Economic Effects of Agricultural Biotechnology Research in the Presence of Price-Distorting Policies

Kym Anderson and Chantal Nielsen ()
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Chantal Nielsen: University of Copenhagen, Postal: University of Copenhagen, and Danish Research, Institute of Food Economics (FOI) 1958 Copenhagen, Denmark

Journal of Economic Integration, 2004, vol. 19, 374-394

Abstract:

The economic welfare implications of some countries using new genetically modified varieties in crop production will depend on which countries choose to adopt them and on whether others (notably Western Europe) ban their importation. They also depend on existing (non-GMO-specific) agricultural policies in affected markets. This paper uses a well-received empirical economywide model of the global economy (GTAP) to quantify the effects of selected countries enjoying an assumed degree of productivity growth from adopting GMO maize and soybean. It does so first by leaving existing distortionary policies in place and then assuming agricultural policies in Western Europe are completely liberalised. In both cases we investigate the effects of Western Europe refraining from using GMO technology in its own farm production but without versus with a ban on imports of GM products. The results suggest that (a) such an import ban would have a large adverse effect on economic welfare, particularly in Western Europe itself, and (b) while estimated global economic welfare benefits from the new biotechnology are not greatly reduced by Europe’s traditional price-distorting policies, the reductions in technology gains are concentrated in non-European countries.

Keywords: GMOs; Benefits of R&D; Agricultural and trade policies (search for similar items in EconPapers)
JEL-codes: C68 D58 F13 O30 Q17 Q18 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (7)

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Working Paper: Economic Effects of Agricultural Biotechnology Research in the Presence of Price-distorting Policies (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0280

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