Evaluating biotechnology: Fertiliser substitution and US rice policy

Abstract

A model is designed to determine the conditions under which producers would adopt a cereal that fixes nitrogen. Applying the model to the US case, it appears that genetically engineering a nitrogen-fixing rice plant would probably divert too much energy from other yield-increasing mechanisms to be economically attractive. A plausible second-best case for public investment in biological technologies can be supported, however. Because biological nitrogen fixation is a land-using technology, subsidising its use reduces the need for costly set-aside programmes to maintain farm incomes.