Import Demand Systems for Genetic Products

Abstract

Genetic products have been traded internationally since the 1970s. Over 190 countries have participated in trading genetic products including bovine semen, live bovine animals for breeding purposes, and live swine animal for breeding purposes. The goal of his research is to study the international market for genetic products and answer three research questions: 1. If importers’ farm cash income or the number of animals in stock changes, do importers increase or decrease their expenditures on genetic products from specific exporters? 2. If genetic product prices change, how will importers change their expenditures on genetic products from different exporters? 3. If importers’ total genetic product expenditures change due to trade policies such as subsidies and quotas, how will importers change their expenditures on genetic products from different exporters? In this research, I conducted an econometric analysis of the import demand for genetic products. Overall, 15 two-stage demand systems are estimated for 15 major bovine semen importing countries and regions. The estimation results, the elasticities, and model simulation results of three major Canadian bovine semen importers (Australia, Japan, and the Netherlands) are used to answer the three research questions of this research. The result shows that the effects of Farm Cash Income and Animal Number increase on importers’ total bovine semen expenditure vary across importers. Overall, the elasticities and simulations suggest that three importers would change Canadian bovine semen import value if their total bovine semen expenditures change due to Farm Cash Income and Animal Number changes. An increase in Canadian bovine semen export price would cause less import demand for Canadian bovine semen. Importers are more likely to increase their Canadian bovine semen import values if their governments provide subsidy to bovine semen import and increase their total genetic product expenditures.