Analysing the farm level economic impact of GM corn in the Philippines

• We evaluated the economic viability of GM corn in the Philippines at the farm level.
• Data are from Isabela province and include non-GM, Bt, BtHT and HT corn growers.
• Production and net income of GM corn were statistically comparable to non-GM corn.
• No differences in production-cost ratio and return on investment between corn types.
• Decomposition analysis is used to further analyse the mean gaps between corn types.

This paper analyses the farm economic viability of genetically modified (GM) corn in the Philippines. Data was collected from 114 farmers in Isabela province including non-GM, Bacillus thuringiensis (Bt), herbicide tolerant (HT) and BtHT corn farmers. Results of univariate analysis showed that non-GM corn was not statistically different from Bt, BtHT and HT corn in terms of production output, net income, production-cost ratio and return on investment. Multivariate econometric analysis for the agronomic input variables showed a higher return on investment for Bt corn as the only significant difference between seed types. Next, pest occurrence and severity variables were included in the regression to address endogeneity. The Blinder-Oaxaca decomposition method was used to further investigate differences between growers of BtHT corn and non-GM corn into an endowment and a coefficient effect. The decomposition analysis showed that BtHT corn has a negative impact on return on investment as revealed by the negative signs of the overall mean gap and the characteristics and coefficient components. In contrast, the overall mean gap for net income indicated that adopting BtHT corn could potentially increase non-GM growers’ income mainly from better control of corn borer pest even though mean levels of borer occurrence are lower for non-GM growers.