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The Distribution Of Benefits Resulting From Biotechnology Adoption

Author

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

Abstract

The purposes of this study are two-fold: (1) to estimate the size of total benefits arising from the adoption of agricultural biotechnology, and (2) to measure the distribution of total benefits among key stakeholders along the production and marketing chain, including U.S. farmers, gene developers, germplasm suppliers, U.S. consumers, and the producers and consumers in the rest of the world. This study focuses on the benefits that resulted from the adoption of herbicide-tolerant soybeans as well as insect-resistant (Bt) and herbicide-tolerant cotton in 1997. In this analysis, various data sources are examined for measuring the farm-level effects of adopting biotechnology and the resulting benefit estimates are compared. The size and distribution of the benefits arising from the adoption of biotech crops vary significantly, depending on the farm-level effects obtained from the various data sources and the supply and demand elasticity assumptions for the domestic and world markets. Estimates of the benefits derived from farm-level impacts that isolate the effects biotechnology appear to be the most plauible. This study does not lend support to the popular belief that U.S. farmers received at least one-half, or as much as two-thirds, of the total benefits realized from the adoption of biotechnology. In contrast, the results of this study indicate that in 1997, U.S. farmers realized considerably less than half of the total benefits. The bulk of the benefits appear to have gone to the gene supplier, seed companies, U.S. consumers, and the rest of the world.

Suggested Citation

  • Price, Gregory K. & Lin, William W. & Falck-Zepeda, Jose Benjamin, 2001. "The Distribution Of Benefits Resulting From Biotechnology Adoption," 2001 Annual meeting, August 5-8, Chicago, IL 20681, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20681
    DOI: 10.22004/ag.econ.20681
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    References listed on IDEAS

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    1. Giancarlo Moschini & Harvey Lapan, 1997. "Intellectual Property Rights and the Welfare Effects of Agricultural R&D," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1229-1242.
    2. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
    3. Sullivan, John & Wainio, John & Roningen, Vernon, 1989. "A Database For Trade Liberalization Studies," Staff Reports 278178, United States Department of Agriculture, Economic Research Service.
    4. Jose B. Falck-Zepeda & Greg Traxler & Robert G. Nelson, 2000. "Rent creation and distribution from biotechnology innovations: The case of bt cotton and Herbicide-Tolerant soybeans in 1997," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 21-32.
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    Cited by:

    1. Demont, Matty & Tollens, Eric, 2001. "Uncertainties Of Estimating The Welfare Effects Of Agricultural Biotechnology In The European Union," Working Papers 31828, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.

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