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Ex-ante regulation and ex-post liability under uncertainty and irreversibility: governing the coexistence of GM crops

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  • Beckmann, Volker
  • Soregaroli, Claudio
  • Wesseler, Justus

Abstract

Ex-ante regulations and ex-post liabilities for using a new technology will induce additional costs for adopters. The standard model is advanced by including irreversibility and uncertainty and taking into account transaction costs of negotiating possible cost reductions. The case analysed is the coexistence policy for GM crops in the European Union. Results show, the design of the rules and regulations can provide strong incentives for regional agglomeration of GM and non-GM farmers.

Suggested Citation

  • Beckmann, Volker & Soregaroli, Claudio & Wesseler, Justus, 2010. "Ex-ante regulation and ex-post liability under uncertainty and irreversibility: governing the coexistence of GM crops," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-33.
    • Handle: RePEc:zbw:ifweej:20109
    DOI: 10.5018/economics-ejournal.ja.2010-9
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    Cited by:

    1. Marion Desquilbet & Sylvaine Poret, 2014. "How do GM/non GM coexistence regulations affect markets and welfare?," European Journal of Law and Economics, Springer, vol. 37(1), pages 51-82, February.
    2. Dillen, Koen & Tollens, Eric & Wesseler, Justus, 2010. "The Barroso Proposal Of Nationalizing Gmapproval: A Look At Ht Sugar Beets Under Changed European Sugar Policy," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188086, International Consortium on Applied Bioeconomy Research (ICABR).
    3. Skevas, Theodoros & Fevereiro, Pedro & Wesseler, Justus, 2010. "Coexistence regulations and agriculture production: A case study of five Bt maize producers in Portugal," Ecological Economics, Elsevier, vol. 69(12), pages 2402-2408, October.
    4. Vincent Smith & Justus H. H. Wesseler & David Zilberman, 2021. "New Plant Breeding Technologies: An Assessment of the Political Economy of the Regulatory Environment and Implications for Sustainability," Sustainability, MDPI, vol. 13(7), pages 1-18, March.
    5. Oliver Maaß & Nicola Consmüller & Hella Kehlenbeck, 2019. "Socioeconomic Impact of Genome Editing on Agricultural Value Chains: The Case of Fungal-Resistant and Coeliac-Safe Wheat," Sustainability, MDPI, vol. 11(22), pages 1-26, November.
    6. Ambec, Stefan & Langinier, Corinne & Marcoul, Phillipe, 2011. "Spatial Efficiency of Genetically Modified and Organic Crops," Working Papers 2011-11, University of Alberta, Department of Economics.
    7. Meyerding, Stephan G.H. & Spiwoks, Elisabeth & Rombach, Meike & Lehberger, Mira, 2019. "Not only speed matters – Crisis response in the hypothetical case of a transport accident involving genetically modified crops," Food Policy, Elsevier, vol. 85(C), pages 55-63.
    8. Rolf A. Groeneveld & Erik Ansink & Clemens C.M. Van de Wiel & Justus Wesseler, 2011. "Benefits and Costs of Biologically Contained Genetically Modified Tomatoes and Eggplants in Italy and Spain," Sustainability, MDPI, vol. 3(8), pages 1-17, August.
    9. Tillie, Pascal & Dillen, Koen & Rodríguez-Cerezo, Emilio, 2014. "Modelling ex-ante the economic and environmental impacts of Genetically Modified Herbicide Tolerant maize cultivation in Europe," Agricultural Systems, Elsevier, vol. 127(C), pages 150-160.
    10. Ceddia, Michele Graziano & Bartlett, Mark & Lucia, Caterina De & Perrings, Charles, 2011. "On the regulation of spatial externalities: coexistence between GM and conventional crops in the EU and the ‘newcomer principle’," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), pages 1-18.
    11. Thomas J. Venus & Koen Dillen & Maarten J. Punt & Justus H. H. Wesseler, 2017. "The Costs of Coexistence Measures for Genetically Modified Maize in Germany," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(2), pages 407-426, June.
    12. Andreas Gabriel & Klaus Menrad, 2015. "Cost of Coexistence of GM and Non‐GM Products in the Food Supply Chains of Rapeseed Oil and Maize Starch in Germany," Agribusiness, John Wiley & Sons, Ltd., vol. 31(4), pages 472-490, October.
    13. Gabriel Andreas & Menrad Klaus, 2014. "The Costs of GM and Non-GM Co-existence in Processed Food Systems – Demonstrated for the Cases of the German Supply Chains of Chocolate and Frozen Pizza," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 141-158, January.
    14. Wesseler, Justus, 2014. "Biotechnologies and agrifood strategies: opportunities, threats and economic implications," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(3), pages 1-18, December.

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    More about this item

    Keywords

    Ex-ante regulation; ex-post liability; irreversibility; uncertainty; agglomeration;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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