You are doing field work in India. You go into rural villages and you interview

Question

You are doing field work in India. You go into rural villages and you interview a large number of families who are farmers. For each family, you record the following information:

Y = annual family income (in rupees)
C = number of children
L = whether or not the male adult is literate
F = the amount of land the family farms (in hectares)
B = whether or the family has a bank account

c. Here are values of the same mean and sample standard deviation for Y, C, and F, and also the pairwise covariances between these variables:

Mean Standard Deviation Covariance
Y 19000 3000 Syc = -1680
C 4.7 1.4 Scf = 0.196
F 1.2 .2 Syf = 360

Originally, Y is measured in rupees. You decide to add a government subsidy for education, in the amount of 500 rupees, that each family receives. Also, you decide to change the units so that each family's income is in US dollars. The exchange rate is 40 rupees per US dollar. Call the new variable "net US dollar family income" (N). Give the values of the mean and standard deviation of N.

d. Originally, F is measured in "hectares" (one hectare is about 2.5 acres). You decide to rescale farm size so it is measured in acres. Call the new variable A (for area). Give the value of the covariance between A and N. Give the vale of the correlation between A and N.

Explanation / Answer

In 2003, the chairman of the Ubongwa Farmers Union [1] in Makhathini, stood side-by-side with the US trade representative, Robert Zoellick. They announced together that the US would take the European Union (EU) to the World Trade Organisation (WTO) to challenge its stand on genetic modification (GM). The clear message to both the EU and Africa was that the US was standing by the African farmer by giving it access to GM technologies, whereas the EU was not. The Bt cotton farmers of the Makhathini Flats, in northern KwaZulu Natal, South Africa, had become a centrepiece of the GM industry's global promotion of GM crops as a solution to poverty and hunger. Why? A previous study, focussing on the agricultural economics of Bt cotton and published three years previously, had proclaimed huge yield increases for Bt cotton farmers in the Makhathini floodplains. [2] This study had a profound impact around the world. Bt cotton was heralded as an African success story by the biotech industry. Numerous delegations of African scientists, policy makers, farmer representatives and journalists, were brought to South Africa to meet with selected farmers in Makhathini and to showcase the benefits of GM crops for African farmers, all kindly funded by the GM industry and the US government. [3] Even the FAO used this study as a basis for its widely criticised SOFA report [4] in 2004. Yet, it is now widely recognised that there is massive variability in the growing of Bt cotton; single surveys of farmers provide variable answers, each growing season provides very different results in the growing of Bt cotton. All in all, this initial economic study was a bit premature [5] and the publicity generated from it, plainly misleading. It is not only in South Africa that the GM industry has been proclaiming the benefits of Bt cotton. For example, in India, Monsanto led a massive media campaign of showing the wonderful benefits of Bt cotton, which, it turns out, have proved to be extremely misleading (see Box: Bt Cotton in Andhra Pradesh - a three year assessment below). Therefore, we have a few widely publicised studies proclaiming the benefits of Bt cotton for small farmers, including higher yields and reduced pesticide use. However, the growing evidence of farmers’ experiences points to a darker reality, as shown by this article in South Africa. Bt cotton has not proved to be sustainable in terms of reducing pesticide use nor in terms of improving income for farmers. In many areas insect resistance management plans are not known by farmers and therefore not followed. Secondary pests are becoming a major problem and in some areas, such as in India, Bt cotton simply did not perform. Far from addressing the problems faced by small farmers, reports from the field show that Bt cotton exacerbates their poverty. Alternative methods for reducing pesticide use in cotton are not promoted even though it has proven to be very successful. [6] Bt cotton is just a distraction that maintains the pesticide industry and lures countries of the South into accepting GM. For it is clear that Bt cotton is also a Trojan Horse. By having one GM crop in place, it is then possible and far easier to grow other GM crops; the necessary legislation is in place, the relevant scientists are trained up, the idea of genetically modified crops is more acceptable, etc....[7] Bt cotton has been chosen as a Trojan Horse in Africa and India, as it is perceived as being less controversial (it is not a food crop) and it has been easy to convince farmers with little money to start growing it.

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