Performance Results and Characteristics of Adopters of Genetically Engineered Soybeans in Delaware

Agricultural and Resource Economics Review, Oct 2004 by Bernard, John C, Pesek, John D Jr, Fan, Chunbo

Genetically engineered (GE) soybeans first became available to farmers in 1996. Despite the common questions regarding any new crop technology, the new seeds were rapidly adopted. This study examines the characteristics of adopters, as well as yield and weed control cost changes, using survey results from Delaware farmers at the start of the 2000 season. Duration analysis reveals that earlieradopting farmers had larger farms and tended to use computers for financial management, while regression analysis shows significantly lower weed control costs and, to a lesser extent, higher yields for GE soybeans.

Key Words: GE soybeans, technology adoption

The first-generation crops created through genetic engineering were designed to incorporate traits beneficial to farmers. The two major lines of these crops featured either insect resistance or herbicide tolerance. Among the most successful was a soybean genetically engineered (GE) by the Monsanto Corporation to be resistant to the herbicide glyphosate. Sold under the brand name Roundup Ready, they became available in 1996, and were rapidly adopted. According to USDA figures, within four years, these GE soybeans accounted for over 50% of U.S. soybean acreage [U.S. Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), 2000a].

Given this situation, the primary objective of this research was to determine what factors or characteristics have led farmers to adopt GE soybeans at different times. This was accomplished through the use of duration analysis. The secondary goal was to analyze the performance of GE soybeans in the field. Performance was judged in terms of two criteria: yield and weed control costs per acre. While the quick adoption alone would strongly suggest farmers approved of the GE soybeans, actual yield and cost changes could be difficult for individual farmers to judge due to differing conditions each season. These aspects were examined using regression analysis.

Data

A mail survey of soybean farmers in Delaware was conducted to obtain the data for this study. The mailing list was compiled in three segments, one for each county in the state, provided by the respective offices of the University of Delaware's Cooperative Extension. Each list varied in the breadth of its audience, with the lists for New Castle, Kent, and Sussex counties providing addresses for soybean farmers, grain farmers, and all farmers. Extraneous entries were culled, leaving a final mailing list of 787 fanners.

The survey, cover letter, and a postage-paid return envelope were mailed at the end of March 2000. Timing was selected to reach farmers prior to the start of their busy spring planting season, but after they had made final decisions on their plantings for the year. This mailing was followed two weeks later by a postcard designed to be a reminder to nonrespondents or a thank-you for those who had responded. The survey yielded a 22.24% response rate, or 175 surveys. After removing 46 respondents who indicated they were not soybean fanners and 13 whose surveys were too incomplete for any analysis, 116 usable responses remained for analysis. While these remaining surveys still were not all fully complete, every available complete response was used for each model.

Table 1 contains a summary of the variables of interest, including the characteristics of respondents, and their means and standard deviations. An examination of the summary statistics shows the fewest respondents were young farmers under age 40 and those with graduate degrees, with most respondents being between 40 and 55 and possessing only a high school degree. The majority sold soybeans under contract, and the vast majority had adopted narrow row spacing. There was also great homogeneity in both sources and ranking of importance of sources of information regarding GE soybeans. Almost all farmers based their adoption decisions on information obtained from seed companies and cooperative extension offices, and far fewer on arguably more negative media sources.

Direct comparisons with official figures, however, did suggest the sample was skewed toward larger and perhaps better-managed farms. First, the survey's average of 30.3 bushels per acre in 1999 exceeded the USDA's estimate of 27 bushels for that year (USDA/NASS, 2000b). Second, the sample distribution was more heavily weighted toward large size farms than the 1997 Census of Agriculture (USDA/NASS, 1998). This latter statement should be tempered by noting that more than 200 small farms had since ceased operation, and more farmers with operations of over 3,000 acres responded than were reported existing in the Census (Delaware Agricultural Statistics Service, 2000).

For each year GE soybeans were available, the survey additionally asked farmers if they had used them and, if so, what percentage of their soybean crop had been planted with the GE seeds. These figures are reported in table 2. A rapid rise in both of these percentages over the 1996-2000 time period is readily apparent, showing Delaware farmers adopting at a pace much more rapid than USDA national estimates. It took only five years from introduction for GE soybeans to become the Delaware farmers' dominant soybeans. Nevertheless, it should be noted that most farmers did not convert entirely to the GE version, but rather tended to plant both. Theoretically this practice could be viewed as evidence either of risk aversion or of learning-by-using on the part of the farmers (Sunding and Zilberman, 2001). In particular, this finding may reflect existence of doubt about both the costs and yield differences between the soybean versions. Comments on the survey indeed noted some uncertainty, and an interest by respondents in better identifying the differences.