Public Regulation of Agricultural Biotechnology Field Tests: EconomicImplications of Alternative Approaches

摘要

Federal regulation and oversight of agricultural biotechnology field testing arebased on public concerns that unknown consequences or hazards could arise from such tests, and that private firms may not adequately consider the public consequences of their research and development activities. In the paper, four general types of regulatory approaches to limit public risks from field testing are explored: a fixed-cost regulatory standard, a marginal-cost standard, a property rule (environmental bond), and a liability rule. Analysis shows that the four approaches are least effective at facilitating the research process while controlling public risks when the research firm is small (defined by wealth relative to potential returns) and the potential damages from the firm's activities exceed the value of the firm. Thus, public regulation of risk is most difficult for small and private biotechnology research firms, the very firms that are playing a central role in bringing new agricultural biotechnologies to market.