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Effects of the GM Controversy on Iowa Corn-Soybean Farmers' Acreage Allocation Decisions

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  • Alexander, Corinne E.
  • Fernandez-Cornejo, Jorge
  • Goodhue, Rachael E.

Abstract

Prior to the 2000 planting season, some industry observers predicted acreage of genetically modified crops would decline dramatically. However, actual 2000 plantings presented a puzzle. Farmers reduced their acreage of genetically modified corn, but concurrently increased their acreage of genetically modified soybeans. We demonstrate that it may be theoretically optimal for risk-averse farmers to reduce their corn acreage but not their soybean acreage. However, past experience, attitudes, and farm size explained planting decisions to a larger degree than did risk preferences.

Suggested Citation

  • Alexander, Corinne E. & Fernandez-Cornejo, Jorge & Goodhue, Rachael E., 2003. "Effects of the GM Controversy on Iowa Corn-Soybean Farmers' Acreage Allocation Decisions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(3), pages 1-16, December.
    • Handle: RePEc:ags:jlaare:31066
    DOI: 10.22004/ag.econ.31066
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    1. Fernandez-Cornejo, Jorge & Daberkow, Stan G. & McBride, William D., 2001. "Decomposing The Size Effect On The Adoption Of Innovations: Agrobiotechnology And Precision Farming," 2001 Annual meeting, August 5-8, Chicago, IL 20527, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    5. Moschini, Giancarlo & Hennessy, David A., 2001. "Uncertainty, risk aversion, and risk management for agricultural producers," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 2, pages 88-153, Elsevier.
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    Cited by:

    1. Do-il Yoo & Jean-Paul Chavas, 2021. "An analysis of risk aversion in biotechnology adoption: the case of US genetically modified corn," Empirical Economics, Springer, vol. 60(5), pages 2613-2635, May.
    2. Oliver Musshoff & Norbert Hirschauer, 2011. "A behavioral economic analysis of bounded rationality in farm financing decisions," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(1), pages 62-83, May.
    3. Nugzar Todua & Teona Gogitidze, 2017. "Marketing Research Of Attitudes Towards Genetically Modified Crops By Georgian Farmers," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 69-76, February.
    4. Joshua D. Detre & Hiroki Uematsu & Ashok K. Mishra, 2011. "The influence of GM crop adoption on the profitability of farms operated by young and beginning farmers," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(1), pages 41-61, May.
    5. Paul, Catherine J. Morrison & Nehring, Richard, 2005. "Product diversification, production systems, and economic performance in U.S. agricultural production," Journal of Econometrics, Elsevier, vol. 126(2), pages 525-548, June.
    6. Yoo, Do-il, 2012. "Individual and Social Learning in Bio-technology Adoption: The Case of GM Corn in the U.S," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124975, Agricultural and Applied Economics Association.
    7. Jennifer Schweiger & Ali Ferjani, 2009. "Determinanten einer potenziellen Anbaubereitschaft von transgenen Kulturen: Untersuchungsregion im Kanton Zürich," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 2(1), pages 59-80.
    8. Frisvold, George B. & Reeves, Jeanne M., 2008. "The costs and benefits of refuge requirements: The case of Bt cotton," Ecological Economics, Elsevier, vol. 65(1), pages 87-97, March.
    9. Catherine Morrison Paul, 2003. "Productivity and Efficiency Measurement in Our “New Economy”: Determinants, Interactions, and Policy Relevance," Journal of Productivity Analysis, Springer, vol. 19(2), pages 161-177, April.
    10. Monteiro, Guilherme Fowler de Avila & Zylbersztajn, Decio, 2013. "Economic Governance of Property Rights: comparative analysis on the collection of royalties in genetically modified soybean seeds," Brazilian Journal of Rural Economy and Sociology (Revista de Economia e Sociologia Rural-RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 51(1), pages 1-20, March.
    11. Suntornpithug, Pasu & Kalaitzandonakes, Nicholas G., 2009. "Understanding the Adoption of Cotton Biotechnologies in the US: Firm Level Evidence," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(1), pages 1-17.
    12. Monteiro, Guilherme Fowler de Avila & Zylbersztajn, Decio, 2013. "Economic Governance of Property Rights: comparative analysis on the collection of royalties in genetically modified soybean seeds," Revista de Economia e Sociologia Rural (RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 51(1), January.
    13. Alexander, Corinne E., 2002. "The Role Of Seed Company Supplied Information In Farmers' Decisions," 2002 Annual meeting, July 28-31, Long Beach, CA 19617, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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