IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/199909010700001325.html
   My bibliography  Save this paper

Roundup Ready Soybeans and Welfare Effects in the Soybean Complex

Author

Listed:
  • Moschini, GianCarlo
  • LAPAN, HARVEY E
  • Sobolevsky, Andrei

Abstract

A stylized three-region world model for the soybean complex is developed to evaluate the welfare effects of Roundup Ready (RR) soybean adoption. The innovation is modeled in a structural way that explicitly accounts for the incentives open to farmers as well as for the pricing of RR soybean seeds by a multinational firm thatholds intellectual property rights. Themodel, calibrated on recent benchmark data, is solved for various scenarios to evaluate the production, price, and welf2U"e impacts of RR soybean adoption. The United States gains substantially from the superior innovation, with the innovator capturing the larger share of the welfare gains. US farmers benefit in the base scenario, but would be adversely affected if the RR innovation were to increase yields. Spillover of the new technology to foreign competitors erodes the competitive position of domestic soybean producers, and export of the technology per se may not improve the welfare position of the innovating country. With strong overseas intellectual property rights protection, the innovator-monopolist could extract a substantial share of the efficiency gains, thus benefiting the home country. But with weaker international intellectual property protection, profits from foreign sales of the new technology just offset the loss of domestic producer welfare. Consumers in every region gain from the adoption of RR soybeans.

Suggested Citation

  • Moschini, GianCarlo & LAPAN, HARVEY E & Sobolevsky, Andrei, 1999. "Roundup Ready Soybeans and Welfare Effects in the Soybean Complex," ISU General Staff Papers 199909010700001325, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:199909010700001325
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/dbebdd33-2a07-4d4b-b35f-300aee6eed9f/content
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Roningen, Vernon O. & Dixit, Praveen M., 1989. "Economic Implications Of Agricultural Policy Reforms In Industrial Market Economies," Staff Reports 278843, United States Department of Agriculture, Economic Research Service.
    2. Harvey E. Lapan & Giancarlo Moschini, 2000. "Incomplete Adoption of a Superior Innovation," Economica, London School of Economics and Political Science, vol. 67(268), pages 525-542, November.
    3. Fuglie, Keith & Ballenger, Nicole & Rubenstein, Kelly Day & Klotz, Cassandra & Ollinger, Michael & Reilly, John & Vasavada, Utpal & Yee, Jet, 1996. "Agricultural Research and Development: Public and Private Investments Under Alternative Markets and Institutions," Agricultural Economic Reports 262031, United States Department of Agriculture, Economic Research Service.
    4. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    5. Spencer, Barbara J. & Jones, Ronald W., 1992. "Trade and protection in vertically related markets," Journal of International Economics, Elsevier, vol. 32(1-2), pages 31-55, February.
    6. Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 3-27, Winter.
    7. Jagdish N. Bhagwati, 1968. "Distortions and Immiserizing Growth: a Generalization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(4), pages 481-485.
    8. Maredia, Mywish K. & Ward, Richard & Byerlee, Derek, 1996. "Econometric estimation of a global spillover matrix for wheat varietal technology," Agricultural Economics, Blackwell, vol. 14(3), pages 159-173, August.
    9. Rausser, Gordon C. & Scotchmer, Suzanne & Simon, Leo K., 1999. "Intellectual Property and Market Structure in Agriculture," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt70j206tr, Department of Agricultural & Resource Economics, UC Berkeley.
    10. Huffman, Wallace E. & Evenson, Robert E., 1993. "Science for Agriculture: A Long Term Perspective," Staff General Research Papers Archive 10997, Iowa State University, Department of Economics.
    11. William H. Meyers & S. Devadoss & Michael D. Helmar, 1991. "World Soybean Trade Model: Specification, Estimation, and Validation, The," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 91-tr23, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    12. 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.
    13. William H. Meyers & S. Devadoss & Michael D. Helmar, 1991. "World Soybean Trade Model: Specification, Estimation, and Validation, The," Center for Agricultural and Rural Development (CARD) Publications 91-tr23, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    14. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    15. Park, Walter G, 1995. "International R&D Spillovers and OECD Economic Growth," Economic Inquiry, Western Economic Association International, vol. 33(4), pages 571-591, October.
    16. Carlson, Gerald A. & Marra, Michele C. & Hubbell, Bryan J., 1997. "Transgenic Technology for Crop Protection: The New "Super Seeds"," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 12(3), pages 1-6.
    17. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908, Elsevier.
    18. Michael D. Helmar & S. Devadoss & William H. Meyers, 1991. "World Feed-Grains Trade Model: Specification, Estimation, and Validation, The," Center for Agricultural and Rural Development (CARD) Publications 91-tr18, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Moschini, GianCarlo & Lapan, Harvey E. & Sobolevsky, Andrei, 2000. "Trading Technology As Well As Final Products: Roundup Ready Soybean and Welfare Effects in the Soybean Complex," Staff General Research Papers Archive 5317, Iowa State University, Department of Economics.
    2. Roe, Terry L. & Mohtadi, Hamid, 1999. "International Trade And Growth: An Overview From The Perspective Of The New Growth Theory," 1999 Annual meeting, August 8-11, Nashville, TN 21536, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Alston, Julian M. & Wyatt, T. J. & Pardey, Philip G. & Marra, Michele C. & Chan-Kang, Connie, 2000. "A meta-analysis of rates of return to agricultural R & D: ex pede Herculem?," Research reports 113, International Food Policy Research Institute (IFPRI).
    4. Huffman, Wallace E., 1999. "New Insights on the Organization of Agricultural Research: Theory and Evidence for Western Developed Countries," ISU General Staff Papers 199907010700001319, Iowa State University, Department of Economics.
    5. Catherine C. Benjamin & Chantal Guéguen & Magalie Houée Bigot, 2003. "World cereals markets under alternative common agricultural policy reforms [Les marchés mondiaux des céréales sous les propositions de la réforme de la politique agricole commune]," Post-Print hal-02831935, HAL.
    6. Pedro Andres Garzon Delvaux & Heinrich Hockmann & Peter Voigt & Pavel Ciaian & Sergio Gomez y Paloma, 2018. "The impact of private R&D on the performance of food-processing firms: Evidence from Europe, Japan and North America," JRC Research Reports JRC104144, Joint Research Centre.
    7. Moschini, GianCarlo, 2001. "Biotech--Who Wins? Economic Benefits and Costs of Biotechnology Innovations in Agriculture," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 2(1), pages 1-25.
    8. Jacinto F. Fabiosa & Samarendu Mohanty & Darnell B. Smith & William H. Meyers & S. Patricia Batres-Marquez, 1997. "Jamaica Technical Manual: Conceptual Framework and Software Documentation," Center for Agricultural and Rural Development (CARD) Publications 97-tr33, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    9. Huffman, Wallace, 2005. "Developments in the Organization and Finance of Public Agricultural Research in the United States, 1988-1999," Staff General Research Papers Archive 12485, Iowa State University, Department of Economics.
    10. Thirtle, Colin G. & Srinivasan, Chittur S. & Heisey, Paul W., 2001. "Public Sector Plant Breeding In A Privatizing World," Agricultural Information Bulletins 33775, United States Department of Agriculture, Economic Research Service.
    11. Demont, Matty & Tollens, Eric, 2001. "Welfare Effects Of Transgenic Sugarbeets In The European Union: A Theoretical Ex-Ante Framework," Working Papers 31852, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    12. Harvey E. Lapan & Giancarlo Moschini, 2000. "Incomplete Adoption of a Superior Innovation," Economica, London School of Economics and Political Science, vol. 67(268), pages 525-542, November.
    13. Demont, Matty & Tollens, Eric, 2001. "Ex-Ante Evaluation Of The Economic Impact Of Agricultural Biotechnology In The European Union: The Case Of Transgenic Sugarbeets," 2001 Annual meeting, August 5-8, Chicago, IL 20631, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. repec:kap:iaecre:v:11:y:2005:i:2:p:201-213 is not listed on IDEAS
    15. Nunez, H., 2018. "Building a Bioethanol Market in Mexico," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275921, International Association of Agricultural Economists.
    16. 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.
    17. Jacinto F. Fabiosa & Samarendu Mohanty & Darnell B. Smith & William H. Meyers & S. Patricia Batres-Marquez, 1997. "Jamaica Technical Manual: Conceptual Framework and Software Documentation," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 97-tr33, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    18. Mapila, Mariam A. T. J., 2013. "The impact of alternative input subsidy exit strategies on Malawi’s maize commodity market:," IFPRI discussion papers 1278, International Food Policy Research Institute (IFPRI).
    19. Benjamin, Catherine & Gueguen, Chantal & Houee, Magalie, 2003. "World Cereals Markets Under Alternative Common Agricultural Policy Reforms," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25913, International Association of Agricultural Economists.
    20. Yuki Ishikawa-Ishiwata & Jun Furuya, 2021. "Fungicide Cost Reduction with Soybean Rust-Resistant Cultivars in Paraguay: A Supply and Demand Approach," Sustainability, MDPI, vol. 13(2), pages 1-14, January.
    21. Nuñez, Hector M., 2016. "Biofuel Potential in Mexico: Land Use, Economic and Environmental Effects," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236067, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:199909010700001325. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.