Performance evaluation of biotech crops in emerging markets: the case of India

Several studies have found that biotechnology crops increase yield and reduce the use of pesticides. These studies failed to consider the long-run growth of the pest population as it becomes more resistant to both pesticide-producing crops and the pesticides. There is evidence that biotechnology crops do not prevent pest density from growing and different types of new pests from emerging. The objective of this paper is to evaluate the performance of biotechnology crops in India, explicitly taking into account the pest density. Stochastic production function is used to capture the impacts of the inputs on the mean of the output and the effect of pest density on the variability of the output. Furthermore, comparative analysis is conducted between biotech and non-biotech crops using the elasticities of the insecticides and human labour with respect to the yield. The results show that the presence of new pests has nullified the productivity gains from biotech seeds and the associated insecticides.