Purdue News
Purdue News
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October 31, 2001 Bt corn costs often higher than returns in Indiana, economist saysWEST LAFAYETTE, Ind. – Genetically modified seed designed to stop a destructive worm from devouring corn plants may itself take a bite out of some corn growers' profits, says a Purdue University agricultural economist. Farmers at the eastern end of the nation's Corn Belt are less likely to recover the cost of planting seed containing the gene Bacillus thuringiensis, or Bt, than producers farther west, said Marshall Martin. Martin, a biotechnology expert, was among a team of researchers at Purdue who studied the economic impact of planting Bt corn. Bt corn controls the European corn borer, a one-eighth-inch to inch-long larva that feeds on corn leaves and burrows into and through corn stalks, tassels and around ears. Bt corn is engineered to produce the Cry protein, an active substance fatal to corn borers but not humans and animals. When consumed by corn borers, the protein kills the pests within a day or two. The Purdue study found that higher-priced Bt seed, combined with lower corn borer infestation levels and other issues, makes transgenic corn less attractive than traditional varieties for farmers in Indiana. "The adoption level of Bt corn in the Eastern Corn Belt has been relatively low compared to the average for the Corn Belt and the reported percentage in the western and southwestern parts of the Corn Belt, for two fundamental reasons," Martin said. "One, our European corn borer infestation level historically has been pretty low, so that the extra cost of the seed cannot be justified based on the number of bushels saved because you planted Bt corn to reduce damage. The second reason is, we have here in the Eastern Corn Belt – and Indiana in particular – a number of companies that process corn for food uses, none of which now will accept any transgenic corn." Corn borer infestations are more frequent and severe in parts of Illinois and states to the west and upper Midwest. In Indiana, corn borer problems occur about once every four years. Because farmers in the Western Corn Belt experience more corn borer damage, the use of Bt and other transgenic corn is greater in those states. "Nationwide in 2000, 25 percent of the U.S. corn crop was transgenic," Martin said. "This year, based on a June survey by the U.S. Department of Agriculture, it was 26 percent. Of that nationwide use, 18 percent in both years was Bt. When we look at Indiana specifically, in 2000 only 7 percent of corn was Bt." Farmers in Illinois, a corn borer border state, planted about 13 percent of their corn crop in Bt this year. Analyzing a broad range of data, from crop yields and values to pesticide cost savings to the technology fees companies factor into the price of the genetically modified seed, Martin and fellow researchers concluded that 40 percent of a Hoosier grower's crop would have to threatened by corn borers to make Bt use financially viable. "If you have a 25 percent probability of corn borer infestation, like we do in Indiana, and the value of your crop is about $400 an acre – or $2 a bushel of corn – the value of using Bt corn compared to not spraying or doing anything is a little over $5 an acre," Martin said. "That's about the break-even level. So the decision there would be to not adopt the Bt." Conversely, higher yields and crop values, combined with greater corn borer infestation and smaller technology fees, may warrant planting Bt seed, Martin said. Farmers worried about big crop losses also might be better off with transgenic corn, he added. "If your financial situation's not as stable and your bank or lender says you need to do something to manage your risk, maybe you better use the Bt," Martin said. "There's this kind of 'insurance value' for some high-risk farmers." Farmers should consider two other issues before buying Bt, he said. "The grower needs to look at refuges," Martin said. "By U.S. Environmental Protection Agency requirement, farmers must plant at least 20 percent of their acreage within a quarter- to half-mile distance of a non-Bt variety to maintain a viable population of European corn borer susceptible to being killed by the Bt toxin. "The other thing farmers need to take into account is the market. If you're in a region where market segregation is necessary because you may be selling corn to a processor that wants to be assured of non-transgenic corn, then you need to be able to plant, grow, harvest, dry, store and transport the non-Bt types and keep them separate." In the last few growing seasons, non-Bt corn has commanded premiums of between 5 cents and 15 cents per bushel, Martin said. The study, titled "The Economics of Bt Corn: Adoption Implications," is available through the Purdue Cooperative Extension Service. It is publication number ID-219. The study also appears on the Internet, and may be downloaded. Writer: Steve Leer, (765) 494-8415; sleer@aes.purdue.edu Source: Marshall Martin, (765) 494-4268; martin@agecon.purdue.edu Related Web site: Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu; https://www.agriculture.purdue.edu/AgComm/public/agnews/ Purdue News Service: (765) 494-2096; purduenews@purdue.edu
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