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Environment and Development Economics

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Agricultural biotechnology, Biotechnology


The rapidity of change has left scant opportunity for investigation of the consequences of biotechnology adoption on long-term ecosystem or economic system functioning. Economic theory suggests that, if the "Biotechnology Revolution" is left to market forces alone, there will be neglected public goods. Theory and limited empirical evidence suggests that there are significant incentives for private firms to discount and neglect negative environmental impacts and to develop products that meet only the needs of those able and willing to pay. Negative distributional impacts on rural societies and economies will not normally enter the private calculus nor will the long-term problems of insect and plant resistance. Furthermore, economists have shown the detrimental effects from excessive market power on prices, product quality and innovation. For example, the growing concentration in the biotechnology industry may dampen incentives to assure adequate diversity in plant germplasm. The authors suggest adoption of the precautionary approach in weighing the adoption of new agricultural biotechnologies.


Copyright 1999 by Sandra S. Batie and David E. Ervin. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies.

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