Rice Production in Uruguay: Technical Change Options under a General Equilibrium Framework

Federico Garcia, Bruno Lanfranco and Guy G. Hareau

No 331839, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: As a result of the technological dynamism of its rice sector, Uruguay has become one of the ten largest world exporters of this cereal, with a productivity level ranking amongst the highest at global level. Uruguayan producers have adopted a set of practices defined as Best Management Practices (BMP). This set of practices may contribute to product differentiation, making it possible to access market niches that are willing to pay a premium for better quality and environmental friendly products. On the other hand, biotechnology made possible the creation of herbicide-resistant varieties, facilitating weed control. This technology, however, may involve some risk of loosing these niche markets. This study assesses and compares the economic impact of BMP and herbicide-resistant technology adoption in the rice sector of Uruguay through an ex-ante general equilibrium simulation using GTAP. BMP adoption may report US$ 29 to 32 millions in welfare gains for the whole Uruguayan economy. In turn GMO adoption may offset BMP gains by 50%. Under the current scenario, the strategy followed by Uruguayan rice producers, opposing to GMO adoption, seemed to be correct. However if Brazil finally decides to introduce commercial GM rice varieties, the conclusions presented in this study should be reviewed.

Keywords: Crop Production/Industries; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 34
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331839

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