But increase it substantially in a bad one bad bt

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Unformatted text preview: increases mean yield but reduces variance Bt and especially down side risk-where pesticides are costly and yield losses still may result in bankruptcy result Example 2 Example Potential yield: 6 local variety 4 generic variety Damage 25% with 50% probability 50% with 50% probability Bt eliminates pest damage Adoption of generic Bt Reduces yield from 4.5 to 4 with 50% probability Increases yield from 3.0 to 4 with 50% probability Adoption of local Bt Increases yield from 4.5 to 6 with 50% probability Increases yield from 3.0 to 6 with 50% probability Biotech risk and farm size Biotech The gain in terms of risk bearing cost is main The reason for adoption even in US reason Small farmers that have little access to Small insurance and formal credit market may be beneficial of lower risk beneficial Seed technology has minimal economics of Seed scale, reduce need to invest in pest control equipment and reduce monitoring time- thus may be appealing to small farmer if affordable and Modification is done with a good variety Modification Predicted yield effects of pest controlling Biotech Availabili Regi on Pest pressure ty of chemical alternativ es Developed countries Lowmed L.Am (c ommer cial) China medium medium medium medium high...
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This note was uploaded on 03/18/2010 for the course ECON C125 taught by Professor Zelberman during the Spring '09 term at University of California, Berkeley.

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