GENETICALLY MODIFIED COTTON IN UGANDA 73


only. Plots with incomplete information were not considered in the analy- sis. Thus, the total number of observations in our analysis ended up being 151 plots managed by 129 farmers. Of this total, 35 were plots from 32 pro- ducers located in Lira with only 12 real organic producers,7 and the rest were plots from producers located in Kasese.


Stochastic Budget Analysis


We used basic partial budget analysis augmented with stochastic simulations to evaluate cotton profitability across different scenarios. The scenarios evalu- ated included (1) a conventional cotton producer, (2) an organic cotton pro- ducer, (3) a conventional producer using Bt cotton seed, (4) a conventional producer using HR cotton seed, and (5) a hypothetical case where an organic cotton producer is using a GM seed. Additionally, we artificially classified pro- ducers as “low input” and “high input” to get some insights about the effect of higher input use on cotton performance (see appendix tables 3A.1–3A.5 for details on the descriptive variables used).8 Fertilizer use was considered as a cri- terion to classify high-input producers. Obviously, this classification is also a proxy for income level. Therefore, the category “high-input producers” refers to farmers who use chemical fertilizers and above-average amounts of pesti- cides in our sample. From a total number of 151 observations, only 27 quali- fied as high-input users. The survey provided information to estimate input use and their costs and


derive the partial budgets. The basis for calculating the partial budgets was the comprehensive guide produced by CIMMYT (1988). Cotton seed is distrib- uted free of charge, and thus the value is zero for the producer. This informa- tion was used for the partial budgets of the conventional, organic, high-input, and low-input producers. For the simulated scenarios, we imputed seed costs based on the farmgate price of the cotton seed. Total use of chemical and organic fertilizers and pesticides was reported by farmers and converted to val- ues per hectare. The value of the land was the equivalent of renting it. Average wages paid to hired labor were used to estimate the total family labor costs. This assumption seems reasonable in the production areas studied, where labor markets are active and farmers produce the crops commercially. Male and female labor days were valued equally. Using this information, we estimated


7 When analyzing the data, we noticed that several farmers who called themselves organic cotton producers were using insecticides and chemical fertilizers; therefore, the number of organic pro- ducers dropped considerably.


8 The use of statistical and econometric tests is a better alternative when there are a larger number of observations.


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