Incentive Design for Introducing Genetically Modified Crops

The introduction of genetically modified (GM) crops raises several issues. This paper looks at incentives required to reduce problems of illegal and improper use of GM proprietary technology used in growing GM crops. A simple model of producer behaviour describes some key influences of a farmer’s response to GM crops. The model is illustrated using the example of INGARD cotton grown in Australia. The key findings are that legitimate adoption of a GM crop by a farmer depends on their attitude to risk, the relative profitability of growing the GM crop, the probability of detection of illegal or improper use of the GM crop and the severity of fines successfully imposed for fraud or contract breaches. In the case of INGARD cotton the problem of illegal and improper use of the technology can be addressed with modest changes to some of these factors.

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 Record created 2017-04-01, last modified 2018-09-10

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