Surplus Distribution from the Introduction of a Biotechnology Innovation

We examine the distribution of welfare from the introduction of Bt cotton in the United States in 1996. The welfare framework explicitly recognizes that research protected by intellectual property rights generates monopoly profits, and makes it possible to partition these rents among consumers, farm...

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Bibliographic Details
Published in:American journal of agricultural economics 2000-05, Vol.82 (2), p.360-369
Main Authors: Falck-Zepeda, José Benjamin, Traxler, Greg, Nelson, Robert G.
Format: Article
Language:English
Subjects:
Agricultural economics
Biotechnology
Bt cotton
Consumer surplus
Cotton
Crop economics
Crops
Genetic engineering
genetically modified organisms
Market surplus
Monopoly
O340
Organisms
Producer surplus
Q160
Rents
Surplus
Technological innovation
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Summary:We examine the distribution of welfare from the introduction of Bt cotton in the United States in 1996. The welfare framework explicitly recognizes that research protected by intellectual property rights generates monopoly profits, and makes it possible to partition these rents among consumers, farmers, and the innovating input firms. We calculate a total increase in world surplus of $240.3 million for 1996. Of this total, the largest share (59%) went to U.S. farmers. The gene developer, Monsanto, received the next largest share (21%), followed by U.S. consumers (9%), the rest of the world (6%), and the germplasm supplier, Delta and Pine Land Company (5%).
ISSN:0002-9092
1467-8276
DOI:10.1111/0002-9092.00031