Effects of Bt Cotton Adoption on Cotton Price and International Trade

The use of Bt cotton is spreading very rapidly, pulled by farmers’ demand for this technology. By, 2014, Bt cotton was planted on more than 25 million of hectares worldwide. This technology reduces cotton farmers’ use of pesticides, subsequently reducing their exposure to pesticides.  Farmers have been able to increase increase their yield per hectare, reduce pesticides cost and other socioeconomic benefits. However, due to widely increasing adoption rate of Bt cotton, global cotton supply is expected to surpass demand, thereby reducing the price of cotton remarkably.  It is anticipated that if the Bt cotton is planted in total area available for cotton cultivation, the global production would increase by nearly 20 % that causes the price to drop significantly.