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82 CHAPTER 3


not be readily available at the critical times or that the household may not have enough financial resources to hire more labor. As shown in Table 3.7, yield increases imputed to GM seed are basically due to the combination of damage- control effects and the technology efficiency, which could be used to represent the upper bound of additional labor used for harvesting under perfect correla- tion. Taking the average values shown in Table 3.7, Bt cotton reports the high- est reduction in marginal benefits (about 30 percent) whereas the organic plus Bt scenario reports the lowest reduction (13 percent). In other words, if the producer uses mainly hired labor, the practice will definitely have an impact on the margins. This type of producer will also invest in other complementary inputs that will contribute to an even better performance of the variety, and thus compensate for the additional investment. Figure 3.3 presents a graphical analysis of the marginal benefits for all five


scenarios evaluated. The distribution of marginal benefits is represented in the histogram, and the tornado graph summarizes the relative impact of a particu- lar input variable on these margins.11 For all scenarios the variability in yield and the high labor costs are the main determinants of the margins generated. A technology that contributes to reduce this yield variability would definitely have an impact on farmers’ welfare.


Conclusions and Policy Recommendations


This study provides an ex ante evaluation of the potential impact of GM cot- ton adoption in Uganda. A survey was used to calculate partial budgets for representative growers and compare partial budgets for various real and simu- lated scenarios. The partial budget of a low-input cotton producer was com- pared with that of a high-input producer. Similarly, we compared the partial budget of a conventional cotton producer with that of an organic producer. The latter two cases were used to develop the simulated scenarios of conven- tional cotton producers using GM seed (both Bt and HT cotton) and organic producers using Bt cotton. The primary data for this analysis comes from two main cotton-


producing districts in Uganda: Kasese and Lira. Partial budgets are used to evaluate the profitability of cotton production and to compare conventional and organic cotton production with hypothetical GM scenarios. We added stochastic simulations to the partial budgets to account for the effects of risk


11 Appendix E presents the graphical analysis of the marginal benefits for the low- and high- input systems.


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