PPP Special 08 - Institut für Entwicklungs- und Agrarökonomik

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Table 4.12:
Economics of cotton production, across farm
comparison, irrigated [US$/ha]
Type of Cost
Non-Bt Cotton Bt Cotton Only-Bt cotton
Mean Mean Mean
Pesticides 54.43* 24.66 23.28*
Fertiliser 45.90 51.83 47.04
Labour 144.76 133.53 151.90
Seed 19.59* 79.24* 80.12*
Irrigation 34.50 52.27 91.90
Total Variable Costs 238.47 260.80 296.92
Total Yield [kg/ha] 1556.10 1759.30 1818.00
Total Revenues 515.87* 683.30 700.36
Gross Margin 359.07 443.90 431.43
*Means are statistically significant at 95%
Source: Own Calculation, 2003
The costs for pesticides were only a small proportion of the total
production costs. As mentioned before, according to Khadi et al. (2002),
pesticides count for 80 per cent of total production costs. In this case
study the pesticide costs were especially low due to climatic conditions.
As expected, costs of pesticides in Bt cotton production were lower than
for non-Bt cotton. For irrigated conditions, the pesticide costs were
significantly higher for non-Bt cotton.
Seed costs for Bt cotton were about four times higher than for
conventional varieties and outweighed the difference in pesticide costs.
The irrigation cost for those farmers who grow only Bt cotton was higher
than for those growing both. Possibly, farmers who switched to Bt cotton
invested more in water given the prospects of higher yield from Bt
cotton or they were farmers with better access to water in the first place.
The fact that most of the irrigated cotton was Bt cotton (78 per cent)
supports this assumption.
Besides irrigation costs, there was no other cost item which showed a
significant difference. The gross margins for irrigated cotton were
significantly higher than those for non-irrigated cotton (Figure 4.8). It is
remarkable that the revenue of Bt cotton under non-irrigated conditions
was lowest for farmers who switched to Bt varieties but highest when