Modern biotechnology will generate crops with higher yields and enhanced resistance to pests and diseases. In the case of perennial crops, the age composition of the present stand, the farmers' willingness to invest, and the yield profiles of old and new trees determine the speed of adoption of the new technology and the timing of the effects on supply and demand conditions. We adapt conventional welfare measures to account for these factors in the assessment of research induced supply shifts. The application to cocoa in Malaysia shows that consumers and adopting producers gain and non-adopters lose. Overall, 72% of the welfare gains go to the consumers. Copyright 2001, Oxford University Press.
The importance of short‐run risk in Swiss wheat production is explored empirically by using the moment‐based approach. Marginal contributions of controlled and uncontrolled inputs to revenue variance are estimated and then used to test the hypotheses that chemical pesticides and nitrogen are risk increasing. Fungicides are shown to have a statistically significant risk‐increasing effect on revenue at low levels of rainfall. There is no conclusive evidence that nitrogen and plant growth regulators are either risk‐reducing or risk‐increasing. Comparison of conventional and organic wheat growers shows that while yield variance is lower, revenue variance is higher for conventional growers. This is because the latter are protected from market risks by guaranteed prices, while prices of organic wheat fluctuate highly. This result supports the hypothesis that chemical pesticides and nitrogen may be risk‐increasing inputs, at least in some circumstances.
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