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GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach

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Author Info
Konduru, Srinivasa
Kalaitzandonakes, Nicholas
Magnier, Alexandre
Abstract

Since their commercial introduction in 1996, genetically modified (GM) crops have been quickly adopted world wide, but some GM crops/varieties have not received regulatory approval for use in some importing countries, leading to asynchronicity in regulatory approvals. In this context, the international agricultural trade relied on analytical GMO testing which is a statistical process, along with identity preserved systems to segregate GM and non-GM crops. This led to a situation where measurement uncertainty became an important issue as it can lead to potential holdups at the point of import. In this background, this paper examines the implications of measurement uncertainty associated with GMO testing on the behavior of importers and exporters in a game theoretic framework. The results indicate that relative size of identity preservation costs, testing and rejection costs, the premiums offered in the non- GM markets and measurement uncertainty all have direct impacts on the behavior of importers and exporters.

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Paper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49594.

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Date of creation: 2009
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Handle: RePEc:ags:aaea09:49594

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Related research
Keywords: GMO testing; measurement uncertainty; identity preservation systems; agricultural trade; International Relations/Trade;

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  1. Wilson, William W. & Janzen, Edward L. & Dahl, Bruce L. & Wachenheim, Cheryl J., 2003. "Issues In Development And Adoption Of Genetically Modified (Gm) Wheats," Agribusiness & Applied Economics Report 23497, North Dakota State University, Department of Agribusiness and Applied Economics. [Downloadable!]
  2. Charles Noussair & StÈphane Robin & Bernard Ruffieux, 2004. "Do Consumers Really Refuse To Buy Genetically Modified Food?," Economic Journal, Royal Economic Society, vol. 114(492), pages 102-120, 01. [Downloadable!] (restricted)
  3. Bullock, David S. & Desquilbet, Marion & Nitsi, Elisavet, 2000. "The Economics Of Non-Gmo Segregation And Identity Preservation," 2000 Annual meeting, July 30-August 2, Tampa, FL 21845, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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  4. Maskus, Keith E. & Wilson, John S. & Tsunehiro Otsuki, 2000. "Quantifying the impact of technical barriers to trade : a framework for analysis," Policy Research Working Paper Series 2512, The World Bank. [Downloadable!]
  5. Golan, Elise & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  6. Murray Fulton & Konstantinos Giannakas, 2004. "Inserting GM Products into the Food Chain: The Market and Welfare Effects of Different Labeling and Regulatory Regimes," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 86(1), pages 42-60, 02. [Downloadable!] (restricted)
  7. Parcell, Joe L., 2001. "An Initial Look At The Tokyo Grain Exchange Non-Gmo Soybean Contract," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 19(1). [Downloadable!]
  8. Giannakas, Konstantinos & Fulton, Murray, 2002. "Consumption effects of genetic modification: what if consumers are right?," Agricultural Economics, Blackwell, vol. 27(2), pages 97-109, August. [Downloadable!] (restricted)
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