0 3002 Southern Agricultural Economics Association Impacts of the Adoption of Genetically Engineered Crops on Farm Financial Performance

The rapid adoption of genetically engineered (GE) crops by U.S. Srirniers suggests that these technologies have bee11 perceived to improve farm financial perfor-mance. Thi.; stiidy develops and applies ari econometric modcl to data from corn and soyhean producers in order to evalu:~te tlie financial i~iipncts of the adoption of GE crops. Results indicate that the adoption of CiE crops has had a liniirecl impact on financial performance that varies by crop. type ot ' technology. type of farm, and region of the n~~tion. Factors other than tlic tinancial irnpacts appear to be important reasons for the rapid;~dopti~ri (11 ' GE crops. Genetically engineered (GE) crop varieties have been promoted by seed companies and scientists as more effective options for con-trolling pests. reducing pesticide use and costs. and in some cases increasing yields. Faced with reducecl returns to c rop procluction caused by low commodity prices. farmers al-e examining alternati\;e technologies as poten-tial ways to cut costs ancl improve financial performance. Rapid adoption of G E crop va-rieties among farmers suggests that these tech-nologies are perceived to have economic ad-vantages o\ler traditional methods. The most widely used CE crops;Ire those with herbicide-tolerant and insect-resistant traits. Crops with herbicide-tolerant traits per-rnit f i~r~nel-s to use herbicides that offer more effective weed control. Insect-resistant crops The author- \ are economists w i t h the USDh. Economic Rc\earcli Scr\.icc. Washington. C1.C. The vicws ex-pres\cti here are not neccs\aril! (how o f the Eco~io~nic Research Service 01- tlie li.S. Department ol ' Agt-icul-ture. containing;I gene derived from the soil bac-terium Bcic.il1rt.s tll~it*itz,qit~tl.\is (BT) PI-oduce their own toxin to protect the plant from cer-tain target insect\. Although her-bicide-tolerant and insect-resistant crops were only first com-mercially available in the U.S. d i ~ r ing the mid-1990s, their adoption progressed to about 25 percent of corn acreage and about half of soy-bean acreage by the end of the decade (USDA