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Abstract

This study examines the impact of genetically modified maize on labour, cost and input substitutability for smallholders in South Africa. Producers of Roundup Ready® (RR) maize use significantly less child, female and male labour than non-RR producers, resulting in lower costs despite significantly higher herbicide, seed and fertiliser costs. A treatment effects model controlling for selection bias shows that the entire cost advantage and more can be attributed to the Roundup Ready® technology. These results are supported using a nonparametric kernel density estimator. Elasticities of factor substitution indicate strong substitutability among inputs; however, a lack of statistical significance limits the interpretation of the results.

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