Modelling heterogeneity to estimate the ex ante value of biotechnology innovations

After more than a decade of GM crops, literature reports farmers and consumers can gain significantly from the technology, despite the intellectual property rights assigned to the innovator. In this paper we assess the effect of heterogeneity on this distribution of benefits. A two dimensional framework is created to assess the ex ante benefits of an innovation. Given this setting and the scarce data often available, a parametric modelling approach is taken. The two dimensions of heterogeneity, spatial and temporal, are explicitly modelled as they have a different importance for different technologies. Using this framework we can simulate different corporate pricing strategies and evaluate the benefits generated under changing heterogeneity. The framework is tested on the introduction of HT sugar beet in the EU-27.Heterogeneity, Parametric modelling, ex ante, Research and Development/Tech Change/Emerging Technologies,

The Global Welfare Effects of GM Sugar Beet under Changing Sugar Policies

Since most of the recent agricultural biotechnology innovations have been developed by private companies, the central focus of societal interest is on the distribution of the gains from these technologies among all stakeholders. In a partial equilibrium model, assuming perfect corporate pricing strategies given the heterogeneous population of potential adopters, we model the worldwide introduction of GM sugar beet. The introduction is modelled under both the old and new CMO for sugar in the EU. We see GM sugar beet could bring great benefits to both consumers in the world and sugar beet producers even when the innovation is protected by intellectual property rights and the innovator uses his restricted monopoly to the full extend.GM, sugar beet, partial equilibrium, Agricultural and Food Policy, Crop Production/Industries,

Global welfare effects of transgenic sugar beet

Although the EU is still in a quasi moratorium stage concerning GM crops, doors for GM crops in the sugar industry seem to open. Herbicide tolerant sugar beet could mean a boost for the sugar beet sector. The ex ante impact assessment shows a created welfare of 15 billion during 1996-2014. The rule of thumb found in ex post impact studies of a sharing out between downstream and upstream sector of 2/3 versus 1/3 is seems to be applicable to this case as well. The sugar beet sector and consumers worldwide are the winners while cane growers lose due to technology eroded world prices. The reform of the EU Common market organization for sugar in 2006 seems to create an incentive for innovation to efficient European sugar producers. Crowding out of inefficient producers could take place as was one of the goals of the reform.Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,

CROSS COMPLIANCE AND COMPETITIVENESS OF THE EUROPEAN BEEF AND PIG SECTOR

Beef and pig production are important sectors affected by the cross-compliance policy. Full compliance with SMRs and GAECs generates costs and benefits which may have an impact on the competitiveness of these sectors on the world market. Compliance with the Nitrate Directive, animal identification and registration requirements and animal welfare standards can give rise to non-negligible cost of production increases at individual farm level and at sector level. Additional costs can be relevant either due to a low degree of compliance or by significant adjustments costs at farm level. Full compliance generates a level playing field between Member States of the EU, as some countries have to face higher additional costs than others, which are be attributed to differences in degree of compliance. This paper first presents evidence of additional costs at individual farm level due to full compliance. Then for beef and pork a methodology has been developed in order to calculate sector cost impacts following an upcsaling procedure for each of the analysed directives. Simulations with the GTAP model have enabled an assessment of the trade effect of compliance with standards and the impact on the external competitiveness of the EU beef and pork production. In some policy fields covered by cross-compliance important trade partners such as Canada, USA and New Zealand have implemented policies similar to the EU. In these three countries comparable standards to those in the EU were identified and the level and cost of compliance have been assessed. The pig sector will be affected most by a unilateral compliance with standards in the EU, in particular as the Nitrate Directive is concerned. Within the EU pig production costs will rise by 0.545 %. Imports may increase by 4% and exports may fall by 3%. However full application of the Clean Water Act in the US, which contains similar obligations to the Nitrate Directive, generates a significant sector cost increase (1,08%) which may counterbalance the loss of competitiveness of EU pork production towards the US. Compliance with the mandatory animal welfare standards has only minor cost implications and has negligible effects on external competitiveness of the EU both because of a high degree of compliance and relatively low adjustment costs at farm level. Finally, in many EU member states the degree of compliance of beef farms with the animal registration and identification directives is below 100%. Additional costs for full compliance within the EU have been estimated at 0.455%, which may cause an increase of beef imports of 2.21% and a decline of exports of –2.12%. This loss in competitiveness of the EU will further favour the position of Brazil on the world beef market. At the other hand significant benefits are obtained in food security of EU beef.Cross compliance, beef sector, pork sector, Agricultural and Food Policy, Q10, Q18,

Proceedings of a workshop on "Wheat productivity in the EU: determinants and challenges for food security and for climate change"

The Institute for Prospective Technological Studies (IPTS) of the European Commission’s Joint Research Centre (JRC) is starting a new research line with the aim to describe the current situation and analyze the elements affecting wheat yields and wheat farming productivity. To scope the issue, the JRC organised a workshop on "Wheat productivity in the EU: determinants and challenges for food security and for climate change" in Seville on 22nd and 23rd November 2012. This JRC Scientific and Policy Report provides the proceedings of the workshop, that covered the following topics: Session 1: Wheat productivity trends in Europe and world-wide Session 2: Innovation in production factors affecting wheat productivity Session 3: Policies and regulations affecting wheat productivity Session 4: Outlook on wheat productivityJRC.J.4-Agriculture and Life Sciences in the Econom

Are EU spatial ex ante coexistence regulations proportional?

The EU is currently struggling to implement coherent coexistence regulations on genetically modified (GM) and non-GM crops in all member states. While it stresses that any approach needs to be “proportionate to the aim of achieving coexistence”, very few studies have actually attempted to assess whether the proposed spatial ex ante coexistence regulations (SEACERs) satisfy this proportionality condition. In this article, we define proportionality as a functional relationship which is weakly increasing in the incentives for coexistence. We propose a spatial framework based on an existing landscape and introduce the new concept of shadow factor as a measure for the opportunity costs induced by SEACERs. This enables comparing the proportionality of (i) rigid SEACERs which are based on large isolation distances imposed on GM farmers versus (ii) flexible SEACERs based on pollen barrier agreements between neighboring farmers. Our theoretical and empirical findings argue for flexibility as rigid SEACERs violate the proportionality condition and, hence, are not consistent with the objectives of the EU.policy analysis, GIS, shadow factor, Agricultural and Food Policy, Crop Production/Industries,

Economics of spatial coexistence of genetically modified and conventional crops: Oilseed rape in Central France

Europe is currently struggling to implement coherent coexistence regulations on genetically modified (GM) and non-GM crops in all EU Member States. We conduct simulations with the software ArcView® on a GIS dataset of a hypothetical case of GM herbicide tolerant oilseed rape cultivation in Central France. Our findings show that rigid coexistence rules, such as large distance requirements, may impose a severe burden on GM crop production in Europe. These rules are not proportional to the farmers’ basic incentives for coexistence and hence not consistent with the objectives of the European Commission. More alarming, we show that in densely planted areas a domino-effect may occur. This effect raises coexistence costs and even adds to the non-proportionality of rigid coexistence regulations. Instead, we show that flexible measures would be preferable since they are proportional to the incentives for coexistence and, hence, less counterproductive for European agriculture.regulation, GIS modelling, domino-effect, Crop Production/Industries,

Proceedings of a workshop on "Markets for non-Genetically Modified Identity Preserved crops and derived products" organised by the JRC

The Institute for Prospective Technological Studies (IPTS) of the European Commission’s Joint Research Centre (JRC) is currently undertaking research activities in order to describe the current situation and functioning of the markets for non Genetically Modified Identity Preserved crops and derived products. For this purpose, JRC-IPTS organized an International Workshop on "Markets for non-GM Identity Preserved crops and derived products" in Seville on 21&22 June 2012. This workshop brought together key stakeholders in the supply chain, as well as leading scientists and experts active in the field of non-GM IP markets. This JRC Scientific and Policy Report provides the proceedings of the June 2012 workshop, that covered the following topics: Session 1: Situation and availability of non-GM Identity Preserved crops on world markets Session 2: Non-GM IP crops for the EU feed and livestock sector Session 3: EU demand for food products from non-GM IP crops and derived ingredients Session 4: Case studies of the use of non-GM IP crops or derived product for animal or biofuel productionJRC.J.4-Agriculture and Life Sciences in the Econom

Contribution to the economic impact assessment of policy options to regulate animal cloning for food production with an economic simulation model

The EU is currently evaluating different policy options towards the use of cloning or products derived from cloned animals in the food chain. This study presents a first attempt to quantify the likely effects of different policy scenarios on international trade and EU domestic production. In the context of the Impact Asessment process the JRC was requested to simulate via a modelling study the economic impact of selected policy options. Based on a literature review and the specific constraints for this study, the choice was made to perform the analysis through the use of a computable general equilibrium model and focus on the dairy and beef sector . The different model scenarios are constructed based on combinations of the discussed policy options such as a ban or traceability and labelling requirements with the productivity increase associated with cloning. The results show that only the situation where trade with countries using the technique of cloning is suspended has an effect on competitiveness. This suspension could be due to express prohibitions or a de facto decision by exporters when traceability and labeling costs increase. Unde this scenario imports drop significantly which is followed by a slight increase in domestic production and prices, especially for beef and cattle.JRC.J.4-Agriculture and Life Sciences in the Econom

Contribution to the economic impact assessment of policy options to regulate animal cloning for food production with an economic simulation model

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