Abstract/Summary

The paper reports the findings of a study designed to consider the impact of the adoption of Bt cotton on markets, businesses, and institutional arrangements in India. Given that evidence to date suggests that widespread adoption of Bt cotton by farmers is likely to increase production, this study aims to assess possible implications for markets (access to inputs, prices of inputs and outputs, etc.) and local industries and to identify potential winners and losers. The results suggest that there are impacts on the cotton industry following from the release of Bt hybrids, and so far the impacts are most noticeable "upstream" (i.e., the input suppliers), where companies are rapidly moving away from the sale of bollworm insecticide and attempting to sell Bt seeds. Seed companies are looking for partnerships with Monsanto, the owner of the Bt gene. One reason that companies are keen to move away from insecticide is so they can avoid the need for credit supply to their customers. Seed purchase is not normally through credit, whereas insecticide purchase is. Issues for companies "downstream" (gins, textile manufacturers) relate more to the better quality of Bt cotton and the need for adequate segregation of Bt and non-Bt cotton.