Genetically engineered Bt (Bacillus thuringiensis) corn provides farmers with a new tool for controlling the European corn borer (ECB). The high efficacy and potential rapid adoption of Bt corn has raised concerns that the ECB will develop resistance to Bt. The Environmental Protection Agency has responded to these concerns by requiring farmers to plant refuge corn. Current refuge requirements are based on models that do not consider the value of dynamically varying refuge in response to increased scarcity and diminished control over time or the importance of backstop technologies currently being developed. The purpose of this paper is to evaluate dynamically optimal refuge requirements with the arrival of alternative backstop technologies and to compare the results to an optimal static refuge policy. The results show that a dynamically optimal refuge requirement only provides modest benefits above a static optimum. The results also show how the type of backstop technology and characteristics of ECB population dynamics affect the optimal refuge requirement.
This working paper was published as Secchi, Sylvia, Terrence M. Hurley, Bruce A. Babcock and Richard L. Hellmich, "Managing European Corn Borer Resistance to Bt Corn with Dynamic Refuges," in Regulating Agricultural Biotechnology: Economics and Policy, edited by Richard E. Just, Julian M. Alston and David Zilberman (New York: Springer US, 2006): 559–577, doi:10.1007/978-0-387-36953-2_25.
Available at: http://works.bepress.com/richard_hellmich/161/