

915

.99

10.3

216

.23

13.9

68.

8417

.012

.63

6.97

Chi

ldre

n0.

700.

380.

240.

450.

320.

310.

220.

570.

210.

290.

570.

20To

tal

man

-day

s eq

uiva

lent

33.9

427

.97

17.8

226

.72

27.5

417

.78

26.6

923

.68

15.9

028

.18

21.9

812

.54

Att

ache

d la

bour

Mal

e0.

874.

944.

740.

973.

768.

531.

741.

545.

050.

673.

385.

06Fe

mal

e0.

310.

060.

040

00.

300

00.

540.

00.

630.

0C

hild

ren

00

00

00

00

00

00.

0To

tal

man

-day

s eq

uiva

lent

1.08

4.98

4.77

0.97

3.76

8.73

1.74

1.54

5.41

0.67

3.8

5.06

Tota

l lab

our

utili

zed

Mal

e23

.37

24.0

618

.77

19.4

222

.89

22.5

519

.05

20.0

717

.44

19.5

921

.614

.86

Fem

ale

56.1

565

.74

63.1

155

.91

67.8

666

.39

50.5

55.2

747

.74

58.8

456

.58

37.2

5C

hild

ren

6.54

5.86

5.3

4.58

5.26

7.57

3.69

3.57

4.13

3.74

4.83

2.76

Tota

l m

an-d

ays

equi

vale

nt64

.07

70.8

263

.49

58.9

870

.76

70.6

054

.56

58.7

051

.33

60.6

961

.74

41.0

7


Table 5.7: Perceptions of BT Farmers in the Selected Districts

S.No Item Warangal Nalgonda Guntur Kurnool A.P

1 Per cent growing BT for the 1st time 83.4 83.5 95.9 61.2 83.1

2 Reasons for growing- Higher yield 79.7 75.6 75.7 85.7 78.5Lesser expenditure 48.1 34.6 50.0 34.7 43.0Low insecticide requirement 21.9 6.3 17.6 14.3 15.8

3 Per cent reporting BT cotton to bebeneficial 92.0 83.5 83.8 61.2 84.7

4 Reasons for being beneficial

a. Higher yield 70.1 65.4 58.1 53.1 64.8

b.Lower cost of insecticides 63.1 46.5 59.5 40.8 55.1

5 Neighbourers objecting BT cottoncultivation 0 0 0 0 0

6 Per cent already grown BT again 90.9 73.2 90.5 73.5 83.8Per cent willing to grow BT again 5.9 3.1 5.4 2.0 4.6

Total 96.8 76.3 95.9 75.5 88.4

7 Per cent reporting to havereceived training 8 3.1 1.4 0 4.6

8 Per cent reporting to have goneon exposure visits 17.1 7.1 9.5 2.0 11.2

9 Per cent reporting visits by govt.inspecting agencies 11.8 14.2 13.5 8.2 12.4

10 Per cent knowing advantages/disadvantages in advance ofgrowing 64.2 66.1 39.2 44.9 58.4

11 Per cent reporting knowledge ofregulatory mechanism at districtand state levels 16.6 18.9 0 24.5 15.3

12 Per cent reporting knowledge ofother transgenics 3.2 2.4 0 0 2.1

13 Problems in BT cultivationHigh cost of seeds 51.3 49.6 20.3 8.2 40.7Low yield compared to expected 12.3 21.3 23.0 46.9 20.6Unavailability of quality BT seeds 14.4 17.7 5.4 49 17.6Lack of awareness 10.7 15.7 0 14.3 10.8Pest not controlled 5.9 0.8 10.8 4.1 5.0

14 Suggestions to overcome problemsMake quality seeds available ataffordable prices 71.7 71.7 58.1 79.6 70.3Create awareness aboutBT cultivation 33.2 35.4 10.8 6.1 27.0Government may supply seeds 8.6 15.0 8.1 8.2 10.3Research to make seeds thatcan control all bollworms 5.9 1.6 12.2 0 5.0


prices (70%), creating awareness about BT cultivation (27%), state intervention inthe supply of seeds (10%) and finally developing seeds resistant to all bollworms(5%).

The BT farmers to have already grown BT again in 2005-2006 and those willing togrow it again are the maximum in Warangal (97%) followed by Guntur (96%) andthe least in Nalgonda and Kurnool (76%). This can be explained by the returns tofarming as explained in fourth chapter. The farmers in Kurnool opined thatunavailability of quality BT seeds (49%) and low yield compared to the expectedyield are the major problems.

The percent of farmers reporting to have received training on BT cultivation is verylow at 5 per cent. None of the BT cotton growers in Kurnool have received trainingon BT cotton cultivation. Nearly half (58%) of the BT cotton growers knew inadvance of cultivation the advantages and disadvantages of growing the crop andthe rest of them have taken up randomly in the hope that the new technology maysave them. The biosafety protocol envisages that the monitoring committees shouldbe set up at the state and district levels. But, very few BT cotton cultivators viz.,only 15.3 per cent heard about them.

It can be observed from Table 5.8 that only 79 per cent of SC-BT farmers and 81per cent of BT farmers from small farmers reported BT cotton to be beneficial.Among large farmers, 96 per cent revealed that BT cotton cultivation is beneficial.The same can be observed in case of growing BT cotton again. In this case, 94 percent of small farmers and 81 per cent of farmers from SCs reported that they wouldcultivate BT again. In fact, 92 per cent of BT small farmers and 79 per cent of Btfarmers from SCs have already grown it in 2005-2006. This is a very high percentageof adoption for any new technology. If farmers from these groups have grown thesame BT cotton in the second year at a high rate, there can not be any other proof ofthe superiority of the technology.


ble

5.8:

Per

cept

ions

of

BT

Far

mer

s ac

ross

Soc

ial C

ateg

orie

s

Sl.N

oIt

emSC

&ST

BC

OC

SFM

FL

FA

ll B

Tgr

ower

s

1Pe

r ce

nt g

row

ing

BT

for

the

1st ti

me

89.7

79.5

82.5

84.0

80.7

85.0

83.1

2R

easo

ns f

or g

row

ing-

Hig

her

yiel

d86

.076

.176

.080

.279

.374

.078

.5L

esse

r ex

pend

iture

40.2

39.2

49.4

44.4

37.3

49.0

43.0

Low

ins

ectic

ide

requ

irem

ent

15.0

13.1

19.5

19.8

11.3

15.0

15.8

3Pe

r ce

nt r

epor

ting

BT

cot

ton

to b

e be

nefi

cial

78.5

85.2

88.3

80.7

82.0

96.0

84.7

4R

easo

ns –

Hig

her

yiel

d62

.666

.564

.359

.964

.774

.064

.8L

ower

cos

t of

inse

ctic

ides

57.9

50.6

58.4

51.3

55.3

62.0

55.1

5N

eigh

bour

ers

obje

ctin

g B

T c

otto

n cu

ltiva

tion

00

00

00

06

Per

cent

alr

eady

gro

wn

BT

aga

in79

.485

.285

.191

.881

.391

.083

.8Pe

r ce

nt w

illin

g to

gro

w B

T a

gain

1.9

4.0

7.1

2.1

6.0

7.0

4.6

Tota

l81

.389

.292

.293

.987

.398

.088

.47

Per

cent

rep

ortin

g to

hav

e re

ceiv

ed tr

aini

ng2.

85.

15.

22.

75.

37.

04.

68

Per

cent

rep

ortin

g to

hav

e go

ne o

n ex

posu

re v

isits

2.8

11.9

16.2

9.6

12.7

12.0

11.2

9Pe

r ce

nt r

epor

ting

visi

ts b

y go

vt. i

nspe

ctin

g ag

enci

es11

.210

.814

.911

.212

.015

.012

.410

Per

cent

kno

win

g ad

vant

ages

/dis

adva

ntag

es in

adv

ance

of

grow

ing

40.2

66.5

61.7

55.1

60.0

62.0

58.4

11Pe

r ce

nt r

epor

ting

know

ledg

e of

regu

lato

ry m

echa

nism

at d

istr

ict a

nd s

tate

leve

ls11

.214

.818

.812

.314

.722

.015

.312

Per

cent

rep

ortin

g kn

owle

dge

of o

ther

tra

nsge

nics

1.9

1.1

3.2

1.6

3.3

1.0

2.1

13Pr

oble

ms

in B

T c

ultiv

atio

n H

igh

cost

of

seed

s37

.446

.636

.442

.844

.032

.040

.7L

ow y

ield

com

pare

d to

exp

ecte

d27

.119

.916

.921

.420

.719

.020

.6U

nava

ilabi

lity

of q

ualit

y B

T s

eeds

20.6

18.2

14.9

1617

.320

.017

.6L

ack

of a

war

enes

s11

.213

.617

.113

.98.

78.

010

.8Pe

st n

ot c

ontr

olle

d2.

84.

57.

15.

34.

06.

05.

014

Sugg

estio

ns t

o ov

erco

me

prob

lem

sM

ake

qual

ity s

eeds

ava

ilabl

e at

aff

orda

ble

pric

es74

.873

.363

.671

.769

.369

.070

.3C

reat

e aw

aren

ess

abou

t BT

cul

tivat

ion

26.2

23.3

31.8

27.8

27.3

25.0

27.0

Gov

ernm

ent m

ay s

uppl

y se

eds

7.5

14.2

7.8

9.1

9.3

14.0

10.3

Res

earc

h to

mak

e se

eds

that

can

con

trol

all

bollw

orm

s1.

95.

76.

54.

86.

04.

05.

0


The farmers of non-BT cotton revealed that the high cost of seeds (55.4%), lackawareness (54.3%), fear of fertility depletion (9.1%) and perception that BT cottonhybrids are not suitable for high rainfall conditions (5.9%) as the reasons for notgrowing BT cotton (Tables 5.9 and 5.10). The farmers of BT and non-BT are alikein respect of certain non-pesticide and agronomic measures like phermone traps,bird perches, spray of NPV solution etc, negating the fears that BT cotton may notbe compatible with other non-pesticidal control measures. The major problem incotton cultivation in both BT and non-BT cotton growers is that they are sprayingpesticides either as a precautionary measure or on noticing pest without any regardto the economic threshold levels of the pest. Therefore, the cost of the pesticide islikely to be more than the benefit caused due to control of pest in many cases.

Table 5.9: Perceptions and Some Features of Cultivation in BT andNon-BT Cotton


Why not grown

High cost of seeds NA 55.4Lack of awareness NA 54.3Fear of fertility depletion NA 9.1Not suitable for high rain conditions NA 5.9Percent erecting phermone traps 19.5 12.9Per cent erecting bird perches 25.4 20.4Per cent knowing NPV 2.7 2.73Spray as precautionary measure 27.7 27.9Spray on noticing pest 68.1 65.6Spray on noticing damage 4.2 5.5Average expenditure on health in previous year 4719 6441Health problems at the time of spray 25.4 27.4Average expenditure on education in previous year 7519 392Per cent reporting drinking habit 62.0 78.7Drink daily 24 27.9Drink weekly 46.1 44.3

NA- Not applicable


ble

5.10

: P

erce

ptio

ns a

nd S

ome

Fea

ture

s of

Cul

tiva

tion

of

BT

and

Non

-BT

Cot

ton

Far

mer

s ac

ross

Dis

tric

ts

Item

BT

Cot

ton

Non

-BT

Cot

ton

WG

LN

LG

GN

TK

NL

WG

LN

LG

GN

TK

NL

Why

not

gro

wn

Hig

h co

st o

f se

eds

52.0

54.1

55.2

71.4

Lac

k of

aw

aren

ess

53.3

52.5

79.3

28.6

Fear

of

fert

ility

dep

letio

n21

.30

3.4

9.1

Not

sui

tabl

e fo

r hi

gh r

ain

cond

ition

s5.

39.

83.

40

Perc

ent

erec

ting

pher

mon

e tr

aps

31.0

12.6

13.5

2.0

24.0

8.2

3.4

0

Per

cent

ere

ctin

g bi

rd p

erch

es39

.616

.56.

822

.437

.311

.50

14.3

Per

cent

kno

win

g N

PV5.

31.

60

05.

31.

60

0

Spra

y as

pre

caut

iona

ry m

easu

re25

.033

.328

.422

.227

.026

.734

.525

.0

Spra

y on

not

icin

g pe

st66

.365

.971

.675

.663

.566

.765

.570

.0

Spra

y on

not

icin

g da

mag

e8.

70.

80

2.2

9.5

5.0

00

Ave

rage

exp

endi

ture

on

heal

th in

pre

viou

s ye

ar72

1972

0383

9176

4951

3566

8935

1414

429

Hea

lth p

robl

ems

at th

e tim

e of

spr

ay26

.227

.633

.84.

125

.336

.124

.114

.3

Ave

rage

exp

endi

ture

on

educ

atio

n in

pre

viou

s ye

ar13

451

9730

6724

4616

9395

5156

4293

2157

Per

cent

rep

ortin

g dr

inki

ng h

abit

74.9

65.4

25.7

59.2

73.3

70.5

34.5

66.7

Dri

nk d

aily

3016

.910

.524

.134

.527

.935

.521

.4

Dri

nk w

eekl

y46

.455

.415

.837

.941

.851

.230

.042

.9

It was found that the BT cotton technology is superior to the conventional cottonhybrids in terms of yield and net returns. The expenditure on insecticides decreasedby 18 per cent and still the cost of production is 17 per cent higher. The number ofpesticidal sprays have come down from 12 in non-BT cotton to 9 in BT cotton, onan average. The yield is higher by 32 per cent. As a result of this, the cost perquintal is lower by Rs.223 and 11 per cent in BT cotton. Though both BT and non-BT cottons could not cover all costs of the farmers, viz., paid-up and imputed, theBT cotton farmer could improve his net income by 83 per cent over non-BT cotton.It is noteworthy that the realised price of cotton during the year is 21 per cent lessthan previous seven year average and the actual rainfall in the study area is 33 percent less than the normal rainfall. These two factors might have combined to reducethe profitability to both BT and non-BT farmers. The analysis using productionfunctions revealed that there can be a 36 per cent increase in yield in Bt cottoncultivation compared to the non-Bt cotton. This is explained in the damage controlframework. This validates the hypothesis that there can be considerable yield effectsin tropical countries, where the pest pressure cannot be controlled otherwiseeffectively. The districts of Warangal and Guntur performed better compared toNalgonda and Kurnool in the same order. But, in all these districts, BT outperformednon-BT cotton. The BT cotton farmers from SCs obtained 10 per cent lesser yieldand 9 per cent higher cost per quintal than the OC-BT farmers and could not covercost C. But the BT-SC farmers got 40 per cent more yield than their non-BT counterparts. The small farmers are also better off with BT cotton than without BT cottonsituation. On the whole, the small farmers are doing worse compared to the largefarmers vis-à-vis SC farmers against OC farmers. The study also proved that manyof the small farmers and SC farmers participated in using the technology andimproved their position with regard to profitability by growing BT cotton.

The total man-days equivalent for human labour (includes hired labour, family labourand attached labour) for BT cotton are 66.29 and 21 per cent higher than non-BTcotton; and out of this increase, hired labour, family labour and attached labouraccounted for 63,27 and 10 per cent, respectively. While the major beneficiary ofthis increase is hired labour, there is also increase in the use of family labour andattached labour to a certain extent. The female labourers are the major beneficiariesamong casual labourers. They got 10.05 days more of employment due to BT cottoncultivation. The employment elasticity for BT cotton is found to be 0.65, meaningthat one percent growth in BT cotton yield over non-BT cotton increases employment

6. Conclusions


by 0.65 per cent. This validates the second hypothesis that there can be considerablepositive impact on employment where the cotton is picked manually.

It was found that only 63 per cent of the BT cotton farmers have grown refugecrops. Though good percent of BT farmers have grown refuge in Warangal (84%)and Nalgonda (78%), the farmers in Guntur (27%) and Kurnool (2%) have notcared to grow it. This practice is almost non-existent in Kurnool. The farmersrevealed that they have now stopped growing refuge, though they cultivated it insome rows in the first year. They feared losing some portion of their land and furtherthey observed that the bollworm attack is very heavy for the refuge rows, which inturn makes it necessary to spray some chemicals. If this trend on non-observance ofrefuge rows increases further in BT cotton cultivation, the selection pressure forthe pest may increase, as it faces BT cotton in thousands of acres in contiguousareas. Finally, it may lead to development of full resistance in 8-10 years as thescientists warned.

While 83 per cent of the farmers in the sample have grown BT cotton for the firsttime in 2004-2005, 84 per cent of the farmers have grown BT cotton again in2005-2006 and another 5 per cent are willing to use the BT cotton. It was found thatmajor traits, the adopters expected in the BT cotton, are higher yield (79%), lesserexpenditure (43%) and lower insecticidal sprays (16%). There is no resistance atall from the neighbouring farmers for growing BT cotton. Among the adopters,very few (2.1%) knew about other possible transgenic crops. The major problemsin the cultivation of BT cotton according to the adopters are high cost of seeds(41%), lower yield than expected (21%), unavailability of quality BT seeds (18%)and lack of awareness (11%) and non-control of the target pest (5%). It can beconcluded from this that the cost and availability of seeds are the major problems.The suggestions according to them are making quality seeds available at affordableprices (70%), creating awareness about BT cultivation (27%), state intervention inthe supply of seeds (10%) and finally developing seeds resistant to all bollworms(5%). The farmers of BT and non-BT are alike in respect of certain non-pesticideand agronomic measures like phermone traps, bird perches, spray of NPV solutionetc, negating the fears that BT cotton may not be compatible with other non-pesticidalcontrol measures. The major policy implication from this study is that quality BTseeds should be made available to the farmers at affordable rates to increase the useby small farmers and to increase their profitability. Then the creation of awarenesson BT cultivation is also very important and it should be undertaken by thegovernmental agencies. The profitability of both BT and non-BT farmers are erodedby the depressing prices and so the government should introduce variable importtariffs according to the movement of international prices.


The Bt cotton seeds of high quality should be made available to the farmers ataffordable rates to increase the use by small farmers and to increase their profitability.Then the creation of awareness on Bt cultivation is also very important and it shouldbe undertaken by the governmental agencies. The adopters also asked for varietiesinstead of hybrids for recycling of seeds. Further, they also wanted that the hybrid/variety should be resistant to all bollworms since Spodoptera larvae as well as pinkbollworms are causing considerable damage. These issues may be considered bythe policy makers at the governmental level.


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Apprendix 4 : Study Area in Warangal District


Appendix 5 : Study Area in Nalgonda District


Appendix 6 : Study Area in Guntur District


Appendix 7 : Study Area in Kurnool District

About Authors

Prof. S. Mahendra Dev is currently Director, Centre for Economic and Social Studies,Hyderabad. He did his Ph.D from the Delhi School of Economics and his Post-doctoralresearch at the Economic Growth Centre, Yale University and was faculty member at theIndira Gandhi Institute of Development Research, Mumbai for 11 years. He was SeniorFellow at Rajiv Gandhi Foundation during 1996-97 and Visiting Professor at University ofBonn, Germany in 1999. He has written extensively on agricultural development, povertyand public policy, food security, employment guarantee schemes, social security, farm andnon-farm employment. He has more than 70 research publications in national andinternational journals. He is the author of Inclusive Growth in India: Essays on Agriculture,Poverty and Human Development published by Oxford University Press, New Delhi. Hisco-edited books include "Social and Economic Security in India" (published by Institutefor Human Development), "Towards A Food Secure India: Issues & Policies" (publishedby Institute for Human Development (IHD) and Centre for Economic and Social Studies(CESS) , "Andhra Pradesh Development: Economic Reforms and Challenges Ahead"(published by CESS) and "Rural Poverty in India: Incidence, Issues and Policies" (publishedby Indira Gandhi Institute of Development Research (IGIDR)). He has been a consultantand advisor to many international organizations like the UNDP, UNICEF, World Bank,International Food Policy Research Institute, ESCAP. He has been a member of severalgovernment Committees including Prime Minister's Task Force on Employment. He isalso a member of the Committee on 'Financial Inclusion' chaired by Dr.C. Rangarajan.

N. Chandrasekhara Rao is Fellow/Associate Professor at the Centre for Economic andSocial Studies, Hyderabad. Several of his research papers were published in reputed journalsin the field of economics. Also, he received Anamitra Saha Prize Award for the best articlein the Indian Journal of Agricultural Economics, Mumbai in 2004. His areas of researchinterest include agricultural and development economics, employment and poverty reduction.Email: [email protected]

Documents

Socioeconomic Impact of Bt Cotton · 2019. 10. 16. · Categorywise 4.10 Costs and Returns in Official and Unofficial BT Cotton 63 4.11 Costs and Returns in BT and Non-BT Cotton in