The public sector can expand private sector research for small farmers by converting some of the social benefits to private gains, e.g., by offering to buy exclusive rights to newly developed technology and making it available free or for a nominal charge to small farmers. The private research agency would bear the risks, as it does when developing technology for the market. This arrangement is similar to that proposed by Sachs for developing a malaria vaccine for use in Africa.
Public-private sector research collaboration involving foreign companies is likely to be confined to those areas where companies can draw on complementarities with the public sector such as functional genomics, where they can see future profits and where their intellectual property can be protected. Research collaboration with local companies is likely to be confined in the short term to seed companies, which have access to germplasm from public research institutes for the development of new varieties, or tissue culture companies, which collaborate with universities.
The private sector is likely to be more efficient than the public sector in product development and distribution. Public research institutions are ill-equipped to carry through the entire innovation process from research to farmers' fields. In addition, research budgets do not usually include the often substantial costs of product development. There is also a need to provide incentives for local entrepreneurs to develop new forms of partnership between public research and community organizations, nongovernment organizations, and farmers for product development, field testing, and distribution.
A number of successful Asian experiences have been brought about through the brokering of proprietary technology. Technology brokers or intermediaries can clearly play a useful role in bringing together public and private sector partners, and in negotiating the terms of technology transfer.
Governments have an important role to play in facilitating and stimulating public and private sector cooperation, whether by providing incentives for the development of local companies or ensuring a clear regulatory framework for foreign companies. They may also need to be directly involved in negotiations for the transfer of proprietary technology between foreign companies and the public sector.
While the prospects for public-private sector cooperation are favorable in certain areas, it is unlikely that the private sector will play a major role in the development of the technologies most relevant to the needs of Asia's poor farmers. A key role therefore remains for the public sector and for national governments if biotechnology is to be directed toward the goals of food security and poverty reduction.
Public-private sector cooperation is premised on three key points:
(i) The private sector is the current main investor, main owner of intellectual property, and the main disseminator of the technology's products, especially for cash crops in Asia.
(ii) Innovative partnerships are needed for the public sector to multiply benefits for resource-poor farmers by using the technologies developed by the private sector for cash crops to improve orphan crops.
(iii) The private sector stands ready to cooperate with the public sector.
The fundamental nature of conducting business in the private sector differs from that of the public sector. These key differences need to be recognized at the outset:
(i) Private sector companies need to demonstrate to their shareholders that cooperation with the public sector improves the company's bottom line either through increasing public acceptance of the company, its products and services, or by reducing public concern or opposition to it.
(ii) No private sector company will willingly share its trade secrets if in the process its own competitiveness is affected, especially vis-à-vis its competitors in the industrialized world.
(iii) Companies focus on much shorter term targets than public sector institutions; therefore in any cooperative arrangement, time bound expectations need to be clearly specified.
In Asia, the private sector investment in biotechnology is spearheaded by the following companies: Monsanto, Syngenta, Aventis Crop Sciences, and Dupont-Pioneer HiBrid. Eleven countries in Asia have ongoing agricultural biotechnology research and development (R&D) activities in the public sector. The status of developing, testing, and commercializing genetically improved varieties is shown in Table A13.1.
The pipeline of biotechnology improved crops, especially genetically modified crops, is extensive. The anticipation is that many products will be approved for general release or commercialization once the regulatory frameworks are in place. The public sector R&D effort has concentrated on a diverse mixture of crops for both cash and subsistence farmers: rice, maize, cotton, pulses, papaya, sweetpotato, cassava, flowers, and leafy vegetables. The private sector in Asia has focused on cotton, maize, and soybeans, and mainly on the traits associated with lepidopteran insect pest resistance conferred by Bacillus thuringiensis (Bt), and herbicide tolerance. Until recently, at least two companies had programs to genetically modify rice, but these have now been discontinued.
In the PRC, the private sector has engaged local entities to form joint ventures aimed at producing genetically improved seeds of cotton and maize. In Indonesia, herbicide tolerant maize, cotton, and soybean have been field tested by the private sector under government supervision. In the Philippines, Bt maize has been field tested by two companies, and in Thailand both cotton and maize were tested. In India, extensive trials on Bt cotton have been conducted by the joint venture between MAHYCO and Monsanto. The private sector does not appear to have plans to commercialize genetically modified crops in countries such as Malaysia and Viet Nam because of small market size or intellectual property (IP) related issues.
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