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The economic impact of StarLink corn

Author

Listed:
  • Troy G. Schmitz

    (Morrison School of Agribusiness and Resource Management, Arizona State University, 7001 E. Williams Field Rd., Mesa, AZ 85212. E-mail:tschmitz@asu.edu)

  • Andrew Schmitz

    (Food and Resource Economics Department, Institute of Food and, Agricultural Sciences, University of Florida, Gainesville, FL 32611-0240)

  • Charles B. Moss

    (Food and Resource Economics Department, Institute of Food and, Agricultural Sciences, University of Florida, Gainesville, FL 32611-0240)

Abstract

The discovery of StarLink corn in U.S. food products caused considerable disruption in corn markets in 2000 and 2001. Segregation costs were incurred by the U.S. grain-handling system in order to ensure that domestic and export sales of food corn and export sales of non-food corn to Japan meet stringent tolerance levels. These costs reduced the revenue that U.S. corn producers would have received in the absence of StarLink. However, the Loan Deficiency Payment Program (LDP) effectively reduced the loss in revenue attributed to StarLink. This study develops a partial equilibrium model that encompasses both segregation costs and the LDP program in order to obtain empirical estimates of the impact of StarLink on U.S. corn producers over the 2000|2001 marketing year. It is estimated that StarLink caused U.S. producers to lose between $26 and $288 million in revenue. [EconLit citations: Q18, Q17, L51.] © 2005 Wiley Periodicals, Inc. Agribusiness 21: 391-407, 2005.

Suggested Citation

  • Troy G. Schmitz & Andrew Schmitz & Charles B. Moss, 2005. "The economic impact of StarLink corn," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 391-407.
    • Handle: RePEc:wly:agribz:v:21:y:2005:i:3:p:391-407
    DOI: 10.1002/agr.20054
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    References listed on IDEAS

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    Cited by:

    1. Henseler, Martin & Piot-Lepetit, Isabelle & Ferrari, Emanuele & Mellado, Aida Gonzalez & Banse, Martin & Grethe, Harald & Parisi, Claudia & Hélaine, Sophie, 2013. "On the asynchronous approvals of GM crops: Potential market impacts of a trade disruption of EU soy imports," Food Policy, Elsevier, vol. 41(C), pages 166-176.
    2. Kalaitzandonakes, Nicholas & Kaufman, James & Miller, Douglas, 2014. "Potential economic impacts of zero thresholds for unapproved GMOs: The EU case," Food Policy, Elsevier, vol. 45(C), pages 146-157.
    3. Anania, Giovanni, 2010. "EU Economic Partnership Agreements and WTO negotiations. A quantitative assessment of trade preference granting and erosion in the banana market," Food Policy, Elsevier, vol. 35(2), pages 140-153, April.
    4. Magnier, Alexandre & Konduru, Srinivasa & Kalaitzandonakes, Nicholas G., 2009. "Market and Welfare Effects of Trade Disruptions from Unapproved Biotech Crops," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49592, Agricultural and Applied Economics Association.
    5. Zhu, Manhong & Schmitz, Andrew & Schmtiz, Troy G., 2016. "Why Has not Genetically Modified Wheat Been Commercialized: A Game Theoretical Perspective," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230796, Southern Agricultural Economics Association.
    6. Troy G. Schmitz, 2018. "Impact of the Chinese embargo against MIR162 corn on Canadian corn producers," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(4), pages 571-586, December.
    7. Herrmann, Roland & Möser, Anke & Weber, Sascha A., 2009. "Grocery retailing in Germany: Situation, development and pricing strategies," Discussion Papers 41, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).

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