Developed countries have tried to promote intellectual property rights (IPRs) over new varieties of seeds in developing countries to protect the investments of their companies abroad. On the other hand, developing countries have insisted on sustaining a loose property rights system to favour their farmers and obtain new technologies at the lowest possible cost. To understand the effects of different regulatory regimes, we analyse the production of new varieties of corn and soybean in Argentina and the USA. Soybean requires a higher level of protection than corn, given the reproductive characteristics of each plant. As a result, it is observed that in countries like the USA utility patents can be used to protect research in new soybean varieties, while simple Plant Variety Protection Certificates (PVPCs) may be enough protection for some hybrid seeds like corn.
However, in Argentina patent protection is not generally available for plant varieties, and seed producers only have PVPCs according to the guidelines established by the International Union for the Protection of New Varieties of Plants (UPOV) 78. A change in legislation and an increase in enforcement effort in the early 1990s produced an increase in the number of new corn varieties, whereas soybean varieties, which need stricter property protection (PP), like patents, did not experience such an increase. In Argentina prices of corn seeds were closer to those in the USA, because of the higher level of appropriation in the corn market, while prices for soybean were much lower than prices for soybean in the USA. It is assumed that, without patent protection, farmers save seed for the next crop. Using an econometric model, the chapter examines the effect of saved seeds on production decisions.
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