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Market and Welfare Effects of GMO Introduction in Small Exporting Countries

Author

Listed:
  • Plastina, Alejandro S.
  • Giannakas, Konstantinos
Abstract
This paper analyzes the market and welfare effects of the introduction of GM products in small open developing economies that, prior to the adoption of GM crops, were net exporters of non-GM products. It explicitly accounts for differences in consumer attitudes towards GM products and producer agronomic characteristics as well as for the structure and conduct of the GM seed suppliers. Different scenarios concerning different labeling regimes in the small exporting country and the world market of the products are considered. A positive welfare effect of the introduction of GM products to small open economies should not be taken for granted. While yield increases and cost reductions associated with the GM technology are certainly important, their presence does not guarantee a positive effect on the welfare of all groups involved and/or on aggregate domestic welfare. The market and welfare effects of the introduction of GM crops in small exporting economies were shown to be case-specific and dependent on the labeling regimes in the world market, the labeling regime in the domestic market, the segregation costs and the marketing margins under the different labeling scenarios, the domestic consumer attitudes towards GM products, the premium enjoyed by the non-GM crops, the relative cost effectiveness of GM crops under the local production conditions, and the market power of the GM seed suppliers.

Suggested Citation

  • Plastina, Alejandro S. & Giannakas, Konstantinos, 2005. "Market and Welfare Effects of GMO Introduction in Small Exporting Countries," 2005 Annual meeting, July 24-27, Providence, RI 19484, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19484
    DOI: 10.22004/ag.econ.19484
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    References listed on IDEAS

    as
    1. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
    2. Murray Fulton & Konstantinos Giannakas, 2004. "Inserting GM Products into the Food Chain: The Market and Welfare Effects of Different Labeling and Regulatory Regimes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 42-60.
    3. Harvey E. Lapan & Giancarlo Moschini, 2004. "Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 634-648.
    4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    5. Oz Shy, 1996. "Industrial Organization: Theory and Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691795, April.
    6. Anderson, Kym & Jackson, Lee Ann, 2004. "Implications of genetically modified food technology policies for Sub-Saharan Africa," Policy Research Working Paper Series 3411, The World Bank.
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    Cited by:

    1. 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.

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