AN EMPIRICAL INVESTIGATION OF THE PRODUCTION EFFECTS OF ADOPTING GM SEED TECHNOLOGY: THE CASE OF FARMERS IN ARGENTINA

Use of Genetically Modified Soybean and Productivity

Despite the discussion regarding the legal problems seed producers face in the
Argentine market, most researchers work under the assumption that the adoption of
genetically modified seeds is always good for farmers, and that developing countries’
government do not want to protect companies’ property rights to favor farmers. However,
there are not many comprehensive analysis of the impact of the use of genetically
modified soybean in developing countries. In this case we use a database from 3000
Argnentine farms, in the Province of Buenos Aires for the year 2001⁸⁵. The uniqueness of
this database is that one of the questions ask farmers if the soybean they are using is
genetically modified or not. As a result, we use this survey to analyze the productive
impact of using genetically modified soybeans. Furthermore, the results will help to
support, or not, the heated debate among government and companies with respect to
regulation. In this respect, if government pushes for more lax regulation because farmers
are beneffiting from it, but farmers are not getting big gains, then why to pursue such a
policy. On the other hand, if the benefits are too big, seed companies can show that
farmers can pay for the use of the better seeds, given the important effect in their yields.

Accoridngly, we want to test the following model:

Y_i = α₀ + β₁Soy_i + β₂GMO_i + β₃Farmer_i + β₄Soc_i + β₅Corp_i + e_i

Where Y is the yield of soybean crop in each farm;

Soy: is the area planted with soybean

GMO is a dummy variable equal to 1 if the soybean seed is genetically modified
Farmer: is a dummy variable that represents farms owned by an individual farmer
Soc: is a dummy variable that represents farms owned by a group of farmers
(informal societies)

Corp: are the farms owned by corporations

http://www.seedquest.com/News/releases/2005/january/11144.htm.

⁸⁵ This database was collected by the Direccion Provincial de Estadistica de la Provincia de Buenos Aires.

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