ique’s cotton sector is very important to the economy and to poverty reduction in the rural sector. Cotton production in Mozambique is characterized by low levels of productivity, low prices and low returns. Cotton farmers in Mozambique are often no better off than their neighbors who do not grow cotton. Not surprisingly, many cotton farmers have switched to other crops such as sesame. But the Government of Mozambique and the National Cotton Institute (INE) are committed to improving the profitability of the cotton sector and encouraging new investments by international companies. Looking at cotton production globally, the most important innovation in recent years has been the introduction of transgenic Bt cotton. Bt cotton varieties have built-in resistance to bollworm, a devastating insect pest. Cotton production in countries that have introduced Bt varieties, like India, China and the United States, has soared. Yet no country in Sub-Saharan Africa (SSA), with the exception of South Africa, has yet introduced Bt cotton. Burkina Faso is at an advanced stage of testing. Mozambique should not ignore the single most important technical advance in rain-fed cotton production in the past decade. What are the potential benefits and costs to Mozambique from the introduction of Bt cotton? Would it be profitable for farmers to adopt? What would be the effects of adoption on poverty? If the results are potentially profitable what steps need to be taken and by who to realize the potential gains? This working paper answers these questions by conducting first a detailed review of the experience of other countries who have adopted Bt cotton, and then an economic ‘experiment’ to estimate the expected profitability of cotton production based on farm-level cotton pest control and crop management data.
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