Rent-Seeking in Noxious Weed Regulations: Evidence from US States

regulations restricts commodity producers’ seed choices, which increases agricultural production
cost and thus consumer prices. To the extent that the increase in L protects the environment, the
second right-hand-side term in equation (1), the ecosystem-preference effect, is positive. The
sign of the derivative in equation (1) is either positive or negative depending on the relative
strengths of these two effects.

Seed and Commodity Producers’ Interest in IS Regulation: Given a set of agronomic conditions,
A, producers’ decision-making in the state planner’s model may be represented by two profit
functions, one each for seed producers and commodity producers.³ Seed producers’ maximum
profit function is given by π_s[p_s(L) , W_s, L, A], where L is defined as in the consumer
problem, and ps and Ws are, respectively, seed price and the vector of input prices in seed
production. As in the standard profit function, profit opportunities are conditioned by output and
input prices. In addition, they are directly influenced by weed list L insofar as the list provides
seed producers with biological protection from invasive weeds. Holding A and Ws constant, the
profit impact of altering the list L is:

Note that ∂p_s /∂L is positive since the stringency of weed regulations provides greater market
protection to local seed producers. Since ∂π_s /∂p_s is also positive, the first right-hand term in
equation (2), namely the price-enhancement effect, is positive. ⁴ The second right-hand term or
the agronomic-protection effect, also is positive because the larger the weed list, the greater the
agronomic protection (lower weed abatement costs) to local producers. The expected sign of

³ In this section we replace the term “seed producers and nursery growers” by “seed producers” for convenience.

⁴ However, seed producer profits can be a negative function of the size of lists in jurisdictions to which local
producers would export. That is, noxious weed regulation can be perceived as export barriers, if a states’ seed
producers incur additional costs to obtain certification and/or labeling privileges.

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