Genetically Modified Crop Innovations and Product Differentiation: Trade and Welfare Effects in the Soybean Complex

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dc.contributor.author Sobolevsky, Andrei
dc.contributor.author Moschini, GianCarlo
dc.contributor.author Moschini, Giancarlo
dc.contributor.author Lapan, Harvey
dc.contributor.department Center for Agricultural and Rural Development
dc.date 2018-02-16T13:26:19.000
dc.date.accessioned 2020-06-30T01:04:06Z
dc.date.available 2020-06-30T01:04:06Z
dc.date.embargo 2015-06-16
dc.date.issued 2002-11-01
dc.description.abstract <p>We develop a new partial equilibrium, four-region world trade model for the soybean complex comprising soybeans, soybean oil, and soybean meal. In the model, some consumers view genetically modified Roundup Ready (RR) soybeans and products as weakly inferior to conventional ones; the RR seed is patented and sold worldwide by a U.S. firm; and producers employ a costly segregation technology to separate conventional and biotech products in the supply chain. The calibrated model is solved for equilibrium prices, quantities, production patterns, trade flows, and welfare changes under different assumptions regarding regional government’s production and trade policies, differentiated consumer tastes, and several other demand and supply parameters. Incomplete adoption of RR technology naturally arises in the free trade equilibrium, with the United States producing both genetically modified and conventional soybeans. The United States, Argentina, Brazil and the Rest of the World all gain from the introduction of RR soybeans, although some groups of agents (producers or consumers) may lose. Compared to free trade with no domestic bans, a ban on RR production in the Rest of the World improves that region’s welfare at some levels of segregation costs but hurts the United States. Introduction of the same ban in Brazil benefits its farmers but makes the region worse off, and an import ban on RR products significantly reduces welfare of all agents. Price support programs for U.S. farmers, despite hurting the United States, have the potential to further improve the world’s efficiency. The distribution of welfare between consumers and producers appears to be sensitive to several parameters of the model, but region-level outcomes are robust with respect to most of them and are sensitive only to parameters defining the share of consumers conscious of genetically modified organisms and the elasticity of demand for conventional product varieties.</p>
dc.identifier archive/lib.dr.iastate.edu/card_workingpapers/343/
dc.identifier.articleid 1339
dc.identifier.contextkey 7223759
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath card_workingpapers/343
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/12680
dc.source.bitstream archive/lib.dr.iastate.edu/card_workingpapers/343/02wp319.pdf|||Fri Jan 14 23:41:56 UTC 2022
dc.subject.disciplines Agricultural and Resource Economics
dc.subject.disciplines Agricultural Economics
dc.subject.disciplines Biotechnology
dc.subject.disciplines Economics
dc.subject.disciplines Intellectual Property Law
dc.subject.disciplines Technology and Innovation
dc.subject.keywords biotechnology
dc.subject.keywords differentiated demand
dc.subject.keywords food labeling
dc.subject.keywords genetically modified products
dc.subject.keywords identity preservation
dc.subject.keywords innovations
dc.subject.keywords intellectual property rights
dc.subject.keywords international trade
dc.subject.keywords loan deficiency payments
dc.subject.keywords market failure
dc.subject.keywords monopoly
dc.subject.keywords Roundup Ready soybeans
dc.title Genetically Modified Crop Innovations and Product Differentiation: Trade and Welfare Effects in the Soybean Complex
dc.type article
dc.type.genre article
dspace.entity.type Publication
relation.isAuthorOfPublication 875efd32-d51f-480d-8d4b-3d87da3f2678
relation.isOrgUnitOfPublication 1a6be5f1-4f64-4e48-bb66-03bbcc25c76d
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