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Costs and Risks of Segregating GM Wheat in Canada

  • William W. Wilson
  • Bruce Dahl

"An analytical model was developed to explore prospective costs and risks of alternative testing strategies for a marketing system in Canada which markets both genetically modified (GM) and Non-GM wheats. The problem is solved using stochastic optimization, base case results are defined, and sensitivities conducted to evaluate impacts of selected variables. Added costs include: testing, rejection, and a risk premium which is required for handlers to be indifferent between the current and the proposed dual system. Protocols would require testing at the point of loading at the primary elevator, and export elevator, and supplementing this information with some form of grower variety declaration. There are several sources of inherent risks in such a system. For buyers, the cumulative impact of these is the risk of receiving GM content in a Non-GM shipment. For sellers, it is the risk of having a Non-GM shipment rejected. For sellers, the risk of rejection was typically less than 2%, and for buyers, the risk was typically less than 0.02%." Copyright 2006 Canadian Agricultural Economics Society.

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Article provided by Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie in its journal Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie.

Volume (Year): 54 (2006)
Issue (Month): 3 (09)
Pages: 341-359

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Handle: RePEc:bla:canjag:v:54:y:2006:i:3:p:341-359
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