Forecasting the Adoption of GM Oilseed Rape: Evidence from a Discrete Choice Experiment

Gunnar Breustedt, Muller-Scheessel, Jorg and Latacz-Lohmann, Uwe

No 36771, 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK from Agricultural Economics Society

Abstract: This paper explores farmers’ willingness to adopt genetically modified oilseed rape prior to its commercial release and estimates the ‘demand’ for the new technology. The analysis is based upon choice experiments with 202 German arable farmers. A multinomial probit estimation revealed that GM attributes such as gross margin, expected liability from cross pollination, or flexibility in returning to conventional oilseed rape significantly affect the likelihood of adoption. Neighbouring farmers’ attitudes towards GM cropping and a number of farmer and farm characteristics were also found to be significant determinants of prospective adoption. Demand simulations suggest that adoption rates are very sensitive to the profit difference between GM and non-GM rape varieties. A monopolistic seed price would substantially reduce demand for the new technology. A monopolistic seed supplier would reap between 45 and 80 per cent of the GM rent, and the deadweight loss of the monopoly would range between 15 and 30 per cent of that rent. The remaining rent for farmers may be too small to outweigh possible producer price discounts resulting from the costs of segregating GM and non-GM oilseed rape along the supply chain.

Keywords: adoption forecast; choice experiment; genetically modified oilseed rape; multinomial probit; technology adoption; C42; C81; Q12; Q16 (search for similar items in EconPapers)
Date: 2008-03-31
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