Department of Economics Yale University New Haven Connecticut USA

The characterization of varieties of rice (and of other crops as well) as 'modern' or 'high yielding' (as opposed to traditional) has been quite important for policy analysis. Many countries collect and report data on the share of area planted to modern varieties (MVs) by region and period. Different rates of change in MV area are often taken to be indicators of policy success (especially of research policies) and of resource-technology interactions.

It is important to note, however, that the class of MVs has not been static through time. The original MVs of rice made available to farmers in the late 1960s (IR8-IR20 and related varieties) were largely replaced during the 1970s by a second generation of MVs that incorporated several new 'traits', especially brown plant hopper (BPH) resistance and Tungro resistance. That generation of MVs, in turn, has now been replaced by further generations of MVs with added traits for resistance to insect pests and diseases, for tolerance to ecological stresses (heat, cold, drought, floods) and for agronomic traits (especially grain quality).

These traits have become important features of research policy and design. Rice breeders seek both 'quantitative' genetic objectives and specialized trait-based genetic objectives. The 'IRRI plant-type' as exemplified by IR8 represented a major advance in quantitative genetic traits which are complex and controlled by many genes. The incorporation of specialized traits, which are controlled by a single (or few) genes, has been the objective of most rice breeding work since the development of the IRRI plant type. The Genetic Evaluation and Utilization (GEU) programme at IRRI, for example, was directed toward incorporating a number of specialized traits into rice varieties. (IRRI has also recently started work on a second plant type.)

Specialized traits are also likely to be the objectives of rice biotechnology research. The tools of biotechnology allow breeders to search for 'alien gene' sources of traits. It is thus important that estimates of the economic value of these traits be made.

It is possible to use 'hedonic' regression methods to infer trait values. These methods require a measure of value of the item in which traits are embedded -in this case in rice cultivars. As noted above, traits have two means by which they contribute values. First, they may result in higher rice yields, because of reduced losses from pests and disease (or they may result in higher value). But, second, they also contribute value if they enable high-yielding quantitative plant types to be produced in rice ecologies or environments where they were previously unsuited.

In light of this dual nature of trait values (i.e. affecting both yield and MV adoption), a model of MV adoption, supply and factor demands is suited to trait value analysis and to supply analysis. Such a model is specified in the following section of this chapter. The subsequent section summarizes data from India suited to estimation of the model, and the final section reports estimates for a region of north India.

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