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BUSINESS & SEEDS: What was the real reason for planting Bt corn?



                                  PART 1


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TITLE:   WHAT WAS THE REAL REASON FOR PLANTING BT CORN?

SOURCE:  Farms.com, USA

AUTHOR:  Stu Ellis

URL:     http://www.farms.com/FarmsPages/Commentary/DetailedCommentary/tabid/192/Default.aspx?NewsID=42446

DATE:    29.06.2011

SUMMARY: "Although the reduced insect infestation in 2005 could be an issue, the USDA economists say the important take home information is that variable profits were $18.84 higher per acre with Bt hybrids, as the result of corn yields 17 bushels higher. But they say their results suggest that Bt adoption is not significantly related to insecticide use."

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WHAT WAS THE REAL REASON FOR PLANTING BT CORN?

How many of your corn acres this year are planted to Bt varieties designed to control insects that might decrease your potential yield? Last year the national average was 63%, and for many Cornbelt farmers the percentage is going to be every acre but the refuge. For some farmers it will be all of their acres. But the question arises whether you are trying to control yield robbing insects, or increasing your yield, since you heard that Bt varieties have a higher yield. You might answer ?both,? so let?s find out what is motivating your neighbors.

Bt genetics were initially introduced 15 years ago to help control European corn borer, and have done a pretty good job. ECB has certainly dropped into the level of minor pests, except in refuge fields where the scouting process has overlooked corn borers. In 2000 Bt accounted for 19% of planted acres and in 2003, Bt seed was introduced to control corn rootworm as well. Economists from USDA?s Economics Research Service report it is hard to estimate the true costs and benefits of Bt corn because of ?weather, infestation levels and seed costs, along with conservation tillage, crop rotation, and other pest-management practices.?

http://ageconsearch.umn.edu/bitstream/103327/2/AAEA2011%20-%20Fernandez-Cornejo%20and%20Wechsler%20May%202011.pdf

On the whole studies have found that Bt corn yields are higher for Bt adopters than for corn growers depending on conventional varieties. A myriad of studies have gauged the difference anywhere from 7.1 bushels per acre to 18.2 bushels per acre. Parallel studies have found that Bt users used less insecticide than non-Bt adopters. While that may seem to be obvious, the economists said all of those studies occurred from 1996 to 2001 and motivations for use may have changed over time. So they base a new study on data collected in 2005.

After interviewing 1,156 corn growers in 19 major corn growing states, half of whom were in the Cornbelt, 76.5% reported they used Bt corn to increase yields. 11.3% used Bt corn to reduce their pesticide costs, and 3.3% did it to save on management time. 10% had ?other? reasons. The latest survey indicated that actual Bt yields were 17 bushels more, seed use was just slightly higher, insecticide active ingredient use was 43% lower, and profits were $18.84 higher per acre for Bt users. The primary decline in insecticide use was for the primary formulas for corn rootworm.

While those statistics may be meaningful, the economists say the survey did not find out whether the data came from farmers who where Bt users or non-users based on their management ability, instead of a random phone call. Their concern stemmed from the knowledge that large operations are more likely than small operations to adopt agricultural innovations, and that farmers using crop insurance are more likely to use Bt seed than those without crop insurance. And they knew that farmers expecting yield losses from corn borers were more likely to plant Bt hybrids than those not expecting yield losses. While adopters of new technology are usually more experienced, Bt adopters were an average 4 years younger than non-Bt users.

Regarding price, non-Bt users received more money for their corn than Bt users, but that could be a function of the market paying more for non-genetically enhanced hybrids. The economists also found that increases in seed prices reduce the demand, but increases in insecticide prices appear to decrease seed demand, which they say implies that seed and insecticides are complementary in the production process. And with Bt adoption, Bt seed use increases profits, yields, and seed demand. Specifically, a 10% increase in Bt adoption was associated with a $2.89 per acre increase in profits and a 1.72 bushel per acre increase in yields.

The 2005 data did not indicate any impact on insecticide demand, but they report that insect infestation levels were lower in 2005, and as a result less was used. The researchers add, ?This may have reduced the impact of Bt adoption on insecticide use. After all, farmers only use insecticides if treating pest infestations is expected to be profitable. In other words, farmers only use insecticides if infestation levels are above a certain threshold. Below this threshold, Bt adoption should not affect insecticide use.?

Summary:

Although the reduced insect infestation in 2005 could be an issue, the USDA economists say the important take home information is that variable profits were $18.84 higher per acre with Bt hybrids, as the result of corn yields 17 bushels higher. But they say their results suggest that Bt adoption is not significantly related to insecticide use.



                                  PART 2

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TITLE:   U.S. FARMERS CONTINUE TO PREFER BIOTECH CROP VARIETIES

SOURCE:  Biotechnology Industry Organisation, USA (BIO)

AUTHOR:  Press Release

URL:     http://bio.org/news/pressreleases/newsitem.asp?id=2011_0705_01

DATE:    05.07.2011

SUMMARY: "Ab Basu, Acting Executive Vice President, Food and Agriculture for the Biotechnology Industry Organization, issued the following statement in response to the report?s findings: ?This year?s data on adoption of genetically engineered crops suggest that nine out of ten U.S. farmers choose to plant biotech varieties of soybeans, cotton and corn. Most farmers point to the economic and environmental benefits provided by agricultural biotechnology as the reason for their planting choices.?"

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U.S. FARMERS CONTINUE TO PREFER BIOTECH CROP VARIETIES

WASHINGTON, D.C. (Tuesday, July 05, 2011) - Genetically engineered varieties of soybeans, cotton and corn are preferred by American farmers over their conventional and organic counterparts, according to newly released data from the U.S. Department of Agriculture (USDA).

USDA?s Economic Research Service (ERS) report, Adoption of Genetically Engineered Crops in the U.S. was released July 1, 2011. Key findings include:

- The use of GE soybeans rose to 94 percent in 2011. (up from 93 percent in 2010)

- The use of GE cotton is at 90 percent in 2011. (down slightly from 93 percent in 2010, but up from 88 percent in 2009)

- The use of biotech corn climbed to 88 percent in 2011. (up from 86 percent in 2010)

Ab Basu, Acting Executive Vice President, Food and Agriculture for the Biotechnology Industry Organization (BIO), issued the following statement in response to the report?s findings:

?This year?s data on adoption of genetically engineered crops suggest that nine out of ten U.S. farmers choose to plant biotech varieties of soybeans, cotton and corn.

?Most farmers point to the economic and environmental benefits provided by agricultural biotechnology as the reason for their planting choices. For example, biotech crops require less tilling of the soil and fewer applications of insecticides. These practices promote environmental sustainability, reduce on-farm fuel use and increase profit margins for U.S. farms.

?The move to biotechnology and modern farming practices is reflected in the choices of farmers around the world. In 2010, 366 million acres of biotech crops were planted in 29 countries by 15.4 million farmers.

?The next generation of biotech crops, with resistance to environmental stresses such as drought and frost, and enhanced nutritional content will provide for healthier plants and healthier foods. And we continue to discover new energy sources with biofuels made from corn, wood, grasses, algae and non-edible parts of plants- such as cornstalks.

?Since 1996, innovations in science and technology have made modern agriculture more sustainable, and agricultural biotechnology has played a key role in that trend. These science-based solutions are crucial to meeting the challenge of feeding and fueling a growing world.?

**The report summarizes the extent of adoption of herbicide-tolerant and insect?resistant crops since their introduction in 1996. Three tables within the report devoted to corn, cotton, and soybeans cover the 2000-11 period by U.S. state. A copy of the USDA ERS report, Adoption of Genetically Engineered Crops in the U.S. (July 1, 2011) including data tables is posted at http://www.ers.usda.gov/Data/BiotechCrops.