The Unintended Consequences of Technological Change: Winners and Losers from GM Technologies and the Policy Response in the Organic Food Market

Stuart Smyth, William Kerr and Peter W. B. Phillips
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Stuart Smyth: Department of Bioresource Policy, Business and Economics, University of Saskatchewan, Saskatoon, SK S7N 5A8, Canada
Peter W. B. Phillips: Johnson-Shoyama School of Public Policy, University of Saskatchewan, Saskatoon, SK S7N 5B8, Canada

Sustainability, 2015, vol. 7, issue 6, 1-17

Abstract: It is often said that innovations create winners and losers. All innovations are somewhat disruptive, but some have more distributed effects. We have a sense of who the winners are and how much they gain. Yet, how much do losers actually lose? Organic farmers frequently like to publicly announce that they are the losers following the commercialization of genetically modified (GM) crops, yet consumers in search of non-GM products have helped increase demand for organic products, something that would not have occurred in the absence of GM crops. Are organic farmers really losers? This article lays out the argument that were it not for the commercialization of GM crop varieties in the mid-1990s, organic production and food sectors would not be at the level they enjoy today. That is, the commercialization of GM crops has made the organic industry better off than had GM crops not been commercialized. Theoretical modelling of the organic benefits is complemented by supportive market data. The article concludes that in spite of numerous vocal offerings about the adverse impacts suffered by the organic industry due to GM crop production, the organic industry has gained significantly from that which they vociferously criticize.

Keywords: coexistence; GM crops; labelling; social welfare; socio-economic considerations; spill-over benefits (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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