Foreword

There is growing international consensus on the urgency of slowing the human-induced deterioration of biodiversity, a deterioration that may be coming at high costs to present and future generations. Indeed, within the United Nations system, the adoption of the International Undertaking on Plant Genetic Resources in 1983, at the Food and Agriculture Organization (FAO), and of the Convention on Biological Diversity (CDB) in 1992, at the Rio Earth Summit, were motivated by the universal goal of achieving a better sustainability and diversity of species and ecosystems. As this Convention also recognized the particular relevance of biodiversity for food and agriculture, the FAO adopted a resolution in 1993 requesting member countries to negotiate (through the FAO Inter-governmental Commission on Genetic Resources for Food and Agriculture) the revision of the International Undertaking in harmony with the CBD. The Third Conference of the Parties to the Convention also decided to establish a multi-year programme of activities on agricultural biological diversity with the goals of: (i) promoting the positive effects and mitigating the negative impacts of agricultural practices on biological diversity in agro-ecosystems and their interface with other ecosystems; (ii) promoting the conservation and sustainable use of genetic resources of actual or potential value for food and agriculture; and (iii) promoting the fair and equitable sharing of benefits arising from the utilization of genetic resources. Benefit sharing is also called for under the International Undertaking's endorsement of the concept of Farmers' Rights, which aims, inter alia, to 'allow farmers, their communities, and countries in all regions, to participate fully in the benefits derived, at present and in the future, from the improved use of plant genetic resources'. The CBD Secretariat has agreed to work jointly with the FAO in the implementation of this programme of activities.

In considering the sharing of benefits between providers and users of genetic material, at national and global levels, questions of economic efficiency arise. Unfortunately, the economic benefits associated with the conservation and sustainable use of genetic resources for food and agriculture are poorly understood. In fact, FAO's desire to address this topic area was the impetus for the Economic and Social Department of FAO, in conjunction with the University of Rome 'Tor Vergata', to co-sponsor the Symposium on the Economics of Valuation and Conservation of Genetic Resources for Agriculture in May 1996. The chapters presented in this book were derived from this symposium. The purpose of the symposium was to bring to focus the key issues and to discuss economic instruments that could encourage the implementation of both socially acceptable strategies for the conservation and sustainable use of genetic resources for food and a fair and equitable sharing of the related benefits and costs. I believe that the symposium was particularly timely in addressing these issues only a few weeks before a Global Plan of Action for the Conservation and Sustainable Use of Plant Genetic Resources for Food and Agriculture was adopted in Leipzig, Germany, at the International Technical Conference on Plant Genetic Diversity.

Determining the value (private and public) of genetic resources, and hence the benefit of having more or less of them is by no means a trivial task. The market price of germplasm is not an appropriate indicator of the value, because it does not normally reflect in full all of the actual or potential kinds of benefits derivable from a genetic material: specifically, benefit from current use, benefit from future use options, and benefit from existence per se. Under the prevailing market conditions, the price of germplasm captures mainly the so-called use value of genetic resources (i.e. the value associated with the direct and indirect benefits resulting from the use of germplasm by farmers and plant breeders). For them, seeds are inputs to more productive or disease-resistant varieties. To a large extent, this use value is a function of the breeding technology and of the income achievable from the productive use of the improved seed. Improvements in breeding technology, for example through biotechnology, will increase breeders' demand for germplasm and thus raise its value and market price. One share of the economic benefits of more successful breeding goes ultimately to consumers in the form of lower food prices and another to farmers in the form of greater revenues due to higher yields.

The second value component, the so-called option value, is much less well captured in the market price of germplasm. It reflects the future benefit to the society associated with a reduced disappearance and a better preservation of genetic resources for future needs of breeders. In other words, the option value reflects the economic benefit of avoiding irreversible decisions which would limit the options for breeders in the future. The market price of seeds and germplasm is not a good indicator of this value component because, for a number of reasons, there is only a limited current market demand for such future use options. Unless appropriate institutions are established, those who would have to bear the consequences of reduced future agro-biodiversity are not well represented in today's markets for germplasm exchange.

Theoretically, there could be a third component of the value of genetic resources, the existence value (i.e. the value of ensuring the survival of a species, variety or breed just for its own sake or for some moral reason). While this may be the case for some rare animal breeds which people wish to keep just for their beauty, such existence values are likely to be of little practical relevance for the plant genetic resources of interest to food and agriculture. But reference to this value category is made mainly to illustrate the complexity of the valuation problem.

From an economic standpoint, one of the key issues is how to factor uncertainty into the estimation of benefits and costs of programmes for maintaining agro-biodiversity. Uncertainty in this case regards the possibility of acquiring better information about future consequences of erosion of agro-biodiversity over time. If such information is forthcoming, there is a value on those initial actions that preserve future flexibility and a cost on those which reduce flexibility, because the latter precludes the exploitation of the additional information at a later date. If a society takes measures to halt the erosion of agro-biodiversity now, and, subsequently, future generations place a low value on the greater agro-biodiversity, it will still be possible to revert to the old practices that were more harmful for biodiversity But if no measures are taken now and the genetic resource base is allowed to deteriorate, it will be too late to act if it is subsequently discovered that future generations depend and place a higher value on agro-biodiversity. In other words, there is a premium associated with actions that preserve flexibility.

This flexibility premium is another term for option value or quasi-option value of maintaining a sufficiently large biodiversity. Ultimately this premium will manifest itself through greater stability and/or more rapid growth of agriculture and through the ability of breeders to respond to yet unknown human needs for food quality and safety. To avoid undervaluation of genetic resources for food and agriculture, this flexibility premium must be part of the total economic valuation.

Examples abound of other issues for which economic analysis may aid the decision maker. For instance, considering that some genetic resources are more in need of conservation than others, and, certainly, some geographic regions are more important sources of germplasm than others, what are the criteria for decision making? If numerous communities have basically the same genetic resources, is conservation advisable in all of them or just in a few, and what are the appropriate actions to be taken? Can existing, or new sui generis systems of intellectual properties' rights, including farmers' rights, be formulated in such a way that these questions are answered through some sort of a market mechanism?

I have attempted to raise only few of the many questions that need to be answered if action on the conservation and more sustainable use of agro-biodiversity is to be taken seriously. In a more comprehensive fashion, Agricultural Values of Plant Genetic Resources should help the reader to become informed about some of the key issues involved in the economics of the valuation and conservation of genetic resources of interest to food and agriculture. These chapters demonstrate that, while research on the economics of this subject is in its infancy and measures of the economic benefits are uncertain, economics can provide insights on this subject that can be useful to the policymaker.

Hartwig de Haen Assistant Director-General Economic and Social Department, FAO

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