A. Introduction

In 2001/02 Mexico grew 80,000 hectares of cotton with a high lint yield of 1,152 kg /hectare to generate a total production of 92,000 metric tons. Mexico consumed 403,00 tons of cotton lint in 2001/02 and had to import 383,000 tons; exports were minimal at 28,000 tons (ICAC, 2002a). The area of cotton in Mexico has declined from over 300,000 hectares in 1996 to less than 100,000 hectares today. Bt cotton was introduced commercially into Mexico in 1996. The two varieties of Bt cotton used in Mexico are NuCOTN 33B and NuCOTN 35B, with the Cry1 Ac Bt gene developed by Monsanto and Delta Pine Land. They are the same varieties introduced in the US in 1996. This case study is based on survey work conducted by Traxler et al (2001) and summarizes the impact of the introduction of Bt cotton in the region of Comarca Lagunera where survey information was collected from two farmer groups; the first group known as ejitarios with small farm sizes ranging from 2 to 10 hectares and the second group with larger farm sizes of 30 to 120 hectares. The mean size of surveyed cotton area /farm in 1997 was 15 hectares, and 8 hectares in 1998.

B. Distribution of Cotton and Adoption of Bt Cotton

Total area of cotton in Mexico has declined by 75% from about 315,000 hectares in 1996 to approximately 80,000 hectares in 2001 (Table 37). The significant decline in area is mainly due to low world cotton prices, which are now at their lowest historically at approximately $0.40 a pound. The decline in prices has been exacerbated by changes in government policy and recent limitations of irrigation water - 90% of the cotton area in Mexico is irrigated. Whereas total cotton area has decreased significantly during the last six years, the area of Bt cotton in Mexico has increased from 900 hectares in 1996, when it was first introduced, to a peak of 37,000 hectares in 1998 and occupied 28,000 hectares in 2001. The data in Table 37 indicate that Bt cotton as percentage of the total area of cotton in Mexico, has increased steadily from less than 1% in 1996 to 15% in 1998 to a maximum of 35% in 2001.

In 2000, about 80,000 hectares of cotton were grown in seven states of Mexico with the largest area in the state of Chihuahua, more than 25,000 hectares, representing more than 25% of the country’s cotton area. The states of Baja California, Tamaulipas, Sonora, Coahuila, Durango and Sinaloa grew the balance of 55,000 hectares in 2000. Adoption rates of Bt cotton vary by state, and range from a low of less than 10 % in Sinaloa and Baja California to 64 % in north Sonora to a high of over 95% in the region of Comarca Lagunera in the states of Coahuila and Durango, where the survey was conducted (Table 38) and where approximately 8,000 hectares of Bt cotton was grown in 2000.

C. The Importance of Cotton Pests

There are seven important insect pests that can cause damage to the crop in Mexico and result in economic losses. The most damaging are pink bollworm (Pectinophora gossypiella), boll weevil (Anthonomus grandis), tobacco budworm (Heliothis virescens) and cotton bollworm (Helicoverpa zea). Fall armyworm (Spodoptera exigua), white fly (Bemisia argentifolii), and conchuela (Chlorochroa ligata) can also cause crop damage and may require treatment in some areas in particular years. The infestation levels of the major lepidopteran insect pests, for which Bt cotton confers control, vary significantly from state to state, and patterns of infestation levels and economic losses vary widely across the main growing regions. The pests of importance in Comarca Lagunera are pink bollworm, cotton bollworm and tobacco budworm; boll weevil has recently been eradicated in the region. Bt cotton is very effective in controlling pink bollworm, provides good control for tobacco budworm, is sometimes less effective for cotton bollworm, and is only partially effective against fall armyworm. Pest infestation levels, particularly of boll weevil and pink bollworm, have fallen during the 1990s in Comarca Lagunera and the government has supported pest monitoring, post harvest control of cotton residue, and has subsidized the adoption of Bt cotton. An active biological control program has released approximately 40 million eggs of the beneficial insect Trichograma spp. against budworm and Crysoperla spp. against white fly.

D. Yield Advantage of Bt cotton in Mexico

The yield advantage of Bt cotton when infestation was low in 1997 was 0.04 metric tons/hectare, equivalent to 3%, and 0.29 metric tons/hectare, equivalent to 20% in 1998 when infestation was higher (Table 39). The yield advantage of Bt cotton is related to the infestation level of pink bollworm and cotton bollworm which were relatively low in 1997 and high in 1998.

E. Reduction in Use of Insecticides

The data in Table 40 indicate a consistent decrease in the number of insecticide sprays applied to Bt cotton compared with non-Bt cotton which also resulted in decreased cost due to less product and labor savings. In 1997 there was a saving of 2.26 sprays resulting in a cost advantage of $154/hectare. Similarly, in 1998 there was a saving of 3 sprays at a cost of $139/hectare. No estimates of cost savings were available for 1999 and 2000 but again Bt cotton required 2.5 less sprays in 1999 and 1.0 spray less in 2000. Thus, over the four year period 1997 to 2000, the number of insecticide sprays required by Bt cotton was approximately half of that required on non-Bt cotton, resulting in an average number of 2.2 less insecticide sprays at a cost saving of approximately $150 per hectare in 1997 and 1998.

F. Economic Advantage of Bt Cotton

Bt cotton was grown on 52% of the cotton area in 1997 in Comarca Lagunera and pest infestation was relatively low compared to 1998. Although Bt cotton yielded slightly more than non-Bt cotton the latter was graded slightly higher in 1997, resulting in a slightly lower return of $49/hectare for Bt cotton. This was offset by substantially lower insecticide costs of $154 for Bt cotton, which had higher seed cost ($61/hectare). Overall, this resulted in a small economic advantage of $44/hectare for Bt cotton in 1997 compared with non-Bt cotton (Table 41).

In 1998, Bt cotton occupied 72% of the cotton area in Comarca Lagunera. The results for 1998, when pest infestation was higher than 1997, exhibit a significantly greater economic advantage ($543/hectare) attributed to yield which was 20% higher, as opposed to 3% in 1997. Cost savings for insecticide were $139/hectare which were offset by higher Bt cotton seed cost of $56/hectare, resulting in an overall economic advantage for Bt cotton of $626 per hectare. It is noteworthy that the higher yield of Bt cotton was the major contributor ($543) to the overall economic advantage of $626 for Bt cotton (Table 42). There was a large degree of variation in the performance of Bt and non-Bt cotton between 1997 and 1998, reflecting relatively low levels of pest infestation in 1997 compared with 1998 when they were high but not severe.

In 1997 and 1998, Bt cotton farmers gained about 3% and 20 % respectively in yield. Insecticide sprays were decreased by half in both years, for a saving of about two sprays resulting in a cost saving of about $150/hectare. Although the cost of Bt seed was about $60 more than non-Bt, the cost savings for Bt cotton, due to less insecticide and higher yields, which generated higher revenues, resulted in an economic advantage of $44/hectare in 1997 and $626/hectare in 1998.

G. Distribution of Benefits

It was estimated (Falck-Zepeda et al 2000b) that Bt cotton in Mexico in 1997 and 1998 resulted in an economic surplus of more than $6 million of which 86% went to Bt cotton farmers and 14% to the developers of the Bt cotton. Whereas Bt cotton farmers in 1997 and 1998 benefited $335/hectare on average, the developers of the technology gained less than $100 per hectare.

H. Concluding Comments

The combined effect of the eradication of the boll weevil, use of Bt cotton and the reduced cotton area has resulted in a dramatic fall in the use of chemical insecticides in the Comarca Lagunera region of Mexico. Per hectare insecticide use has fallen by more than 80%, from an average of nearly 14 kgs/hectare of active ingredient in the 1980s to about 2 kgs/hectare. The large difference in relative profitability of Bt cotton between 1997 and 1998 is probably largely due to differences in pest infestation levels. The yield advantage of Bt cotton increases in parallel with higher infestation levels; 1997 was a low year for pink bollworm compared to 1998. By historical standards, even 1998 was not a heavy pink bollworm year. With more than $600/hectare net benefit during years of high infestation, and slightly higher profits in low pest years, Bt cotton provides growers a valuable insurance against pest infestation. The profit from 1998 alone will cover the additional cost for Bt cotton seed for several years.

Cotton production in the Comarca Lagunera region has undergone a transformation over the past decade. The most notable changes are a reduction in insecticide use and the corresponding reduction in the cost of production. The result has been increased yields and profitability and competitiveness, and a reduction in the risk associated with cotton production failures from insect infestations. A number of factors have been important, including the availability of Bt cotton varieties, and government support for farm credit and integrated pest management. Bt cotton varieties have made an important contribution to the region’s control of pink bollworm, which would not have been possible without the new technology. At an average of about two insecticide applications per season, cotton has now become a profitable and low insecticide crop, benefiting both farmers and residents of the region. Bt cotton varieties have been a very appropriate useful technology for the Comarca Lagunera region. Bt cotton only protects against lepidopteran pests and has lower adoption in other Mexican states, where lepidopteran pests are less important. Cotton production in Comarca Lagunera is intensive; 95% of cotton is irrigated, yields are high by world standards, infrastructure is well developed, and material, financial and other inputs are readily available. All of these factors have favored the very high adoption of Bt cotton. Of particular importance in Comarca Lagunera were the key government interventions of credit for financing the purchase of Bt cottonseed combined with technical assistance for small landholders, and the implementation of an effective integrated pest management program.

I. Highlights