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The distortion in the EU feed market due to import constraints on genetically modified soy

Author

Listed:
  • Shyam Kumar Basnet

    (Stockholm University
    Swedish University of Agricultural Sciences)

  • Ranjan Kumar Ghosh

    (Indian Institute of Management Ahmedabad (IIMA))

  • Mattias Eriksson

    (Swedish University of Agricultural Sciences)

  • Carl-Johan Lagerkvist

    (Swedish University of Agricultural Sciences)

Abstract

Feed importers in some EU member states face constraints on imports of genetically modified (GM) soy, a practice that may compromise the interests of EU livestock farmers. Using the cases of Sweden and Austria, we analyzed price transmission in the soy supply chain originating from Brazil, applying an asymmetric non-linear auto-regressive distributed lag (ARDL) model to identify short-run and long-run asymmetries. The results revealed significant asymmetric effects in how positive and negative price changes are absorbed within the feed industry. Notably, increases in the cost of Brazilian soy swiftly affect the prices for EU farmers, while cost reductions fail to trigger corresponding price decreases. Consequently, stronger constraints on GM soy imports are likely to exacerbate the competitiveness challenges faced by livestock farmers, primarily due to their reliance on non-GM soy. This implies that the restrictions on GM imports need to be relaxed or that low-cost local protein alternatives need to be developed.

Suggested Citation

  • Shyam Kumar Basnet & Ranjan Kumar Ghosh & Mattias Eriksson & Carl-Johan Lagerkvist, 2023. "The distortion in the EU feed market due to import constraints on genetically modified soy," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-26, December.
    • Handle: RePEc:spr:agfoec:v:11:y:2023:i:1:d:10.1186_s40100-023-00290-7
    DOI: 10.1186/s40100-023-00290-7
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    More about this item

    Keywords

    Soy supply; Price transmission; ARDL model; Genetically modified;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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