Overview Of This Book

This section provides a summary of the contents of the rest of the chapters in this book. Chapter 2 is an overview of the processes of globalization (particularly trade liberalization), environmentalism, consumerism, and the rise of the information economy, all of which are key factors that shape the evolution of agriculture, biotechnology, and biodiversity.

5 PGRFAs consist of the diversity of genetic materials contained in all domestic cultivars as well as wild plant relatives and other wild plant species and plant matter (germplasm) that are used in the breeding of new varieties—either through traditional breeding or through modern biotechnology techniques.

Chapter 3 covers the evolution of plant improvement research, focusing on changes in the research process from the "green revolution" to the "gene revolution." Among the chapter's key points are that the green revolution was largely based in the public sector and involved crops and varieties that were suited for developing countries with highly productive fanning areas. Varietal adoption patterns were also very much conditioned upon the presence of local breeding capacity. With the subsequent gene revolution, agricultural research and development (R&D) are now largely based in the private sector. The result of a shift in center of research innovation from the public to the private sector is that the focus of R&D will be on seeds or varieties with significant commercial value, which tend not to be seeds or varieties adopted for specific developing country conditions. Given the focus of biotechnology applications on varieties intended for profitable developed country conditions, the ability of developing countries to benefit from biotechnology will depend on their local breeding capacity. Of three breeding options examined in the chapter—local breeding with local varieties, regional breeding with adapted varieties, and adoption of seeds produced elsewhere—the first option is most expensive and last is the least. However, the first option is more likely to produce higher benefits in terms of biotechnology adoption as well as biodiversity conservation, as local varieties will be used in breeding.

Part II of this book covers valuation and conservation issues for genetic resources and biodiversity. Chapter 4 discusses the economic value of maintaining crop diversity as insurance against vulnerability to disease and pests. Based on an empirical assessment of the change in welfare resulting from a marginal change in number of potential parents, the author finds little value overall in maintaining a large number of potential parents in breeding lines. On the other hand, while noting that this chapter does not cover exactly the same subjects as Chapters 5, 6, and 7, these latter chapters argue that in situ conservation is an important means of conserving a valuable aspect of plant genetic diversity: The evolutionary process which occurs as a result of both human and natural selection pressures.

Chapter 5 tackles the economic incentives for conserving crop genetic diversity on farms. The chapter starts off with an assessment of the market failure that arises from the public good nature of in situ conservation, in which farmers bear the cost of conservation but perhaps a small share of the benefits to society of such conservation. The chapter argues that there is a greater harmony between public and private values in terms of managing biodiversity for reduction in vulnerability to pests and diseases (i.e., a form of portfolio diversification at the farm level), but not for reducing genetic erosion, which has public good aspects. Rural populations depend to some extent on diversity in the genetic base, particularly in areas with isolated markets, as a form of insurance. However, such a dependence is not necessarily sufficient to promoting socially optimal levels of in situ conservation. Policies to promote conservation in situ include promotion of demand for products of diverse (landrace) varieties, e.g., building niche markets, labeling, and raising public awareness. Other methods include changes in plant-breeding methods, such as participatory plant breeding, community seed banks, seed registers, and protection of farmers' varieties through "farmers' rights." The argument made in this chapter—that in situ conservation is cheapest where opportunity costs associated with the adoption of modern varieties are highest—also comes out in other conservation chapters in this section.

Chapter 6 focuses on in situ conservation methods and their costs, but in a less micro-oriented fashion than the previous chapter. Like Chapters 5 and 7, Chapter 6 asserts that the cheapest means of promoting in situ conservation is to look for such conservation situations with the lowest opportunity costs for maintaining diversity in situ. However, the chapter provides more analysis of the processes required to keep conservation incentives in place even while promoting economic development, given that the cheapest conservation possibilities tend to be in areas with relatively low levels of economic development. The chapter differs from all other chapters on in situ conservation in that it addresses the consequences of having more PGRFA conservation than is optimal for society.

Chapter 7 uses empirical evidence from Mexico to investigate the factors driving on-farm diversity in PGRFAs. It argues that we need better information on what factors determine the selection of particular varieties for adoption by farmers, what impacts the process of selection has on genetic populations and what (e.g., trading networks, markets, seed exchange networks) determines genetic flows in and out of PGRFA populations. Of all the chapters that address conservation issues, this chapter goes into the most detail about how human selection of PGRFAs interacts with natural selection in determining patterns of diversity.

Chapter 8 talks about the backbone of all regional and international collaboration for PGRFA conservation, namely, the presence of reliable national conservation programs. International funding does not remove the need for domestic funding. Emphasis must be on measures that improve the efficiency of conservation, and measures to be targeted for improvement include regional and international collaboration, data and information management, and over-duplication of samples. For example, conservation efficiency can be raised through the creation of a multilaterally accessible database with information on the ex situ and in situ germplasms that are available in the regions from which the germplasm is drawn.

The author of the chapter asserts that a final prerequisite for any collaboration on the regional or international level is the maintenance of national sovereignty of those countries involved. Namely, only with their sovereign rights maintained over materials such as germplasm are countries willing to place such materials in secure storage facilities outside their borders.

Part III of this book covers distributional issues in the management of genetic resources. Chapter 9 discusses the sharing of benefits derived from the utilization of PGRFAs in the breeding of new varieties. From an economic efficiency as well as equity standpoint, it seems reasonable to tie a country's contribution to a benefit-sharing fund (such as that envisioned under the auspices of the new International Treaty) to the benefits it receives from its use of PGRFAs. Every country benefits from utilization of PGRFAs in the production of new goods, but some countries may benefit more than others. Unfortunately, as discussed in this chapter, these benefits cannot be quantified, except perhaps in limited case studies. Hence, given that political considerations dictate that a benefit-sharing fund be created, an alternative can be to appeal to indicators that take equity and development considerations into account in determining contributions, and that acknowledge at least some of the characteristics of the benefits of PGRFAs. Thirteen potentially feasible indicators are examined in this chapter. All the feasible indicators are deficient in some way.

While Chapter 9 discusses who should contribute to a benefit-sharing fund, and how much, Chapter 10 examines potential economic criteria for distributing money from the conservation fund for the conservation and sustainable development of plant genetic resources. However, benefits accruing from the distribution of these funds for conservation activities are almost impossible to ascertain. The question then becomes what is the most economically efficient method of distributing the funds among countries or throughout the world, given the available data. This chapter describes a proxy indicator for the importance of a region as a primary center of diversity. It then goes on to rank their importance to the global community and to OECD countries based upon the consumption of crops originating from various centers of diversity.

Chapter 11 extends the institutional discussion in the previous chapter with a demonstration of how cooperative game theory can be applied to determining the "fair and equitable sharing" of the benefits arising from the use of PGRFAs, using as a starting point the regional allocations from the previous chapter. Using this approach, the impacts of the players' (e.g., countries') bargaining power on the resulting allocations can be empirically assessed. Furthermore, the approach allows us to explicitly account for potentially competing interests of the players, thereby introducing some equity to the allocation. The implications of three different allocation regimes are modeled. One of these assumes that funds will be distributed by the International Treaty only to world regions, which then will be responsible for allocating the funds within their regions. This scenario was found to be particularly appropriate as part of a flexible mechanism for biodiversity conservation as it allows the use of different types of control mechanisms at different levels of negotiation processes.

Part IV of this book includes chapters that address biotechnology concepts, economic valuation of biotechnology, and management of biotechnology production and processes. Chapter 12 gives an overview of evolution of agricultural biotechnology concepts and applications. While this chapter provides a conceptual overview of the present state of biotechnology applications to agriculture, the first section of Chapter 13 provides a technical overview that includes examples of specific products.

Specifically, Chapter 13 provides a relatively detailed summary of existing biotechnology applications and provides details on second-generation biotechnologies that are being developed and that may be of relevance to developing countries. The chapter also presents data on the adoption of genetically modified organisms (GMOs) in developing countries. It also discusses GM products that are further down the production pipeline, and does so by country, crop, and trait and, for livestock, by country, species, and trait.

Chapter 14 examines how differing IPR regimes, states of development of the seed industry, and agricultural R&D capacities will affect the nature of biotechnology adoption in developing countries. For example, with strong IPRs, a strong breeding sector, but high transaction costs in trading IPRs, the most likely outcome is that the biotechnology company will directly introduce GM varieties that are not locally adapted, resulting in a loss of in situ diversity in PGRFAs. With weak IPRs and a strong breeding sector, every breeder or seed company can use commercialized GM varieties in order to cross-breed the technology into their own germplasm. Thus, many different GM varieties will be available on the market, although in the long run there may be less access to technology, due to developer's inability to capture rents.

Chapter 15 utilizes the example of biotechnological innovation in the global canola sector to identify some lessons for how developing countries might participate and benefit from this innovation. Developing countries are facing ever-rising technical, economic, and political barriers that limit their capacity to use biotechnology in their fight against hunger. Developing countries require functioning economic markets, physical and scientific infrastructure, and political and legal capacities. In many cases, these countries will need to create the appropriate input and output market conditions for the new technology to be disbursed. Firms will only go where there is supporting infrastructure, research collaborators, functioning labor markets, competent regulators, and markets that are accepting of GM products. Some developing countries, such as China, India, and Brazil, have the prospect of assembling institutions adequate to promoting adoption of GM crops.

Like the previous chapter, Chapter 16 addresses the economics of the adoption of biotechnology and the constraints to its adoption, but does so from the farm level. The chapter argues that divisible technologies that are simple to use and that have limited fixed costs (e.g., GM seed varieties and tissue culture technologies) hold the most promise for adoption by small, poor farmers. The fact that biotechnology varieties do not require high inputs of human capital—in fact, they often result in reduced management requirements—also means they may be well suited for adoption among low-income farmers. Nevertheless, adoption may be constrained by several farm-level factors including farm size, agroecological conditions, availability of credit, and risk. These factors have been shown to be important in the adoption decisions among smallholders in developing countries. Adoption levels also depend on macro-level factors including a country's research capacity and characteristics of its input and output markets. China has shown the greatest success with GM crop adoption—where farmers have benefited instead of foreign firms due to a combination of weak IPRs and significant government involvement in biotechnology research. In Latin America, a growing gap between small, poor farmers and large multinational cooperation, as well as negative public perception of GM crops, continue to be significant constraints to farmer adoption of GM crops.

Part V, the final section, draws policy implications by identifying and expounding on the themes that cut across the biodiversity, biotechnology, and development issues raised in this book. Chapter 17 examines the potential of biotechnology for poverty alleviation and is the only chapter to consider indirect impacts (via labor markets and food prices) of biotechnology adoption on the poor. The chapter raises questions about biotechnology as a means of poverty alleviation: (1) Do faster and cheaper means of economic development exist than through agricultural technology change; (2) are there faster and cheaper means of agricultural technology change than through biotechnology; (3) do many market failures (e.g., in the provision of credit) exist that may prevent agricultural biotechnology from being effective; and (4) do other basic needs of the poor need to be addressed before biotechnology adoption would be effective? After raising these questions, the chapter provides many policy recommendations for how to get biotechnology to work as a tool for poverty alleviation.

Chapter 18 describes a possible mechanism for reconciling the economic tension that exists between the public and private economic forces that drive agricultural research. That mechanism is the establishment of an intellectual property clearinghouse for agricultural biotechnology. This clearinghouse would provide three essential functions: (1) identification of all relevant intellectual property that exists over a given technology and what properties are available and how they could be accessed; (2) the establishment of a pricing scheme and terms of contract that depend on the identity of the buyer; and (3) the establishment of an arbitration mechanism for monitoring and enforcement of the contracts made through the clearinghouse. The purpose of the clearinghouse would be to reduce market failures in agricultural biotechnology markets. It would also increase access to agricultural biotechnology in the National Agricultural Research Systems (NARS) in the developing countries, the Consultative Group on International Agricultural Research (CGIAR) system, universities, and, ultimately, farmers in developing countries.

Chapter 19 picks up on and amplifies policy themes in agricultural biodiversity conservation and sustainable use that were raised in earlier chapters. The chapter discusses the effectiveness of various types of payment mechanisms for conservation. It identifies the wide range of actors who are, or potentially could become, involved in conservation through the use of a wide range of mechanisms that go well beyond the traditional concepts of conservation activities. A key theme throughout the discussion in the chapter is the importance of recognizing human knowledge as a key component of agricultural biodiversity and the necessity of incorporating means for knowledge preservation as much as the physical conservation of agricultural biodiversity. Chapter 20 provides a detailed history and description of the International Treaty on Plant Genetic Resources for Food and Agriculture. Finally, Chapter 21 is a synthesis that attempts to identify and reconcile the common themes across the chapters and draws some major economic conclusions and policy recommendations from this synthesis.

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