How do GM / non GM coexistence regulations affect markets and welfare?

Marion Desquilbet and Sylvaine Poret

No 114757, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: This paper presents a theoretical economic model assessing the effect of the level of mandatory genetically modified (GM) / non-GM coexistence regulations on market and welfare outcome. We assume vertical differentiation of GM and non-GM goods on the consumer side. Producers are heterogeneous in their cost savings from GMO adoption. Producers of non-GM crops face a probability of having their harvest downgraded if gene flow from GM fields makes its GMO content above the labeling threshold. The government may impose to GMO producers mandatory ex ante isolation distances from non-GM fields in order to decrease the probability of non-GM harvest downgrading. It may also introduce an ex post compensation to non-GMO farmers for profit losses due to harvest downgrading, imposing GMO farmers’ participation to a compensation fund via a tax on GM seeds. Assuming endogenous crop choices and prices, we study the effects of ex ante regulation and ex post liability of GMO producers on market equilibrium as well as on global and interest group welfare.

Keywords: Marketing; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 14
Date: 2011
New Economics Papers: this item is included in nep-reg
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Related works:
Working Paper: How do GM / non GM coexistence regulations affect markets and welfare? (2015)
Journal Article: How do GM/non GM coexistence regulations affect markets and welfare? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114757

DOI: 10.22004/ag.econ.114757

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