[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eme/afrpps/v71y2011i1p41-61.html
   My bibliography  Save this article

The influence of GM crop adoption on the profitability of farms operated by young and beginning farmers

Author

Listed:
  • Joshua D. Detre
  • Hiroki Uematsu
  • Ashok K. Mishra
Abstract
Purpose - The purpose of this paper is to assess the impacts of GM crop adoption on the profitability of farms operated by young and/or beginning farmers and ranchers (YBFR). Design/methodology/approach - This research uses weighted quantile regression analysis in conjunction with 2004‐2006 Agricultural Resource Management Survey to evaluate the impact of GM crop adoption on financial performance of farms operated by YBFR. The methodology employed in this study corrects for the simultaneity of technology adoption and farm financial performance. Findings - As expected, the impact of GM crop adoption on profitability is positively affected by the scale of operation and leverage. On the other hand, off‐farm employment by “beginning” farmers has a negative impact on farm's profitability if they choose to adopt GM crops. Finally, quantile regression results from a farm household study shows that the model performs better at the higher quantile of the distribution. Research limitations/implications - This study helps to determine whether the adoption of GM crops increases the profitability of farms operated by “beginning” farmers. In addition, it explores the impact of other factors (such as farm, operator, demographic, and financial characteristics) on the profitability of farms operated by “beginning” farmers. Practical implications - Computing the profitability of adoption decisions for YBFR will provide significant information to YBFR that they can use in constructing their farm operations strategic business plan and future decisions regarding farming operations. Originality/value - Existing research does not examine the impact of GM crops adoption on farm profitability of YBFR. Furthermore, YBFR operators face significant challenges in making their operations financially viable, owing to lack of access to capital and land.

Suggested Citation

  • Joshua D. Detre & Hiroki Uematsu & Ashok K. Mishra, 2011. "The influence of GM crop adoption on the profitability of farms operated by young and beginning farmers," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(1), pages 41-61, May.
    • Handle: RePEc:eme:afrpps:v:71:y:2011:i:1:p:41-61
    DOI: 10.1108/00021461111128156
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/00021461111128156/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/00021461111128156/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/00021461111128156?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fernandez-Cornejo, Jorge & Daberkow, Stan G. & McBride, William D., 2001. "Decomposing The Size Effect On The Adoption Of Innovations: Agrobiotechnology And Precision Farming," 2001 Annual meeting, August 5-8, Chicago, IL 20527, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Mishra, Ashok K. & El-Osta, Hisham S. & Johnson, James D., 1999. "Factors Contributing To Earnings Success Of Cash Grain Farms," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(3), pages 1-15, December.
    3. Alston, Julian M. & Hyde, Jeffrey & Marra, Michele C. & Mitchell, Paul D., 2003. "An Ex Ante Analysis of the Benefits from the Adoption of Corn Rootworm Resistant, Transgenic Corn Technology," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57828, Australian Agricultural and Resource Economics Society.
    4. Gloy, Brent A. & Hyde, Jeffrey & LaDue, Eddy L., 2002. "Dairy Farm Management and Long-Term Farm Financial Performance," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 31(2), pages 1-15, October.
    5. Marra, Michele & Pannell, David J. & Abadi Ghadim, Amir, 2003. "The economics of risk, uncertainty and learning in the adoption of new agricultural technologies: where are we on the learning curve?," Agricultural Systems, Elsevier, vol. 75(2-3), pages 215-234.
    6. Matin Qaim & Alain de Janvry, 2003. "Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 814-828.
    7. Thomas M. Burrows, 1983. "Pesticide Demand and Integrated Pest Management: A Limited Dependent Variable Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 806-810.
    8. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-298, January.
    9. Fernandez-Cornejo, Jorge & Hendricks, Chad & Mishra, Ashok K., 2005. "Technology Adoption and Off-Farm Household Income: The Case of Herbicide-Tolerant Soybeans," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(3), pages 1-15, December.
    10. Fernandez-Cornejo, Jorge & McBride, William D., 2000. "Genetically Engineered Crops For Pest Management In U.S. Agriculture," Agricultural Economic Reports 33931, United States Department of Agriculture, Economic Research Service.
    11. Mutuc, Maria Erlinda M. & Pan, Suwen & Rejesus, Roderick M. & Yorobe, Jose M., Jr., 2007. "Farm Level Impacts of Bt Corn Adoption in a Developing Country: Evidence from the Philippines," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9891, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Alexander, Corinne E. & Fernandez-Cornejo, Jorge & Goodhue, Rachael E., 2003. "Effects of the GM Controversy on Iowa Corn-Soybean Farmers' Acreage Allocation Decisions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(3), pages 1-16, December.
    13. Carin W. Rougoor & Ger Trip & Ruud B.M. Huirnc & Jan A. Renkema, 1998. "How to define and study farmers' management capacity: theory and use in agricultural economics," Agricultural Economics, International Association of Agricultural Economists, vol. 18(3), pages 261-272, May.
    14. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
    15. Kenneth A. Baerenklau, 2005. "Toward an Understanding of Technology Adoption: Risk, Learning, and Neighborhood Effects," Land Economics, University of Wisconsin Press, vol. 81(1).
    16. repec:ebl:ecbull:v:17:y:2008:i:12:p:1-10 is not listed on IDEAS
    17. Bryan J. Hubbell & Michele C. Marra & Gerald A. Carlson, 2000. "Estimating the Demand for a New Technology: Bt Cotton and Insecticide Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 118-132.
    18. Steven T. Sonka & Robert H. Hornbaker & Michael A. Hudson, 1989. "Managerial Performance and Income Variability for a Sample of Illinois Cash Grain Producers," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 11(1), pages 37-47.
    19. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    20. Marra, Michele C. & Pardey, Philip G. & Alston, Julian M., 2002. "The payoffs to agricultural biotechnology: an assessment of the evidence," EPTD discussion papers 87, International Food Policy Research Institute (IFPRI).
    21. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    22. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, vol. 50(1), pages 43-61, January.
    23. Fernandez-Cornejo, Jorge, 2007. "U.S. Farmers Increase Adoption of Genetically Engineered Crops and Favor Multiple Traits," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-1, September.
    24. J. Davis & P. Caskie & M. Wallace, 2009. "Economics of farmer early retirement policy," Applied Economics, Taylor & Francis Journals, vol. 41(1), pages 35-43.
    25. Johnson, James D. & El-Osta, Hisham S., 1998. "Determinants of Financial Performance of Commercial Dairy Farms," Technical Bulletins 33561, United States Department of Agriculture, Economic Research Service.
    26. Mishra, Ashok & El-Osta, Hisham, 2007. "Factors Affecting Succession Decisions in Family Farm Businesses: Evidence from a National Survey," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2007, pages 1-10.
    27. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    28. Kauffman, Jonas B. III & Tauer, Loren W., 1986. "Successful Dairy Farm Management Strategies Indentified By Stochastic Dominance Analyses Of Farm Records," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(2), pages 1-10, October.
    29. Barry K. Goodwin & Ashok K. Mishra, 2004. "Farming Efficiency and the Determinants of Multiple Job Holding by Farm Operators," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 722-729.
    30. McBride, William D. & El-Osta, Hisham S., 2002. "Impacts Of The Adoption Of Genetically Engineered Crops On Farm Financial Performance," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(1), pages 1-17, April.
    31. Fernandez-Cornejo, Jorge & Klotz-Ingram, Cassandra & Jans, Sharon, 2002. "Farm-Level Effects Of Adopting Herbicide-Tolerant Soybeans In The U.S.A," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(1), pages 1-15, April.
    32. Wallace E. Huffman, 1977. "Allocative Efficiency: The Role of Human Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 59-79.
    33. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1.
    34. Ashok Mishra & Christine Wilson & Robert Williams, 2009. "Factors affecting financial performance of new and beginning farmers," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(2), pages 160-179, July.
    35. Fernandez-Cornejo, Jorge & Klotz-Ingram, Cassandra & Jans, Sharon, 2002. "Farm-Level Effects of Adopting Herbicide-Tolerant Soybeans in the U.S.A," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(1), pages 149-163, April.
    36. Payne, Tim & Fernandez-Cornejo, Jorge & Daberkow, Stan G., 2003. "Factors Affecting The Likelihood Of Corn Rootworm Bt Seed Adoption," 2003 Annual Meeting, July 13-16, 2003, Denver, Colorado 35983, Western Agricultural Economics Association.
    37. Hennings, Enrique & Katchova, Ani L., 2005. "Business Growth Strategies Of Illinois Farms: A Quantile Regression Approach," 2005 Annual meeting, July 24-27, Providence, RI 19367, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    38. Rougoor, Carin W. & Trip, Ger & Huirne, Ruud B. M. & Renkema, Jan A., 1998. "How to define and study farmers' management capacity: theory and use in agricultural economics," Agricultural Economics, Blackwell, vol. 18(3), pages 261-272, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aruga, Kentaka, 2011. "非遺伝子組換え大豆とエネルギーの価格関係について [Relationships among the Non-Genetically Modified Soybean and Energy Prices]," MPRA Paper 38186, University Library of Munich, Germany, revised 20 Aug 2011.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oliver Musshoff & Norbert Hirschauer, 2011. "A behavioral economic analysis of bounded rationality in farm financing decisions," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(1), pages 62-83, May.
    2. Adhikari, Arun & Mishra, Ashok K. & Chintawar, Sachin, 2009. "Adoption of Technology and Its Impact on Profitability of Young and Beginning Farmers: A Quantile Regression Approach," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46830, Southern Agricultural Economics Association.
    3. Yoo, Do-il, 2012. "Individual and Social Learning in Bio-technology Adoption: The Case of GM Corn in the U.S," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124975, Agricultural and Applied Economics Association.
    4. Areal, Francisco J. & Riesgo, Laura & Gómez-Barbero, Manuel & Rodríguez-Cerezo, Emilio, 2012. "Consequences of a coexistence policy on the adoption of GMHT crops in the European Union," Food Policy, Elsevier, vol. 37(4), pages 401-411.
    5. Chintawar, Sachin & Mishra, Ashok K. & Gillespie, Jeffrey M., 2009. "The Impact of Adoption of Genetically Modified Corn on the Off-Farm Labor Supply in the United States," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46832, Southern Agricultural Economics Association.
    6. Mutuc, Maria Erlinda M. & Rejesus, Roderick M. & Pan, Suwen & Yorobe, Jose M., Jr., 2012. "Impact Assessment of Bt Corn Adoption in the Philippines," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(1), pages 1-19, February.
    7. Matty Demont & Marie Cerovska & Wim Daems & Koen Dillen & József Fogarasi & Erik Mathijs & František Muška & Josef Soukup & Eric Tollens, 2008. "Ex Ante Impact Assessment under Imperfect Information: Biotechnology in New Member States of the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(3), pages 463-486, September.
    8. Dependra Bhatta & Krishna P. Paudel & Kai Liu, 2023. "Factors influencing water conservation practices adoptions by Nepali farmers," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 10879-10901, October.
    9. Jeffrey Hyde & Lisa Holden & Richard Stup, 2008. "The Effect of Human Resource Management Practices on Farm Profitability: An Initial Assessment," Economics Bulletin, AccessEcon, vol. 17(12), pages 1-10.
    10. Frisvold, George, 2010. "Resistance Management and Sustainable Use of Agricultural Biotechnology," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188091, International Consortium on Applied Bioeconomy Research (ICABR).
    11. Schorr, A. & Lips, M., 2018. "Influence of milk yield on profitability a quantile regression analysis," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277000, International Association of Agricultural Economists.
    12. Foreman, Linda F. & Livezey, Janet S., 2003. "Factors Contributing To Financially Successful Southern Rice Farms," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35215, Southern Agricultural Economics Association.
    13. Pham, Huong Dien & Waibel, Hermann, 2018. "Risk attitudes, knowledge, skills and agricultural productivity," TVSEP Working Papers wp-007, Leibniz Universitaet Hannover, Institute for Environmental Economics and World Trade, Project TVSEP.
    14. Do-il Yoo & Jean-Paul Chavas, 2021. "An analysis of risk aversion in biotechnology adoption: the case of US genetically modified corn," Empirical Economics, Springer, vol. 60(5), pages 2613-2635, May.
    15. Bert Lenaerts & Yann de Mey & Matty Demont, 2022. "Revisiting multi‐stage models for upstream technology adoption: Evidence from rapid generation advance in rice breeding," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(1), pages 277-300, February.
    16. Khanal, Aditya R. & Mishra, Sachin K & Honey, Ummey, 2018. "Certified organic food production, financial performance, and farm size: An unconditional quantile regression approach," Land Use Policy, Elsevier, vol. 78(C), pages 367-376.
    17. Anjani Kumar & Ashok K. Mishra & Sunil Saroj & Vinay K. Sonkar & Ganesh Thapa & Pramod K. Joshi, 2020. "Food safety measures and food security of smallholder dairy farmers: Empirical evidence from Bihar, India," Agribusiness, John Wiley & Sons, Ltd., vol. 36(3), pages 363-384, June.
    18. Kim, Seon-Ae & Westra, John V. & Gillespie, Jeffrey M., 2006. "Factors Influencing the Adoption of Russian Varroa-Resistant Honey Bees," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35311, Southern Agricultural Economics Association.
    19. Sadashivappa, Prakash & Qaim, Matin, 2009. "Effects of Bt Cotton in India During the First Five Years of Adoption," 2009 Conference, August 16-22, 2009, Beijing, China 49947, International Association of Agricultural Economists.
    20. Agbeyegbe, Terence D., 2015. "An inverted U-shaped crude oil price return-implied volatility relationship," Review of Financial Economics, Elsevier, vol. 27(C), pages 28-45.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:afrpps:v:71:y:2011:i:1:p:41-61. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.