Genetically Modified Crop Innovations and Product Differentiation: Trade and Welfare Effects in the Soybean Complex
AbstractA partial equilibrium four-region world trade model for the soybean complex is developed in which Roundup Ready (RR) products are weakly inferior substitutes to conventional ones, RR seeds are priced at a premium, and costly segregation is necessary to separate conventional and biotech products. Solution of the calibrated model illustrates how incomplete adoption of RR technology arises in equilibrium. The United States, Argentina, Brazil, and the Rest of the World (ROW) all gain from the introduction of RR soybeans, although some groups may lose. The impacts of RR production or import bans by the ROW or Brazil are analyzed. U.S. price support helps U.S. farmers, despite hurting the United States and has the potential to improve world efficiency.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10098.
Date of creation: 10 Dec 2002
Date of revision:
Publication status: Published in American Journal of Agricultural Economics, August 2005, vol. 87 no. 3, pp. 621-644
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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Other versions of this item:
- Andrei Sobolevsky & GianCarlo Moschini & Harvey E. Lapan, 2002. "Genetically Modified Crop Innovations and Product Differentiation: Trade and Welfare Effects in the Soybean Complex," Center for Agricultural and Rural Development (CARD) Publications 02-wp319, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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