On the Effects of Technological Innovation as a Response to Cotton Policy Change: the Case of Bt Cotton in Spain

The 2004 reform of the EU cotton policy significantly reduces the profitability of the crop, with knock-on consequences on the rural economies of producing regions in the EU (i.e. Greece and Spain) and has been suspended in 2006. In this paper we analyse how technological innovation, in the form of genetically modified (GM) insect-resistant cotton varieties (Bt cotton), might help EU cotton farmers to reduce production costs, increase profitability and therefore face the cotton policy reform, should it be reinstated. We start by studying farmers' attitudes towards adoption of Bt cotton varieties through a survey conducted in Andalusia (Southern Spain). The results show a positive attitude of Andalusian cotton farmers towards the Bt cotton varieties. Second, we perform an ex-ante analysis of the economic effects of introducing Bt cotton in Andalusia. To conclude, we integrate the analysis of the effects of Bt cotton with the analysis of the EU cotton reform. Our results show that despite the significant economic benefits of Bt cotton, the current policy reform is likely to jeopardize the profitability of cotton production in the EU.

CEDDIA Michele;  GOMEZ BARBERO Manuel;  RODRIGUEZ CEREZO Emilio; 

2008-12-10

ISSCRI

JRC44303

http://www.isscri.org/conference_may_08/proceedings_publication,    https://publications.jrc.ec.europa.eu/repository/handle/JRC44303,