Estimating the Economic Effects of Gmos: The Importance of Policy Choices and Preferences

Adelaide University Policy Discussion Paper No.0035

40 Pages Posted: 3 Oct 2000

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Chantal Nielsen

Danish Research Institute of Food Economics (FOI) - Agricultural Policy Division

Sherman Robinson

International Food Policy Research Institute (IFPRI)

Date Written: August 2000

Abstract

The new agricultural biotechnologies that are generating transgenic or genetically modified organisms (GMOs) are attracting an exceptionally large degree of opposition to their production and trade. Both environmental and food safety concerns have been raised by opponents to the development of transgenic crops. The vast majority of opponents want at least to have labels on products that may contain GMOs, while the most extreme of them (particularly in Western Europe) want to see GM crops totally excluded from production and consumption in their country. This extreme view contrasts with the more relaxed attitude towards the use of GMOs in pharmaceuticals, and swamps discussions of the positive attributes of the new technology. Also associated with that view is the idea that we should not try to measure the economic and other effects of GMOs because there is too much uncertainty surrounding the technology. We beg to differ with the latter sentiment, believing that without attempts to quantify the economic effects of GMOs, opinion formation and policy making would be even less well informed because it would have to depend even more on guesswork.

To illustrate the usefulness of quantitative models for informing GMO debates, the present paper draws on three recent studies by the authors that use existing empirical models of the global economy to examine what the effects of widespread adoption of genetically modified crop varieties in some (non-European) countries might be in light of different policy and consumer preference responses. Specifically, the effects of an assumed degree of GMO-induced productivity growth in selected countries for cotton, rice, and maize plus soybean are explored. In the latter case those results are compared with what they would be if (a) Western Europe chose to ban consumption and hence imports of those products from countries adopting GM technology or (b) some Western European consumers and intermediate users responded by boycotting imported GM crops. Then another global CGE model is introduced which distinguishes GM-inclusive from GM-free maize and soybean. It is used to explore the impact of increased preferences for GM-free food. The final section discusses areas where future empirical work of this sort might focus.

Keywords: globalization

Suggested Citation

Anderson, Kym and Pohl Nielsen, Chantal Maria and Robinson, Sherman, Estimating the Economic Effects of Gmos: The Importance of Policy Choices and Preferences (August 2000). Adelaide University Policy Discussion Paper No.0035. Available at SSRN: https://ssrn.com/abstract=243553 or http://dx.doi.org/10.2139/ssrn.243553

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Chantal Maria Pohl Nielsen

Danish Research Institute of Food Economics (FOI) - Agricultural Policy Division ( email )

Rolighedsvej 25
1958 Frederiksberg C
Denmark
+45 3 528 6864 (Phone)
+45 3 528 6800 (Fax)

Sherman Robinson

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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