Economic potential of adopting genomic technology in Alberta’s tree improvement sector

The adoption of genomic technology and the use of improved seeds are expected to improve timber productivity in Alberta. However, this improvement will need to take place within the confines of the public-private nature of the sector where 93% of the total forest area is publicly owned. The purpose of this study is to explore the extent to which a timber harvest policy known as the allowable cut effect can affect the welfare outcomes of adopting genomics-assisted tree breeding. Using the forest industry of Alberta as the empirical setting, the economic returns to the adoption of this new breeding technology in lodgepole pine (Pinus contorta Dougl. ex Loud. var. latifolia Engelm.) and white spruce (Picea glauca (Moench) Voss) are calculated by estimating a timber supply model and a spatial equilibrium model. Under certain policy and technology improvement scenarios, the economic returns are negative, which would result in non-adoption of the technology. However, under other feasible conditions, the payoffs of genomics-assisted tree breeding research are large and positive. These results illustrate the important role that government policies can have on the returns to adopting new technologies.