The economic impact of StarLink corn

Abstract

The discovery of StarLink corn in U.S. food products caused considerable disruption in corn markets in 2000 and 2001. Segregation costs were incurred by the U.S. grain-handling system in order to ensure that domestic and export sales of food corn and export sales of non-food corn to Japan meet stringent tolerance levels. These costs reduced the revenue that U.S. corn producers would have received in the absence of StarLink. However, the Loan Deficiency Payment Program (LDP) effectively reduced the loss in revenue attributed to StarLink. This study develops a partial equilibrium model that encompasses both segregation costs and the LDP program in order to obtain empirical estimates of the impact of StarLink on U.S. corn producers over the 2000|2001 marketing year. It is estimated that StarLink caused U.S. producers to lose between $26 and $288 million in revenue. [EconLit citations: Q18, Q17, L51.] © 2005 Wiley Periodicals, Inc. Agribusiness 21: 391-407, 2005.

Impact of the Chinese embargo against MIR162 corn on Canadian corn producers

“…(Schmitz, Schmitz, & Moss, 2005). This approach has been used to analyze events with similar policy implications as the Chinese embargo on MIR162 corn (i.e., rejections of GM corn imports on a country-of-origin basis).…”

“…This translated into losses realized by U.S. corn producers in the form of reduced prices. (Schmitz, Schmitz, & Moss, 2005).…”

“…For example, a regression discontinuity analysis similar to that developed by Hahn, Todd, and Van der Klaauw (2001) was estimated, using daily, weekly, and/or monthly Chatham/Kent corn price quotes, but did not generate consistent results. A supply and demand system along the lines of Schmitz et al (2004Schmitz et al ( , 2005 was also considered, but unlike Japan, Chinese import allocation decisions are highly influenced by its state trading activities (Schmitz & Gray, 2000) and this type of analysis would involve modeling the complexities of the interface between agricultural policy and trade (e.g., Schmitz & Schmitz, 2012;Schmitz, Schmitz, & Dumas, 1997). Finally, a system-wide import demand system approach was explored, which would generate estimates of income and cross-price elasticities of Chinese import demand for different types of feed by country of origin (e.g., Schmitz & Seale, 2002).…”

First-generation genetically modified organisms in agriculture

“…Possibly the most litigious example of GM technology to date is that of StarLink TM corn. Aventis Crop Science (Aventis) introduced StarLink TM corn in the United States in the late 1990s even though the US Environmental Protection Agency had not approved Star-Link TM corn for human consumption (Schmitz et al, , 2005. StarLink TM was a first generation genetic modification containing the Cry9C protein that offered protection against the European corn borer.…”

“…The discovery of the Cry9C protein caused US corn exports to Japan to decline (Schmitz et al, 2005). For the September 1999 through August 2000 period, US corn exports to Japan were 15.8 million metric tons (mmt).…”