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Irreversibility, Uncertainty, and the Adoption of Transgenic Crops: Experiences from Applications to HT Sugar Beets, HT Corn, and Bt Corn

In: Regulating Agricultural Biotechnology: Economics and Policy

Author

Listed:
  • Sara Scatasta

    (Wageningen University)

  • Justus Wesseler

    (Wageningen University)

  • Matty Demont

    (Catholic University)

Abstract

This study applies a real option approach to quantify, ex-ante, the maximum incremental social tolerable irreversible costs (MISTIC) that would justify immediate adoption of HT and Bt corn in the European Union (EU). The results are compared with previous ones for HT sugar beets. In total, according to our analysis, the BU gives up about €309 million on average per year due to the quasi moratorium on transgenic crops for Bt corn, HT corn, and HT sugar beets alone. On the other hand, the MISTIC per household and year for Bt corn, HT corn, and HT sugar beets is €0.27, €0.46, and €1.10, respectively, or €1.83 for all three crops. The low MISTIC provides a strong economic argument for prohibiting the immediate introduction of the three transgenic crops. The validity of the argument will largely depend on consumer attitudes towards transgenic crops.

Suggested Citation

  • Sara Scatasta & Justus Wesseler & Matty Demont, 2006. "Irreversibility, Uncertainty, and the Adoption of Transgenic Crops: Experiences from Applications to HT Sugar Beets, HT Corn, and Bt Corn," Natural Resource Management and Policy, in: Richard E. Just & Julian M. Alston & David Zilberman (ed.), Regulating Agricultural Biotechnology: Economics and Policy, chapter 0, pages 327-352, Springer.
    • Handle: RePEc:spr:nrmchp:978-0-387-36953-2_16
    DOI: 10.1007/978-0-387-36953-2_16
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    Citations

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    Cited by:

    1. Bohanec, Marko & Messéan, Antoine & Scatasta, Sara & Angevin, Frédérique & Griffiths, Bryan & Krogh, Paul Henning & Žnidaršič, Martin & Džeroski, Sašo, 2008. "A qualitative multi-attribute model for economic and ecological assessment of genetically modified crops," Ecological Modelling, Elsevier, vol. 215(1), pages 247-261.
    2. 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.
    3. Falck-Zepeda, José & Kilkuwe, Enoch & Wesseler, Justus, 2008. "Introducing a genetically modified banana in Uganda: Social benefits, costs, and consumer perceptions," IFPRI discussion papers 767, International Food Policy Research Institute (IFPRI).
    4. Demont, Matty & Dillen, Koen & Daems, Wim & Sausse, Christophe & Tollens, Eric & Mathijs, Erik, 2009. "On the proportionality of EU spatial ex ante coexistence regulations," Food Policy, Elsevier, vol. 34(6), pages 508-518, December.
    5. Beckmann, Volker & Soregaroli, Claudio & Wesseler, Justus, 2006. "Governing the Co-existence of GM Crops: Ex-Ante Regulation and Ex-Post Liability under Uncertainty and Irreversibility," Institutional Change in Agriculture and Natural Resources Discussion Papers 18845, Humboldt University Berlin, Department of Agricultural Economics.

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