Potential Impacts of Bt Eggplant on Economic Surplus and Farmers’ Health in India

In this article, the potential impacts of Bt eggplant technology in Indian agriculture are analyzed. Several proprietary Bt hybrids are likely to be commercialized in the near future. Based on field trial data, it is shown that the technology can significantly reduce insecticide applications and increase effective yields. Comprehensive farm survey data are used to project farm level effects and future adoption rates. Simulations show that the aggregate economic surplus gains of Bt hybrids could be around US $108 million per year. Consumers will capture a large share of these gains, but farmers and the innovating company will benefit too. As the company has also shared its technology with the public sector, Bt open-pollinated varieties might become available with a certain time lag. This would make the technology more accessible, especially for resource-poor farmers, entailing further improvements in welfare and distribution effects. The wider implications of the private-public technology transfer are discussed. Furthermore, the potential benefits for farmers' health resulting from reduced insecticide applications are examined, using an econometric model and a cost of illness approach. These benefits are worth an additional $3-4 million per year. Yet they only constitute a small fraction of the technology's environmental and health externalities. More research is needed for comprehensive impact analysis.