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Forecasting the Adoption of GM Oilseed Rape: Evidence from a Discrete Choice Experiment

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  • Breustedt, Gunnar
  • Muller-Scheessel, Jorg
  • Latacz-Lohmann, Uwe
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    Abstract

    This paper explores farmers’ willingness to adopt genetically modified oilseed rape prior to its commercial release and estimates the ‘demand’ for the new technology. The analysis is based upon choice experiments with 202 German arable farmers. A multinomial probit estimation revealed that GM attributes such as gross margin, expected liability from cross pollination, or flexibility in returning to conventional oilseed rape significantly affect the likelihood of adoption. Neighbouring farmers’ attitudes towards GM cropping and a number of farmer and farm characteristics were also found to be significant determinants of prospective adoption. Demand simulations suggest that adoption rates are very sensitive to the profit difference between GM and non-GM rape varieties. A monopolistic seed price would substantially reduce demand for the new technology. A monopolistic seed supplier would reap between 45 and 80 per cent of the GM rent, and the deadweight loss of the monopoly would range between 15 and 30 per cent of that rent. The remaining rent for farmers may be too small to outweigh possible producer price discounts resulting from the costs of segregating GM and non-GM oilseed rape along the supply chain.

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    Bibliographic Info

    Paper provided by Agricultural Economics Society in its series 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK with number 36771.

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    Date of creation: 31 Mar 2008
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    Handle: RePEc:ags:aes008:36771

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    Related research

    Keywords: adoption forecast; choice experiment; genetically modified oilseed rape; multinomial probit; technology adoption; C42; C81; Q12; Q16;

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    1. Matin Qaim & Alain de Janvry, 2003. "Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 814-828.
    2. Jayson L. Lusk, 2003. "Effects of Cheap Talk on Consumer Willingness-to-Pay for Golden Rice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 840-856.
    3. Krishna, Vijesh V. & Qaim, Matin, 2006. "Estimating the Adoption of Bt Eggplant in India: Who Benefits from Public-Private Partnership?," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25311, International Association of Agricultural Economists.
    4. Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003. "Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 16-29.
    5. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-40, September.
    6. Marra, Michele C. & Hubbell, Bryan J. & Carlson, Gerald A., 2001. "Information Quality, Technology Depreciation, And Bt Cotton Adoption In The Southeast," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
    7. Wiktor Adamowicz & Peter Boxall & Michael Williams & Jordan Louviere, 1998. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 64-75.
    8. Bolduc, Denis, 1999. "A practical technique to estimate multinomial probit models in transportation," Transportation Research Part B: Methodological, Elsevier, vol. 33(1), pages 63-79, February.
    9. Bryan J. Hubbell & Michele C. Marra & Gerald A. Carlson, 2000. "Estimating the Demand for a New Technology: Bt Cotton and Insecticide Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 118-132.
    10. Adamowicz, Wiktor L. & Boxall, Peter C. & Williams, Michael & Louviere, Jordan, 1995. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments versus Contingent Valuation," Staff Paper Series 24126, University of Alberta, Department of Resource Economics and Environmental Sociology.
    11. Fernandez-Cornejo, Jorge & McBride, William D., 2002. "Adoption Of Bioengineered Crops," Agricultural Economics Reports 33957, United States Department of Agriculture, Economic Research Service.
    12. Mogas, Joan & Riera, Pere & Bennett, Jeff, 2006. "A comparison of contingent valuation and choice modelling with second-order interactions," Journal of Forest Economics, Elsevier, vol. 12(1), pages 5-30, March.
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    Cited by:
    1. Areal, Francisco J. & Riesgo, Laura & Gomez-Barbero, Manuel & Rodriguez-Cerezo, Emilio, 2011. "Adoption of GMHT Crops: Coexistence Policy Consequences in the European Union," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114227, European Association of Agricultural Economists.
    2. Skevas, Theodoros & Wesseler, Justus & Fevereiro, Pedro, 2009. "Coping with ex-ante regulations for planting Bt maize: the Portuguese experience," MPRA Paper 25609, University Library of Munich, Germany.

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