Coexistence regulations and agriculture production: a case study of five Bt maize producers in Portugal

In 1998, Genetically Modified (GM) maize entered European Agriculture. After the publication of the European Commission's guidelines on coexistence in 2003, Portugal developed ex-ante regulatory and expost tort liability rules on the coexistence of GM and non-GM maize crops. There is an on-going debate on the extent to which the coexistence policies affect adoption. In this study we measure the costs and benefits of planting GM maize as a member of a cooperative. All group members achieved a higher gross margin by planting GM maize rather than non-GM maize on their farms. Group members did not face any ex-post liability costs and had zero ex-ante regulatory costs as they could easily internalize the ex-ante coexistence regulations. The results show that coexistence regulations such as informing neighbors or keeping minimum distances do not necessarily lead to increased production costs provided they are flexible enough.