The Adoption of Genetically Modified Cotton and Poverty Reduction in Pakistan

Abstract This article employs a propensity score‐matching approach to examine the direct effects of adoption of Bacillus thuringiensis (Bt) cotton on yields, pesticide demand, household income and poverty, using cross‐sectional data from a survey of farmers in the Punjab province of Pakistan. Generally, the findings reveal that adoption of the new technology exerts a positive and significant impact on cotton yields, household income and poverty reduction, and a negative effect on the use of pesticides. The positive and significant impact of the technology on yields and household income is consistent with the potential role of new agricultural technology in directly reducing rural poverty through increased farm household income.