Coexistence of Genetically Modified (gm), Conventional and Organic Crops: Are the Two Main Property Rights Regimes Symmetric?

Volker Beckmann (Brandenburg University of Technology (BTU))
Claudio Soregaroli (Universita Cattolica del Sacro Cuore)
Justus Wesseler (Wageningen University)

Abstract: Two major regulatory regimes for planting of genetically modified (GM) crops have emerged: one, where the property right of growing GM crops is mainly with the GM farmer and one where the property right is mainly with the non-GM farmer. In this contribution the regulatory model chosen by Canada and the United States will be compared with the model of the EU and its different variants, the ex-ante regulations and ex-post liability rules chosen by EU member states and analyzed from an efficiency point of view. While the general result in the literature on ex-ante regulation versus ex-post liability rules under uncertainty shows the most efficient regulatory regime does depend on the specific case under investigation, we will investigate the analytical conditions for one or the other regulatory system to be more efficient. The results show the property right systems are almost symmetric as long as transaction costs are not prohibitively high and using the court system is costless. As using the court system is not cost free, property right regimes where the GM farmer is not liable are preferable from a social welfare point of view.

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