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Costs and Risks of Testing and Segregating Genetically Modified Wheat
Author(s) -
Wilson William W.,
Dahl Bruce L.
Publication year - 2005
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/j.1467-9353.2005.00222.x
Subject(s) - genetically modified organism , genetically modified crops , microbiology and biotechnology , business , economics , biology , genetics , gene , transgene
Development of genetically modified (GM) crops is challenging the functions of the grain marketing system. A stochastic optimization model was developed in this study to determine optimal testing strategies. The model chooses the optimal testing strategy that maximizes utility (minimizes disutility) of additional system costs due to testing and rejection, and allows the estimation of the risk premium required for sellers to undertake the dual marketing of GM and non‐GM segregations over a non‐GM system. Costs are estimated for a vertically integrated grain export chain including testing, rejection, and a risk premium. The model includes elements of costs and risks of adventitious commingling at all stages of the marketing chain, variety declaration, grower truth‐telling, and accuracy of testing technologies. Sensitivities were evaluated for the effects of GM adoption, risk parameters, variety declaration, and tolerance levels.