Reforming intellectual property rights and the Bt cotton seed industry in China: Who benefits from policy reform?

China has been one of the leaders in agricultural biotechnology research and the adoption of transgenic plants. Despite this, critics argue that China's biotechnology policies could be improved to provide more benefits to farmers. The objective of the paper is to examine if policy changes could improve the welfare of farmers in the cotton industry. The paper first reviews recent changes in laws and policies that affect China's plant biotechnology sector—with a focus on IPR legislation and seed industry reform. Next, using a primary data set collected from 1661 plots from a sample of farmers in northern China in 1999, 2000 and 2001, we econometrically estimate the effect of changes to intellectual property rights (IPR) and seed industry reform on farmer pesticide use and yields. Our results are consistent with a conclusion that improvements to the IPR environment and greater commercialization of the seed industry can increase the benefits that farmers derive from new cotton technology.