Genetic engineering: Affects on Markets

How do the costs and benefits of genetic engineering affect the consumers? Due to increased crop yields the supply of crops has increased substantially. This change in supply affects the price and product. The farmers gain anywhere from 5-40% profitability, depending on the price, yield, and seed cost. The innovators of the genetically modified seeds generally get between 10-70% of those benefits. Of course, some of those benefits are transposed to the consumers. Studies in the US show that the consumers share the benefits of anywhere from 6-60%! The share of benefits accumulated by consumers is greater with genetically modified plants that those plants that are not modified which creates a very inelastic demand, characterized by “a small increase in supply reduces prices substantially.” However farmers who use non-modified plants are being affected by the increased use of genetic modification as well, because herbicide resistant plants are causing the price of herbicides to increase, and insect resistant plants are causing pesticides to increase.  Further, as environmental awareness has been increasing, the demand for genetically modified plants has been in decline.

          This picture compares genetically modified corn(left) to natural corn(right).

To read more about genetically modified crops and its effects on the market read the full article here: http://www.choicesmagazine.org/magazine/print.php?article=129

Sources:

Zilberman, David, Jorge Fernandez-Cornejo, Steve E. Sexton, and Michele Marra. "The Economic Impact of Genetically

                  Engineered Crops." Choices n.d.: n. pag. The Economic Impact of Genetically Engineered Crops. Print.

Picture Sources:

"Genetically Modified Corn." POS Software Advice. N.p., n.d. Web. 17 Dec. 2012.