Source: NORTH CAROLINA STATE UNIV submitted to NRP
THE ECONOMICS OF THE ADOPTION OF AGRICULTURAL TECHNOLOGIES
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
Reporting Frequency
Annual
Accession No.
0188894
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Oct 1, 2001
Project End Date
Sep 30, 2007
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
NORTH CAROLINA STATE UNIV
(N/A)
RALEIGH,NC 27695
Performing Department
AGRICULTURAL AND RESOURCE ECONOMICS
Non Technical Summary
New technology for southeastern crop farms is being introduced rapidly, but rates of adoption differ by technology type. This study examines the differences between transgenic crop and precision farming adoption by North Carolina cotton farmers.
Animal Health Component
85%
Research Effort Categories
Basic
15%
Applied
85%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6011710301085%
6091710301015%
Goals / Objectives
To evaluate and summarize the farm-level economic impacts of transgenic crops in the Southeast. (2) To follow and analyze the adoption process of Bt/Round-up Ready cotton in the Southeast, including the second generation Bt technology to be introduced soon. (3) To follow and analyze the adoption process of precision farming for North Carolina cotton farmers. (4) To compare the adoption patterns for the two technologies in cotton in North Carolina to gain insight as to why the patterns are so different.
Project Methods
(1) Use various literature search techniques and Internet searches, as well as requests of colleagues to gather together the results of field studies and farmer surveys that have information from which farm level economic impacts can be calculated. Compile the information and construct a database for summarizing and analyzing the available data. (2) Using the mailing list from my original survey of southeastern cotton farmers in the initial years of transgenic cotton availability, re-survey the same sample to get information on how their individual adoption patterns have evolved over time, how their acreage of transgenic cotton has changed over time, and how their input use and characteristics of their farm have changed. Questions asking their opinion of the technology, technology pricing, their intentions to adopt the second wave of cotton biotechnologies, and refugia requirements will also be included. Information from the two surveys will be combined to estimate and explain the longitudinal pattern of adoption over time for southeastern cotton farmers. (3) Survey North Carolina cotton farmers to get information on their use of and attitudes about precision farming as it applies to cotton production. Summarize the data, estimate a standard probit adoption model, and estimate an economic model of the willingness to pay for more effective precision farming technology in cotton. Also, an investigation into how the option value and irreversibility literature might apply to this technology will be undertaken. (4) After the studies in objectives 2 and 3 are completed, an attempt will be made to explain the differences in the adoption patterns for the two technologies in North Carolina. This will be mostly a qualitative study, but the fixed cost, irreversibility, option value literature will be explored to attempt to explain the differences using statistical models.

Progress 10/01/01 to 09/30/07

Outputs
OUTPUTS: Project Outputs Project outputs include many written publications, including refereed journal articles, publications for the popular press, and extension publications. Some of the journal articles have been cited many times already. Also, three graduate students earned their Ph.D.s under the auspices of this project, fulfilling some of the project objectives. Also, many presentations to various groups, including extension meetings, professional conferences, and invited talks have been given based on material generated by this project. Some of the journal articles have been cited many times already. PARTICIPANTS: Individuals who worked on the project: Michele C. Marra (Project Director/Principal Investigator) Bailey F. Norwood (Ph.D. student) Olha Sydorovych (Ph.D. student) E. Clifford Mensah (Ph.D. student) Partner Organizations: USDA PIAP Monsanto Company Syngenta, Inc. NSF Center for Integrated Pest Management Cotton, Inc. Collaborators: Gerald A. Carlson Brian Hubbell Nick Piggott Opportunities for Training: Three Ph.D. students studied with me under this project and earned their doctoral degrees. Presentations based on project results and outcomes have been made to grower groups, grower associations, and professional conferences. TARGET AUDIENCES: Target audiences include, depending on what sub-part of the project, farmers, extension agents, private companies, and professional colleagues. The biotechnology adoption part of the project also targeted small and minority farmers, because the technology is scale-neutral and does not require additional skills to begin using it. Precision farming, on the other hand, would be targeting larger growers. PROJECT MODIFICATIONS: No major changes or delays encountered.

Impacts
One of the studies conducted under this Hatch project help lead to a change in an EPA regulation for cotton farmers that allowed them to capture more profit on their cotton farms and reduce pesticide use. The natural refuge requirement was adopted by EPA this summer, in part because of this study. We estimated that North Carolina cotton farmers would gain about $15,000,000 per year from the regulation change. Another study conducted under this Hatch project developed a method for rescaling the values of non-pecuniary characteristics (such as convenience) of biotech crops to eliminate biased responses, thus giving regulators and biotech companies a truer picture of these values, which in some cases are substantial.

Publications

  • Marra, M.C. and S. Martin. 2007. Important Innovations in Cotton Production: An Assessment by U.S. Cotton Growers and Other Experts. Journal of Cotton Science, in press.
  • Sydorovych, Olha and M.C. Marra. 2007. A Genetically Engineered Crops Impact on Pesticide Use: A Revealed-Preference Index Approach, Journal of Agricultural and Resource Economics, accepted for publication.
  • Martin, S., R. Roberts, B. English, M. Marra, and J. Reeves. 2007. Revealed Characteristics of Guidance Systems Adopters in Cotton Production. Crop Management, accepted for publication.
  • Piggott, N. E. and M. C. Marra. 2007. The Net Gain to Cotton Farmers of a Natural Refuge Plan for Bollgard II Cotton. AgBioforum, Jan. pp.1-10.
  • Marra, M.C. and S. Martin. 2007. Important Innovations in Cotton Production: An Assessment by U.S. Cotton Growers and Other Experts. NSF Center for Integrated Pest Management, CIPM Tech Bull. 2007-1.
  • Piggott, N.E. and M.C. Marra. 2007. The Net Gain to NC Cotton Farmers of a Refuge Policy Change. NC State Economist, in press.
  • Mensah, Clifford. 2005. The Market Impact of the Simultaneous Adoption of Complementary Agricultural Technologies. Ph.D. Dissertation, Marra and Wohlgenant, co-chairs of committee.
  • Sydorovych, Olha. 2005. Pesticide Risk Indices: A Revealed Preference Approach. Ph.D. Dissertation, Marra, chair of committee.


Progress 10/01/05 to 09/30/06

Outputs
Work is proceeding rapidly on this project, with journal article preparation being the main focus now. Several journal articles are in preparation or have been submitted to journals on both precision farming and transgenic crop adoption. Our work on the RRFlex Cotton study resulted in accurate predictions of farmer adoption and percent of acres planted in the first year of commercialization. An analysis of the economic value of a natural refuge for Bollgard II cotton in North Carolina was completed and is now in preparation for submission to a journal. Several publications were completed this year, with the book chapter with Nick Piggott being the most significant of these.

Impacts
Marketers, policy makers, and extension educators will be able to target their efforts where needed, based on the relative values placed on different aspects of each new technology.

Publications

  • Marra, M.C. and N.E. Piggott. 2006. The Value of Non-Pecuniary Characteristics of Crop Biotechnologies: A New Look at the Evidence, Chapter 8 in Just, Alston, and Zilberman, eds Regulating Agricultural Biotechnology: Economics and Policy, Springer-Verlag Publishers, New York, pp.145-178.
  • Roberts, R.K., B.C. English, J.A. Larson, R.L. Cochran, W.R. Goodman, S.L. Larkin, M.C. Marra, S.W. Martin, K.W. Paxton, W.D. Shurley, and J.M. Reeves. 2006. Use of Precision Farming Technologies by Cotton Farmers in Eleven States. In D. Richter (eds.), Proceedings of the Beltwide Cotton conferences, San Antonio, TX. January 3-6.
  • Marra, M.C. Use of Precision Farming Technologies by North Carolina Cotton Farmers. 2006. Selected poster, Beltwide Cotton Conferences, San Antonio, TX. January 3-6.


Progress 10/01/04 to 09/30/05

Outputs
Two farm-level surveys were conducted during the period. One sought information about cotton farmers attitudes and perceptions of precision farming technologies. This survey is a follow-up survey to the survey of cotton farmers conducted in 2001. The main findings are: a)On average, North Carolina cotton farmers placed a positive value on precision farming technologies. However, those North Carolina cotton farmers with precision farming experience tended to value both the information gathered from a yield monitor with GPS and the GPS variable rate guidance system lower than those farmers without precision farming experience, b) North Carolina cotton growers tend to obtain their precision farming information from NC cooperative extension and NC State University, c) On average, there was not much change in North Carolina cotton farmers perceptions of their yield variability on their typical cotton fields after they adopted the cotton yield monitor with GPS, and d)The average cotton yield change perceived by those who have adopted a variable rate system was an increase of 16 pounds lint per acre. The other survey sought cotton farmers pre-launch valuations of Roundup Ready Flex cotton. We found that producers valuation of the convenience of the new product was significantly higher than their valuation of either human health and safety benefits or environmental benefits from the technology relative to Roundup Ready cotton.

Impacts
Marketers, policy makers, and extension educators will be able to target their efforts where needed, based on the relative values placed on different aspects of each new technology.

Publications

  • Larkin, S., M. Marra, Roberts, B. English, J. Larson, and S. Martin. 2005. Southern cotton farmers perceptions of environmental benefits from precision agriculture. Journal of Agricultural and Applied Economics, 37(3): 577-588.
  • Roberts, R.K., B.C. English, J.A. Larson, R.L. Cochran, W.R. Goodman, S.L. Larkin, M.C. Marra, S.W. Martin, and W.D. Shurley. 2004. Adoption of site-specific information and variable rate technologies in cotton precision farming. Journal of Agricultural and Applied Economics 36(1): 143-158.
  • Marra, Michele C., Nick Piggott, and Olga Sydorovych. 2005. The Impact of Herbicide Tolerant Crops on North Carolina Farmers. NC State Economist, March/April.


Progress 10/01/03 to 09/30/04

Outputs
The study of NC cotton farmers and the impact that herbicide tolerant cotton varieties (including stacked bt and RR) have had is now complete and the report submitted to the funding agency. A version of the study report is in review as a NCARS technical bulletin. A follow-up study of NC farmers' attitudes toward and adoption of precision farming technology has begun and is scheduled for completion in late 2005. A study of anticipated acceptance of RRFlex cotton is in the final stages. Basically, this project has spawned several funded research projects and has expanded beyond the project first envisioned. Several presentations on this material were given this year. Details follow. Roberts, R., B. English, J. Larson, S. Larkin, M. Marra, S. Martin, and D. Shurley. Factors Affecting Southern Cotton Farmer Adoption of Precision Technology Sooner than Later. International Conference on Precision Agriculture, Minneapolis, MN, August, 2004. Marra, M.C. and G. Frisvold. Measuring Differences in Pesticide Use from GM Crop Adoption. International Consortium of Agricultural Biotechnology Research (ICABR) Annual Conference, Ravello, Italy, July 2004. Piggott, N.E. and M.C. Marra. Aggregate Soybean Supply in the U.S.: The Role of Biotechnology and the Farm Programs. Presentation at the 2004 Australian Agricultural and Resource Economics Society meetings in Melbourne, Australia. Marra, M.C. and N.E. Piggott. Non-Pecuniary Benefits from Roundup Ready Soybean Adoption. Australian Agricultural Economics Society Annual Meeting, Melbourne, Australia, Feb., 2004 Marra, M.C. The Role of Uncertainty in the Willingness to Pay for Cotton Yield Monitors. Beltwide Cotton Conferences, San Antonio, TX, Jan. 2004.

Impacts
Farmers and policymakers will be able to make informed decisions about the total economic effects of these crop biotechnologies with the information generated from this study.

Publications

  • Norwood, Bailey and Michele C. Marra. 2003. Measuring pesticide productivity: Of bugs and biases. Journal of Agricultural and Resource Economics, Vol. 28, No. 3:596-610.
  • Alston, Julian M., Jeffrey Hyde, Michele C. Marra, and Paul D. Mitchell. 2003. An ex-ante analysis of the benefits from the adoption of corn rootworm resistant, transgenic corn technology. AgBioForum 5(3), 71-84.
  • Marra, Michele C., David J. Pannell, and Amir Abadi Ghadim. 2003. The economics of risk, uncertainty, and learning in the adoption of new agricultural technologies: Where are we on the learning curve? Agricultural Systems, 75: 215-234.
  • Marra, M.C. 2004. Review of the Economic and Environmental Impacts of Agbiotech: A Global Perspective, Nicholas G. Kalaitzandonakes, Editor. AgBioForum, 6(3), 144-145.
  • Marra, M.C., N.E. Piggott, and G.A. Carlson. 2004. The Net Benefits, Including Convenience, of Roundup Ready Soybeans: Results from a National Survey. NSF Center for IPM Technical Bulletin 2004-3, Raleigh, NC, September.
  • Marra, M.C., E. Wu, R. Roberts, B. English, J. Larson, S. Larkin, S. Martin. 2004. The Role of Uncertainty in the Willingness to Pay for Cotton Yield Monitors. National Cotton Council, Beltwide Cotton Conferences, San Antonio, TX, January.
  • Marra, M.C., N.E. Piggott, and O. Sydorovych. The Impact of Crop Biotechnology on North Carolinas Farmers. Report to North Carolina Biotechnology Center, Sept. 2004 also in review as an NCARS Technical Bulletin.


Progress 10/01/02 to 09/30/03

Outputs
Several parts of the project were completed this year. An adoption study of precision farming technologies in Southern cotton is in press at the Journal of Agricultural and Applied Economics. The analysis of cotton farmers' willingness to pay for precision technology has been completed and an article submitted to the Journal of Agricultural and Applied Economics. An analysis of the expected pecuniary and non-pecuniary benefits of the corn rootworm resistant corn biotechnology has been completed and an article has been published in AgBioForum. A follow-up study on the willingness to pay for the non-pecuniary benefits of corn rootworm resistant corn is in progress.

Impacts
Farmers and policymakers will be able to make informed decisions about the total economic effects of these crop biotechnologies with the information generated from this study.

Publications

  • No publications reported this period


Progress 10/01/01 to 09/30/02

Outputs
Several parts of the project were completed this year. The analysis of the farm level benefits of transgenic crops is now an article in press at the journal, AgBioForum. The analysis of cotton farmers' willingness to pay for precision technology is in draft form and being readied for submission to the Journal of Agricultural and Applied Economics. An analysis of the non-pecuniary benefits of several technologies to be introduced in the near future is underway.

Impacts
U.S. and international regulators of agricultural biotechnology will be able to make more informed decisions as a result of this project.

Publications

  • Marra, M.C., P.G. Pardey, and J.M. Alston. 2002. The Farm-Level Benefits of Transgenic Crops: A Review of the Evidence. AgBioForum, 5(2): 1-8.
  • Wu, Ellen and M.C. Marra. 2002. North Carolina Cotton Farmers' Precision Farming Preceptions and Practices. NC Agricultural Research Service Technical Bulletin, in press.
  • Alston, J.M., Jeffrey Hyde, and M.C. Marra. 2002. An Ex Ante Analysis of the Benefits from the Adoption of Monsanto's Corn Rootworm Resistant Varietal Technology - YieldGard Rootworm. NSF Center for Integrated Pest Management Technical Bulletin 103, CIPM, Raleigh, NC.


Progress 10/01/00 to 09/30/01

Outputs
A compilation of all the studies from which the economic benefits of transgenic crops can be estimated has been initiated. A report from that work has been submitted to a journal and as a chapter in an IFPRI monograph. The survey of NC farmers about their precision farming practices and perceptions has been completed, the data tabulated, and an initial report is in review. Work will continue on both fronts in the coming year.

Impacts
Researchers and users of economic benefits information derived from field trials and farm and farmer surveys will be able to assess the likely bias from each source. Those interested in the adoption of precision farming practices will be able to examine the extent of current adoption and the willingness to adopt "better" Technologies.

Publications

  • Marra, Michele C., David Pannell, and Amir Abadi Ghadim. 2001. "The Economics of Risk, Uncertainty and Learning in the Adoption of New Agricultural Technologies: Where Are We on the Learning Curve?, " Agricultural Systems, forthcoming.
  • Marra, Michele C., Bryan J. Hubbell, and Gerald A. Carlson. 2001. "Information Quality, Technology Depreciation, and Bt Cotton Adoption in the Southeast." Journal of Agricultural and Resource Economics 26 (1): 158-175.