A partial equilibrium four-region world trade model for the soybean complex is developed in which Roundup Ready (RR) products are weakly inferior substitutes to conventional ones, RR seeds are priced at a premium, and costly segregation is necessary to separate conventional and biotech products. Solution of the calibrated model illustrates how incomplete adoption of RR technology arises in equilibrium. The United States, Argentina, Brazil, and the Rest of the World (ROW) all gain from the introduction of RR soybeans, although some groups may lose. The impacts of RR production or import bans by the ROW or Brazil are analyzed. U.S. price support helps U.S. farmers, despite hurting the United States and has the potential to improve world efficiency.
for their insightful comments. I am especially thankful to Harvey Lapan for his excellent teaching of international trade. And I am truly indebted to GianCarlo Moschini for his professional and personal guidance, support and inspiration at every stage of the dissertation. My studies at Iowa State University were supported by the Iowa Agricultural Extension Station, the United States Department of Agriculture (through a cooperative agreement) and the Pioneer Chair of Science and Technology Policy. I am grateful for the financial support provided by these institutions.
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