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Producer Surplus Distributions in GM Crops: The Ignored Impacts of Roundup Ready Wheat

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  • Wilson, William W.
  • Huso, Scott R.

Abstract

Release of a genetically modified (GM) crop variety would lower prices of competing pesticides used on conventional varieties. This causes an increase in surplus for those farmers who adopt the GM variety, as well as for those who plant the conventional variety. A Cournot model was developed to determine the equilibrium quantities of conventional pesticides. A market with conventional wheat was compared to a market with both conventional and GM wheat varieties to identify price decreases of the conventional pesticide as a result of the GM trait introduction.

Suggested Citation

  • Wilson, William W. & Huso, Scott R., 2006. "Producer Surplus Distributions in GM Crops: The Ignored Impacts of Roundup Ready Wheat," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(2), pages 1-16, August.
    • Handle: RePEc:ags:jlaare:8608
    DOI: 10.22004/ag.econ.8608
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    References listed on IDEAS

    as
    1. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    2. Fernandez-Cornejo, Jorge & Hendricks, Chad, 2003. "Off-Farm Work And The Economic Impact Of Adopting Herbicide-Tolerant Crops," 2003 Annual meeting, July 27-30, Montreal, Canada 22130, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Wilson, William W. & Huso, Scott R., 2008. "Trait Stacking, Licensing, and Seed Firm Acquisitions on Genetically Modified Grains: A Strategic Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), pages 1-20.

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    Crop Production/Industries;

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