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Regulating transgenic soybean production in Argentina

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  • Pascale Phelinas

    (CESSMA UMRD 245 - Centre d'études en sciences sociales sur les mondes africains, américains et asiatiques - IRD - Institut de Recherche pour le Développement - Inalco - Institut National des Langues et Civilisations Orientales - UPD7 - Université Paris Diderot - Paris 7)

  • Sonia Schwartz

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article investigates how to regulate transgenic soybean production in Argentina. Taking into account the broad range of negative externalities associated with transgenic soybean production, we explore the effects of two different policy instruments, namely a subsidy for non-transgenic soybean and production quotas for transgenic soybean. Taking into account the political and economic context in Argentina, we demonstrate that auctioned production quotas are the best way to achieve the regulation of transgenic soybean production. However, the organization of the agricultural sector in Argentina is such that "raising rivals' costs" behavior could occur on the quota market although the output price is set exogenously. We show that auctioned quotas limit this anti-competitive behavior. Finally, we demonstrate that introducing a shadow cost of public funds leads to an increase in the optimal production level of transgenic soybean.

Suggested Citation

  • Pascale Phelinas & Sonia Schwartz, 2017. "Regulating transgenic soybean production in Argentina," Working Papers halshs-01656924, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01656924
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01656924
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    More about this item

    Keywords

    Transgenic soybean; Argentina; Glyphosate; Environmental regulation; Production quotas; Market power.;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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