Evolution of resistance to Bt pesticides is a negative externality of Bt crops, but a recent paper in Science (DOI: 10.1126/science.1190242) has found that immediate pest control on non-Bt crops is a large positive externality.  The Bt corn growers also benefit from having non-Bt corn around to slow the evolution of resistance.

The New York Times reports Modified Corn Benefits Nearby Farmers, and Vice Versa:

A long-term study of corn production in the Midwest has found that the widespread use of varieties engineered with a bacterial gene that kills insect pests has had big benefits in adjacent fields of conventional corn — cutting infestations there and boosting farmers’ income by billions of dollars. The paper, “Areawide Suppression of European Corn Borer with Bt Maize Reaps Savings to Non-Bt Maize Growers,” is being published in the Oct. 8 edition of the journal Science.

…

According to the paper, maintaining “refuges” of conventional corn varieties helps prevent the corn borer from developing resistance to the engineered variety, and the yields in such areas — because of a combination of reduced insect damage and lower costs of the non-engineered seed — ensure that such plantings are profitable.

Last year, Andrew Pollack reported in The Times that a growing number of corn farmers were violating federal requirements to maintain 20 percent of fields in conventional corn varieties. The new study says that any shift to wall-to-wall Bt corn is bound to backfire and makes little economic sense, Hutchison said.

A separate analysis of the new research in Science, written by Bruce E. Tabashnik, an entomologist at the University of Arizona, describes another approach to fighting insect resistance, in which farmers — instead of setting aside certain areas as refuges — buy a seed mix blending both engineered and conventional corn varieties. He said this could be the ideal way to maximize corn production in developing countries where small farm plots still predominate.