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Abstract
Favorable weather and the adoption of Genetically Modified (GM) corn
hybrids are often argued to be factors that explain recent corn yield increases
and risk reduction in the U.S. Corn Belt. The focus of this analysis
is to determine whether favorable weather is the main factor explaining
increased and more stable yields or if biotechnology adoption is the more
relevant driving force. The hypothesis that recent biotechnology advances
have increased yields and reduced risks by making corn more resistant
to pests, pesticides, and/or drought is tested. Fixed effects models of
yields and crop insurance losses as functions of weather variables and
genetically modified corn adoption rates are estimated taking into account
the non-linear agronomic response of crop yields to weather. Preliminary
results show that genetically modified corn adoption rates, especially insect-
resistant corn adoption, have had a significant and positive effect on average
corn yields in the U.S. Corn Belt over the last years. Furthermore,
genetically modified corn adoption has not only increased corn's tolerance
to extreme heat but has also improved corn's tolerance to excessive and
insufficient rainfall.