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This chapter analyzes the economic implications of genetic engineering for food security. We discuss the asynchronous nature of genetically modified (GM) crop regulation and labeling requirements among countries, associated politics, and consumer perceptions of GM crops.

We perform an ex-ante analysis of the introduction of a GM rice variety in major rice exporting and importing countries (including potential producer and consumer impacts) within the framework of a partial equilibrium trade model.

Although the introduction of a GM rice variety that increases global yield by 5% could result in a consumer gain of US$23.4 billion to US$74.8 billion, it could also result in a producer loss of US$9.7 billion to US$63.7 billion. The estimated net gain to society could be US$11.1 billion to US$13.7 billion. Overall, we find a positive economic surplus for major exporters and importers of rice based on a 5% supply increase with a GM rice variety.

The adoption of transgenic (GM) rice varieties would have a far greater impact on rice prices for poorer counties than for richer countries. Therefore, GM rice may help ensure that more people throughout the world would have food security.