An evaluation of the returns to biotech canola considering health, production and environmental externalities

Rising health care cost in Canada and other developed countries, as well as the pressure for climate change mitigation, reflects the importance of consumption and production-related externalities in agriculture. This study assesses the economic returns to the biotech canola industry in Canada, considering potential health care savings and greenhouse gas (GHG) emissions reduction associated with canola oil consumption and canola seed production. It is shown that the indirect benefits of consumption and production-related externalities associated with the canola sector are substantial aspects of the gains from agricultural research investments and the impacts of agriculture policy. Our estimates suggest that the external implications of increased canola production and consumption could exceed 20% of the economic effect of biotechnological improvements in canola. The impact on research policy and improvement in overall social welfare are also discussed.