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Article
On the Segregation of Genetically Modified, Conventional and Organic Products in European Agriculture: A Multi-market Equilibrium Analysis
Journal of Agricultural Economics
  • Giancarlo Moschini, Iowa State University
  • Harun Bulut, Iowa State University
  • Luigi Cembalo, Iowa State University
Document Type
Article
Publication Version
Submitted Manuscript
Publication Date
12-1-2005
DOI
10.1111/j.1477-9552.2005.00022.x
Abstract
Evaluating the possible benefits of the introduction of genetically modified (GM) crops must address the issue of consumer resistance as well as the complex regulation that has ensued. In the European Union (EU), this regulation envisions the co-existence of GM food with conventional and quality-enhanced products, mandates the labelling and traceability of GM products and allows only a stringent adventitious presence of GM content in other products. All these elements are brought together within a partial equilibrium model of the EU agricultural food sector. The model comprises conventional, GM and organic food. Demand is modelled in a novel fashion, whereby organic and conventional products are treated as horizontally differentiated but GM products are vertically differentiated (weakly inferior) relative to conventional ones. Supply accounts explicitly for the land constraint at the sector level and for the need for additional resources to produce organic food. Model calibration and simulation allow insights into the qualitative and quantitative effects of the large-scale introduction of GM products in the EU market. We find that the introduction of GM food reduces overall EU welfare, mostly because of the associated need for costly segregation of non-GM products, but the producers of quality-enhanced products actually benefit.
Comments

This is a working paper of an article from Journal of Agricultural Economics 56 (2005): 347, doi: 10.1111/j.1477-9552.2005.00022.x.

Citation Information
Giancarlo Moschini, Harun Bulut and Luigi Cembalo. "On the Segregation of Genetically Modified, Conventional and Organic Products in European Agriculture: A Multi-market Equilibrium Analysis" Journal of Agricultural Economics Vol. 56 Iss. 3 (2005) p. 347 - 372
Available at: http://works.bepress.com/giancarlo-moschini/84/