Working Paper: CEPR ID: DP4490
Authors: Kym Anderson; Lee Ann Jackson
Abstract: The first generation of genetically modified (GM) crop varieties sought to increase farmer profitability through cost reductions or higher yields. The next generation of GM food research is focusing also on breeding for attributes of interest to consumers, beginning with ?golden rice?, which has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of unskilled labourers in developing countries. This Paper analyses empirically the potential economic effects of adopting both types of innovation in Sub-Saharan Africa (SSA). It does so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest the welfare gains are potentially very large, especially from golden rice, and that those benefits are diminished only slightly by the presence of the European Union?s current ban on imports of GM foods. In particular, if SSA countries impose bans on GM crop imports in an attempt to maintain access to EU markets for non-GM products, the loss to domestic consumers due to that protectionism boost to SSA farmers is far more than the small gain in terms of greater market access to the EU.
Keywords: biotechnology; computable general equilibrium; GMOs; regulation; sub-Saharan Africa; trade policy
JEL Codes: C68; D58; F13; O30; Q17; Q18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Adoption of GM varieties (Q16) | Welfare gains for SSA countries (D69) |
| Adoption of golden rice (Q16) | Welfare gains for SSA countries (D69) |
| EU's ban on GM food imports (Q17) | Diminished welfare gains from GM adoption (D69) |
| Bans on GM crop imports (Q17) | Loss to domestic consumers in SSA (F61) |
| Adoption of second-generation GM crops (Q16) | Greater welfare improvements (D69) |
| Adoption of GM technologies (Q16) | Productivity growth and improved economic efficiency (O49) |
| Adoption of GM crop technology (Q16) | Alleviation of poverty in SSA (I32) |