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Roundup ready� soybeans and welfare effects in the soybean complex

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  • Giancarlo Moschini

    (Department of Economics, Iowa State University, Ames, IA 50011-1070)

  • Harvey Lapan

    (Department of Economics, Iowa State University, Ames, IA 50011-1070)

  • Andrei Sobolevsky

    (Department of Economics, Iowa State University, Ames, IA 50011-1070)

Abstract

A three-region world model for the soybean complex is developed to evaluate the welfare effects of Roundup Ready (RR) soybean adoption. The structural modeling of the innovation accounts for farmers' adoption incentives and for the observed pricing of RR soybean seeds as a proprietary technology. The calibrated model is solved for various scenarios to evaluate the production, price, and welfare impacts of RR soybean adoption. The United States gains substantially from the innovation, with the innovator capturing the larger share of the welfare gains. US farmers benefit in the base scenario, but would be adversely affected if the RR innovation were to increase yields. Spillover of the new technology to foreign competitors erodes the competitive position of domestic soybean producers, and export of the technology per se may not improve the welfare position of the innovating country. Consumers in every region gain from the adoption of RR soybeans. [JEL Classification: F14, O33, Q16]. © 2000 John Wiley & Sons, Inc.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 16 (2000)
Issue (Month): 1 ()
Pages: 33-55

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Handle: RePEc:wly:agribz:v:16:y:2000:i:1:p:33-55

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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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  1. Barbara J. Spencer & Ronald W. Jones, 1989. "Trade and Protection in Vertically Related Markets," NBER Working Papers 3023, National Bureau of Economic Research, Inc.
  2. William H. Meyers & S. Devadoss & Michael D. Helmar, 1991. "World Soybean Trade Model: Specification, Estimation, and Validation, The," Center for Agricultural and Rural Development (CARD) Publications 91-tr23, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  3. Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 3-27, Winter.
  4. Carlson, Gerald A. & Marra, Michele C. & Hubbell, Bryan J., 1997. "Transgenic Technology for Crop Protection: The New "Super Seeds"," Choices, Agricultural and Applied Economics Association, vol. 12(3).
  5. Maredia, Mywish K. & Ward, Richard & Byerlee, Derek, 1996. "Econometric estimation of a global spillover matrix for wheat varietal technology," Agricultural Economics, Blackwell, vol. 14(3), pages 159-173, August.
  6. Maredia, Mywish K. & Ward, Richard & Byerlee, Derek, 1996. "Econometric estimation of a global spillover matrix for wheat varietal technology," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 14(3), August.
  7. Rausser, Gordon C. & Scotchmer, Suzanne & Simon, Leo K., 1999. "Intellectual Property and Market Structure in Agriculture," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt70j206tr, Department of Agricultural & Resource Economics, UC Berkeley.
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