Economic Effects of Agricultural Biotechnology Research in the Presence of Price-distorting Policies
AbstractThe 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 InfoPaper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2002-32.
Length: 27 pages
Date of creation: Nov 2002
Date of revision:
GMOs; benefits of R&D; agricultural and trade policies;
Other versions of this item:
- Anderson, Kym & Nielsen, Chantal, 2004. "Economic Effects of Agricultural Biotechnology Research in the Presence of Price-Distorting Policies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 374-394.
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
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- 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.
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- 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.
- 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.
- 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.
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