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Producer Contract Strategies In Gm Crops


  • Maxwell, Brett J.
  • Wilson, William W.
  • Dahl, Bruce L.


A number of challenges exist for genetically modified (GM) crop development at the production level. Contract strategies can resolve some of these challenges. Contracts can be designed to induce legal adoption of GM crops by varying technology fees, violation detection, and penalties. The objective of this research is to analyze contracting strategies to determine terms to induce legal adoption of GM wheat and to minimize technology agreement violations. A simulation model of the prospective introduction of GM technology into hard red spring wheat was developed. Results illustrate that contracts can be designed to induce desired behavior. Technology fees, probability of detection, and the level of non-GM premium were the most notable factors influencing adoption decisions.

Suggested Citation

  • Maxwell, Brett J. & Wilson, William W. & Dahl, Bruce L., 2004. "Producer Contract Strategies In Gm Crops," Agribusiness & Applied Economics Report 23534, North Dakota State University, Department of Agribusiness and Applied Economics.
  • Handle: RePEc:ags:nddaae:23534

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    References listed on IDEAS

    1. Munisamy Gopinath & Daniel Pick & Utpal Vasavada, 1999. "The Economics of Foreign Direct Investment and Trade with an Application to the U.S. Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 442-452.
    2. Mattson, Jeremy W. & Koo, Won W., 2002. "U.S. Agricultural Trade With Western Hemisphere Countries And The Effect Of The Free Trade Area Of The Americas," Agribusiness & Applied Economics Report 23525, North Dakota State University, Department of Agribusiness and Applied Economics.
    3. Yulin Ning & Michael R. Reed, 1995. "Locational determinants of the US direct foreign investment in food and kindred products," Agribusiness, John Wiley & Sons, Ltd., vol. 11(1), pages 77-85.
    4. Somwaru, Agapi & Bolling, H. Christine, 1999. "U.S. Foreign Direct Investment And Trade: Substitutes Or Complements? The Case Of The Food Processing Industry," 1999 Annual meeting, August 8-11, Nashville, TN 21715, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Ravichandran Munirathinam & Mary Marchant & Michael Reed, 1997. "The Canada U.S. free trade agreement: Competitive tradeoffs between foreign direct investment and trade," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(3), pages 312-324, August.
    6. Koo, Won W. & Mattson, Jeremy W., 2002. "Processed Food Trade And Foreign Direct Investment Under Nafta," Agribusiness & Applied Economics Report 23566, North Dakota State University, Department of Agribusiness and Applied Economics.
    7. repec:kap:iaecre:v:3:y:1997:i:3:p:312-324 is not listed on IDEAS
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