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Agricultural Biotechnology: Economic Impacts Jennifer Harvey Economics 3353

Consumer preferences and trade in genetically modified foods : 

Consumer preferences and trade in genetically modified foods Authors: Chantal Pohl Nielsen, Karen Thierfelder, and Sherman Robinson Journal of Policy Modeling Volume 25, Issue 8, November 2003, Pages 777-794

Key Points : 

Key Points American consumer vs. Western European and Japanese consumer Computable general equilibrium (CGE) model Non-GM exports decline

Conclusions : 

Conclusions The lower GM crop prices mean improved international competitiveness for exporters of these crops Production and trade results depend strongly on how consumer preferences are assumed to change

International diffusion of gains from biotechnology and the European Union's Common Agricultural Policy : 

International diffusion of gains from biotechnology and the European Union's Common Agricultural Policy Authors: Hans van Meijl and Frank van Tongeren Agricultural Economics Volume 31, Issues 2-3, December 2004, Pages 307-316

Key Points : 

Key Points Focuses on Bt Corn and Br Soybeans CAP policy GTAP model Bt Soybeans: Cost reduction 5 % Bt Corn: Yield increase 1.81 %

Conclusions : 

Conclusions The CAP changes the EU's production response from -0.2 to 2.9% and farm income from -3.6 to -0.2% Even under the current policy environment of the CAP and low social acceptance, the EU could realize a welfare gain of US$ 152 million, whereas an import ban by the EU would result in a loss of US$ 1.4 billion.

Agricultural biotechnology and poverty reduction in low-income countries : 

Agricultural biotechnology and poverty reduction in low-income countries Authors: Gregory Graff, David Roland-Holst, and David Zilberman World DevelopmentVolume 34 Issue 8, August 2006, Pages 1430-1445 Published by Elsevier Ltd.

Key Terms : 

Key Terms Tier I – established innovators, technology intensive economies Tier II – emergent innovators, in transition to Tier I ( China and India) Tier III - Long term net importers of technology, which are the majority of low-income economies Barriers to technology diffusion: Institutional capacity Financial capacity Human capital

Key Points : 

Key Points Agricultural biotechnology is concentrated in high income countries The key challenge is to mobilize the resources, research, and outreach infrastructures for applications that are relevant to the poor in low-income countries Developing crops with high insect and herbicide tolerance Developing fortified crops with micro nutrients Improvement of agronomic characteristics Transgenic solutions to make crops climate tolerant (e.g. freezing)

Computable General Equilibrium (CGE) Model : 

Computable General Equilibrium (CGE) Model Model that use actual economic data to estimate how an economy might react to changes in policy, technology or other external factors Agricultural biotechnology may not prevail over the other large forces that keep people in poverty

Indirect Effects of Agricultural Biotechnology on Poverty : 

Indirect Effects of Agricultural Biotechnology on Poverty Induced economic growth in related sectors Increased international competitiveness Employment creation (from increased yields) Food prices

Conclusions : 

Conclusions Gains from introduction of transgenic varieties in low-income countries will be enhanced: when it is associated with the availability of crop breeding capacity that will allow modification of the existing varieties when registration requirements are at the level of the initial transformation event and not at the level of each separate resulting variety when there are low transaction costs and barriers to trade between the new biotechnologically created trait and the locally optimized conventional varieties as the cost of resulting transgenic varieties decline.

Biotechnology in the developing world: a case for increased investments in orphan crops : 

Biotechnology in the developing world: a case for increased investments in orphan crops Authors: Rosamond L. Naylor , Walter P. Falcon, Robert M. Goodman, Molly M. Jahn, Theresa Sengooba, Hailu Tefera and Rebecca J. Nelson Food Policy Volume 29, Issue 1, February 2004, Pages 15-44

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Purpose: Research the possibilities for using several forms of modern biotechnology to improve orphan crops and transfer current technology to developing countries Reason Population growth over the next 30 years will be almost exclusively in developing countries Orphan crops are valued culturally, often adapted to harsh environments, are nutritious, and are diverse in terms of their genetic components Argument: A large discrepancy exists between the potential role of orphan crops in improving food security and the small amount of attention they have received.

Key Points : 

Key Points Agriculture promotes food security primarily when it contributes to incomes and productive employment. Many developing countries in Africa to allow genetically modified foods because of the belief that plants are injected with foreign genes Introducing new genes into the sweet potato could increase income by 40 %, and reduce costs by 20 %.

Conclusions : 

Conclusions 350 Million/year spent on agricultural R & D over the past decade 35 % of that was spent in developing countries 10 % of that was in Africa During this time period 500 million spent on rice and wheat (each) 10 million spent on an orphan crop will return more than the comparable amount spent on either rice or wheat

Biotechnology boosts to crop productivity in China: trade and welfare implications : 

Biotechnology boosts to crop productivity in China: trade and welfare implications Authors: Jikun Huang , Ruifa Hu, Hans van Meijl, and Frank van Tongeren Journal of Development Economics Volume 75, Issue 1, October 2004, Pages 27-54

Key Points : 

Key Points Rice and wheat are the two most important crops China is one of the worlds leading producers of GM cotton and rice Productivity impact of GM technologies in crops is typically factor-biased Used the GTAP model

Conclusions : 

Conclusions BT farmers reduced pesticide use by 67 % BT increased cotton yields by 7 – 15 % Costs of labor inputs and pesticides reduced BT Variety seed costs were 100 – 250 % higher than regular seed costs Trade restrictions do not significantly lower gains made from BT research

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