The distortion in the EU feed market due to import constraints on genetically modified soy

Basnet, Shyam KumarSveriges lantbruksuniversitet,Stockholms universitet,Stockholm Resilience Centre,Swedish University of Agricultural Sciences, Sweden,Institutionen för ekonomi,Department of Economics (author)

Feed importers in some EU member states face constraints on imports of genetically modified (GM) soy, a practice that may compromise the interests of EU livestock farmers. Using the cases of Sweden and Austria, we analyzed price transmission in the soy supply chain originating from Brazil, applying an asymmetric non-linear auto-regressive distributed lag (ARDL) model to identify short-run and long-run asymmetries. The results revealed significant asymmetric effects in how positive and negative price changes are absorbed within the feed industry. Notably, increases in the cost of Brazilian soy swiftly affect the prices for EU farmers, while cost reductions fail to trigger corresponding price decreases. Consequently, stronger constraints on GM soy imports are likely to exacerbate the competitiveness challenges faced by livestock farmers, primarily due to their reliance on non-GM soy. This implies that the restrictions on GM imports need to be relaxed or that low-cost local protein alternatives need to be developed.

Ghosh, Ranjan Kumar (author)
Eriksson, MattiasSwedish University of Agricultural Sciences,Sveriges lantbruksuniversitet,Institutionen för energi och teknik,Department of Energy and Technology(Swepub:slu)50160 (author)
Lagerkvist, Carl-JohanSwedish University of Agricultural Sciences,Sveriges lantbruksuniversitet,Institutionen för ekonomi,Department of Economics(Swepub:slu)50267 (author)
Stockholms universitetStockholm Resilience Centre (creator_code:org_t)
Sveriges lantbruksuniversitet

By the author/editor: Basnet, Shyam Ku ...; Ghosh, Ranjan Ku ...; Eriksson, Mattia ...; Lagerkvist, Carl ...

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By the university: Stockholm University; Swedish University of Agricultural Sciences

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