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Surplus Distribution from the Introduction of a Biotechnology Innovation

José Benjamin Falck-Zepeda, Greg Traxler and Robert G. Nelson
American Journal of Agricultural Economics
Vol. 82, No. 2 (May, 2000), pp. 360-369
Stable URL: http://www.jstor.org/stable/1244657
Page Count: 10
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Surplus Distribution from the Introduction of a Biotechnology Innovation
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Abstract

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%).

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