GENETICALLY MODIFIED CROPS IN THE NEW MEMBER STATES: HOW MUCH VALUE AND FOR WHOM?

Some argue that the lack of modern agricultural development in the former socialist countries of Central and Eastern Europe has made cutting edge biotechnology attractive. However, the enthusiasm in planting transgenic crops is far from being homogenous amoung the New Member States. While during 2005-2006 the Czech Republic increased its transgenic maize area by five, Hungary imposed a de facto ban on GM crops, following its earlier ban on Bt maize.
Therefore, through multi-crop, multi-trait, single-country studies, we analyse and compare the cases of Hungary and the Czech Republic and assess (i) the value of insect resistant Bt maize and herbicide tolerant (HT) maize, sugar beet and oilseed rape and (ii) how this value is shared among farmers and the seed industry. We develop a partial equilibrium model which accounts for monopolistic technology pricing.

In the case of Bt maize, we use ex post survey data for the Czech Republic and develop a damage abatement model with a stochastic pest population for hungary. In the case of HT crops, our model explicitly incorporates farmer heterogeneity with regard to herbicide expenditures, enabling modelling demand for innovated seed and estimating farmer surplus. During the period 2003-2005, grain maize, sugar beet and oilseed rape were planted on an average area of respectively 1.2 million ha, 58,000 ha and 94,000 ha in Hungary and 91,000 ha, 71,000 ha and 260,000 ha in the Czech Republic. The total value of transgenic varieties for these crops is estimated at €81 million for both countries, of which €59 million (72%) accrues to farmers and €22 million (28%) to the gene developers and the seed industry. This is in line with the literature on benefit sharing of biotechnology innovations in the world.

 

The whole article:  http://www.biw.kuleuven.be/aee/clo/wp/demont2007a.pdf