Spatial Efficiency of Genetically Modified and Non-Genetically Modified Crops

When GM (genetically modified) and non-GM crops coexist, not all of the latter can be sold as GM-free crops as some of them will likely be contaminated by GM crops. The choice of producing non-GM crops will consequently depend on the surrounding crops. We therefore analyze the spatial distribution of GM and non-GM crops. When producers follow individual strategies, many spatial configurations arise in equilibrium, some of which are more efficient than others. We examine how coordination among producers impacts the spatial distribution of crop varieties, and show that coordination among only a small number of producers can greatly improve efficiency. In particular, a non-GM producer neighboring two GM producers needs to coordinate with only one of them to eliminate any spatial inefficiency from variety choices.