The socio-economic impacts of GM cotton in Burkina Faso:

Does farm structure affect how benefits are distributed?

Jeffrey Vitale

Gaspard Vognan

Bollgard II in Burkina Faso:

< 2003Success -> Stagnation

2003-05 Confined Field Trials Ref: Huma et al. 2007;Vitale et al. 2008

2006 Demonstration Plots

2007 On-farm trials

2008 Limited Commercial release

2009-14 Large-Scale Commercial release

Testing

Legal Framework

Biosafety Protocols

Monitor & Evaluate

Ref: Sustainability paper, Sanders et al., Tom Bassett

Summary of Bollgard II® in Burkina Faso: Documented Findings from Surveys

• Six years of commercial use (2009-2014)– Approaching “full” adoption threshold

• Higher BGII yields in all years (20.5%)• Lower pesticide use (2/3 reduction)• Higher economic returns in all years– Consistent with yield increase since no significant

change in costs (higher seed cost offset by insecticide cost savings)

• Health benefits (self-reported) ($1 million annual)

BGII Adoption Profile

2009 2010 2011 2012 2013 20140

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

129,000

256,000 251,000

312,000

450,000 454,000420,000

386,000429,000

600,000

750,000

650,000

BGII Total

Year

Cott

on P

lant

ed A

rea

(ha)

Conventional Cotton = “Gray” – “Red”

BGII Adoption Profile

2009 2010 2011 2012 2013 2014 Ave0

10

20

30

40

50

60

70

80

30.7

66.3

58.5

52.0

60.0

69.8

57.2

% Adoption

Year

Cott

on P

lant

ed A

rea

(ha)

Roger’s 80% upper limit

Seed Supply Issues

Refugia

BGII vs. Conventional Cotton Yields: 2009-2014

2009 2010 2011 2012 2013 2014 Ave0

200

400

600

800

1,000

1,200

1,400

CV BGII

Year

Yie

ld (

kg/h

a)

Ave Yield Increase = 20.5%

INERA Producer Surveys

b a b a b a b a b a b a b a

Summary of Bollgard II® in Burkina Faso: Documented Findings from Surveys

• Six years of commercial use (2009-2014)• Approaching “full” adoption threshold

• Higher BGII yields in all years (20.5%)• Lower pesticide use (2/3 reduction)• Higher economic returns in all years• Proportional with yield increase since no significant

change in costs: higher seed cost offset by insecticide cost savings → Economic Impact ≈ Pcott*∆Yield

• Significant yield impact → Significant economic impact

• Health benefits (self-reported) ($1 million annual)

Are all farmers benefitting?

• Does location matter?– Modest regional difference but producers in all

zones obtained significantly higher yields growing BGII compared to conventional cotton

• Does “farm size” matter?– “Larger” farms were found to have higher yields but

farms of all size, including smallholder farms, obtained significantly higher yields growing BGII compared to conventional cotton

INERA Farm Type Classification Cotton Production Zone

Yield Item SOFITEX (NBT=109) SOCOMA (NBT=73) Faso Coton (NBT=75) All Zone

(kg ha-1) Large nBT=66 nCV=77

Med nBT=31nCV=47

Manual nBT=12nCV=30

Ave Large nBT=23 nCV=21

Med nBT=42nCV=32

Manual nBT=8nCV=9

Ave Large nBT=14 nCV=15

Med nBT=61nCV=56

Manual nBT=0nCV=0

Ave nBT=257 nCV=287

BG II 1,293A 1,169AB 1,297AB 1,258A 1,192AB 1,286A 1,088ABC 1,235A 1,173AB 954C - 995B 1,175aConventional 1,105B 1,084BC 870C 1,053B 948BC 964BC 1,060ABC 972B 866C 825C - 834C 981bAverage Yield 1,199a 1,127a 1,083b 1,155a 1,070a 1,125a 1,074a 1,103a 1,019ab 890b - 914b 1,078Yield inc (kg ha-1) 188 85 427 206 244 322 27 262 307 129 - 161 193Advantage (%) 17.0 7.9 49.1 19.5 25.7 33.4 2.6 27.0 35.4 15.6 - 19.3 19.7

Inc Rev: $ ha-1102.46 46.44 232.38 111.88 132.58 175.49 14.84 142.69 167.03 70.15 - 87.69 105.30

Farm Size (ha) BGII 5.83 3.29 2.42 4.73 4.60 2.46 1.53 3.03 2.25 1.39 - 1.55 3.32 Conventional 4.26 2.77 2.00 3.37 3.05 2.07 1.67 2.34 1.57 1.08 - 1.18 2.60

Source: Vitale et al. (2010) AgBioforum

Yields by Production Zone

SOFITEX SOCOMA FASO COTON0

200

400

600

800

1,000

1,200

1,400

988900

785

1,1581,090

941

CV BT

Production Zone

Cott

on Y

ield

(kg

per

ha)

b a b a b a

Why the Concern over Farm Size/Farm Structure?

• Welfare of the “smallholder farmer” is explicitly mentioned in Burkina Faso’s biosecurity legal framework

• Welfare of the smallholder farmer overarching theme of CGIAR and many NARS

How can Farms be Classified by Size?

• Biosecurity framework provides no specific definition of “smallholder farm”

• Our analysis has followed the classification used by INERA based on the # of draft animals owned by the household

• Given the importance of addressing the welfare of smallholders, we have been investigating whether another classification could provide a more accurate depiction of farm size

Farm Size: INERA Classification

Manual (hand-hoe) Medium (1 Pair of Bullocks) Large (>1 pair of Bullocks)0

5

10

15

20

25

30

5.3

23.1

19.9

4.6

24.222.8

CV BT

Farm Type (INERA CLassification))

% o

f Far

ms

in E

ach

Clas

s

Farm Size: Yields by INERA Class.

Manual (h

and-hoe)

Medium (1

Pair of B

ullock

s)

Large (>

1 pair of B

ullock

s)0

200

400

600

800

1,000

1,200

1,400

807884

9759541,022

1,189

CV BT

Farm Type (INERA CLassification))

Cott

on Y

ield

(kg

per h

a) A

DC

BC

E

R2 = 0.198

Farm Size: Planted Area

0-0.5 0.5-1 1-3 3-5 5-8 8-10 >100

10

20

30

40

50

60

3.7

17.3

51.7

14.3

8.1

2.4 2.5

%

Cotton Planted Area (ha)

Perc

ent o

f far

ms

(%)

Farm Size: Yields by Planted Area

0-0.5 0.5-1 1-3 3-5 5-8 8-10 >100

200

400

600

800

1,000

1,200

1,400

1,600

912852

901971 976 983

1313

1031 1007 10471141 1173 1180

1368

CV BT

Cotton Planted Area (ha)

Cott

on Y

ield

(kg

per h

a)

Small letters: means testing within each land class

a a

a ab a b ab ab ab a

R2 = 0.187

Farm Size: Household Labor

1-3 4-5 6-10 11-15 >150

5

10

15

20

25

30

35

40

45 42.5

16.7

20.1

4.52.9

Labor_Supp

Household Labor Supply (# persons)

Perc

ent o

f far

ms

(%)

1-3 4-5 6-10 11-15 >150

200

400

600

800

1,000

1,200

1,400

909 917 956 948870

1,050 1,074 1,1111,211

1,159

CV BT

Household Labor Supply (#persons)

Cott

on Y

ield

(kg

per h

a)

Farm Size: Yields by Household Labor

R2 = 0.167

b ab a b a b a b a

Summary of Initial Findings• BGII provided significantly higher yields and economic

returns for all types of farmers, in particular smallholder farmers, using three alternative classifications (#animals, land size, HH labor)

• All three classifications provided about the same level of explanatory power, 17-20%

• On-going research: Would using all three farm structure variables provide a better farm classification?

Empirical Evidence

• Investigate the effect of farm size and farm structure on BG II yield performance using six years of cotton producer survey data

• Test whether farm size/farm structure related variables have a significant effect on cotton yield:– Farm size (area)– Household labor – Number of bullocks

Empirical Model Structure

• Y = α0 + α1Year + α2Type + α3Zone + α4Sprays + β1Animals + β2Area + β3Labor + interactions

• Variables:– Type BGII or conventional– Year 2009-2014– Zone SOFITEX,SOCOMA, or Faso Coton– Sprays Late season sprays (secondary pests)– Animals # of working animals (bullocks)– Area # hectares of cotton planted by household– Labor # of household members working on-farm

Model ResultsSource Estimate Pr>F Estimate Pr>F Estimate Pr>F

Intercept 853.7 <.0001 854.9

Year … <.0001 <.0001 <.0001

Type_Coton (BT=1) 139.62 <.0001 146.41 <.0001 <.0001

Year*Type_Coton … 0.0018 0.002 0.0048

Zone … <.0001 <.0001 <.0001

Type_Coton*Zone … 0.0102 0.0176 0.0358

Sprays … 0.118 0.1637 0.1121

Type_Coto*Sprays … 0.0014 0.0015 0.0465

Labor 0.081643 0.9423 -1.53464 0.4694 -0.33358 0.8609

Land 18.65116 <.0001 16.78885 0.008 15.93261 <.0001

Animals 26.68308 <.0001 29.64985 <.0001 32.24178 <.0001

Labor*Land 0.674873 0.0141

Land*Animals -0.59433 0.6084

Labor*Animals -0.32312 0.5855

Labor/Land 0.310934 0.9114

Animals/Land -11.5453 0.0777

R2

Model 1 Model 2 Model 3

0.212 0.215 0.229

Model Results: Estimated BGII Yield Function: Land, Labor, and Animals

0 2 4 6 8 10 12 140

200

400

600

800

1,000

1,200

1,400

0

2

4

6

8

10

12

BGII Yield HH Labor #Bullocks

Area of Cotton Planted (ha)

Cott

on Y

ield

(kg

per h

a)

HH

Lab

or (#

per

sons

) & #

Bul

lock

s

3 animals

4 laborers

1,100 kg yield

4 animals

8 laborers

1,250 kg yield

Practical Implication

• Research findings suggests that the prior definition used to define farm types, based only on # bullocks, is as good as alternative classifications using land and labor.

• Provide policy makers, and the on-going legal framework, with an alternative approach to define what a “smallholder” producer is , i.e. include a “3-D” definition.

The End

Does Farm Size Affect BGII Impact?

• BG II is a scale neutral technology:– Control effectiveness of BGII independent of field size

(~95%) – No new equipment needed (or that could be sold) – Seed cost on a per ha basis (no scale effect)– Insecticide costs on a per ha basis (no scale effect)

• Farm size and farm structure can affect yield performance …

How Farm Size Can Matter: Stylized Facts

• Economy of scale: larger farms can more easily cover fixed costs compared to smaller ones– Higher profits earned by larger farms

• Wealth Effect: Higher profits enable larger (& better managed) farms to make more investments in equipment (e.g. animal traction) and resources– Bigger farms are wealthier & better equipped than

smallholders who remain resource constrained– Greater efficiency, risk mgmt easier, access to capital

How Farm Size Can Matter: Stylized Facts

• “Rich get richer” while smallholders remain trapped in subsistence farming – Increase land holdings, access to quality lands, and

political power while smaller producers are pushed to the margins

Empirical Evidence

• Investigate the effect of farm size and farm structure on BG II yield performance using six years of cotton producer survey data

• Test whether farm size/farm structure related variables have a significant effect on cotton yield:– Farm size (area)– Household labor – Number of bullocks

Scale Effects in Cotton Production• Farm equipment (+)

– Manual farms vs. animal powered vs. mechanized• Deeper plowing, increased speed of operation for bigger farms

• Household farm labor (+/-)– Big farms likely to have larger workforce but also larger field size – Small farms could have more labor per ha but likely have greater labor demand since

they are less well equipped– So this variable is difficult to predict a priori and likely to depend on other variables

(interaction terms)

• Farm Size (+/-) – Larger farms are more difficult to manage since they are more complex and have

larger area, e.g. pest scouting and nutrient management – Larger farms likely better equipped and more efficient– So this variable is difficult to predict a priori and likely to depend on other variables

(interaction terms)

Model Structure• Test alternative regression models and identify which

variables are significant and which model best fits the data

• Include interaction terms and create new variables to place farm structure variables on a unit basis, e.g. labor per ha

• Include other variables to explain cotton yield:– Year– Zone– Insecticide sprays

Empirical Model Structure

• Y = α0 + α0Zone + α0Zone + α0Sprays + β1Area + β1 + α0Year

• Variables:– Type (BGII or conventional)– Year– Zone– Insecticide sprays– Village

Model ResultsSource Estimate Pr>F Estimate Pr>F Estimate Pr>F

Intercept 853.7 <.0001 854.9

Year … <.0001 <.0001 <.0001

Type_Coton (BT=1) 139.62 <.0001 146.41 <.0001 <.0001

Year*Type_Coton … 0.0018 0.002 0.0048

Zone … <.0001 <.0001 <.0001

Type_Coton*Zone … 0.0102 0.0176 0.0358

Late_spray_Cat … 0.118 0.1637 0.1121

Type_Coto*Late_spray … 0.0014 0.0015 0.0465

Actifs_agricole 0.081643 0.9423 -1.53464 0.4694 -0.33358 0.8609

Surface_parcelle 18.65116 <.0001 16.78885 0.008 15.93261 <.0001

Nombre_animaux_trait 26.68308 <.0001 29.64985 <.0001 32.24178 <.0001

Actifs_ag*Surface_pa 0.674873 0.0141

Surface_p*Nombre_ani -0.59433 0.6084

Actifs_ag*Nombre_ani -0.32312 0.5855

Actifs_ha 0.310934 0.9114

Animals_ha -11.5453 0.0777

R2

Results

0 2 4 6 8 10 12 140

200

400

600

800

1,000

1,200

1,400

0

2

4

6

8

10

12

BGII Yield HH Labor #Bullocks

Cott

on Y

ield

(kg

per

ha)

HH

Lab

or (#

per

sons

) & #

Bul

lock

s

Two-Dimensional View of Smallholder Farms

Lighter colors represent larger residuals

Practical Implication

• Research findings suggests that the prior definition used to define farm types, based only on # bullocks, is not the best one, but is still consistent with our more general findings.

• Provide policy makers, and the on-going legal framework, with an alternative approach to define what a “smallholder” producer is , i.e. include a “3-D” defintion.

Conclusions/Policy Implications• Smallholder farmers benefit the same as larger, better equipped

farms on a proportional basis no matter how “smallholder” is defined

• Larger, better equipped farms have higher yields and do achieve higher overall yield and economic benefits

• ALL farm types and size perform significantly better with BGII than conventional cotton

• Policy makers need to focus assisting farmers to become better equipped and to utilize increased profitability of BGII cotton to invest in farm equipment

• More efficient farms are expected to improve yields as suggested by the survey results. – Larger farm sizes will be an outcome of the increased farm capital but

increasing farm size just for the sake of larger farms will not increase yields.

Farm TypeYear Manual Small Large Motorise Ave2009-2011 BGII 1012aC 1064aC 1207aB (1555A) 1094a

CONV 915aA 909bA 973bA - 933bDiff 97 155 234 - 128% Diff 10.6 17.1 24.0 17.2

2012-2013 BGII 978aB 1028aB 1162aA - 1056aCONV 882aB 863bB 947bA - 897bDiff 96 165 215 158% Diff 10.9 19.1 22.7 17.7

2014 BGII 782aD 962aC 1144aB (1310aA) 962aCONV 760aC 872bB 979bA (1000bA) 870bDiff 22 90 165 (310) 92% Diff 2.9 10.3 16.9 (13.1) 10.5

Ave2009-2014

BGII 953aD 1021aC 1174aB (1352aA) 1049a

CONV 860bB 887bB 979bA (1000bA) 908bDiff 92 135 196 (352) 141% Diff 10.8 15.1 19.9 (13.5) 15.5

2009/2010 - 2014/2015 – Yields*old farm type (animals)*type of cottonSofitex + Socoma + Faso Coton

Notes statistical analysesMean separation indicated by letters a,b,c is comparing cotton types within same farm typeMean separation indicated by letters A,B,C is comparing farm types within same cotton type

ALL FARM TYPES BENEFIT FROM GROWING BOLLGARD II®

2009/2010 – 2013/2014BGII yield benefit for all field sizes

Higher yieldsMore consistent yield

2009/2010 – 2013/2014BGII yield benefit for all HH Labor

Higher yieldsMore consistent yield

Better Way to Classify Farms

Monsanto Company Confidential

Conclusions

This presentation focused on cotton yield impact of BGIIThe close proximity of the average production costs of BGII cotton and conventional cotton indicates that the primary source of the increase in cotton profit from growing Bollgard II across years (2009/2010 – 2011/2012) was from a combination of the yield increase and the higher cotton price that placed a greater value on output compared to the previous two years. 

Other socio-economic benefits directly linked to yield are available but not discussed in this presentation - Economic return ($/ha)

Cotton income – Cotton Production cost- Household income (related to hectares of BGII)- Return to labor ($/day)- more consistent production => this will become visible in presentation

(less variable, target pest control)

Consistent benefits not directly linked to yield are available but not discussed in this presentation- improved human health (and related reduced health care cost)

reduced insecticide exposure (2 treatments vs 6 treatments)chemical storage, preparations spray solutions,exposure during applicationswaste handling

- Reduced environmental impact from reduced insecticide usage- labor saving and the related time spending

Further Research

• Is there more land available in all villages?• Is additional training needed for increasing

animal traction