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N. KALAITZANDONAKES, Dept. of Agricultural Economics, Univ. of Missouri, Columbia, 125-D Mumford Hall, Columbia, MO 65211-6200 Biotechnology is a collection of diverse and reinforcing enabling technologies with a wide range of applications in agriculture, forestry, food processing, waste management, pollution control, chemicals, raw materials, energy, cosmetics, pharmaceuticals, and other sectors. In the agrifood sector, first generation biotechnology products have been crops with improved agronomic traits, such as herbicide tolerance and resistance to particular insect pests. Second generation bioengineered crops incorporate additional novel agronomic traits (e.g. disease resistance, stress tolerance and improved yields) but also enhanced quality traits. Novel quality traits will permit the production of better animal feeds (e.g., high energy or nutrient density), foods with healthier nutritional and improved organoleptic properties, enhanced feedstocks (e.g. oils, starches and other polymers) for industrial and pharmaceutical uses, enhanced nutritional and pharmaceutical agents (e.g. neutraceuticals) and various other products. First generation biotechnology crops have been adopted quickly in countries where regulatory approval for production of such crops exists, as they have created significant economic value through reduced insecticide and herbicide use, labor savings, improved risk management in pest control, and increased yields. This economic value provides a glimpse of the potential of second generation agrobiotechnologies. Second generation biotechnology products with novel quality traits are economically intriguing as they create economic value through product differentiation. Crops with bundles of attributes highly valued by particular end-users present possibilities for increasingly sophisticated market segmentation, leading to expansion of market value. Industrial and pharmaceutical applications create entirely new economic possibilities and value. In this paper I discuss the economic fundaments of second generation biotechnology products and the key drivers of their economic value. I also discuss various adjustments in the agrifood supply chain and relevant regulatory advancements that might be necessary for second generation biotechnology products to realize their full economic potential.
Session 13, Second generation genetically modified foods
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