Forecasting the Adoption of Genetically Modified Oilseed Rape

Abstract: The article explores farmers' willingness to adopt genetically modified oilseed rape prior to its commercial release and estimate the 'demand' for the new technology. The analysis is based upon experiments with arable farmers in Germany who were asked to choose among conventional and GM rapeseed varieties with different characteristics.

The analysis has shown that ex ante GM adoption decisions are driven by profit expectations and personal as well as farm characteristics. Monetary and technological determinants such as the gross margin advantage of GM oilseed rape varieties, expected liability from cross pollination and restricted flexibility in returning to conventional oilseed rape growing affect the willingness to adopt GM rape in the expected directions. The results further indicate that neighbourhood effects and public attitudes matter a lot, such that individual farmers may not feel entirely free in their technology choice.

The demand simulations suggest that monopolistic seed prices would be set at between €50 and €100 per hectare, leaving farmers with a small share of the GM rent. This raises the question as to whether the farmers surveyed would actually benefit from the approval of GM rape varieties if the technology were to be provided by a single firm.