The brave new world: imperfect information, segregation costs, and genetically modified organisms

The introduction of genetically modified (GM) crops in the mid 1990s appeared to be the latest in a string of technological innovations in agriculture. However, consumer resistance, particularly in Europe has limited the sector’s enthusiasm. One response to the limited enthusiasm has been the emergence of segregated markets for GM and non-GM products. These separated markets reduce economic welfare because they require additional costs in the marketing system. Offsetting these segregation costs, however, the introduction of GM technologies offers increased economic welfare through reduced commodity prices for consumers who are indifferent to the presence of GM traits and increased profits to producers who adopt GM technologies. This study develops the combinations of segregation costs and increased supplies that leave societal surplus unchanged. Any GM technology that yields a larger increase in supply for any segregation cost depicted in this relationship meets the compensation principle and, thus, improves societal welfare. In this case, market based adoption of these technologies improve economic surplus. On the other hand, technologies that yields less increase in supply for any segregation cost reduces societal welfare. Under this scenario, market based adoption will not be welfare improving and, hence, government regulation may be required.genetically modified (GM) crops, compensation principle, segregation costs, Pareto principle, immiserizing growth, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,

WHERE IS THE WALRASIAN AUCTIONEER FOR AGRICULTURAL MARKETS? AN EXAMINATION OF THE MARKETING INSTITUTION

In the classical development of economic equilibrium and efficiency, transaction costs are seldom considered. This study develops a micro- market model of an agricultural market based on quality differences. The study then develops a model of market structure based on the New Theory of the Firm. Using the two models, we draw conclusions about economic potential for E-Commerce.Marketing,

TWO APPROACHES TO MEASURING THE ECONOMIC IMPACT OF STARLINK CORN ON U.S. PRODUCERS

The discovery of StarLink corn in U.S. food products caused considerable disruption in the corn markets in 2000 and 2001. We estimated two models on the impact of StarLink corn over the 2000/2001 marketing year. In the first model, to segregate the U.S. corn market, identity preservation costs (IP costs) were imposed on the U.S. grain handling system to deal with both domestic and export sales of food corn and export sales of non food corn to Japan. In the second model, structural changes in corn demand were taken into account. Without taking into account Loan Deficiency Payment Program (LDP) payments, significant costs were incurred by producers as a result of StarLink. However, the effectively reduced the loss in revenue that would have been caused by StarLink, since there were periods of time immediately following the discovery of StarLink during which the market price dropped below the loan rate for corn. It was estimated that StarLink caused U.S. producers to lose between $25 and$290 million in revenue.Research and Development/Tech Change/Emerging Technologies,

VERTICAL INTEGRATION AND TRADE POLICY: THE CASE OF SUGAR

The degree of vertical integration in the U.S. sugar industry between raw sugar processing and sugar refining cannot be explained using theories of vertical integration based on transaction costs (e.g. Williamson). We graphically decompose the economic rents accruing to each level in the marketing channel. Different strategies of several major sugar producing, processing and refining entities with regard to sugar quota policy are explored.Agribusiness, Industrial Organization,

INSTITUTIONAL ECONOMICS AND THE EMERGENCE OF E-COMMERCE IN AGRIBUSINESS

The emergence of E-commerce in the 1990s heralded the arrival of the New Economy. However, the failure of numerous dotcoms since early 2001 has led to a debate regarding the future direction of E-commerce and its potential relevance for agribusiness. This study examines the economic implications of E-commerce for agribusiness within the framework of New Institutional Economics. The New Institutional Economics implies that E-commerce has the potential to reduce direct transactions costs in agricultural markets, but that it also may add additional indirect transactions costs. Depending upon the tradeoff between these costs, an institutional innovation which reduces the transactions costs may provide the impetus for an alternative marketing channel for agricultural output. Two models of institutional change are explored. The North model of changes in the rules of the game is found to be more consistent with the advent of E-commerce than the model of technological change suggested by Schumpeter.E-commerce, marketing channels, New Institutional Economics, Schumpeter, Agribusiness, Institutional and Behavioral Economics,

Remarks on the Arab Spring Symposium, Fall 2012 - Prof. Charles Schmitz

Dr. Schmitz discusses America\u27s foreign policy strategies for revolutions versus rebellions, especially looking at Yemen

Natural Disasters and the Yield Curve of Florida Valencias

Crop Production/Industries,

The Effect of Increased Energy Prices on Agriculture: A Differential Supply Approach

The increase in energy prices between 2004 and 2007 has several potential consequences for aggregate agriculture in the U.S. We estimate the derived input demand elasticities for energy as well as capital, labor, and materials using the differential supply formulation. Given that the derived input demand for energy is inelastic, it is more price-responsive than the other inputs. The results also indicate that the U.S. aggregate agricultural supply function is responsive to energy prices.differential input demand, concavity constrained, energy, Agribusiness, Agricultural Finance, Demand and Price Analysis, Financial Economics, Industrial Organization, Labor and Human Capital, Land Economics/Use, Marketing, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, C30, Q11, Q42,

INTERNATIONAL AGRICULTURAL TRADE DISPUTES: CASE STUDIES IN NORTH AMERICA

International Relations/Trade,

Conformités des paysages ruraux et parc naturels wallons : l’exemple du parc naturel de la Vallée de l’Attert

The landscape of a nature park is not a relic landscape but a living cultural landscape. The paper questions the conformity of the landscape in the regional nature park of the Attert valley. It analyses more specifically (1) the conformity to the natural environment and the economic context, (2) the conformity from a semiotic or cultural point of view, and (3) the recognition and the management of the landscape as heritage. It states that few landscape features are preserved from the past. Nevertheless the landscape of the Attert valley maintains an identity due to old settlements, and the influence of the natural environment. The rural policy of renovation since 1970, together with the regional nature park activities, and the coming landscape Charter are useful tools to manage the landscape. However, these tools experience trouble with restraining the increase of real-estate due to the proximity of the Great Duchy of Luxembourg.Le paysage d’un parc naturel n’est pas un paysage relique mais un paysage culturel vivant. L’article interroge la conformité du paysage du Parc naturel de la Vallée de l’Attert et plus particulièrement les triples points de vue : (1) de la conformité au cadre physique et économique (2) de la conformité culturelle ou sémiotique et (3) de la reconnaissance et de la gestion de ces paysages en tant que paysages patrimoniaux. Il constate que peu de structures paysagères sont conservées du passé, mais que le paysage conserve une identité liée aux données du milieu physique et au bâti ancien. La politique de rénovation rurale entamée dès les années 1970 puis les initiatives du Parc naturel jusqu’à la prochaine Charte paysagère sont des outils utiles à la gestion paysagère mais qui peinent à contenir la pression immobilière liée à la proximité du Grand-Duché de Luxembourg