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Size And Distribution Of Market Benefits From Adopting Biotech Crops

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  • Price, Gregory K.
  • Lin, William W.
  • Falck-Zepeda, Jose Benjamin
  • Fernandez-Cornejo, Jorge

Abstract

This study estimates the total benefit arising from the adoption of agricultural biotechnology in one year (1997) and its distribution among key stakeholders along the production and marketing chain. The analysis focuses on three biotech crops: herbicide-tolerant soybeans, insect-resistant (Bt) cotton, and herbicide-tolerant cotton. Adoption of these crops resulted in estimated market benefits of $212.5-$300.7 million for Bt cotton, $231.8 million for herbicide-tolerant cotton, and $307.5 million for herbicide-tolerant soybeans. These benefits accounted for small shares of crop production value, ranging from 2 percent to 5 percent. U.S. farmers captured a much larger share (about a third) of the benefits for Bt cotton than with herbicide-tolerant soybeans (20 percent) and herbicide-tolerant cotton (4 percent). Innovators' share ranged from 30 percent for Bt cotton to 68 percent for herbicide-tolerant soybeans. For herbicide-tolerant cotton, U.S. consumers and the rest of the world (including both producers and consumers) received the bulk of the estimated benefits in 1997. Estimated benefits and their distribution depend on the specification of the analytical framework, supply and demand elasticity assumptions, the inclusion of market and nonmarket benefits, crops considered, and year-specific factors (such as weather and pest infestation levels).

Suggested Citation

  • Price, Gregory K. & Lin, William W. & Falck-Zepeda, Jose Benjamin & Fernandez-Cornejo, Jorge, 2003. "Size And Distribution Of Market Benefits From Adopting Biotech Crops," Technical Bulletins 33562, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerstb:33562
    DOI: 10.22004/ag.econ.33562
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    Citations

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    Cited by:

    1. Matty Demont & Koen Dillen & Erik Mathijs & Eric Tollens, 2007. "GM Crops in Europe: How Much Value and for Whom? Les cultures génétiquement modifiées en Europe : quels avantages et pour qui? Genetisch veränderte Feldfrüchte in Europa: Welcher Wert und für wen?," EuroChoices, The Agricultural Economics Society, vol. 6(3), pages 46-53, December.
    2. Antoine Bouët & Guillaume P. Gruère, 2011. "Refining Opportunity Cost Estimates of Not Adopting GM Cotton: An Application in Seven Sub-Saharan African Countries," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 260-279.
    3. Ramasundaram, P. & Suresh, A. & Samuel, Josily & Wankhade, Shwetal, 2014. "Welfare Gains from Application of First Generation Biotechnology in Indian Agriculture: The Case of Bt Cotton," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(1).
    4. Smyth, Stuart J. & Falck-Zepeda, Jose & Ludlow, Karinne, 2016. "The Costs of Regulatory Delays for Genetically Modified Crops," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 17(2), pages 1-23, December.
    5. Run Yu & Ping Leung, 2012. "The economic implication of rising transport cost for a small open economy: a case study of Hawaii’s vegetable sector," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(3), pages 855-875, June.
    6. Bullock, David S. & D'Arcangelo, Filippo Maria & Desquilbet, Marion, 2018. "A discussion of the market and policy failures associated with the adoption of herbicide-tolerant crops," TSE Working Papers 18-959, Toulouse School of Economics (TSE), revised Aug 2019.
    7. Antoine Bouet & Guillaume Gruère, 2010. "Refining opportunity cost estimates of not adopting GM cotton : An application in seven sub-saharan african countries," Larefi Working Papers 201002, Larefi, Université Bordeaux 4.
    8. Frisvold, George B. & Reeves, Jeanne M., 2008. "The costs and benefits of refuge requirements: The case of Bt cotton," Ecological Economics, Elsevier, vol. 65(1), pages 87-97, March.
    9. Frisvold, George & Reeves, Jeanne, 2015. "Genetically Modified Crops: International Trade And Trade Policy Effects," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(2), pages 1-13, April.
    10. Frisvold, George, 2010. "Resistance Management and Sustainable Use of Agricultural Biotechnology," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188091, International Consortium on Applied Bioeconomy Research (ICABR).
    11. Takeshima, Hiroyuki, 2011. "Distribution of welfare gains from GM cassava in Uganda across different population groups and market margins," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 6(1), pages 1-20, March.
    12. Robert Finger & Nadja El Benni & Timo Kaphengst & Clive Evans & Sophie Herbert & Bernard Lehmann & Stephen Morse & Nataliya Stupak, 2011. "A Meta Analysis on Farm-Level Costs and Benefits of GM Crops," Sustainability, MDPI, vol. 3(5), pages 1-20, May.
    13. Lin, William W. & Somwaru, Agapi & Tuan, Francis C. & Huang, Jikun & Bai, Junfei, 2005. "Consumers' Willingness to Pay for Biotech Foods in China," 2005 Annual meeting, July 24-27, Providence, RI 19569, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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