Annotated Bib. 5

Annotated Bib. 5 - Melissa Walters IS 491 Lence, Sergio H.,...

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Melissa Walters IS 491 Lence, Sergio H., and Dermot J. Hayes. "Genetically Modified Crops: Their Market and Welfare Impacts." American Journal of Agricultural Economics 87.4 (2005): pp. 931- 950. Web. In the late 1990s three countries, the United States, Canada, and Argentina, approved the adoption of genetically modified crop varieties. From that time on approval and adoption of genetically modified crop varieties occurred rapidly, but in congruence with the rapidity of the appearance of Gm crops in those countries, a large consumer base which preferred to maintain access to non- modified crop varieties. The strongest response against genetically modified crops has been in the European Union, where there is an adamant consumer ban on GM crop varieties. The result of this response to genetically modified crops in the European Union has produced a worldwide concern of the safety of GM crops and a subsequent banning in various parts of the world. The reaction of trade markets and commercial development has yet to be fully seen and understood. One reaction in the global market stemming from the controversy over GM crops occurred when the European Union refused to approve genetically modified corn exports from the United States, the result was that United States annual corn exports to the European Union to become almost zero. The article also mentions another case which perpetuated the controversial nature of genetically modified crops. This took place when a corn variety known as StarLink was found in corn tortilla shells, however, this variety of corn was only approved by the EPA for use in animal feed and not human consumption. What ensued was a major crisis in United States corn shipments meant for human consumption. The corn variety had to be tested and certified as safe. In the global market the discovery of this variety of corn in food affected US trade with Japan, who accounts for around a third of the US export market. The authors’ state that the effects of the introduction of genetically modified crops on trade and commercial markets “will depend on the relative supply and demand for GM and non- GM varieties” (p.2). The article seeks to discuss the short term and long term effects of the introduction of genetically modified crops; this is done under an economics perspective. The article presents a framework for developing the price and welfare effects of genetically modified crops into the world market. These are presented as short term and long term effects. The authors’ outline the short term results as genetically modified crops having a profound impact on markets with some policy and trade parameters, due to supplies being fixed. This is most likely to occur when genetically modified crop grains are relatively scarce. The long term results as suggested by the authors, suggests that the introduction and approval of genetically modified crop technology will have positive impacts on consumer and producer welfare, because supply is
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Annotated Bib. 5 - Melissa Walters IS 491 Lence, Sergio H.,...

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