An Economy-Wide Analysis Of Gm Food Labeling Policies In Taiwan

The development of agricultural biotechnology offers the opportunity to increase crop production, lowers farming costs, improves food quality and could reduce costs to consumers. For the food importing economies, the import quantities as well as prices will be affected through world market as the production technology of GM crops is adopted by the exporting countries. Many sectors will be affected by the use of these crops through vertical (or backward) and horizontal (or forward) linkages. The purpose of this paper is to develop an economy-wide quantitative assessment of the economic impacts of the introduction of GM products with and without labeling. The modeling framework used in this analysis is TAIGEM (Taiwan General Equilibrium Model), a multi-sectoral computable general equilibrium (CGE) model of the Taiwan¡¦s economy which is derived from ORANI model (Dixon, Parmenter, Sutton and Vincent, 1982). TAIGEM is amended by splitting corn and soybeans into GM and non-GM varieties. It also endogenizes the decision of producers and consumers to use GM vs. non-GM corn and soybeans in their intermediate uses and consumption, respectively. We also consider the consumers¡¦ acceptance of GM food so that the mandatory labeling policy can be examined. Our simulation results indicate that the most extreme import ban on GM crops would be very costly in terms of total production values, ranging from NT$ 40 to 90 billions per year.