07/27/2000

Consumers, Farmers, and Industry Share in Benefits of Genetically Altered Cotton

AUBURN, Ala. - A genetically enhanced insect-resistant cotton plant that hit the market in 1996 has delivered significant economic benefits, not only to farmers and seed companies, but to consumers as well.

Research by the Alabama Agricultural Experiment Station indicates that U.S. consumers enjoyed $22 million in economic benefits in 1996 and another $19 million in '97 as a direct result of transgenic Bt cotton.

The positive punch to consumers' pocketbooks primarily occurred because of the higher yields and continued strong cotton supplies realized with Bt cotton, said Greg Traxler, professor of agricultural economics and rural sociology at Auburn University and co-author of the study. For retail shoppers, that translates into savings on clothing, sheets and other cotton products.

Bt stands for Bacillus thuringiensis, a bacterium that is found in the soil and is toxic only to certain cotton-destroying pests--specifically, the tobacco budworm, cotton bollworm and pink bollworm.

After a decade of research and development, Monsanto Corp. discovered how to "insert" the Bt gene into traditional cotton plants, so that the plants produce their own continuous supply of the insecticide. When destructive caterpillars ingest the Bt-laden leaves, the toxin damages their stomach linings, and they die.

For Alabama farmers, the introduction of the genetically modified cotton in 1996 couldn't have come at a better time. The previous year, their crops had been all but wiped out by budworms and bollworms that had developed a resistance to the pesticides farmers traditionally had used for control.

Bt cotton was literally the last hope of survival for a large number of producers in the state, which explains why Alabama led the nation in accepting the biotech cotton in its debut year. Despite having to pay a $32-per-acre technology fee in addition to the costs of the seeds, Alabama growers in 1996 planted 75 percent of the state's total cotton acreage to the transgenic crop.

The investment paid off. The product's effectiveness in warding off budworms and bollworms yielded Alabama growers an average $147-per-acre return on their investment, due to reduced pesticide use and higher cotton yields.

Traxler said his AAES study showed U.S. farmers overall netted $141 million in economic benefits from Bt cotton in 1996 and $80 million the following year.

"In Alabama, if it hadn't been for Bt cotton, many growers would have been out of the cotton business after that '95 crop year," Traxler said. "That would have been a tremendous blow to the state's economy overall, and it would have impacted the supply."

Of course, Traxler's economic model examining the distribution of benefits from Bt cotton shows Monsanto profited, too, to the tune of $50 million in 1996 and $67 million in 1997. Traxler noted, however, that those numbers don't take into account the hundreds of millions of dollars estimated to have been invested by Monsanto in the development of Bt cotton.

Besides the economic benefits farmers and consumers realize as a result of Bt cotton, environmental advantages abound, Traxler said. Between 1996 and 1998, American cotton farmers cut pesticide usage by about two million gallons due to the inbred insect resistance of the genetically altered cotton.

On non-Bt acres, Alabama growers average six pesticide applications per season for control of budworm and bollworm. In Bt cotton fields, the average is one spray per season.

For the 2000 crop year in Alabama, Bt cotton was planted on approximately 60 percent of the 610,000 acres of cotton planted statewide. Due to the extreme drought, however, a significant number of those acres will not be harvested.

Traxler predicted the amount and distribution of economic benefits to farmers, consumers, and industry should continue to increase as Bt cotton varieties become used more widely in the U.S. and internationally and as new varieties are developed.

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News from:

Office of Ag Communications & Marketing

Auburn University College of Agriculture
Alabama Agricultural Experiment Station
3 Comer Hall, Auburn University
Auburn, AL 36849
334-844-4877 (PHONE) 334-844-5892 (FAX)

Contact Jamie Creamer, 334-844-2783 or jcreamer@auburn.edu

07/27/00