Implications of IPR for Application of Biotechnology for Other Crops in Leader Countries Especially the USA

The leading agricultural biotechnology firms at present see insufficient prospective returns in most agricultural or horticultural crops except soybean, cotton, maize and canola, whether in developed countries where such crops have been called 'orphans' (analogous to 'orphan drugs', pharmaceuticals with prospective markets of relatively 'small' value) or in developing countries.11 The public and non-profit sectors will have to continue to shoulder the bulk of the burden for these crops. Indeed it is important to note that, from a global viewpoint, two-thirds of agricultural research expenditures are public; roughly equal public totals are spent in developing and developed countries. Almost all the private third is spent in developed countries.

To date, public agricultural research effort that dominates agricultural research spending globally has, with a few notable exceptions, made relatively little progress in developing and commercializing agricultural biotechnology innovations. Many countries have used applications such as virus elimination with in vitro propagation, marker-assisted breeding, and genetic cultivar identification to improve the efficiency of germplasm conservation. But public researchers have not been leaders in commercializing the technology that has most captured the interest of farmers, breeders and private firms: the development of new cultivars with transgenic traits.

Absence of private interest is not per se justification for public investment. The larger the value of the crop, the greater is the value of a given improvement. Before the biotechnology revolution, breeders of crops with small markets relied on a narrow germplasm base and made little use of gene banks to explore sources of genetic improvements (see Wright, 199 7 and references therein). The costs of doing more exploration of genetic resources could not be justified by the prospective returns, even in the absence of any charge for use of germplasm.

On the other hand, absence of private interest, even when institutions are well developed and private investment is highly competitive, is not proof positive that research is not justified. In the USA, wheat breeding has not attracted sustained attention of major private crop breeders. Yet the social returns to wheat breeding accruing domestically in the USA (including prominently domestic adaptation of innovations generated in developing countries) have been high on a sustained basis (Pardey et al., 1996).

For public research, the direct incentive effects of patents, though possibly useful, are not as important as they are for the private sector, to the extent that support is available directly from public funds. Many policymakers and economists see a principal value of public sector patents as encouraging purchase and commercialization by the private sector. Supporters of the United States Bayh-Dole Act (1980), which broadened the ability of researchers to patent innovations supported with federal funding, emphasized this role of patenting. The patent is like a claim on a mineral prospect that protects a developer from free-riding by others on further investment (Kitch, 1977). However, where the public sector is responsible for commercialization, such 'free-riding' is not a problem. On the other hand, the constraints imposed by IPR claims on public sector efforts to bring biotechnology innovations to farmers in the new world of global IPRs may be even more important than for the private sector.

Exploration of this question at this time is difficult, because public acceptance and biosafety have been such dominant constraints up to now. The available sources relevant to the implications of IPRs for freedom to operate in public or non-profit agricultural biotechnology include surveys, econometric analyses of citation behaviour and case studies, which are briefly considered in turn.

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