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Roundup ready® soybeans and welfare effects in the soybean complex
Author(s) -
Moschini Giancarlo,
Lapan Harvey,
Sobolevsky Andrei
Publication year - 2000
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/(sici)1520-6297(200024)16:1<33::aid-agr4>3.0.co;2-5
Subject(s) - competitor analysis , welfare , spillover effect , incentive , position (finance) , economics , agribusiness , business , agricultural economics , microeconomics , marketing , agriculture , market economy , ecology , finance , biology
A three‐region world model for the soybean complex is developed to evaluate the welfare effects of Roundup Ready (RR) soybean adoption. The structural modeling of the innovation accounts for farmers' adoption incentives and for the observed pricing of RR soybean seeds as a proprietary technology. The calibrated model is solved for various scenarios to evaluate the production, price, and welfare impacts of RR soybean adoption. The United States gains substantially from the innovation, with the innovator capturing the larger share of the welfare gains. US farmers benefit in the base scenario, but would be adversely affected if the RR innovation were to increase yields. Spillover of the new technology to foreign competitors erodes the competitive position of domestic soybean producers, and export of the technology per se may not improve the welfare position of the innovating country. Consumers in every region gain from the adoption of RR soybeans. [JEL Classification: F14, O33, Q16]. © 2000 John Wiley & Sons, Inc.