Massive Economic Boost from Biotech Cotton

Massive Economic Boost from Biotech Cotton

October 7, 2015
Economic Development

Biotech cotton has provided a major economic boost to small-scale farmers in Burkina Faso, India and China.

Burkina Faso is West Africa’s leading cotton producer and exporter with 2.2 million people relying on the cotton industry to make a living. Farmers quickly adopted the new biotech variety, which is engineered with a gene from Bacillus thuringiensis to allow the cotton to resist insect damage, in 2008. In 2014 alone the biotech cotton industry generated an estimated US$100 million in additional economic benefits.

Burkina Faso is not the only country seeing huge commercial gains from biotech crops. When India commercially approved biotech cotton in 2002, it was a turning point for its struggling cotton sector. India surpassed the U.S. in 2006 as the second-largest cotton producing country in the world. And in 2014, India produced one quarter of all the world’s cotton.

Developing agricultural markets can also have important knock-on effects further up the supply chain. For example, the stronger cotton industry in Burkina Faso provided more employment opportunities for agricultural laborers, which in turn created more demand for food and non-food items, which consequently increased household incomes in other economic sectors locally. It’s estimated that for each dollar the cotton industry injected into the economy in direct benefits, it produced US$0.80 cents in indirect benefits.

The reduced production costs associated with biotech crops are another major benefit for foreign markets. With Bt cotton, farmers in China increased their income by approximately US$1 billion due, on average, to a 10 per cent increase in yield and a 60 per cent reduction in insecticide applications. Between 1997 and 2012, Bt cotton accounted for US$15.3 billion in economic gains at the farmer level, and US$2.2 billion for 2012 alone.