Effects of the GM Controversy on Iowa Corn-Soybean Farmers' Acreage Allocation Decisions

Corinne Alexander, Fernandez-Cornejo, Jorge and Rachael Evadne Goodhue

Journal of Agricultural and Resource Economics, 2003, vol. 28, issue 03

Abstract: Prior to the 2000 planting season, some industry observers predicted acreage of genetically modified crops would decline dramatically. However, actual 2000 plantings presented a puzzle. Farmers reduced their acreage of genetically modified corn, but concurrently increased their acreage of genetically modified soybeans. We demonstrate that it may be theoretically optimal for risk-averse farmers to reduce their corn acreage but not their soybean acreage. However, past experience, attitudes, and farm size explained planting decisions to a larger degree than did risk preferences.

Keywords: expected utility; genetically modified crops; two-limit tobit model; Crop Production/Industries (search for similar items in EconPapers)
Date: 2003
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