Environmental Stress, Biotechnology, and Agricultural Productivity

• Agricultural Economics Workshop

Date and Location

Thursday, November 3, 2022, 4:10 PM - 5:30 PM
ARE Library Conference Room, 4101 Social Sciences and Humanities

Abstract

The synergies between biotechnology, environmental stresses, and farm management present a new opportunity to enhance agricultural productivity. In this study, we attempt to explore the nexus between biotechnology and environmental stresses while controlling the other factors that affect agricultural productivity. We focus on ground-level ozone pollution, a major source of environmental stresses besides climate change factors that has been identified as a hidden threat to U.S. agriculture in the past two decades. Meanwhile, biotech crops such as the genetically modified (GM) corn and soybean have seen a rapid rise of adoption rate in the U.S. farm field. In this paper, we analyze data from USDA, TROPOMI, and ECMWF, combined with a survey dataset on corn and soybean seed market in the US to investigate the impact of ozone, biotech crop and other weather factors on crop productivity using a two-way fixed effects model. Our results confirm findings from existing literature that environmental stress (both extreme temperature and ozone concentration) would lead to a reduction in crop yield. We find that GM adoption have interfered with the crop’s ability to cope with ozone pollution: the detrimental effects of ozone amplified with the rise of GM adoption. Our results also suggest biotechnology has become an effective strategy for farmers to manage increased exposure to weather risks. This research highlights the potential interaction between biotech and environmental stress in affecting crop productivity and suggests new directions for R&D efforts in the agricultural biotechnology and seed industry. Our results are robust for both corn and soybeans in different econometric specifications and subsamples.