Welfare effects of new fire blight control methods on the U.S. apple industry

Abstract

Technology development for production methods of new varieties and for disease control has been widely explored throughout agriculture including the apple industry. Recent progress has been made to fight against apple fire blight, which cost the Michigan apple industry nearly $42 million in the 2000 fire blight outbreak. Researchers are currently working to control fire blight through development of a microencapsulated chemical and bio-control agents as well as genetically modified (GM) varieties based on current fire blight resistant varieties. This thesis uses dynamic simulations to evaluate the impact of those new technologies on consumption and production as well as world trade. Through development of a dynamic temporal and spatial partial equilibrium model, I am able to evaluate the welfare impact to the apple industry. This thesis shows the overwhelming benefits of GM technology over other methods such as microencapsulation of chemicals and biological agents where the cost-reduction benefits of the technology outweigh the yield-increase benefits. If no hesitation by producers and consumers towards GM crops existed, technology would be readily adopted and society would benefit overall. In the choice between GM and the bio-control technologies of this study, GM technology is adopted with minimal market adjustments.