Justus Wesseler

The economic power of the Golden Rice opposition

Vitamin A enriched rice (Golden Rice) is a cost-efficient solution that can substantially reduce health costs. Despite Golden Rice being available since early 2000, this rice has not been introduced in any country. Governments must perceive additional costs that overcompensate the benefits of the technology to explain the delay in approval. We develop a real option model including irreversibility and uncertainty about perceived costs and arrival of new information to explain a delay in approval. The model has been applied to the case of India. Results show the annual perceived costs have to be at least US

Ex-Ante Regulation and Ex-Post Liability Under Uncertainty and Irreversibility: Governing the Coexistence of Gm Crops

199 million per year approximately for the last decade to explain the delay in approval of the technology. This is an indicator of the economic power of the opposition towards Golden Rice resulting in about 1.4 million life years lost over the past decade in India.

Governing the Co-Existence of GM Crops: Ex-Ante Regulation and Ex-Post Liability under Uncertainty and Irreversibility

Ex-ante regulations and ex-post liabilities for using a new technology will induce additional costs for adopters. The standard model is advanced by including irreversibility and uncertainty and taking into account transaction costs of negotiating possible cost reductions. The case analysed is the coexistence policy for GM crops in the European Union. Results show, the design of the rules and regulations can provide strong incentives for regional agglomeration of GM and non-GM farmers.

The current status of the debate on socio-economic regulatory assessments: positions and policies in Canada, the USA, the EU and developing countries

The future institutional environment for the co-existence of genetically modified (GM) crops, conventional crops and organic crops in Europe combines measures of ex-ante regulation and ex-post liability rules. Against this background we ask the following two questions: How does ex-ante regulation and ex-post liability under irreversibility and uncertainty affect the adoption of GM crops? What are the implications for regional agglomeration of GM and non-GM crops? Ex-ante regulations and ex-post liabilities for using GM crops will induce additional costs. These costs are modelled in a classical way. The model is advanced by including irreversibility and uncertainty and taking into account transaction costs of negotiating possible solutions with neighbouring farmers which are assumed to be partially irreversible. The results show that the design of ex-ante regulation and ex-post liability increases the value of waiting and results in less immediate adoption of the GM technology. Additionally, the rules and regulations in the EU do provide incentives for the regional agglomeration of GM and non-GM crops that are mainly driven by the irreversibility effect of the ex-ante regulatory and ex-post liability costs.

Legal But Costly: An Analysis of the EU GM Regulation in the Light of the WTO Trade Dispute Between the EU and the USA

Article 26.1 of the Cartagena Protocol on Biosafety has the option of considering socio-economic issues in biosafety regulatory approval processes related to genetically engineered organisms. National laws and regulations in some countries have already defined positions and may have enacted policies dealing with socio-economic assessments. Many more countries, especially developing countries, are building their biosafety regulatory systems. This paper considers issues related to socio-economic assessments inclusion in biosafety processes by describing the current status and issues in Canada, USA, EU and selected developing countries. There is broad variation amongst examined countries in terms of inclusion modalities and guidance for assessment implementation. The need exists to define scope and if assessments are strictly socio-economic or expanded to include broader considerations such as ethical, religious, or cultural issues. Countries need to define clearly decision making rules and standards by which to render decisions as unclear procedures can lead to negative outcomes.

Labelling GM-free Products: A Case Study of Dairy Companies in Germany

In this study, we investigate the new European Union (EU) regulations in the light of the ruling by the World Trade Organization (WTO) panel on the trade in genetically modified crops. To this end, we describe: the basic differences in approaches between the EU and the complaining parties with regard to genetically modified crops, what the main arguments were of the complaining parties as well as the defence of the EU, what the final judgement of the panel was and finally, we describe the current EU regulations. We then analyse to what extent, the arguments and conclusions of the panel still hold regarding the new EU legislation. We find that parts of the current EU legislation, that is, the safety bans as they are currently in place, are in breach of the WTO commitments. Moreover, the new approval procedures have the potential to also break these rules, although whether or not they will, depends on how the European Commission acts. Whether or not the EU will be challenged at the WTO remains an open question, as the decision to fight before the WTO may be more costly than working out new bilateral trade agreements.

Evaluating the Impacts of Plantations and Associated Forestry Operations in Africa—Methods and Indicators

Food suppliers in the EU must comply with labelling regulations for genetically modified organisms (GMOs). However, excluded from mandatory labelling are food products derived from animals fed with GM feed (mainly GM soybean in the EU). Because of this labelling exemption, consumers are unable to identify which animal products were derived without the use of GMOs. Therefore, Germany and other countries introduced voluntary GM-free labelling legislations or guidelines that allow companies to signal that their products are GM-free. We present the results of a survey among German dairy companies. We asked them whether they produce GM-free and to assess the GM-free market in terms of (1) the current status, (2) potential benefits, (3) limitations and (4) risks. We find that smaller dairy companies mostly switch completely, whereas GM-free production of larger dairy companies is often limited. The results indicate that for switching to GM-free production, long-term effects such as the creation of a positive image or differentiation from competitors are more important for dairy companies than short-term effects such as higher sales or profit.

Financial, Real, and Quasi Options: Similarities and Differences

SUMMARY This study explores how the impact of large scale plantations and their associated industrial operations can be evaluated. It takes a value chain approach, looking at impacts on suppliers, customers and stakeholders such as communities, local and national government and investors. Whilst there is renewed interest from investors, governments and enterprises in the potential of planted forestry operations in Africa, doubts have been expressed by communities, and environmental and socially orientated NGOs about their impacts. This paper seeks to provide a framework which can be used to examine the impacts of modern plantations in Africa, given that the context can be very different from plantations in temperate regions. An impact logic (theory of change) is developed which sets out the range of activities, stakeholders and intended impacts, based on two cases of investments in sustainable forestry operations in Tanzania and Mozambique. This, a literature review and interviews with stakeholders, guided the development of indicators to assess economic, social and environmental impacts. The extent that a quantitative and qualitative (mixed methods) impact evaluation is possible and the data required to enable such an evaluation are deliberated. An evaluation framework and supporting indicators are proposed and discussed.

Rural consumers' preferences for banana attributes in Uganda: is there a market for GM staples?

Flexibility, uncertainty, and irreversibility provide gains from waiting. These gains have been elaborated in the context of finance (financial option), investment (real option), and environmental policy (quasi option). While the financial and real option values are closely linked as the real option value theory has been developed from the financial option value theory the quasi option value originated from environmental economics and the link with financial and real option value theory is less obvious. A comparison between the three option theories shows similarities as well as differences. Knowing in particular the cause of differences will be important for understanding why either of the approach may yield a different result, for the interpretation of the results, and for the choice of approach.

The impacts and acceptance of agricultural biotechnology: an introduction to the special issue

Choice Experiments in Developing Countries is an invaluable one-stop presentation of the best-practice case studies implementing the choice experiment method in developing countries. It highlights the theoretical and practical issues that should be taken into consideration when applying this method in a developing country context.