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The economics of non-GMO segregation and identity preservation

Author

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  • David S Bullock
  • Marion Desquilbet

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

Abstract

Rejection of genetically modified organisms (GMOs) by some consumers worlwide leads to the creation of market signals encouraging the segregation and identity preservation of non-genetically modified (GM) grain from GM grain. We examine the costs of non-GMO segregation and identity preservation for seed producers, farmers and grain handlers in the United States. We conclude that the major costs of segregation and identity preservation come not from cleaning farm machinery, nor from cleaning handling equipment, nor from testing, but rather from the "reshuffling" of the handling system. Identity preservation at the handling stage requires dedication of some grain paths to non-GM grains. The increase in the number of types of grains to be handled leads to less flexibility and causes existing storage facilities to be too few, too large, and inefficiently located. The adjustment of the handling infrastructure, however, should be expected to be gradual, because of the large fixed costs of grain handling facilities

Suggested Citation

  • David S Bullock & Marion Desquilbet, 2000. "The economics of non-GMO segregation and identity preservation," Working Papers hal-02319375, HAL.
    • Handle: RePEc:hal:wpaper:hal-02319375
    Note: View the original document on HAL open archive server: https://hal.science/hal-02319375
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    References listed on IDEAS

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    1. Roberts, Donna & Unnevehr, Laurian J. & Caswell, Julie A. & Sheldon, Ian M. & Wilson, John S. & Otsuki, Tsunehiro & Orden, David, 2001. "The Role Of Product Attributes In The Agricultural Negotiations," Commissioned Papers 14620, International Agricultural Trade Research Consortium.
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    Cited by:

    1. Konduru, Srinivasa & Kalaitzandonakes, Nicholas G. & Magnier, Alexandre, 2009. "GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49594, Agricultural and Applied Economics Association.
    2. Schmitz, Troy G. & Schmitz, Andrew & Moss, Charles B., 2004. "Two Approaches To Measuring The Economic Impact Of Starlink Corn On U.S. Producers," 2004 Annual meeting, August 1-4, Denver, CO 20306, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Demont, Matty & Tollens, Eric, 2001. "Reshaping The Conventional Welfare Economics Framework For Estimating The Economic Impact Of Agricultural Biotechnology In The European Union," Working Papers 31835, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    4. Mario F. Teisl & Julie A. Caswell, 2003. "Information Policy and Genetically Modified Food: Weighting the Benefits and Costs," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, March.
    5. Hyde, Jeffrey & Martin, Marshall A. & Preckel, Paul V. & Buschman, Lawrent L. & Edwards, C. Richard & Sloderbeck, Phillip E. & Higgins, Randall A., 2003. "The Value of Bt Corn in Southwest Kansas: A Monte Carlo Simulation Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(1), pages 1-19, April.
    6. Nadolnyak, Denis A. & Sheldon, Ian M., 2002. "A Model of Diffusion of Genetically Modified Crop Technology in Concentrated Agricultural Processing Markets - The Case of Soybeans," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24872, European Association of Agricultural Economists.
    7. Harvey E. Lapan & Giancarlo Moschini, 2004. "Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 634-648.
    8. David S. Bullock, 2001. "Les effets économiques des réglementations différentes en matière d'organismes génétiquement modifiés," Post-Print hal-02290699, HAL.
    9. Crowe, Bronwyn & Pluske, Johanna M., 2006. "Is it Cost Effective to Segregate Canola in WA?," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 14.
    10. Baker, Andrew & Smyth, Stuart, 2010. "Managing Opportunism in Value-Added Supply Chains:," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 187979, International Consortium on Applied Bioeconomy Research (ICABR).
    11. 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.
    12. Buhr, Brian L., 2003. "Traceability, Trade And Cool: Lessons From The Eu Meat And Poultry Industry," Working Papers 14577, International Agricultural Trade Research Consortium.
    13. Gawron, J.-C. & Theuvsen, L., 2008. "Kosten der Verarbeitung gentechnisch veränderter Organismen: Eine Analyse am Beispiel der Raps- und Maisverarbeitung," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 43, March.
    14. Gawron, Jana-Christina & Theuvsen, Ludwig, 2007. "Costs of Processing Genetically Modified Organisms: Analysis of the Rapeseed and Corn Industries," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7601, German Association of Agricultural Economists (GEWISOLA).
    15. Chang, Ching-Cheng & Hsu, Shih-Hsun & Wu, Chia-Hsuan, 2004. "An Economy-Wide Analysis Of Gm Food Labeling Policies In Taiwan," 2004 Annual meeting, August 1-4, Denver, CO 19929, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Gryson, N. & Eeckhout, M. & Neijens, T., 2008. "Cost and benefits for the segregation of GM and non-GM compound feed," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44418, European Association of Agricultural Economists.
    17. Hatwell, Bronwyn & Pluske, Johanna M., 2004. "The cost of segregating GM canola: A case study," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58702, Australian Agricultural and Resource Economics Society.
    18. Heyder, Matthias & Theuvsen, Ludwig & Hollmann-Hespos, Thorsten, 2012. "Investments in tracking and tracing systems in the food industry: A PLS analysis," Food Policy, Elsevier, vol. 37(1), pages 102-113.

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