Dynamic supply response and welfare effects of technological change on perennial crops: The case of cocoa in Malaysia

Modern biotechnology will generate crops with highher yields and enhanced r esistance to pests and diseases. In the case of perennial crops. the age co mposition of the present stand. the farmers willingness to invest, and the yield profiles of old and new tries determine the spaed of adoption of the new; technology and the timing of the effects on supply and demand conditio ns. We adapt conventional welfare measures to account for these factors in the assessment of research induced supply shifts. The application to cocoa in Malaysia shows that consumers and adopting producers gain and non-adopte rs lose. Overall. 72% of the welfare gains go to the consumers.