4y Springer REGULATING AGRICULTURAL BIOTECHNOLOGY: ECONOMICS AND POLICY. RICHARD E. JUST University of Maryland

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1 REGULATING AGRICULTURAL BIOTECHNOLOGY: ECONOMICS AND POLICY Edited by RICHARD E. JUST University of Maryland JULIAN M. ALSTON University of California, Davis DAVID ZILBERMAN University of California, Berkeley Liesl Koch, Technical Editor 4y Springer

2 Contents INTRODUCTION 1 Regulating Agricultural Biotechnology: Introduction and Overview: 3 Richard E. Just, David Zilberman, and Julian M. Alston PART I AGRICULTURAL BIOTECHNOLOGY IN THE CONTEXT OF A REGULATED AGRICULTURAL SECTOR Section I.I - Technological Regulation in U.S. Agriculture 2 Economic Analysis and Regulating Pesticide 21 Biotechnology at the U.S. Environmental Protection Agency Derek Berwald, Sharlene Matten, and David Widawsky 3 Compliance Costs for Regulatory Approval of New Biotech Crops 37 Nicholas Kalaitzandonakes, Julian M. Alston, Kent J. Bradford 4 Regulation of Technology in the Context of U.S. Agricultural Policy 59 Bruce Gardner 5 Managing Liabilities Arising from Agricultural Biotechnology 81 Stuart Smyth, Peter W.B. Phillips, W.A. Ken- Section Benefits from Agricultural Biotechnologies 6 Status of Agricultural Biotechnology: An International Perspective 103 Robert E. Evenson 7 Interactions Between Trade Policies and GMFood Regulations 125 Kym Anderson Section Hidden Benefits of Agricultural Biotechnologies 8 The Value of Non-Pecuniary Characteristics of Crop 145 Biotechnologies: A New Look at the Evidence Michele C. Marra and Nicholas E. Piggott 9 Bt Corn's Reduction of Mycotoxins: 179 Regulatory Decisions and Public Opinion Felicia Wu

3 vi REGULATING AGRICULTURAL BIOTECHNOLOGY: ECONOMICS AND POLICY Section Consumer and Market Acceptance of Agricultural Biotechnologies 10 Consumer Attitudes and Market Resistance to Biotech Products 201 Wallace E. Huffman and Matt Rousu 11 Comparison of Consumer Responses to Genetically 227 Modified Foods in Asia, North America, and Europe Jill J. McCluskey, Kristine M. Grimsrud, and Thomas I Wahl PART II CONCEPTUAL ISSUES IN REGULATING AGRICULTURAL BIOTECHNOLOGY Section The Causes of Regulations and Their Impacts 12 The Economics of Biotechnology Regulation 243 David Zilberman 13 Labeling Regulations and Segregation of First- and Second- 263 Generation GM Products: Innovation Incentives and Welfare Effects GianCarlo Moschini and Harvey Lapan Section Environmental Risks of Agricultural Biotechnologies and Regulatory Response 14 Regulation of Technology in the Context of Risk Generation 283 Erik Lichtenberg 15 Environmental Effects of Genetically Modified Crops: 301 Differentiated Risk Assessment and Management \ David E. Ervin and Rick Welsh 16 Irreversibility, Uncertainty, and the Adoption of. 327 Transgenic Crops: Experiences from Applications to HT Sugar Beets, HT Corn, and Bt Corn Sara Scatasta, Justus Wesseler, and Matty Demont Section Imperfect Competition, Political Economy, and Regulation of Agricultural Biotechnologies 17 Anticompetitive Impacts of Laws That Regulate Commercial 353 Use of Agricultural Biotechnologies in the United States Richard E. Just 18 Regulation, Trade, and Market Power: 397 Agricultural Chemical Markets and Incentives for Biotechnology Vincent H. Smith

4 CONTENTS vii 19 Regulation and the Structure of Biotechnology Industries 421 Paul Heisey and David Schimmelpfennig 20 The Social Welfare Implications of Intellectual Property Protection: 437 Imitation and Going Off Patent James F. Oehmke PART III CASE STUDIES ON THE ECONOMICS OF REGULATING AGRICULTURAL BIOTECHNOLOGY Section III.l - International Evidence ' 21 International Approval and Labeling Regulations of 459 Genetically Modified Food in Major Trading Countries Colin A. Carter and Guillaume P. Gruere 22 Benefits and Costs of Biosafety Regulation in India and China 481 Carl E. Pray, Jikun Huang, Ruifa Hu, Qihuai Wang, Bharat Ramaswami, and Prajakta Bengali 23 Biosafety Regulation of Genetically Modified Orphan Crops 509 in Developing Courntries: A Way Forward Jose Falck Zapeda and Joel I. Cohen Section Refuge Policy and Regulatory Compliance at the Farm Level 24 Bt Resistance Management: The Economics of Refuges 535 George B. Frisvold 25 Managing European Corn Borer Resistance to 559 Bt Corn with Dynamic Refuges Silvia Secchi, Terrance M. Hurley, Bruce A. Babcock, and Richard L. Hellmich 26 Farmer Demandfor Corn Rootworm Bt Corn: : Do Insect Resistance Management Guidelines Really Matter? Ines Langrock and Terrance M. Hurley 27 Adverse Selection, Moral Hazard, and Grower 599 Compliance with Bt Corn Refuge Paul D. Mitchell and Terrance M. Hurley 28 Damage from Secondary Pests and the Need for Refuge in China 625 Shenghui Wang, David R. Just, and Per Pinstrup-Andersen

5 viii REGULATING AGRICULTURAL BIOTECHNOLOGY: ECONOMICS AND POLICY Section III.3 - Crop-Specific Issues in Biotechnology Regulation 29 Regulation of Biotechnology for Field Crops 639 Richard K. Perrin 30 Regulation oftransgenic Crops Intended for 647 Pharmaceutical and Industrial Uses Gregory D. Graff 31 Regulation of Biotechnology for Forestry Products 663 Roger A. Sedjo 32 Regulation of Biotechnology for Specialty Crops 683 Kent J. Bradford, Julian M. Alston, and Nicholas Kalaitzandonakes CONCLUSIONS 33 What Have We Learned, and Where Do We Go from Here? 701 Julian M. Alston, Richard E. Just, and David Zilberman INDEX 723