Publication: Recent and Prospective Adoption of Genetically Modified Cotton: A Global Computable General Equilibrium Analysis of Economic Impacts
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Date
2008
ISSN
00130079
Published
2008
Author(s)
Jackson, Lee Ann
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Abstract
This article provides estimates of the economic impact of initial adoption of genetically modified (GM) cotton and of its potential impacts beyond the few countries where it is currently common. Use is made of the latest version of the GTAP database and model. Our results suggest that if other developing countries--especially in sub-Saharan Africa--were to follow the lead of China, South Africa, and most recently India, adoption of GM cotton varieties could provide even larger proportionate gains to farmer and national welfare than in those early-adopting countries. Furthermore, those estimated gains are shown to exceed--and reinforce--those from a successful campaign under the WTO's Doha Development Agenda to reduce/remove cotton subsidies and import tariffs globally.
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Publication Recent and Prospective Adoption of Genetically Modified Cotton : A Global CGE Analysis of Economic Impacts(World Bank, Washington, DC, 2006-05)The authors provide estimates of the economic impact of initial adoption of genetically modified (GM) cotton and of its potential impacts beyond the few countries where it is currently common. They use the latest version of the Global Trade Analysis Project (GTAP) database and model. The results suggest that by following the lead of China and South Africa, adoption of GM cotton varieties by other developing countries-especially in Sub-Saharan Africa-could provide even larger proportionate gains to farmer and national welfare than in those first-adopting countries. Furthermore, the estimated gains are shown to exceed those from a successful campaign under the World Trade Organization's Doha Development Agenda to reduce and remove cotton subsidies and import tariffs globally.Publication General Equilibrium Effects of Price Distortions on Global Markets, Farm Incomes and Welfare(World Bank, Washington, DC, 2008-09)Earnings from farming in many developing countries have been depressed by a pro-urban bias in own-country policies as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies, which reduce national and global economic welfare and contribute to global inequality and poverty, have been undergoing reform since the 1980s. Using the linkage model of the global economy and modifications to the pre-release of version 7 of the Global Trade Analysis Project (GTAP) protection database for 2004, this paper seeks to compare the effect of those reforms to date with those that would come from removing remaining agricultural and trade policies. Two sets of results are thus presented: one showing the effects of policy reforms between 1980-84 and 2004, the other showing what the removal of remaining distortions as of 2004 could be. Both sets of results indicate improvements in the real value of agricultural output and exports, the real returns to farm land and unskilled labor, and real net farm incomes in most developing country regions despite the adverse effect on the international terms of trade for some developing countries that are net food importers or are enjoying preferential access to agricultural markets of high-income countries. Landowners in those high-income countries still offering their farmers price supports could readily afford to compensate them from the benefits of removing remaining agricultural protectionism.Publication Genetically Modified Rice Adoption: Implications for Welfare and Poverty Alleviation(World Bank, Washington, D.C., 2004-08)The first generation of genetically modified (GM) crop varieties sought to increase producer profitability through cost reductions or higher yields, while the next generation of GM food research is focusing on breeding for attributes of interest to consumers. Golden Rice, for example, has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of poor people in developing countries. This paper analyzes the potential economic effects of adopting both types of innovation in Asia, including its impact on rice producers and consumers. It does so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest the farm productivity gains could be dwarfed by the welfare gains resulting from the potential health-enhancing attributes of golden rice, which would boost the productivity of unskilled workers among Asia's poor.Publication Implications of Genetically Modified Food Technology Policies for Sub-Saharan Africa(World Bank, Washington, D.C., 2004-09)The first generation of genetically modified (GM) crop varieties sought to increase farmer profitability through cost reductions or higher yields. The next generation of GM food research is focusing also on breeding for attributes of interest to consumers, beginning with "golden rice," which has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of unskilled laborers in developing countries. The authors analyze empirically the potential economic effects of adopting both types of innovation in Sub-Saharan Africa (SSA). They do so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest that the welfare gains are potentially very large, especially from nutritionally enhanced GM wheat and rice, and that-contrary to the claims of numerous interests-those estimated benefits are diminished only slightly by the presence of the European Union's current barriers to imports of GM foods. In particular, if SSA countries impose bans on GM crop imports in an attempt to maintain access to EU markets for non-GM products, the loss to domestic consumers due to that protectionism boost to SSA farmers is far more than the small economic gain for these farmers from greater market access to the EU.Publication Trade, Standards, and the Political Economy of Genetically Modified Food(World Bank, Washington, D.C., 2004-09-01)A common-agency lobbying model is developed to help understand why North America and the European Union have adopted such different policies toward genetically modified (GM) food. Results show that when firms (in this case farmers) lobby policy makers to influence standards and consumers and environmentalists care about the choice of standard, it is possible that increased competition from abroad can lead to strategic incentives to raise standards, not just lower them as shown in earlier models. We show that differences in comparative advantage in the adoption of GM crops may be sufficient to explain the trans-Atlantic difference in GM policies. On the one hand, farmers in a country with a comparative advantage in GM technology can gain a strategic cost advantage by lobbying for lax controls on GM production and usage at home and abroad. On the other hand, when faced with greater competition, the optimal response of farmers in countries with a comparative disadvantage in GM adoption may be to lobby for more-stringent GM standards. Thus it is rational for producers in the EU (whose relatively small farms would enjoy less gains from the new biotechnology than broad-acre American farms) to reject GM technologies if that enables them and/or consumer and environmental lobbyists to argue for restraints on imports from GM-adopting countries. This theoretical proposition is supported by numerical results from a global general equilibrium model of GM adoption in America without and with an EU moratorium.
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