Bt-cotton seed has been effective to control the damage of bollworm in Chinese cotton production since 1999, reducing the need for pesticides and increasing incomes of Chinese farmers. Field data collected in 2004 indicates that these benefits have been eroded by increasing the use of pesticides aimed to control secondary pests. The combination of Bt-cotton seed and other forms of biological pest control may help farmers regain the economic and environmental benefits of previous years. Failure to find a solution, may lead to the discontinuation of the use of Bt-cotton seed in China and elsewhere.

Because Bt technology targets only bollworm populations, secondary pest populations have slowly eroded the benefits of Bt technology in China. Stochastic dominance tests based on primary household data from 1999–2001 and 2004 in China provide strong evidence that secondary pests have completely eroded all benefits from Bt cotton cultivation. Refuge, while currently used to prevent Bt resistance in the United States, could be used to control secondary pest populations by increasing their exposure to lethal toxins. We show that such a strategy would be profitable in China.