Assessing the expected welfare effects of biotechnological change on perennial crops under varying economic environments: A dynamic model for cocoa in Malaysia

A dynamic model is developed for the ex ante measurement of research benefits resulting from the adoption of biotechnological innovations for perennial crops. It is implemented empirically for cocoa in a large producer country, namely Malaysia, and all other countries as an aggregate. The sensitivity of the model is investigated with regard to variations of exogenous factors (growth rate of supply, wages, discount rate). The price and quantity effects resulting from the adoption of new cultivars in Malaysia are relatively small. Malaysian producers and consumers gain, whereas the fact that producers' losses are more or less offset by consumers' gains in the Rest of the World illustrates the distributive effect of Malaysia's adoption of improved cultivars. The most sensitive reaction is exhibited by an increase in the supply growth rate in the Rest of the World.