Working Papers
1. The Game of Corn Rootworm Control with Bt Crops. Ziwei Ye
Abstract The corn rootworm is a major corn pest that costs the US economy an estimated one billion dollars per year. To reduce rootworm damage, corn growers plant genetically engineered hybrids that produce rootworm-active Bacillus thuringiensis (Bt) toxins. We provide the first empirical evidence of areawide suppression from rootworm Bt corn hybrids, using a unique and representative panel on corn root damage in non-Bt experimental fields and regional Bt corn coverage from 2003 to 2016 in the Corn Belt. Findings are consistent in suggesting a significant yield benefit from suppressive Bt corn planting, but the pest suppression is effective only when regional Bt coverage level is sufficiently high, i.e., greater than 63%. This is followed by a synthesis of game theory and biological modeling that formalizes the inconsistency between voluntary and group-optimal in the presence of two countervailing externalities: free-riding incentives arising from area suppression, and susceptibility resource depletion. The theoretical analysis shows that at the current Bt coverage level, voluntary planting exceeds the group-optimal level. The policy implications for sustainable pest management are discussed.
Fig. Piecewise linear effects of areawide rootworm Bt planting on root injury scale, 2003-2016. The green line represents the fitted piecewise linear function, with the dashed lines denoting 95% confidence intervals. The orange dots are the predicted values of observations in the sample based on the piecewise linear estimates.
2. Adoption of transgenic, insect-protected corn reduces aflatoxin- and drought-related insurance claims. Wei-Ting Chiang, Ziwei Ye, David A. Hennessy, Gary P. Munkvold, and Felicia Wu.
Abstract Since 1996, transgenic Bt maize (or Bt corn), which contains transgenes from the soil bacterium Bacillus thuringiensis (Bt) has progressed from containing one plant-incorporated protectant per hybrid to multiple stacked and pyramided traits in the same hybrid. Early Bt genes protected against corn borers such as Ostrinia nubilalis (European corn borer, ECB), with limited protection against other lepidopteran pests that feed on kernels. In 2003, the first Bt hybrids with protection against Diabrotica virgifera (western corn rootworm, CRW) were planted, and later years saw the stacking of traits to protect against multiple insect pests, as well as to confer herbicide and drought tolerance. We determined if these transgenic traits indirectly protected against aflatoxin and drought risk by analyzing crop insurance claims made by United States corn growers from 2003-2016. Hybrids containing lepidopteran protection alone or stacked with CRW traits protected against aflatoxin risk, with a greater effect in stacked events. Both lepidopteran and CRW traits showed reduced drought damage, with the strongest effect in CRW-protected corn, which may be because healthier root systems improved water utilization.
3. Vip-Containing Bt Corn and Irrigation Reduce Aflatoxin Risk in Southern US Corn Fields: An Analysis of Crop Insurance Claims. Wei-Ting Chiang, David A. Hennessy, Jina Yu, Ziwei Ye, and Felicia Wu.
Abstract Aflatoxin, a liver carcinogen produced by the fungi Aspergillus flavus and A. parasiticus, is a common contaminant of corn grown in warm climates worldwide. In the United States, this has meant that corn grown in Southern states have had perennial aflatoxin contamination problems. Aside from heat, drought stress and insect pest damage can also increase the risk of aflatoxin contamination in corn. While transgenic Bt corn has been planted in the United States since 1996, Bt corn that specifically contains vegetative insecticidal proteins (Vip) have been available commercially since 2011. These Vip traits have improved control against the corn pests corn earworm (Helicoverpa zea) and fall armyworm (Spodoptera frugiperda): two insect pests associated with increased risk of A. flavus infection and subsequent aflatoxin contamination. In this study we examined how corn growers’ crop insurance claims for aflatoxin damage correlated with drought, daily maximum temperatures, irrigation, Bt corn, and particularly Vip-containing Bt corn planting in six southern US states from 2011-2016. We found that Vip-containing Bt corn planting and irrigation were both associated with lower aflatoxin risk in these six states. Additionally, a dry June and July increased aflatoxin risk, indicating the roles of drought in midsummer as additional risk factors for the developing corn plant. Overall, the region’s declining water table together with climate change suggest that the region will face greater aflatoxin risks in the decades to come. Vip-containing Bt corn may play a role in reducing some of the aflatoxin-related damage.
Work in Progress
1. Drought-tolerant Technology: A Mixed Blessing. Ziwei Ye, David A. Hennessy, Felicia Wu.
Download the AAEA poster here
2. The impact of land market openning in Ukraine. (with Klaus W. Deininger, Donald F. Larson, Oleg Nivievskyi, and Anna Harus)
Abstract On July 1, 2021, the Government of Ukraine lifted a moratorium on agricultural land sales that had been in place for more than 20 years. The new policy affects 7 million landowners and nearly 71 percent of all land in Ukraine. Land valuations are rising in anticipation of the new policies and are expected to rise further as reforms are fully implemented. This paper uses farm-level data from 2016-2019 to estimate a translog cost function for Ukraine’s gain and oilseed subsector, which account for 29 32 percent of the country’s export earnings. We use the model, in combination with a hedonic pricing model, to simulate the impacts of forecasted land-prices increases and declines in implicit transaction costs on production costs, land and labor use, and technology choice. Simulations suggest that published forecasted land-price increases in excess of 50 percent are unlikely because of the disruptive displacement of land from the subsector needed to sustain such increases. The estimated model reveals little variation in applied production technologies across farm size and simulations also show that the policy impacts are similar except for the smallest farms in our sample. The simulations do show some variation in regional impacts, due to differences in transaction costs and labor markets.
3. The Price of Antimicrobial Resistance Risk: Evidence from the new VFD rule. Ziwei Ye, and April Athnos
Abstract Higher antimicrobial-resistance (AMR) risk of living in proximity to livestock farms has been indicated in scientific studies and therefore has the potential to impact the nearby housing markets. A new antimicrobial policy, the Veterinary Feed Directive (VFD) rule introduced on October 1st, 2015, provides a unique opportunity to identify the effect of AMR risk as an environmental disamenity from other disamenities that are associated with living in proximity to livestock farms, and thereby the valuation of AMR risk using a hedonic approach. In this paper, we estimate the hedonic price model for rural properties in Warren County, Iowa to investigate the effects of distance to swine CAFOs on property values before and after the policy introduction. We find that at the same distance, property value declines after the policy shock. At sample average, for a distance increase of 0.5 miles, the property value reduction attributed to the policy shock is \$1,078, and the estimated value loss for our sample is significant: the total value loss is \$1.21 million, which translates into a 5.26% loss.