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Impact of Genetically Engineered Varieties on the Cost Structure of Corn and Soybean Production in Canada
Author(s) -
Saha Bishnu,
Sarker Rakhal,
Mitura Verna
Publication year - 2014
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/cjag.12026
Subject(s) - productivity , production (economics) , index (typography) , genetically modified maize , fertilizer , agronomy , cost structure , agricultural science , microbiology and biotechnology , genetically modified crops , mathematics , economics , environmental science , biology , agricultural economics , computer science , biochemistry , transgene , world wide web , gene , macroeconomics
This paper investigates the impact of genetically engineered (GE) varieties on the cost structure of corn and soybean production in Canada. Employing an adoption index for each farm and a time trend with farm‐level data on production costs of grain corn and soybeans from 2000 to 2007, a translog cost function and the associated input‐share equations are estimated. The use of the adoption index improves the estimates of technological change and multifactor productivity (MFP) growth. The results demonstrate that the adoption of GE corn and soybean reduced the variable costs of production by 0.62% per year. The MFP of corn and soybean grew by 2.0% per year during the study period, and 31% of this growth is attributable to GE varieties of these crops. The results also reveal that the adoption of GE varieties reduced the cost shares of fertilizer, herbicides and pesticides, and machinery in corn and soybean production. While the adoption of GE varieties increased the cost shares of seeds and custom works including labor, only the former was statistically significant.