Economic Analysis On Chinese Domestic Genetically Modified Cotton R&D Investment And Application

The Genetically Modified cotton hybridized by the Chinese property right gene has made much progress by stabilizing cotton production, increasing production benefit and protecting the ecological environment in China. What 's more, it impacts on the whole GM seed market situation as the GM cotton hybridized by Monsanto gene was once in a monopoly status in Chinese GM cotton production.However, the study from an economic view about Chinese GM cotton at present is limited to its production and consumption, and there is not any analysis on its R&D investment. What is the research framework on GM cotton in China? Can the investment get high return? How could the Chinese GM cotton get a high speed diffusion comparing with Monsanto's? The research objective of this paper is to answer these questions. In order to fulfill these objectives, we surveyed 29 GM cotton research institutes of China, talked with GM cotton experts and gathered from relative Yearbooks to obtain our data. The main methods are Economic Surplus theory and DREAM Model. Our main findings and conclusions were as follows:First, using the survey materials of 29 Chinese GM cotton research institutes, the paper defined the Chinese GM cotton research system and its different work on different research stages. The result demonstrates that a full-function GM cotton research system in china has already come into being.Second, the paper estimated the total R&D investment of GM cotton in China based on the 29 research institutes surveyed. It also calculated the R&D investment allocation structure such as different source from central government, provincial government, research institutes-their own or private companies and association, different purpose on direct and indirect investment and different research content on fundamental field, application field and experimental development. Meanwhile, the paper analyzed the alteration of R&D investment allocation structure from 1991 to 2005. We concluded that Chinese GM cotton R&D investment was in accordance with the international biotech development road, which provides empirical evidence for other agricultural high-tech industrialization in China.Third, using the model of Dynamic Research EvaluAtion for Management (based on Economic Surplus Theory), designing four scenarios in different cotton areas along Yellow River and Yangtze River, and in different varieties as transgenic hybridized variety and non-hybridized variety, the paper calculated the total investment benefit and Internal rate of return (IRR) in whole cotton life span from 1997-2015(Ex-post from 1997 to 2005 and ex-ante from 2006 to 2015), and analyzed three main sensitive factors, cotton yield, amount of pesticide application and variety life span. With the case of two typical varieties Lumianyan 15 and SGK321, the paper quantitatively studied how the benefit from R&D investment was influenced by different cotton character between a transgenic hybridized variety and a non-hybridized variety. The results showed that the IRR from GM cotton investments is 60.57 percent; IRR from hybridized cotton is 25 percent higher than that of non-hybridized; that the benefit will increase nearly 10 million when the hybridized GM cotton adopting rate increases one percent with the total planting area unchanged; that the yield was the most sensitive factor than the other two, pesticide used and the life span of GM cotton.Fourth, the paper discussed the framework of Chinese GM cotton diffusion compared with that of Monsanto's GM cotton diffusion in China. Monsanto, whose product was supposed to have 95 percent in Chinese market at the beginning, is the distinct private company with the seeds breeding, producing and diffusion integrative. On the contrary, cotton research institutes, government diffusion section and Seeds Company collaborated to increase Chinese GM cotton extension. The diffusion framework of Chinese GM cotton needs to be improved in the interest coupling between different involved bodies, seed purity and quality supervision.According to the research results, the paper put forward the following policy suggestions: 1. strengthening the GM cotton R&D system in fundamental and application research, and encouraging private investment to make transgenic technology more perfect when applied in reality; 2. Particularly enhancing the GM hybridized variety research and diffusion to make more benefit, emphasizing GM cotton field management and cotton variety update; 3.Constructing a good competitive environment for seed market, taking all kinds of forms to connect the different bodies involved in extension, and reinforcing seeds processing management both on equipment and supervision levels.