Competitive markets for seeds of a GM generic variety

In some countries, a limited capacity to modify GMVs or cost considerations may lead even the public sector to introduce a generic GMV, imported from abroad, instead of genetically modifying local varieties.

The results for the competitive and monopolistic markets for GMVj can be modified accordingly. If the seed industry is competitive, the possible outcome includes

C8j2: Partial adoption if PMrf(o)> Vj > PMrf^}-Here Af < when at Af PMjf^Af^ PMp^AfY Vj , - Af in a traditional variety.

Cp\ Full adoption when PMrf^-PM/?°^> Vj . Mj/j^ Af j = Mcj + Vj. Output in this case is

and net social benefit is

The generic GMV has a lower marginal productivity than GMVp but its variable cost is lower. Thus, comparing CJI-CJ3 with C?3

suggests that more (less) acreage will be utilized with the GMVj than the is generic GMV if the marginal benefit gain /jMp^^-mPj{j4T) greater (smaller) than Mcj - - Vg ).

When the variable cost of GMVj is very high due to an undeveloped crop-breeding sector (and the yield disadvantage of generic variety is not overwhelming), adoption rates of a generic GMV will be higher. In these situations, it may be that, despite lower yield per acre, the actual output of the generic GMV will be greater than those of the GMVj. In most situations, however, we do not expect the extra cost of GMVj to be dominant and expect both adoption and output to be higher with a GMVj. At this stage, there are no empirical examples of a generic GMV being introduced by the public sector. As indicated before, the introduction of most GMVs worldwide has been done by private monopolists, and outcomes with generic GMVs in such situations are discussed below.

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