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Landscape Clubs: Co-existence of GM and Organic Crops

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  • Furtan, William Hartley
  • Guzel, A.
  • Weseen, A.S.

Abstract

The possibility of increased production of genetically modified (GM) crops in agriculture accentuates the need to examine the feasibility of GM and non-GM technologies coexisting on a common physical landscape. Using the theory of clubs, this paper examines the possibility of coexistence for GM and organic wheat technologies through the formation of an organic club with an endogenously determined buffer zone. Given the available data on prices, yields, and rotations, it is shown that a club can be created in which GM and organic agricultural production technologies can economically co-exist in the same physical landscape. Specifically, co-existence results in an increase in economic welfare over a situation where only GM technology is used but is not Pareto superior because producers in the buffer zone will incur injury. We show that organic producers in the club can compensate producers in the buffer zone and still be better off. Hence, the compensation principle holds.

Suggested Citation

  • Furtan, William Hartley & Guzel, A. & Weseen, A.S., 2005. "Landscape Clubs: Co-existence of GM and Organic Crops," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24495, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24495
    DOI: 10.22004/ag.econ.24495
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    References listed on IDEAS

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    3. Scotchmer, Suzanne, 2002. "Local public goods and clubs," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 29, pages 1997-2042, Elsevier.
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    7. Furtan, William Hartley & Gray, Richard S. & Holzman, J.J., 2005. "Regulatory Approval Decisions in the Presence of Market Externalities: The Case of Genetically Modified Wheat," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(1), pages 1-16, April.
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    Keywords

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