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Figure 9-1. Economic losses stemming from loss ofPGRFAs set I.

suppliers may cut across country boundaries. Furthermore, for most PGRFAs, the level of substitutability by other PGRFAs appears to be quite high.4

Given the divergence between the social and the market value of PGRFAs, a related difficulty in establishing the value of genetic resources is that it is extremely difficult to separate the value of the raw PGRFA input from the value of the research used to produce a new variety. With enough information on the plant breeders' PGRFA choice set and their process of selecting between PGRFAs, it may be possible under certain conditions to separate these values, perhaps in some manner analogous to bioprospecting models for pharmaceuticals (e.g., Simpson, Sedjo, and Reid, 1996), at least in some narrowly focused studies. However, the necessary information is largely proprietary and/or costly to collect. The contingent valuation and hedonic methods may come to mind as shortcuts to estimating values of PGRFAs, but have some serious shortcomings.

4 That the market price is zero is not to say that the value of PGRFAs is zero, but that suppliers cannot capture this value. The only way suppliers could obtain this value in the marketplace would be if these suppliers formed an effective cartel in access to their PGRFAs. However, even with a single supplier, the willingness to pay for a "marginal" PGRFA is likely to be close to zero. Some genetic resources may be quite valuable in the market, but most will not be. A cartel might function more profitably by not charging the monopoly price on all genetic materials, but rather, by attempting to appropriate the buyers' entire surplus by charging a price discriminator-based fee for any access to genetic materials. In practice, however, there are too many potential suppliers, and a cartel cannot be formed through private actions.

The general concept of economic value in period j of a set of PGRFAs, can be formally stated in a simple manner. Ignoring for ease of exposition the lags in the development of new products that use / as input, the value of I summed across all stakeholders in period j is

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