Addressing the Externalities from Genetically Modified Pollen Drift on a Heterogeneous Landscape

Genetically modified (GM) crops have single or multiple genes introduced to obtain crop characteristics that cannot be obtained through conventional breeding. Pollen mediated gene flow from GM to non-GM crops causes some crops planted as non-GM to become GM, and this imposes economic losses on farmers who planted a non-GM crop but then have to sell the harvest on a GM market. The economic losses that result when both crops are grown together depend on the institutional arrangements and the type of property rights in place. We analyze how the spatial heterogeneity of a farmer’s fields affects the land allocation between buffers, the GM, and the non-GM crop based on cross-pollination and initial assignment of property rights. Greater spatial heterogeneity reduces the possibility of coexistence of crops on the landscape and increases the economic losses. Buffer zones enforced to reduce cross-pollination result in less coexistence on heterogeneous landscapes.