(Table 2). As a result, both countries play an important role in international agriculture
markets. The strength of both countries in international markets is also reflected in the
market for new seeds (Table 3). In this case, the United States is first in the consumption
of new varieties, while Argentina is eighth. Finally, Argentina, following the United
States, was one of the earliest adopters of genetically modified crops, especially soybean
and corn.8 Since 1996, the Argentine government has approved the use of genetically
modified seeds, and farmers have been adopting Roundup Ready soybean and Bt corn
intensively.9 In the case of soybean, the area sown with genetically modified seeds rose
from 6% in 1996 to 99.5% in 2002-03, while genetically modified corn increased from
0.25% to 40% during the same period; cotton went from 2.7% to 20%.10 Despite the
impressive increase in new technological advances, there are important gaps in the
amount of investment in research and development of new varieties, which are, in part,
due to the investment gap between developed and developing countries.11 Part of this
gap also corresponds to the incentives offered by different regulatory regimes in each
country.12
Given the important role the United States and Argentina play in international grain
markets, an analysis of the differences in property rights legislation is meaningful to
understand market behavior and the incentives producers face in each country.
TABLE 1. International Exports in Soybean13
8 “In 2002 four countries accounted for 99% of total area sown with genetically modified crops: United
States with 39.0 million hectares (66% of total), Argentina with 13.5 million hectares (23%), Canada
with 3.5 million hectares (6% of total) and China with 2.1 million hectares (4% of total).” CARMEN VICIEN
(2003)
9 See GAO (2000).
10 See DOMINGO (2003).
11 This gap is significant and may be growing:
In 1995 developed countries spent $5.43 on public and private agricultural research and development
for every one hundred dollars of agricultural output, compared with just sixty-six cents per one
hundred dollars of output for developing countries. The eightfold difference in total research intensities
illustrates the size of the technological gap in agriculture between rich and poor countries. Moreover,
the situation is growing worse. The difference in public research intensity ratios was 3.5-fold in the
1970s, compared with 4.3-fold now. An even wider gap would have opened up if private spending was
also factored in.
Pardey, Koo & Nottenburg (2004), at 218 (footnotes omitted).
12 See next sections.
13 For table data, see U.S. Dep’t of Agric., Market and Trade Data,
http://www.fas.usda.gov/archive/asp (last visited Mar. 18, 2006).