Equity Issues In The Management Of Plant Genetic Resources

Miracle Farm Blueprint

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Sharing the benefits (and costs) of plant genetic diversity conservation and maintaining access to genetic resources and biotechnologies for low-income groups are critical concerns addressed throughout this volume, but particularly in Part III and Chapter 20. Equity (and efficiency) criteria would suggest that since much of the natural capital embodied in agricultural biodiversity is in developing countries, companies and nations in the North, which are potential beneficiaries of this conservation, should contribute to crop biodiversity conservation funds.

Developed countries tend to be in regions whose original genetic endowment in the major agricultural crops was lower than in biodiversity hotspot areas. As Tables 10-1 and 10-2 demonstrate, primary centers of agricultural genetic diversity are mostly in developing countries. Thus, private breeders largely from developed countries develop and market varieties that rely on genetic materials that originated at some point (perhaps many generations ago) from the developing world. Many less-developed countries (LDCs) or associated interest groups claim that these breeders are benefiting from utilization of their native landraces without compensating the farmers responsible for their maintenance. Furthermore, they assert that developed countries are benefiting more from the utilization of plant genetic resources for food and agriculture (PGRFA) from developing countries than do the LDCs themselves and that these LDCs are not being compensated in return for using these resources. The issue has become particularly acute with the development of biotechnology and privatization of agricultural research and development. This perspective leads to active demand for compensation of farmers and others in LDCs for past conservation efforts.

However, at least from the economics standpoint, there is some difference between biodiversity funds that aim to compensate for past conservation and funds that aim to encourage future conservation. Paying LDC farmers for past conservation efforts is largely an equity issue given that insufficient data are available to establish compensation payments based on the economic value of conservation efforts in the past and, as such, one must appeal to equity, even though it is a weak mechanism for allocating funds (Chapters 9 and 11). Paying for current and future conservation activities can have more potential to be made using notions of economic efficiency (i.e., making conservation payments such that the marginal benefit of conservation effort equals its marginal cost). Chapter 11, for example, demonstrates a proxy measure for economic value that can at least be used as a rough mechanism for distributing conservation funds to world regions with an eye on increasing the economic benefits to society of conservation efforts.

The analyses suggest that on efficiency as well as equity grounds, direct beneficiaries from agricultural biodiversity conservation would be made to reward the providers of the benefits, based both on actual and expected gains. However, there are also significant benefits to maintaining a free flow of genetic resources among breeders and other researchers, and this is a difficult issue to address in the design of compensation and incentive mechanisms. On the one hand, improved property rights over genetic resources and their embodied values would facilitate the establishment of exchange and compensation mechanisms. However, at the same time, economic efficiency and equity criteria suggest that the continued sharing of the benefits associated with these goods be promoted. While this book suggests some possibilities for cost-sharing mechanisms, their exact design still needs further research.

Chapter 21 describes in detail how issues of equity and benefit sharing have been incorporated into the design of the International Treaty on Plant Genetic Resources for Food and Agriculture. The chapter discusses the economic, technical, and legal reasons for the establishment of a multilateral system to facilitate access to and sharing of benefits from the utilization of plant genetic resources. The chapter also discusses the role of various forms of property rights, including intellectual property rights and farmers' rights and how the two systems can complement each other to ensure that incentives to innovate are maintained, while at the same time ensuring the capacity of rural communities to benefit from their conservation of plant genetic resources.


One of the major points made about biotechnology in this volume is that it is much more than just a tool for genetically modifying crop varieties. Aside from the crop sector, livestock, fisheries, and forestry biotechnology products of relevance to the poor are currently under development (Chapters 12 and 13). As noted above, one of the key benefits of biotechnology is through increasing information on genomics and, thus, values of biodiversity, which are necessary for developing effective conservation and compensation strategies and programs. The main focus of the potential benefits of biotechnology in economic development has been on the increased potential to generate breeding materials that are specifically relevant to the production and consumption conditions in developing countries, and in a much more targeted fashion and shorter time frame than is possible with conventional breeding methods.

Several chapters in the book describe the experience that has already been seen with biotechnology adoption in developing country agriculture. Chapters 12, 13, 14, and 16) note the dominance of tissue culture technologies in developing countries, and their importance in generating disease-free plants. Other chapters focus on the experience with GMOs in both developed and developing countries. Transgenics are in the early stages of their development, yet GMOs that control pests have high adoption rates for major crops in Latin America and China. Nevertheless, the adoption of transgenics in the majority of developing countries has been minimal, and no GMOs have been introduced for several major staples consumed by the poor (rice, wheat, cassava) in developing countries. At this point it is not possible to draw firm conclusions about the potential impacts of the adoption of transgenics in developing countries. However, the current evidence provides valuable insights, including:

• Adoption patterns and impacts of GMOs vary over different economic and agronomic circumstances. Chapter 14 cites evidence on how differences in pest incidence, land quality, and credit availability affect adoption rates. The availability, effectiveness, and prior use of pesticides determine the extent to which GMOs reduce chemical use and affect output levels, and GMOs may increase agricultural production where other approaches have not been effective in controlling pest damage at lower environmental costs.

• By reducing the variability of crop yields, GMOs can serve as an insurance strategy allowing the farmer to cope with the randomness of pest infestation within and between seasons. The benefits of GMOs consist both of their average yield effect and yield risk-reducing effects.

• The yield gains from the adoption of GMOs are likely to be smaller if the modified varieties are generic, as opposed to those based on local materials adapted to the local conditions. Chapter 14 suggests that using GMOs not adapted to local conditions is likely to introduce new sources of yield risks.

• Whether transgenics increase yields or reduce pest-control costs, they tend to increase the overall supply of the crops. Chapter 17 suggests that this may lead to reduction in the prices of the modified commodity, which will benefit consumers including urban population, the rural landless poor, and net-consuming farm households. However, lower prices may harm the nonadopting farmers.

• Transgenics are a highly divisible technology with low fixed costs and low management requirements—e.g., they have limited requirements for human capital inputs (Chapters 14 and 17). These characteristics make GMOs accessible and attractive to small- and low-income producers. Nonetheless, the traditional constraints to technology adoption among the poor—such as lack of credit, poorly developed input and output markets, and the presence of risk—are likely to impede adoption among smallholders.

• The adoption of GMOs may generate environmental and human health benefits through the reduction of pesticide use, and yield effects may lead to reduction of land conversion to agricultural use and thus reduce deforestation and land degradation (Chapter 13). These benefits have to be weighed against the risks that may be introduced with GMOs, such as irreversible changes in genetic populations through geneflow.

The substantial rates of adoption of agricultural biotechnologies in some developed and developing countries and their realized net benefits suggest that these technologies are likely to play a significant role in global agriculture as they evolve (Chapters 13 and 16). Chapters 12 and 13 highlight the applications of agricultural biotechnology currently available and in the development pipeline, which could be highly beneficial to low-income farmers in particular and to developing countries in general. However, the degree to which these potential benefits of biotechnology are realized by poor farmers and developing countries is likely to be determined more at a macro than at a microlevel (Chapters 14, 15, and 16). The benefits of biotechnology to farmers and the poor will depend on the degree to which biotechnology innovations address production and consumption constraints, and are affordable and accessible to farmers (Chapters 15, 16, and 17).

Farmer access to biotechnology is determined by the type, amount, and cost of technologies produced by plant breeders—either nationally or internationally. As argued in Chapter 14, these factors are, in turn, driven by the combination of intellectual property (IP) regimes, local breeding capacity, commercial seed industry development, and biosafety regulation regimes. Transactions costs (affected by IPRs and biosafety regulations) associated with obtaining breeding materials will determine the degree to which private sector materials would be available to local breeders, while local breeding capacity will determine the costs of adapting them to local conditions, and the development of the commercial seed sector drives the degree to which such innovations could be disseminated to farmers (Chapter 16). High transactions costs in obtaining breeding materials and local breeding capacity are the two most critical determinants of potential beneficial effects of biotechnology in developing countries (Chapters 13-18), which can be addressed by institutional reforms at both the national and international levels.

Chapter 18 gives one example of such an institutional reform, arguing that the transaction costs can be significantly reduced by establishing clearinghouses for IP, which will provide crop breeders with information on the status of IP over various crops and technologies and assist them to obtain access to it. The recently established Public Intellectual Property Resources for Agriculture (PIPRA) is one example of a clearinghouse that aims to reduce the transaction cost constraints of agricultural biotechnology.4 Chapters 16 and 18 also argue that reducing registration requirements for agricultural biotechnology will reduce transaction costs and lead to a more diversified portfolio of modified varieties. A clear example of a policy that reduces transactions costs is the requirement of registration and safety testing only for new biotechnology events (such as development of a parent GMV, which through back crossing can lead to insertion of the modification from the parent into all the varieties of the crop) rather than for every modified variety. Chapters 3 and 15 argue that the CGIAR centers have an important role to play in filling the gap created by a lack of local breeding capacity in many developing countries, as well as greater integration of NARS research work over agroecological regions

In many developing countries, agricultural biotechnology may not be the least cost or most efficient means of improving agricultural productivity (Chapter 17). The national breeding capacity, type of farming systems present, and constraints to increases in agricultural productivity are key determinants of the degree to which developing countries will benefit from agricultural biotechnology (Chapters 3,16, and 17).

4 For an example of a knowledge clearinghouse for agricultural biotechnology, see www.ers.usda.gov/data/AgBiotechIP/.

The future of agricultural biotechnology and its impacts on economic development will be affected by the management of the human health and environmental risks associated with it (Chapter 17). Continuous research and monitoring of the potential risks involved are clearly critically important. The efficiency of the regulation of biotechnology applications would increase significantly with greater quantification and definition of the risks associated with these applications. However, the high degree of uncertainty and the lack of information on the risks prevent precise estimation. Building this uncertainty into biosafety regulatory structures would provide more meaningful information than that associated with simply providing mean measures of risks. One way to overcome the lack of information at the initial stage may be to quantify the potential risks under plausible pessimistic scenarios, and assess their costs relative to the expected economic and environmental benefits of the technology. It is important to recognize that, beyond a certain stage, estimates of outcomes and the technology itself will not improve significantly without field experience, which implies that the efficiency of assessment and regulation of technologies will be increased if they can incorporate adaptive learning and through taking advantage of findings in the laboratory as well as outcomes in the field. Poorly designed biosafety regulations that lead to excessive delay in the introduction of biotechnologies may generate significant economic costs in terms of foregone opportunities for technological development, including learning by doing, and improvements in agricultural productivity.

An important reference point for the development of biosafety regulations in the context of agricultural biotechnology is the Draft Code of Conduct on Biotechnology as it relates to Genetic Resources for Food and Agriculture. (Chapter 20) The objective of the code is to maximize the positive effects and minimize the possible negative effects, of biotechnology (http://www.fao.org/ag/cgrfa/biocode.htm). The draft Code is based on the results of two major surveys of stakeholders in 1993 and 2001, which identified the key issues of concern. Issues currently being considered as possible components of the Code include access to and transfer of biotechnology, capacity-building, biosafety and environmental concerns, public awareness, development of appropriate biotechnologies for poor farmers and developing countries, ethical questions regarding new biotechnologies, genetic use restriction technologies ("terminator" technology), GMOs, gene flow and the question of liability, voluntary certification schemes, and possible FAO universal declarations on plant and animal genomes.

A clear message that emerges from the analyses in this volume is that appropriately designed policies and institutions are essential for enabling agricultural biotechnology to fulfill its promise for developing countries. One policy implication arising from the analyses presented is the potential benefits to be reaped from strengthening of the capacity of developing country agricultural research and development and seed sectors to introduce desired traits into local varieties, rather than relying upon imports of generic transgenic varieties. A second policy implication that emerges is the need for regulations to manage the risks associated with the new technology as well as the importance of including cost considerations—particularly the costs of foregoing opportunities to improve productivity—when designing such regulations. Thirdly, barriers to access the intellectual property needed for the development of transgenic crops for developing countries should be reduced through institutional arrangements for technology transfer and sharing of knowledge about IPR and technology management.

A clear message that emerges from the analyses in this volume is that designing appropriate policies and institutions is essential for enabling agricultural biotechnology to fulfill its promise for developing countries. First, benefits to developing countries will be greater if the capacity of the seed sector in these countries is enhanced to allow introduction of desired traits into local varieties than with simply importing generic transgenic varieties. Second, economic efficiency suggests that the level of regulation of new varieties to allow control against risks has to be balanced against cost considerations—particularly the costs of foregoing opportunities to improve productivity—when designing such regulations. Third, the most efficient way to reduce barriers to access the IP needed for the development of transgenic crops for developing countries would be likely be through institutional arrangements for technology transfer and sharing of knowledge about IPR and technology management.

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