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Whether the monopolist has access to all local varieties and markets GMVs itself or the technology is licensed to other seed producers does not matter for the scenario outcome. Technology licensing under strong IPRs is rather typical for GMVs in the United States. For Roundup Ready (RR) soybean and RR and Bt corn, biotechnology firms have issued nonexclusive licenses to all breeders and seed companies interested in endowing their own breeding lines with the transgenic traits. Due to high demand and a relatively low fixed cost to modify local varieties, numerous GMVs are available on the U. S. market.5 The number of RR soybean varieties increased along with increasing technology adoption rates. In 2002, around 200 different seed companies marketed over 1,100 RR soybean varieties, which were adapted to diverse local conditions (Carpenter et al., 2002). On average, this implies an area of less than 20,000 hectares per variety. Likewise, several hundred RR and Bt corn hybrids are available from seed companies of all sizes, with an average area of less than 10,000 hectares per hybrid. Although the patent owners capture a significant share of the rent through monopoly pricing, U. S. farmers and consumers also benefit significantly (Moschini, Lapan, and Sobolevsky, 2000; Falck-Zepeda, Traxler, and Nelson, 2000), as the licensors have not set prices to take advantage of variations in marginal product across regions or varieties.

For RR soybean and Bt corn in Argentina, the scenario is similar. Although IPR protection is weaker than in the United States, the technologies have been licensed to various seed companies that incorporated them into their own breeding lines. Today, there are seven different companies providing 56 RR soybean varieties and four companies providing over 20 different Bt corn hybrids in Argentina (ASA, 2002). Most of this germplasm has been locally bred or adjusted, and the total number of soybean varieties and corn hybrids in Argentina did not change significantly since the introduction of GM technology (INASE, 2000). Especially in the case of RR soybeans, farmers are the main beneficiaries because Argentine

5 For Bt and RR cotton in the United States, technology release was somewhat different. Instead of issuing licenses to all seed producers, Monsanto entered into an exclusive agreement with D&PL, the dominant seed company in cotton. Although in 2002 there were 33 GM cotton varieties available on the market, the exclusive agreement led to an increase in D&PL's market share at the expense of some varieties sold by smaller seed companies.

legislation allows the on-farm reproduction of seeds (Qaim and Traxler, forthcoming). Thus, average royalty payments are relatively low, so that the situation has some elements of the social optimum scenario.

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