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Economic Effects of Agricultural Biotechnology Research in the Presence of Price-distorting Policies

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  • Kym Anderson

    ()
    (School of Economics, University of Adelaide, Australia)

  • Chantal Nielsen

    (Danish Research Institute of Food Economics, University of Copenhagen, Denmark)

Abstract

The economic welfare implications of some countries using new genetically modified varieties in crop production will depend on which countries choose to adopt them and on whether others (notably Western Europe) ban their importation. They also depend on existing (non-GMOspecific) agricultural policies in affected markets. This paper uses a well-received empirical economy-wide model of the global economy (GTAP) to quantify the effects of selected countries enjoying an assumed degree of productivity growth from adopting GMO maize and soybean. It does so first by leaving existing distortionary policies in place and then assuming agricultural policies in Western Europe are completely liberalised. In both cases we investigate the effects of Western Europe refraining from using GMO technology in its own farm production but without versus with a ban on imports of GM products. The results suggest that (a) such an import ban would have a large adverse effect on economic welfare, particularly in Western Europe itself, and (b) while estimated global economic welfare benefits from the new biotechnology are not greatly reduced by EuropeÂ’s traditional price-distorting policies, the reductions in technology gains are concentrated in non-European countries.

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Bibliographic Info

Paper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2002-32.

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Length: 27 pages
Date of creation: Nov 2002
Date of revision:
Handle: RePEc:adl:cieswp:2002-32

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Keywords: GMOs; benefits of R&D; agricultural and trade policies;

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Cited by:
  1. Matthias Gruber, 2004. "Inside or outside? The role of the WTO in the settlement of the transatlantic trade dispute on GMOs," Intereconomics: Review of European Economic Policy, Springer, vol. 39(1), pages 36-45, January.
  2. Zhao, Xueyan & Anderson, Kym & Wittwer, Glyn, 2003. "Who gains from Australian generic wine promotion and R&D?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), June.
  3. Anderson, Kym & Jackson, Lee Ann & Nielsen, Chantal Pohl, 2004. "Genetically modified rice adoption : implications for welfare and poverty alleviation," Policy Research Working Paper Series 3380, The World Bank.
  4. Anderson, Kym & Valenzuela, Ernesto & Jackson, Lee Ann, 2006. "Recent and prospective adoption of genetically modified cotton : a global computable general equilibrium analysis of economic impacts," Policy Research Working Paper Series 3917, The World Bank.
  5. Anderson, Kym & Jackson, Lee Ann & Valenzuela, Ernesto, 2006. "GM Cotton Adoption, Recent and Prospective: A Global CGE Analysis of Economic Impacts," CEPR Discussion Papers 5568, C.E.P.R. Discussion Papers.
  6. Kym Anderson & Ernesto Valenzuela & Lee Ann Jackson, 2007. "Recent and Prospective Adoption of Genetically Modified Cotton: A Global CGE Analysis of Economic Impacts," Centre for International Economic Studies Working Papers 2007-07, University of Adelaide, Centre for International Economic Studies.

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