The International Consortium on Agricultural Biotechnology Research (ICABR)

Non technical abstract
Potential adoption of GM rapeseed in France, effects on revenues of farmers and upstream companies: an ex ante evaluation

Marion Desquilbet, Stéphane Lemarié, Fabrice Levert
INRA Economie, France

 In this paper, we provide an empirical analysis about two economic aspects of the current controversy about GMOs in France: does France loose much by not using GMOs, i.e., how large would be potential benefits from GMOs in France; and who bears the loss, i.e. how would these potential benefits be shared, notably between farmers and input suppliers. We focus our study on herbicide-tolerant (HT) genetically modified (GM) rapeseed. Our aim is to study ex ante the potential impact of its adoption in France, in terms of adoption level, economic gains, and distribution of these gains between farmers and input suppliers.

Our methodology relies on two lessons drawn from US studies: potential gains from GMOs vary widely from one farm to another, largely due to differences in weed/insect infestations and weed control practices (see e.g. Bullock and Nitsi, 2000); diffusion of GMOs happened very quickly, indicating that farmers have learned very quickly about this innovation. Drawing from these two lessons, we abstract from questions about learning about the innovation and we focus on heterogeneity of potential gains between farmers due different pest control practices.

We use survey data and results of studies about GM variety trials in France from the French technical institute for oilseeds CETIOM about current plant protection problems and practices, in order to compute conventional herbicide costs and a predicted GMO weeding cost for individual farms. For each individual farm, we assume that GMOs are adopted if herbicide costs savings are higher than the seed price premium plus a minimal additional profit. Next, calculate the adoption rate, the gains to farmers, the gains to the innovator supplying the GM technology and the losses of conventional herbicide suppliers, for different levels of the price premium on GM seeds, i.e. the technology fee charged by GM seed suppliers. Then, we make several assumptions on herbicide price, margin rate on herbicides and level of the minimal additional profit at which a farmer decides to adopt GMOs, and discuss the results in terms of potential adoption by farmers, net gains and distribution of these gains.

An adoption rate of GM rapeseed by farmers of around 75 % is confirmed in all our simulations. The innovator and farmers always gain from GMO introduction while suppliers of conventional pesticides always loose. The global estimated gain does not change much from one simulation to another, but the gains and losses of these three types of actors are sensitive to assumptions on parameters.

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