Implications of biotech traits with segregation costs and market segments: the case of Roundup Ready(R) Wheat

Roundup Ready^® Wheat (RRW) is one of the first geneticallymodified (GM) traits for the wheat sector. We develop a spatialpartial equilibrium model of the higher-protein hard wheat marketand assess the changes in the distribution of welfare associatedwith release and adoption of RRW. It incorporates segments forGM aversion in each market and segregation costs for each segment.In the most likely scenario, producer and consumer welfare increasesby $301 and $252 million, respectively. Producers of hard redspring wheat in the US and Canada gain. There are welfare lossesto hard red winter wheat growers in the US and to EU consumerswho have to import at a higher cost.