Policies for the regulation of coexistence between GM and conventional crops

Pollen-mediated gene flow is one of the main concerns associated with the introduction of genetically modified (GM) crops, since growers of GM varieties normally do not take into account its possible impact on conventional and organic growers therefore generating negative externalities. Should a premium for non-GM varieties emerge on the market, 'contamination' with GM pollen would generate a revenue loss for growers of non-GM varieties. The existence of such externalities has led the European Union (EU) to put forward the concept of coexistence in order to guarantee farmers' freedom to plant both conventional and GM varieties without generating economic losses to conventional farmers. The first part of this paper develops a simple economic model analysing the problem of pollen-mediated gene flow as a particular kind of production externality. The model, although simple, provides useful insights into the policy needed to regulate coexistence. Since pollen-mediated gene flow is distance-dependent, the externalities will depend on the spatial structure of GM adoption in the landscape. The second part of the paper, taking GM herbicide tolerant oilseed rape (Brassica napus) as a model crop, uses a Monte Carlo experiment to generate data and then estimate the effect of some important policy variables (i.e. number of GM and conventional fields in the landscape, width of buffer zones and spatial aggregation) on the magnitude of the externality associated with pollen-mediated gene flow. Our results show that buffer areas on conventional fields are more effective than those on GM fields and that the degree of spatial aggregation exerts the largest marginal effect on the externality to conventional growers. The implications of the results for the coexistence policies in the EU are then discussed.