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Genetically Modified Crops and Product Differentiation: Trade and Welfare Effects in the Soybean Complex

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  • Andrei Sobolevsky
  • GianCarlo Moschini
  • Harvey Lapan

Abstract

A partial equilibrium four-region world trade model for the soybean complex is developed in which Roundup Ready (RR) products are weakly inferior substitutes to conventional ones, RR seeds are priced at a premium, and costly segregation is necessary to separate conventional and biotech products. Solution of the calibrated model illustrates how incomplete adoption of RR technology arises in equilibrium. The United States, Argentina, Brazil, and the Rest of the World (ROW) all gain from the introduction of RR soybeans, although some groups may lose. The impacts of RR production or import bans by the ROW or Brazil are analyzed. U.S. price support helps U.S. farmers, despite hurting the United States and has the potential to improve world efficiency. Copyright 2005, Oxford University Press.

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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 87 (2005)
Issue (Month): 3 ()
Pages: 621-644

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Handle: RePEc:oup:ajagec:v:87:y:2005:i:3:p:621-644

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Citations

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Cited by:
  1. GianCarlo Moschini & Harun Bulut & Luigi Cembalo, 2005. "On the Segregation of Genetically Modified, Conventional, and Organic Products in European Agriculture: A Multi-market Equilibrium Analysis," Center for Agricultural and Rural Development (CARD) Publications 05-wp411, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  2. Crowe, Bronwyn & Pluske, Johanna M., 2006. "Is it Cost Effective to Segregate Canola in WA?," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 14.
  3. Moschini, GianCarlo, 2006. "Pharmaceutical and Industrial Traits in Genetically Modified Crops: Co-Existence with Conventional Agriculture," Staff General Research Papers 12666, Iowa State University, Department of Economics.
  4. van Tongeren, Frank & Beghin, John C. & Marette, Stephan, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," Staff General Research Papers 13146, Iowa State University, Department of Economics.
  5. Bouet, Antoine & Gruère, Guillaume & Leroy, Laetitia, 2011. "The price and trade effects of strict information requirements for genetically modified commodities: Under the Cartagena Protocol on Biosafety," IFPRI discussion papers 1102, International Food Policy Research Institute (IFPRI).
  6. Kalaitzandonakes, Nicholas & Kaufman, James & Miller, Douglas, 2014. "Potential economic impacts of zero thresholds for unapproved GMOs: The EU case," Food Policy, Elsevier, vol. 45(C), pages 146-157.
  7. Marette, Stephan & Roosen, Jutta & Blanchemanche, Sandrine & Verger, Philippe, 2008. "The Choice of Fish Species: An Experiment Measuring the Impact of Risk and Benefit Information," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(01), April.
  8. Moschini, GianCarlo, 2008. "Biotechnology and the Development of Food Markets: Retrospect and Prospects," Staff General Research Papers 12982, Iowa State University, Department of Economics.
  9. Anderson, Kym & Jackson, Lee Ann, 2005. "GM crop technology and trade restraints: economic implications for Australia and New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(3), September.
  10. GianCarlo Moschini & Harvey E. Lapan, 2005. "Labeling Regulations and Segregation of First- and Second-Generation Genetically Modified Products: Innovation Incentives and Welfare Effects," Center for Agricultural and Rural Development (CARD) Publications 05-wp391, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  11. Johan F.M.Swinnen & Thijs Vandemoortele, 2011. "On Butterflies and Frankenstein: A Dynamic Theory of Regulation," LICOS Discussion Papers 27611, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  12. Magnier, Alexandre & Konduru, Srinivasa & Kalaitzandonakes, Nicholas G., 2009. "Market and Welfare Effects of Trade Disruptions from Unapproved Biotech Crops," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49592, Agricultural and Applied Economics Association.
  13. Graham Brookes & Tun-Hsiang (Edward) Yu & Simla Tokgoz & Amani Elobeid, 2010. "Production and Price Impact of Biotech Crops, The," Food and Agricultural Policy Research Institute (FAPRI) Publications 10-wp503, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  14. Liu, Pengcheng & Huang, Chung-Huang & Feng, Zhongchao & Zhou, Deyi, 2009. "Consumer’s choice on GM labeling: evidences from China," 2009 Conference, August 16-22, 2009, Beijing, China 51807, International Association of Agricultural Economists.

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