Need help with principles of Economics

Monsanto & GMO

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· Farmers have to decide whether to go GMO or organic.

· If they go “organic” they charge more for their product

· If they go “GMO” they may increase yield at the beginning.

· can’t charge as much as people don’t GMO

Opportunity Cost

· The cost of an alternative that must be forgone in order to pursue a certain action.

· OR the benefits you could have received by taking an alternative action.

As a farmer

· Choose to GO GMO

· Increase yield in the short term

· Protect crop from insects

· Larger fruit and vegetables

· Grow crops under poor conditions

· Loose the benefits of ORGANIC

· Demand at high price

· Greater nutrition

· Less cost of inputs: fertilizer and pesticide

· Collect and reproduce seeds

· Long term success

As a consumer

· Choose to GO GMO

· Cheaper product

· Longer shelf life

· Bigger and prettier looking

· Available everywhere

· Loose the benefits of ORGANIC

· More nutrition

· Healthier food without poison in the cells

· Less health care needs

· Support small local farmers

Economic concerns

Corrupt Leadership:

· Former Monsanto Vice President is running for (FDA) Food and Drug Administration.

· Former Monsanto Attorney sitting on the supreme court.

· Creamed the competition in biotech seeds for most of the decade.

Concerns of pros and cons

Herbicide Tolerance:

Farmers always have hard time controlling weeds. Glyphosate was an option but the crops can not resist it. However, GMO invented a new product that can resist herbicides, enabling us to spray the whole field with out having to worry about the crops.

Pesticide Crops:

Technology has developed new ways to make the plants produce more toxins in order to kill insects that try to eat it. The benefits of it, reduce damage and improve yield. Bt crops are one of the successful examples.

Virus Resistance: The most significant concerns for farmers are fungus and viruses. GMO technology have developed product that can destroy the cell walls of the fungus. Moreover, it terminates the reproduction of the viruses.

Quality & Nutrition:

One of the advantages of GMO is that it can increase the production of amino acids in plants. This way can be useful because human lack amino acids. The other sources of amino acids like meat are really expensive.

Monopoly

· Monsanto monopolizes the seed supply and wants to be the only company the has control of these genes. (TR)

· Intellectual property rights used by Monsanto to copyright genes, gene ownership.

 

· Monsanto wants to collect royalty monies for every single time that their gene appears in the neighboring farm.

· (CW) Eventually super-insects evolve to eat your crop anyway (Environmental)

Competitive Advantage, Monsanto has power and money to support their goals

· The company regularly sues farmers for not buying new batches of its patented seeds each year.

· Monsanto is looking to acquire Swiss agrichemical giant Syngenta to further Monopolize

· Monsanto can continuously deliver unique combinations of new traits and genetics through a combination of seed chipping and molecular breeding.

Market Effects of GMO’s

· Shift in demand and supply curve

· According to studies between GMO’s and organic suggest having both products on the market is the most profitable.

· Companies such as Monsanto have benefited from GMO’s due to licensing and technology fees.

· US is large exporter of corn and soybean production

· Continuing large production of corn and soybean would enhance US production and exports.

· If fully adopted we would see little change in prices of goods produced.

· Nelson, G. C. (2001). Genetically Modified Organisms in Agriculture: Economics and Politics. London, GBR: Academic Press. Retrieved from http://www.ebrary.com

Nelson, Gerald C.. Genetically Modified Organisms in Agriculture : Economics and Politics. London, GBR: Academic Press, 2001. ProQuest ebrary. Web. 30 November 2015. Copyright © 2001. Academic Press. All rights reserved.

Nelson, Gerald C.. Genetically Modified Organisms in Agriculture : Economics and Politics. London, GBR: Academic Press, 2001. ProQuest ebrary. Web. 30 November 2015.

Copyright © 2001. Academic Press. All rights reserved.