Intellectual Property Rights and the Welfare Effects of Agricultural R…D
14 Pages Posted: 31 Mar 2020
Date Written: November 1997
We review intellectual property rights in agriculture and outline a modeling framework that accounts for relevant institutional features of agricultural R…D. The analysis emphasizes vertical market linkages whereby agricultural innovations adopted by farmers are produced upstream by input suppliers. It is argued that the conventional assumption of competitive pricing cannot hold when new technologies are produced by private firms because such innovations are typically protected by intellectual property rights (such as patents) that confer (limited) monopoly rights to discoverers. The implications of intellectual property rights for the welfare evaluation of agricultural R…D are derived, and it is shown that conventional methods usually overestimate the welfare gains from agricultural innovations.
Keywords: agricultural innovations, consumer surplus, input markets, patents, producer surplus, O340, Q160
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