| By: |
Falck-Zepeda, José;
Kilkuwe, Enoch;
Wesseler, Justus |
| Abstract: |
"Banana is a staple crop consumed by Ugandan households. The Uganda National
Agricultural Research Organization has implemented conventional and
biotechnology programs that seek improving bananas and address the crop's most
important pest and disease problems. A major thrust is the development of
genetically modified (GM) bananas. The purpose of this paper is to examine
potential social welfare impacts of adopting a GM banana in Uganda. The study
has three objectives. First, suggest and apply an approach to calculate
reversible and irreversible benefits and costs of introducing a GM banana. The
study applies a real option approach to estimate, ex ante, the maximum
incremental social tolerable irreversible costs (MISTICs) that would justify
immediate introduction of the technology. Second, suggest an approach for
assessing producer/consumer preferences and willingness to pay (WTP) for
introducing a GM banana. Finally, the paper discusses main implications for
biosafety decision making for GM crops in Uganda. Results of MISTICs
estimation for different scenarios indicate that in delaying the approval of a
GM banana, Uganda foregoes potential annual benefits ranging approximately
from US$179 million to US$365 million. Average annual MISTICs per household
vary between US$34 and US$ 69. Results indicate that only if the average
household is willing to give up at least US$38 per year to avoid introduction
of a GM banana, should postponing an immediate release be considered. Results
imply that although GM bananas promise vast benefits, realization of those
benefits depends on consumers' perceptions and attitudes and the willingness
to pay for the GM technology." from Author's Abstract |
| Keywords: |
GM banana, Real option, Choice experiment, Biosafety, MISTICs, |
| Date: |
2008 |
| URL: |
http://d.repec.org/n?u=RePEc:fpr:ifprid:767&r=dcm |