Agriculture Reference
In-Depth Information
Table 8. (Continued)
GE traits (percent adopters)
Bt
only
Seed Type
HT
only
Bt/
HT
No
GE
10.
Stacked
gene varieties that, in addition to
the ECB and the rootworm, can control the
corn earworm
5.71
11. Multiple (more than three)
trait
stacked
variety with sev-eral Bt traits and two
herbicide resistant traits—glyphosate
(Roundup) and glufosinate (Liberty)
1.24
12. None of the above 6.79
Total 13.99 25.08 50.66 10.26
Source: USDA Economic Research Service using data from 2010 Agricultural
Resource Management Survey corn survey.
The increase in GE seed prices can be attributed in part to increasing price
premiums over conventional seeds (which include technical fees) associated
with the rising share of GE seeds with more than one trait and/or more than
one mode of action for particular target pests (NRC, 2010). Another factor
contributing to the increase in GE seed prices is the improvement in seed
genetics (germplasm) (NRC, 2010). The rapid adoption of GE crops indicates
that many farmers are willing to pay higher seed prices because of improved
seed performance and the additional pest management traits embedded in the
GE seed.
Various studies of stacked GE seed varieties have found that stacked seeds
are priced less than the sum of their component values (Stiegert et al., 2010).
Shi et al. (2008, 2010) note that sub-additive pricing is consistent with “the
presence of economies of scope in seed production.” Moreover, these scope
economies are consistent with “synergies in R&D investment (treated as a
fixed cost)” across stacked seeds that can contribute to reducing total cost (Shi
et al., 2010). Shi et al. (2009) found that while increased concentration in the
seed industry has contributed to higher seed prices, complementarity effects in
production and distribution mitigate these effects. Kalaitzandonakes et al.
(2010-11) conclude that, while estimation of market power and associated
price markups is not straightforward, the U.S. seed industry show both
“moderate market power” and dynamic market efficiency (as indicated by the
balance between firm profits and investments in product quality and
innovation) over their period of analysis (1997-2008).
