A. Introduction

Cotton is the leading plant fiber crop in the world and in India it is the most important fiber crop. India has a larger area of cotton than any other country in the world, approximately 9 million hectares (Table 31). This represents about one quarter of the world total cotton area and occupies 5% of India’s total cultivated land area. However, cotton lint yield in India, averages only 233 kg/hectare and is one of the lowest in the world. As a result of very low yields, cotton production in India represents only about 12% of total world production. It is estimated that the income of approximately 60 million people living in India is derived from the production, processing, and/or export of raw cotton and cotton textile goods (Bell and Gillham 1989). Some of the major constraints to cotton production in India are water availability at crucial stages of crop development, inadequate insect and disease control measures, low fertilizer inputs, and limited use of hybrid seeds.

(To view Table 31, click here)

B. Production, Distribution and Farm Size

India has addressed the need for increased cotton production under a series of 5-year plans. The strategy for increasing cotton production has several thrusts: accelerate the use of improved technology in both irrigated and rainfed areas, with emphasis on use of improved seed, optimum agronomic practices, and integrated pest management; cultivate more cotton in rice fallow and non-traditional areas; expand the irrigated area of cotton production; and increase the use of hybrid cotton. Targets for the 5-year plans have met with some success and India has graduated from being a large net importer of cotton, to being a modest importer and an exporter of a small tonnage of high-quality cotton suitable for spinning into higher count yarns. In 2000/01, India imported 450,000 MT and exported 34,000 MT (ICAC, 2002a). Today, cotton is grown in four regions in India encompassing the three states of Punjab, Rajasthan, and Haryana in the north; Maharashtra and Madhya Pradesh in the central region; Gujarat in the northwest coastal region; and Andhra Pradesh, Karnataka, and Tamil Nadu in the southern region. In the north, cotton is an important cash crop where approximately 95% of the crop is irrigated, and yields are generally higher than the other regions. The principal hybrids produce a short staple cotton suitable for spinning into 24 to 28 count yarns. In the central states, cotton is considered the most important cash crop. Even though some of the cotton production in the central area is irrigated, production depends largely on monsoon rains. The northwest coastal state of Gujarat is also dependent on monsoon rains for cotton production, because water salinity prevents extensive irrigation. The southern states are the most important from the standpoint of high quality cottons.

The distribution of cotton in India by state, farm size, area, yield, production, and number of farms is characterized in Table 31. The major feature of cotton-growing in India is that it is produced on relatively small farms by approximately 4 million producers. Farm sizes on which cotton is grown in India vary by state and range from an average farm size of 0.93 hectares in Tamil Nadu to 2.63 hectares in Maharashtra, which grows 35% of the national cotton area, to 4.7 hectares in the Punjab which grows only 6% of the cotton in India. The subsistence marginal farms that produce cotton in India are less than one hectare in size, whilst the small, semi-medium, medium and large are only 1 to 2 hectares, 2 to 5 hectares, 5 to 10 hectares, and >10 hectares, respectively. Thus, most of the cotton in India is produced by small farmers who are representative of the 4 million cotton farmers in the country. The average cotton holding in India is only just over 2 hectares. In terms of distribution by state, Maharashtra has by far the largest area of cotton (3.2 million hectares), with an average holding size of just over 2 hectares, followed by Gujarat (1.6 million hectares) and Andra Pradesh (1.28 Million hectares).

C. Insect Pests

The rationale for India’s interest in Bt cotton is that cotton production is severely constrained due to damage by insect pests, particularly lepidopterans, which are the most important. The most serious pest is the American bollworm (Helicoverpa armigea), which can be very destructive, and is equally damaging to legumes, tomato, and several other crops. Annual losses caused by bollworm alone are estimated at approximately US$300 million (King 1994). Other important lepidopteran insect pests of cotton in India are the pink bollworm (Pectinophora gossypiella), spotted bollworm (Earias vittella), spiny bollworm (Earias insulana), and tobacco caterpillar (Spodoptera litura). To date, chemical control has been the most common practice and was often the only option. It is estimated that insecticides valued at $700 million are used on all crops annually in India, of which about 50% is used on the cotton crop alone (Dhar 1996). Many cotton farmers in India have committed suicide because of the heavy debt that they have incurred because of high expenditure on insecticides and the low international price of cotton. Because of heavy and indiscriminate use of all categories of insecticides, pests have developed resistance to most of the commonly used insecticides in the country. Conway (1997) reported that 450 pest species had developed resistance to one or more insecticides. Because of the undesirable effects of chemical insecticides, including the development of resistance to major pests, emphasis was placed on IPM where nonchemical crop management practices are used in conjunction with selective insecticides for insect pest control. Bt, with appropriate management, provides an effective alternative and environmentally superior control of bollworm and other lepidopteran insect pests of cotton (Wilson et al 1994, Luthy et al 1982).

Bt cotton was developed by the Maharashtra Seed Company (Mahyco) in which Monsanto has a 26% investment. The Cry1A (c) gene has been incorporated in hybrid cotton material and was approved for release in the environment in March 2002. Bt cotton with the Cry1A (c) gene has been tested in India for several seasons and three data sets are presented here for the period 1998 to 2001. While the data is not as comprehensive as is the case in countries where the products are grown on large acreage post-commercialization, there are some noteworthy trends apparent in the field trial data.

1. Department of Biotechnology Study, 1998/99

Extensive and fully replicated field trials of Bt cotton have been conducted under the guidance of the Department of Biotechnology of the government of India. These trials met the requirements of the government for release into the environment. Information from two sets of Bt cotton trials conducted in 1998-99 and 2000-01 are reported here (Barwale 1999, James 1999). Trial results are summarized in Table 32. Set A trials were conducted at 15 sites in seven Indian states in 1998-99 featuring six cotton hybrids, one containing the Bt gene, and one without Bt. Set B trials featuring one cotton hybrid (MECH-1) with and without Bt, were conducted at 25 sites in nine Indian states in kharif 1998-99.

Results from both studies indicate that Bt cotton hybrids significantly outyielded their non-Bt counterparts by 40% in Set A trials and 37% in Set B trials. Results confirm significantly less bollworm larvae on Bt cotton hybrids compared with their counterparts during the two periods 0-60 days (1.2 vs 6.1) and 61-90 days (1.7 vs 7.4) after sowing. Similarly, damage to fruiting bodies was significantly lower for Bt cotton hybrids compared with their counterparts in both sets of trials. Populations of sucking pests (aphids, jassids, and whitefly) and beneficial predators (ladybirds, green lacewing bug, spiders) were monitored in both Bt hybrids and non-Bt hybrids; no differences were noted between Bt hybrids and non-Bt hybrids. In Set B trials standard cotton cultivation practices were followed at each site including application of insecticides when the economic threshold levels for pests were exceeded. Application of up to seven insecticide sprays was necessary for non-Bt hybrids at all sites, (average of four) whereas Bt hybrids required no sprays in most sites except two, where 1 to 3 sprays were applied.

2. The Naik Study: 1998/99 and 2000/01

Some of the same data from the multi-locational tests, discussed above, and conducted by the Department of Biotechnology in 1998/99 and 2000/01, were further analyzed by Naik (2001) with particular emphasis on assessing the potential economic advantage of Bt cotton in India. The results presented by Naik (2001) are summarized in Table 33 and for convenience discussed under the three topics of yield advantage, pesticide reduction and economic advantage.

a. Yield Advantage of Bt Cotton

In 1998/99 Bt cotton hybrids yielded 1,861 kg/hectare compared with 1,359 kg/hectare for corresponding conventional hybrids – a 37% yield advantage for Bt cotton. Similarly, in large scale field trials covering 85 hectares in 2000/01 Bt cotton hybrids yielded 850 kg/hectare versus 619 kg/hectare for conventional hybrids resulting in a 38% yield advantage for Bt cotton. Taking into account both years’ data (1998/99 and 2000/01), the yield advantage of Bt cotton, compared with conventional, ranged from 24% to 56% in individual trials, with an average of 38% and an absolute yield advantage of 502 kg/hectare in 1998/99 and 237 kg/hectare in 2000/01 (ISAAA 2002b).

b. Reduction in Insecticide Use

In the 1998/99 field trials Bt cotton required no sprays at all whereas the conventional hybrids required 4 sprays (Table 33). Similar results for 2000/01 indicate that when only one spray was necessary for Bt cotton, four sprays were required for conventional cotton; a 75% reduction in insecticides for Bt cotton. However, it is important to note that the results from field experiments underestimate the actual reduction compared with the practice of farmers who apply up to twice the number of sprays, that are applied to conventional cotton in field experiments. On average farmers will apply 5 to 9 prophylactic insecticide sprays per season to control bollworm and other pests in their fields, compared with four sprays on conventional cotton plots in field experiments. In some regions in India such as Andra Pradesh and Karnataka where bollworm infestation is very high and resistance has developed to the cotton bollworm, farmers spray 15 to 18 times per season. Thus, in practice the potential insecticide savings with Bt cotton, for some farmers could be up to 75%, with an average reduction of at least 50%, from 7 sprays to 2 or 3 sprays.

c. Economic Advantage

The data in Table 33 indicate that the economic advantage from the yield increases associated with Bt cotton is relatively much greater than the cost advantage related to insecticide savings. Thus, in 1998/99 the cost advantage associated with increased yield was $241/hectare compared with $45 from insecticides; this is reflected in the 79% economic advantage for yield with Bt cotton compared with a corresponding 15% for insecticides in 1998/99. The same pattern is evident for 2000/01 trials which were atypical due to the late planting. At the time that the results of the trial were analyzed by Naik (2001), the additional cost for Bt cotton seed in India was not known. In the absence of prices for Bt cotton seed, Naik assumed that the additional cost for Bt seed would be $84/hectare (same as the US), but the effect of increased cost was only modeled and not included in the analysis of cost estimates published by Naik and reproduced in Table 33. Now, with the benefit of knowing the costs of Bt cotton seed that actually applied in India in 2002, the economic advantage estimates of Naik 2001 have been adjusted down by $50 per hectare for Bt cotton, which is the added cost/hectare of planting Bt seed, compared with conventional seed. Following these adjustments, the overall economic advantage of Bt cotton in 1998/99 was $236 per hectare, equivalent to about 77% gain, compared with conventional cotton. The corresponding figure for the atypical trials of 2000/01 was $76/hectare equivalent to about a 25% advantage over conventional cotton. The lower returns in 2001 were entirely due to the lower yield from later planting, with similar insecticide savings of $42/hectare in 2000/01, and $45/hectare in 1998/99.

The overall economic advantage of Bt cotton over farmer practices in 1998/99 was estimated to be in the range of $255 to $278/hectare, which is at the lower end of the corresponding estimates for China, which range from $350 to $550 per hectare. Naik (2001) also explored the effect of an 11% and 17% drop in the international price of cotton in the event that Bt cotton production would increase supply and reduce prices. Under the most pessimistic price scenario of a maximum 17% decrease in cotton prices, the benefits of Bt cotton over farm practices would be reduced in 1998/99 from ($255 to $278/hectare), to ($185 to $230/hectare), which still provides handsome returns to Bt cotton farmers.

3. The ICAR Cost Benefit Analysis Study

The last data set presented here for evaluating Bt cotton in India is the most recent information published by the Indian Council for Agricultural Research (ICAR). These field trials were conducted in 2001 by ICAR (ICAR 2002) in a project specifically designed to conduct a cost benefit analysis on Bt cotton. The results of the study are detailed in Table 34. Three Bt cotton hybrids, Mech 184, Mech 162 and Mech 12 were planted alongside a local check hybrid and a national check hybrid in a multi locational field trial in India. Pest infestation levels were high in India in 2001, which is the major factor impacting on the economic advantage of Bt cotton.

1. Yield Advantage of Bt Cotton

The data (Table 34) confirm that the Bt hybrids yielded from 60% to 90% more than conventional hybrids – the highest increases were recorded for Mech 184 up to 92%, followed by Mech 162, up to 87%, and Mech 12 Bt up to 60%. Yield increases of the same order of magnitude for the 2001 Kharif season were reported in a separate study (Qaim 2002). These are substantial increases in yield by any standard and provide a major contribution to the gross income increases generated by Bt hybrids. Gross income for the three Bt hybrids averaged 23,604 Rs/hectare ($487/hectare based on Rs 48.5 = $1.00) compared with 14,050 Rs/hectare ($290) per hectare for the local and national checks – a 68% gross income advantage for the Bt cotton hybrids over the conventional checks.

b. Insecticide and Pest Control Costs

Insecticide costs were highest for the local and national conventional check hybrids, which averaged 2,400Rs/hectare ($50) per hectare compared to $29/hectare for Mech 184, $29/hectare for Mech 162 and $36/hectare for Mech 12 (Table 34). Insecticide savings at the farmer level are likely to be significantly greater because farmers often apply unnecessary insecticide applications as prophylactics. The average cost/hectare for pest control was $120/hectare (Table 35), ranging from $56 to $291/hectare and requiring from 6 to 16 sprays with an average of 10 sprays.

c. Economic Advantage of Bt Cotton

The additional cost of Bt hybrid seed versus conventional was not known at the time of the ICAR study. As for the Naik 2001 data set, the additional cost of $50/hectare for Bt hybrid seed, based on 2002 actual prices, has been used to adjust the ICAR data set. Despite this adjustment, the net incomes for the Bt hybrids are significantly higher than for national and local check conventional hybrids. Income is 38 to 46% higher for Mech 12, 70% to 77% for Mech 162, and 75 to 85% for Mech 184 (Table 36). The increase in net income for the Bt hybrids translate to increased profitability for the three Bt hybrids which are summarized in Table 36. This compares the economic advantage of each of the three Bt hybrids with the local/national check conventional hybrids. The data in Table 36 indicate that the economic advantages of Bt hybrids range from $96/hectare (4,633 Rs/hectare) to $210/hectare (10,205 Rs/hectare). It is noteworthy that the magnitude of the economic advantage is of the same order as the 1998/99 data set analyzed by Naik, 2001 ($236/hectare) and higher than the benefits in 2000/01 ($76/hectare) when late planting of trials led to atypical low yields. The data for the 2001 ICAR trials are also consistent with the 1998/99 Department of Biotechnology data set in that the major contribution to economic advantage is due to yield advantage, as opposed to insecticide product and labor reduction costs. However, the benefits in terms of farming practice can be expected to reflect a higher contribution from insecticide savings, because of the higher number of sprays applied by farmers (five to nine sprays or more), compared with up to four in field trials.

D. Summary

Some caution must be exercised with the India experimental data since the large acreage studies/surveys that are only possible after commercialization have not yet been conducted. Nevertheless, very encouraging results have been attained in the field trials conducted over several years. In summary, the three sets of field trial data present consistent data confirming that, compared with conventional hybrids, Bt cotton in India results in significantly higher yields, insecticide reductions, and increased profitability of $75 to $200/hectare or more for producers. The decrease in use of insecticides on Bt cotton could result in a 75% reduction for some farmers applying 10 to 15 sprays, but an average reduction of 50%, or more, from 7 to 2-3 sprays is more probable. This is a very significant potential saving given that in 2001, India used 21,500 metric tons of cotton insecticide (a.i) valued at $343 million, which is equivalent to 50% of all insecticides used in India on all crops. Bt cotton is also projected to result in significant environmental and social benefits, associated with: less insecticide pollution of the environment, soil and water; lower exposure of producers to insecticide and hence less poisonings; and continued low prices for cotton, which consumers will benefit from in terms of more affordable cotton and textile products. Given that India is a large producer of cotton, with 9 million hectares, the importance of providing effective control of bollworm has significant economic advantages and positive environmental implications for India and the textile industry.

Approval of Commercialization and Adoption of Bt Cotton in 2002
Following several years of successful field trials with Bt cotton, the Genetic Engineering Approval Committee (GEAC) of the Indian Government approved on March 26, 2002, the commercial cultivation of three Bt cotton Bollgard hybrids: Mech 12, Mech 162 and Mech 184, developed by Mahyco (Maharastra Hybrid Seed Company), in which Monsanto has a 26 % investment (Luce 2002). The GEAC approval is for 3 years and requires farmers to ensure a refuge of 20 per cent or 5 rows, which ever is greater, and for Mahyco to provide the seed for refuge and to monitor the development of insect resistance, if any, by generation of base line susceptibility data (Ramachandran, 2002).

The first commercial Bt hybrid cotton seed (three hybrids, Mech 12, 162 and 184, containing the Cry 1 Ac Bt gene) sold in India in 2002 was generated on 285 hectares planted with foundation seed by Mahyco, the company that has developed and registered the technology in India (Hindu 2002, Ramachandran 2002). On average, depending on yield, one hectare of foundation seed produced up to 100 hectares of certified seed. For the May/June Kharif season plantings in 2002, farmer demand for Bt cotton seed was very high and it is estimated that 44,500 hectares of certified Bt cotton was planted by 54,000 farmers, with an average of less than one hectare (0.82 ha) of Bt cotton per farm. In 2002 Bt cotton was planted in the six following states in India: Maharashtra, Karnataka, Andra Pradesh, Gujarat, Madhya Pradesh and Tamil Nadu. Bt cotton occupied approximately 0.5 % of the 8.7 million hectares of cotton in India in 2002, of which approximately half the area was planted to hybrids.

The seed was distributed by Mahyco and Monsanto directly to farmers in the Kharif 2002 season but in order to meet future high farmer demand, MMBiotech Ltd., a joint venture of Mahyco and Monsanto has also sub licensed this technology to other seed suppliers namely Raasi Seeds (Attur, Tamilnadu), Ankur Seeds (Nagpur, Maharashtra), Krishidhan (Jalna, Maharashtra), Ajeet Seeds (Aurangabad, Maharashtra), Emergent Genetics (Hyderabad, Andhra Pradesh) who will incorporate the gene in their own hybrids. In 2002 the seed was sold in packets containing 450 gms of Bt cotton seed and 120 gms of non Bt cotton seed sufficient to plant one acre of Bt cotton and required refuge at a price of $30.39 per packet. The corresponding non-Bt hybrid had a comparable price of $10.39 for a price premium of $20 per acre ($50 per hectare) for hybrid Bt cotton seeds. For the additional investment of $50 per hectare it has been established by trials that on average a farmer would generate an additional income of up to $200/hectare or more from cultivation of Bt cotton, equivalent to a 4:1 (200:50) return on investment. The additional income would be related to increased yield, savings on insecticides and labor costs for their application.

Farmers in the Aurangabad-Jalna cotton belt in India reported that they typically applied insecticide (organophosphates or synthetic pyrethroids) 10 to 15 times per season, depending on the infestation of bollworm. The cost of a single application of insecticide is estimated at approximately $12 per hectare for a total cost per hectare per season ranging from $120 (10 sprays) to $180 (15 sprays). For these farmers a reduction of between 4 and 5 sprays would pay for the additional cost of the Bt seed, with any further reductions contributing to profit that would also be generated from significant yield increases. It is estimated that 80% of the Bt cotton sales in 2002 were to farmers in villages near previous trial locations, where farmers had observed, at first hand, the improved performance of Bt cotton. It is projected that in 2003 there will be adequate seed supply to plant 285,000 hectares of Bt cotton, equivalent to approximately 3.5% of the national cotton area in India. Based on the Chinese experience with Bt cotton, where it already occupies one third of the national area, farmer satisfaction with Bt cotton in India could lead to a rapid escalation of adoption where more than half the cotton crop could be planted with Bt cotton in the future. The adoption rate for Bt cotton in India is likely to be similar or even higher than other countries that have adopted Bt cotton. Accordingly, it is feasible that subject to a successful launch in 2002, 25% of the cotton crop could be Bt cotton by 2005, and that eventually adoption rate will exceed 50%.

The Indian Council of Agricultural Research (ICAR) reported that the National Agriculture Research System is also developing hybrids of Bt cotton. Two genes have been successfully incorporated in three hybrids of Indian cotton at the Nagpur-based Central Cotton Research Institute and the University of Agricultural Sciences, Dharwar, Karnataka. It is projected that seeds of commercial quantity will be available in three years. Several of the major institutions in India including the Indian Council of Agricultural Research (ICAR), India Environment Ministry, and the Department of Biotechnology (DBT) strongly supported the decision to approve Bt cotton for commercialization. The Federation of Indian Chambers of Commerce and Industry (FICCI), observed that GM crops offer the potential for huge productive gains and that “if the kind of productivity increase seen in China, is possible in India, then genetically modified crops hold a lot of promise for Indian agriculture.” The Federation believes that GM technology could help alleviate some of the challenges in increasing the productivity of Indian agriculture, the foundation of India’s rural economy. Cotton accounts for approximately one-third ($8.5 billion) of India’s total export earnings ($34 billion) either directly or indirectly through textiles and clothing, and thus has very important financial implications. The Indian Finance Minister, Yashwant Sinha, was very supportive of the commercialization of Bt cotton and has welcomed changes that result in “freedom for the farmer” and the lifting of outdated controls on the development of agribusiness (Luce 2002).

E. Highlights