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Genetically modified food and international trade: The case of India, Bangladesh, Indonesia, and the Philippines

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  • Gruere, Guillaume
  • Bouet, Antoine
  • Mevel, Simon

Abstract

"Genetically modified (GM) food crops have the potential to raise agricultural productivity in Asian countries, but they are also associated with the risk of market access losses in sensitive importing countries. We study the potential effects of introducing GM food crops in Bangladesh, India, Indonesia, and the Philippines in the presence of trade-related regulations of GM food in major importers. We focus on GM field crops (rice, wheat, maize, soybeans, and cotton) resistant to biotic and abiotic stresses, such as drought-resistant rice, and use a multi-country, multi-sector computable general equilibrium model. We build on previous international simulation models by improving the representation of the productivity shocks associated with GM crops, and by using an improved representation of the world market, accounting for the effects of GM food labeling policies in major importers and the possibility of segregation for non-GM products going toward sensitive importing countries. The results of our simulations first show that the gains associated with the adoption of GM food crops largely exceed any type of potential trade losses these countries may incur. Adopting GM crops also allows net importing countries to greatly reduce their imports. Overall, we find that GM rice is bound to be the most advantageous crop for the four countries. Second, we find that segregation of non-GM crops can help reduce any potential trade loss for GM adopters, such as India, that want to keep export opportunities in sensitive countries, even with a 5 percent segregation cost. Lastly, we find that the opportunity cost of segregation is much larger for sensitive importing countries than for countries adopting new GM crops, which suggests that sensitive importers will have the incentive to invest in separate non-GM marketing channels if exporting countries like India decide to adopt GM food crops." from Authors' Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 740.

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Date of creation: 2007
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Handle: RePEc:fpr:ifprid:740

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Keywords: Genetically modified food; International trade; Developing countries; Segregation;

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  1. Huang, Jikun & Hu, Ruifa & van Meijl, Hans & van Tongeren, Frank, 2004. "Biotechnology boosts to crop productivity in China: trade and welfare implications," Journal of Development Economics, Elsevier, vol. 75(1), pages 27-54, October.
  2. Anderson, Kym & Jackson, Lee Ann, 2005. "Genetically Modified Rice Adoption: Implications for Welfare and Poverty Alleviation," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 771-788.
  3. Hareau, Guy Gaston & Norton, George W. & Mills, Bradford F. & Peterson, Everett B., 2004. "Potential Benefits Of Transgenic Rice In Asia: A General Equilibrium Approach," 2004 Annual meeting, August 1-4, Denver, CO 20334, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. van Tongeren, Frank W. & van Meijl, Hans, 2003. "International Diffusion Of Gains From Biotechnology And The European Union'S Common Agricultural Policy," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25835, International Association of Agricultural Economists.
  5. Smale, Melinda & Zambrano, Patricia & Falck-Zepeda, José & Gruère, Guillaume, 2006. "Parables: applied economics literature about the impact of genetically engineered crop varieties in developing economies," EPTD discussion papers 158, International Food Policy Research Institute (IFPRI).
  6. Elbehri, Aziz & Macdonald, Steve, 2004. "Estimating the Impact of Transgenic Bt Cotton on West and Central Africa: A General Equilibrium Approach," World Development, Elsevier, vol. 32(12), pages 2049-2064, December.
  7. Anderson, Kym & Yao, Shunli, 2002. "China, GMOs and World Trade in Agricultural and Textile Products," CEPR Discussion Papers 3171, C.E.P.R. Discussion Papers.
  8. Guillaume P. Gru�re & Mark W. Rosegrant, 2008. "Assessing the Implementation Effects of the Biosafety Protocol's Proposed Stringent Information Requirements for Genetically Modified Commodities in Countries of the Asia Pacific Economic Cooperation," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(2), pages 214-232.
  9. Kym Anderson & Lee Ann Jackson, 2005. "Some Implications of GM Food Technology Policies for Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(3), pages 385-410, September.
  10. Chantal Nielsen & Kym Anderson, 2001. "Global market effects of alternative European responses to genetically modified organisms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(2), pages 320-346, June.
  11. You, Liangzhi & Wood, Stanley, 2006. "An entropy approach to spatial disaggregation of agricultural production," Agricultural Systems, Elsevier, vol. 90(1-3), pages 329-347, October.
  12. 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.
  13. Pohl Nielsen, Chantal & Robinson, Sherman & Thierfelder, Karen, 2001. "Genetic Engineering and Trade: Panacea or Dilemma for Developing Countries," World Development, Elsevier, vol. 29(8), pages 1307-1324, August.
  14. Marra, Michele C. & Pardey, Philip G. & Alston, Julian M., 2002. "The payoffs to agricultural biotechnology: an assessment of the evidence," EPTD discussion papers 87, International Food Policy Research Institute (IFPRI).
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