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fbtwitterlinkedinvimeoflicker grey 14rssslideshare1
Desquilbet, Marion; Poret, Sylvaine (2012)
Publisher: HAL CCSD
Types: Report
Subjects: [ SDV ] Life Sciences [q-bio], coexistence, law and economics, vertical differentiation, liability, identity preservation, genetically modified organisms, coexistence, identity preservation, regulation, liability, vertical differentiation, law and economics, Marketing, Research and Development/Tech Change/Emerging Technologies,, B- ECONOMIE ET FINANCE, regulation, genetically modified organisms
jel: jel:D62, jel:K32, jel:H23, jel:L15
Classification JEL : D62; H23; K32; L15; This paper presents a theoretical economic model assessing the effects of the level ofmandatory genetically modified (GM) / non-GM coexistence regulations on market and welfareoutcomes. We assume vertical differentiation of GM and non-GM goods on the consumerside. Producers are heterogeneous in their production cost for GM crops. Producers of non-GM crops face a probability of having their harvest downgraded if gene flow from GM fieldsraises its content in GMOs (genetically modified organisms) above the labeling threshold. Thegovernment may impose on GMO producers mandatory ex ante isolation distances from non-GM fields in order to decrease the probability of non-GM harvest downgrading. It may alsointroduce an ex post compensation to non-GMO farmers for profit losses due to harvest downgrading,imposing GMO farmers’ participation to a compensation fund via a tax on GM seeds.Assuming endogenous crop choices and prices, we study the effects of ex ante regulation andex post liability of GMO producers on market equilibrium, on the achievement of coexistence,and on both global and interest group welfare.
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