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Incentive to reduce crop trait durability

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  • Ambec, Stefan
  • Langinier, Corinne
  • Lemarie, Stephane

Abstract

Inbred line seed producers face competition from their own consumers: farmers who save part of their harvest can costly self-produce. To reduce this competition, seed producers can switch to non-durable hybrid seed production. In a two-period model, we investigate what is the impact of crop durability on self-production, pricing strategies and switching decision. We first study the pricing decisions and switching decisions of an inbred line seed monopoly. Then, we analyze how the monopoly's behavior is affected by the entry of a hybrid seed producer. We also examine how the introduction of royalties on farmers who self-produce improves efficiency. Our main finding is that, for some constellation of costs, an inbred line seed monopoly has an incentive to produce technologically dominated hybrid seed in order to extract more surplus from farmers. Along the same lines, an inbred line monopoly has an incentive to let a hybrid seed producer enters the market for discrimination purposes.

Suggested Citation

  • Ambec, Stefan & Langinier, Corinne & Lemarie, Stephane, 2005. "Incentive to reduce crop trait durability," 2005 Annual meeting, July 24-27, Providence, RI 19251, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19251
    DOI: 10.22004/ag.econ.19251
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    Cited by:

    1. Khachaturyan, Marianna & Yiannaka, Amalia, 2006. "The market acceptance and welfare impacts of genetic use restriction technologies (GURTS)," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10097, European Association of Agricultural Economists.
    2. Richard S. Gray, 2021. "In defense of farmer saved seeds," Review of Agricultural, Food and Environmental Studies, Springer, vol. 102(4), pages 451-460, December.
    3. Hervouet, Adrien & Langinier, Corinne, . "Plant Breeders’ Rights, Patents, and Incentives to Innovate," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(01).
    4. Eaton, Derek, 2015. "Innovation and IPRs for Agricultural Crop Varieties as Intermediate Goods," 2015 Conference, August 9-14, 2015, Milan, Italy 211581, International Association of Agricultural Economists.
    5. Baudry Marc & Hervouet Adrien, 2016. "Innovation in the Seed Market: The Role of IPRs and Commercialization Rules," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 51-68, May.
    6. Adrien Hervouet & Stéphane Lemarié, 2025. "Farm‐saved seed, royalty rates, and innovation in plant breeding," American Journal of Agricultural Economics, John Wiley & Sons, vol. 107(2), pages 465-503, March.
    7. Adrien Hervouet & Marc Baudry, 2011. "Promoting innovation in the seed market and biodiversity: the role of IPRs and commercialization rules," Post-Print hal-02012239, HAL.
    8. Derek Eaton, 2013. "Innovation and IPRs in the Agricultural Seed Sector," CIES Research Paper series 19-2013, Centre for International Environmental Studies, The Graduate Institute.
    9. Adrien Hervouet & Stéphane Lemarié, 2021. "The Economics of Royalty Rate in Plant Breeding," Post-Print hal-03837325, HAL.
    10. Eaton, Derek, 2014. "A model of IPRs in the international supply chain of seeds and agricultural production," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182643, European Association of Agricultural Economists.
    11. Jaeck, Melanie & Lifran, Robert, 2011. "The Economic Determinants of the On-farm Management of Rice Cultivars in the Rhone River Delta (France)," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115508, New Zealand Agricultural and Resource Economics Society.

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