Price Control on Bt Cotton Seeds in India: Impact on Seed Providers

This paper attempts to examine the impact of such price controls on the revenue and profitability of the seed providers in India. Using a panel data for 9 cotton growing states in India over 2002- 2008, we develop a dynamic logistic model to predict percentage area under Bt cotton. It is shown that the price controls have positively impacted the diffusion of technology in India and was also successful in increasing the revenue of the seed providers in the short run. The paper further examine impact of seed price control on profitability of the seed providers by postulating alternative cost conditions and find that the impact of price controls on profitability depends on the cost of providing Bt cotton seeds.