Trade in Agricultural Technology

One of the principal means of transferring agricultural technology is through imports of inputs and capital goods that embody a new technology, including seeds, agrochemicals and machinery. Given the rapid evolution of agricultural technologies, developing countries clearly benefit from importation of technologies developed elsewhere, sometimes adapting them, while at other times using them directly. Against these benefits, a counterweight of concerns has been raised about the importation of inferior seeds and chemical products and the lack of adequate information for farmers on the quality of products they are receiving. There are two contrasting approaches for dealing with this concern: (i) restricting imports until the products in question are tested, and (ii) allowing them to be imported but disseminating test results, as information to buyers, as the results become available. In the latter case, usually not all products will be tested - sometimes only a small portion of them - and

80. Neuchatel Group, Common Framework on Agricultural Extension, Paris, 1999, selections from pp. 7-9. The Neuchatel Group consists of representatives of eight bilateral economic co-operation agencies and five international agencies, and it was formed for the purpose of forging a common approach to agricultural extension in sub-Saharan Africa.

81. Judith Tendler, Good Government in the Tropics, The Johns Hopkins University Press, Baltimore, MD, USA, 1997.

82. R. Picciotto and J. R. Anderson (1997), pp. 254-255 [emphasis added].

83. W. M. Rivera, 2001, pp. 11-12 [emphasis in original].

test results may lag adoption by farmers by a long period of time, even several years.

However, a policy of restricting imports until they can be tested runs a serious risk of slowing significantly a country's rate of technical progress in agriculture. The dangers of the restrictive approach have been pointed out clearly by David Gisselquist and Jean-Marie Grether:

Agriculture has become a high-technology field, with rapid advances in crop and livestock genetics, pest and livestock management, and machinery.. . . The issue of access to foreign technologies is particularly important because, as in other high-technology fields, agricultural technology is now international. Leading countries continually borrow and build on research from other countries. .. . Whatever the source, most new technologies reach farmers through marketed inputs. .. . Many developing countries lag behind, in part because of self-imposed barriers to the introduction of private agricultural technologies.

Access to new technologies may come either through multiple channels, with regulations focusing on [negative] externalities, or through a single channel, with regulations based on performance tests. ... In industrial countries (and in some developing countries) governments maintain liberal trade regimes for foreign and domestic inputs, allowing multiple channels for the introduction of new technologies.. . . Governments regulate inputs to limit externalities (for example, by not approving dangerous pesticides), but otherwise allow companies to market new technologies, trusting that farmers and companies interacting through markets be able to choose those that are most efficient. .. . This liberal approach to technology transfer is appropriate for agriculture, a field in which local conditions are critical in shaping the impact of new technologies. . ..

In contrast to the market-friendly regimes common in industrial countries, many devel oping and transition countries strictly limit market access for new agricultural technologies. Restrictions are most common and problematic for seeds, but they also may interfere with machinery, fertilizers, low-risk pesticides, feed mixes and other items. Many developing countries maintain positive lists of allowed inputs, even those for which externalities are not a serious concern. For example, many countries list allowed plant varieties, and some also list allowed models of machinery, compositions of fertilizers, and feed mixes based on official performance tests.. . . Positive lists are far more restrictive than negative lists, which allow anything not listed.

For most inputs, environmental or public health concerns can be addressed with negative lists. For example, instead of approving each feed mix, governments can simply ban or limit potentially dangerous components. Although positive lists are standard across all countries for pesticides and veterinary medicines, countries differ in the conditions for registering new products. .. . With regulations and policies that make it difficult for companies to enter and to operate, many developing countries effectively block almost all transfers of private technologies for seeds and other major categories of agricultural inputs. . ..

A single channel system severely constrains the flow of new technologies. In many developing countries with single-channel systems farmers are offered an average of less than one new seed variety a year for each major crop, while farmers in countries with multiple channels may see dozens of new varieties each year for a single major or minor crop or vegetable. Even where private companies are able to operate, regulatory costs limit the transfer of private technologies. Regulatory costs are particularly troublesome in small markets - small countries or minor crops - where companies may judge that registering a new technology is not worth the effort, leaving farmers with no


84. D. Gisselquist and J.-M. Grether, 'An argument for deregulating the transfer of agricultural technologies to developing countries', The World Bank Economic Review, 14(1), January 2000, excerpts from pp. 112-117.

These authors conclude that, on balance, the risks of the restrictive approach to trade in technology are greater than those of the liberal approach. When the latter approach is adopted, some of its risks can be ameliorated by accelerating a program of testing for informational purposes, and not for purposes of control. The testing does not necessarily have to be carried out by the government itself, although normally the government would underwrite its costs. Universities and producers' organizations often have the capability to do the testing and disseminate the findings.

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