An Economic Analysis of Price Control & Adoption of Bt Cotton in India

The adoption of Bt cotton in India has been remarkable with an unprecedented 168-fold increase between 2002-09. The price for official Bt cotton seed in India in 2005 was Rs 1600. The Indian government imposed a ceiling on the price of Bt cotton seeds in 2006. Thus, the adoption rates recorded an increase of 192% in 2006 over the previous year. Also during the same period when the adoption rates were increasing, many more Bt cotton hybrids were approved for cultivation in India. This book has analyzed whether and to what extent the government seed price interventions in 2006 have influenced adoption of Bt cotton in India. Another important contribution of this research is finding the effect of technological development defined in terms of number of Bt hybrids approved for commercial cultivation, on percentage area adopted under Bt cotton. Using a dynamic logistic model, it finds that although seed price interventions of the government were successful in impacting the adoption rates but its impact was limited. It was also found that technological development is an important factor affecting adoption rates.