GM Rice Adoption: Implications for Welfare and Poverty Alleviation

Abstract

The first generation of genetically modified (GM) crop varieties sought to increase producer profitability through cost reductions or higher yields, while the next generation of GM food research is focusing on breeding for attributes of interest to consumers. "Golden rice" has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of poor people in developing countries. Anderson, Jackson, and Nielsen analyze the potential economic effects of adopting both types of innovation in Asia, including its impact on rice producers and other consumers. They do so using the global economywide computable general equilibrium model known as GTAP. The results suggest that farm productivity gains could be dwarfed by the welfare gains resulting from the potential health-enhancing attributes of golden rice which would boost the productivity of unskilled workers among Asia's poor.