T Swanson

School of Public Policy and CSERGE, University College, London, UK

There is a fundamental problem that lies at the base of the need for genetic resources. This is the contest of innovation that exists within any predator-prey system: a Red Queen race.1 Agriculturalists must continue to supply new forms of resistance within modern agricultural systems, otherwise they will be overwhelmed by the continuing selection of those pests which are adapted to those varieties which are in use. Genetic resources have value as potential solution concepts to this fundamental problem.

The importance of public management in this context is restricted to the set of those problems which the private sector cannot or will not address. Genetic resources exist as a stock of potential solution concepts, and they can also provide a flow of potential solutions in the future. The important question for public policy purposes is: What sorts of public intervention are required in order to ensure the set of solutions that agriculture will require in the future?

This chapter develops these ideas concerning the fundamental nature of the values of genetic resources, and the fundamental nature of the public management required to conserve them.

The Ecological Dynamics Within Agriculture: the Source of Genetic Values

Ever since agriculture was first developed, there has been a race implicit within it, as pests and pathogens erode the resistance of the crop varieties currently in use and new varieties are devised to replace them. This race can never be won with finality by agriculturalists, and the correct formulation of the question

© CAB INTERNATIONAL 1998. Agricultural Values of Plant Genetic Resources

(eds R.E. Evenson, D. Gollin and V. Santaniello) 67

concerning agricultural sustainability must be: 'Is it possible to remain a player in this race indefinitely?' Genetic resources as inputs into agriculture play a prominent role in the continuation of this contest, and the optimal conservation of these resources - in order to ensure an optimal supply of resistance into the indefinite future - is at present a necessary condition for the continuance of agriculture. This chapter examines the meaning of the optimal management of these resources, as important inputs into both the improvement of agricultural productivity and the maintenance of agricultural sustainability.

In ecological terms, the stable dynamics witnessed in agriculture are known as a 'Red Queen race'. It is necessary to continue to make moves in order to stand still. In co-evolutionary settings of predator-prey models, it is possible to show that the populations of hosts and pathogens will reach an ecological steady-state where virulence, or its mirror image susceptibility, do not change. In other words, the system converges to a long-run equilibrium of host off-take, and stable population levels. This does not imply that the underlying dynamics have stopped: in fact, both pathogen and host populations continuously update their strategies in order to cope with the constant increase in the opponent's ability to improve its growth parameters (Schaffer and Rosenzweig, 1978).

How has the development of agriculture impacted upon these evolutionary contests within the biosphere? The choices formerly made by evolution have been supplanted by human choice in certain spheres of activity, but the general nature of those forces remains. Humans have selected the crops and crop varieties that are most easily appropriated by themselves (and hence denied to competing pathogens), but this simple act of selection introduces genetic drift within the competing pathogen population that renders them increasingly competitive. This harvest's appropriation generates next harvest's competition, and the race is on. Ever since human societies interjected themselves into the role as selector, the innovation contest between human societies and the pathogens of their crops has been ongoing.

This contest is apparent in the studies of declining resistance in agriculture. Agriculture has witnessed the steady erosion of the productivity of the best performing and most widely used crop varieties due to evolutionary pressures from pathogens. This depreciation in the effectiveness of prevalent varieties has been addressed by agriculturalists by means of the periodic interjection of new varieties into agriculture, and the consequent decline of those varieties. A cycle of introduction and subsequent decline is documented for a range of crops and crop varieties (Evans, 1993; Smale, 1996; Rejesus et al., 1996). A recent empirical analysis has even estimated the impact of 'age' of a variety (i.e. years in agricultural use) on its productivity, and found that it is significantly negative (Hartell et al., 1997).

Therefore human choice has altered the setting for the evolutionary contest quite a lot, but the basic nature of the problem remains unchanged: humans (in their management of crops and crop varieties) continue in a contest of appropriation and innovation with the natural predators and pathogens of those crops. In order to maintain stability within agriculture, it is necessary to continue to develop strategies of resistance to meet the new strategies continually evolving within pest populations. It is as inputs into this ongoing contest of innovation that genetic resources have value. The remainder of this chapter shows how this is the case, and what is necessary to manage these values optimally.

The Informational Nature of the Problem: Information and Agriculture

How is it that the agricultural industry attempts to address the ecological problem identified above? Of course industry has an incentive to address this problem, because these instabilities contribute to lost production in agriculture. In order to assess the management of genetic resources, it is necessary to create a framework for understanding how the private sector uses genetic resources and for what purposes; then it will be possible (see following section, 'The public good nature of the problem') to identify which of the functions of genetic resources are not being managed privately.

In order to maintain stability within modern agriculture, it is necessary for society to continue to search for, identify and utilize strategies that are successful in the continuously evolving biological environment. This is embodied within the research on the traits conferring improved resistance, and the development of these traits into new varieties usable in modern agriculture. Research and development (R&D) is the term used generally to describe the industrial process by which new ideas are developed into applications to problems. When a new solution concept is successfully developed within the R&D process, it will then be marketed, usually embodied within some novel product. Economists have long analysed the research and development process as one of information creation, application and diffusion (Arrow, 1962; Nordhaus, 1969). The theoretical concept of the R&D process is usually presented as a production process, itself dependent upon the application of various factors of production (machinery, labour, etc.) for the production of useful ideas. The base of information so produced is applied by researchers to the solution of the economic problems presented by society.

'Innovations' are then the products which embody those solution concepts when applied to address these problems (Rosenberg, 1974; Kamien and Schwartz, 1985).

Certain industries by their nature expend substantial proportions of their total available resources on the R&D process. For example, the computer software, plant breeding and pharmaceutical industries are all R&D-intensive industries, with over 10% of their gross revenues invested in the development of solution concepts. R&D will always constitute an important part of the agricultural industry because of the contest of innovation described previously. Much of the R&D concerned with the problems generated by the biological world are dealt with by the plant breeding sector of that industry. In the plant breeding industry, one recent survey found that the proportion of annual turnover spent on breeding and research programmes ranges from 0.5-66%. The breeders allocate, on average, 18% of annual turnover to breeding and research activities. Most breeders (73%), however, spend between 0.5 and 15% of annual turnover on research and breeding (WCMC, 1996).

This same survey found that R&D in this sector is becoming increasingly focused on the problem of the maintenance of resistance to pests. A breakdown of properties of new germplasm incorporated into new varieties shows that 45% of the germplasm develops disease/pest resistance, 35% increases yield, 10% improves stress resistance, and 9% improves quality (WCMC, 1996). The majority of plant breeders mentioned 'resistance' as the primary focus of their research activities.

This study (and others) identifies a continuing cycle of declining crop resistance - crop varieties often have a commercial life of about 5-10 years (Swanson and Luxmoore, 1997). Plant breeders act as the sector that continues to address this problem, primarily through the breeding and introduction of varieties with restored characteristics of resistance.

Therefore, it is possible to identify the sector (plant breeders) that addresses the ecological problem outlined above, and how these breeders formulate the problem (developing new varieties to reintroduce resistance into the crop). The remainder of this section identifies the role of genetic resources in this process.

Stocks and Flows of Information in Agricultural R&D

Genetic resources are an important input into this R&D process, but only to the extent that they are an output from the same evolutionary process that is generating the problems to be solved. Genetic resources operate initially as 'flows' of information as well. Whenever the evolutionary process generates a new problem, it simultaneously generates information relevant to the identification and isolation of that problem, in the form of those organisms which have relatively better survival prospects within the new environment. The implied, naturally supplied 'resistance strategies' constitute information themselves, and they are often useful in the identification of the traits and characteristics most effective in the new environment. Genetic resources that have been used and useful in the past contain information on strategies that have worked successfully as solution concepts in the past, even if the precise nature of the problem that they solved has long been forgotten. They contain information in the sense that there is an enhanced probability (over randomness) that this particular combination of traits contains resistance to some sort of agricultural problem.2

Biodiversity operates as an input into the agricultural industry, as both a provider of stocks and as a flow of information into agricultural R&D. The screening of landraces previously in use in traditional farming practices is an example of the use of existing stocks of naturally generated information. Often, all that is required for the industrial application of the stock of information accumulated within a landrace is for this information to be transported into the modern sector.

In this instance the idea and its application are naturally generated, and the local community has accumulated the information as a stock within the plant varieties already in use. Sometimes these selections may have occurred hundreds or even thousands of years ago, but they may still retain some residual of their then-existing beneficial effect. Thus a landrace may be conceptualized as an organism in which a series of beneficial selections have occurred in response to environmental changes (pests, climate stress). The landrace then accumulates a stock of previously successful strategies. The screening of such landraces functions as an important part of the agricultural R&D process; that is, this stock of information provides immediately identifiable innovations for use in agriculture. The extent of the accumulated value of these selections within landraces is indicated by their relative value within the plant breeding industry.

The information generated by nature always arrives initially as a flow, however. This happens, for example, whenever a particular type of pest invasion eliminates a large proportion of an existing crop. The survival of some individuals of any such crop variety is indicative of the presence of a strategy of resistance that is successful within the current environment. Analysis of these individuals might allow for the isolation of the trait or characteristic which confers this resistance and which might then be incorporated within modern agriculture. In this instance the retention of a diversity of plant genetic resources is generating a flow of information for use within the R&D process which, after careful analysis, may result in successful innovations in terms of plant varieties. When a particular plant variety has been subject to years of use and farmer-based selection (as in the case of a landrace) then this flow of information may accumulate in the form of a stock of 'resistance strategies', but the informational value of genetic resources must always originate as a flow.

Consider how the plant breeding industry makes use of naturally generated information in the undertaking of its R&D efforts. Effective characteristics for new plant varieties develop naturally through the process of 'natural selection': only those which are able to survive existing threats (pests and pathogens) remain. Since the set of threats is constantly changing, the natural environment continuously produces a flow of new information on the characteristics that are relatively fit under current environmental conditions. This naturally generated flow of information continues to flow from nature so long as some portion of land use is dedicated to the use of a wide range of plant varieties with relatively unknown genetic characteristics.

With appropriate management, it is possible for these flows of information to accumulate over time. 'Traditional farmers' have themselves survived by means of a process of observing this naturally produced information and the consequent selection and use of the traits and characteristics that have aided survivability. In this way traditional plant varieties (landraces) are transformed into the accumulated history of the information which nature has generated and that farmers have observed and used. The landraces that traditional farmers use constitute a stock of information on naturally generated resistance strategies that have been successful in varying environments over the years.

In general the modern plant breeding industry has operated primarily through the collection and utilization of the set of landraces, and hence the stock of naturally produced information that is encapsulated within them. That is, modern agriculture has then been based on the development of a particular crop variety that is an amalgam of some subset of the traditional varieties and its widespread use. The remaining stock of information derived from the landraces is then retained to deal with subsequently arising problems (occasioned by further mutations of pests and pathogens).

This discussion indicates that the nature of the R&D industry in agriculture is one that has relied heavily upon the accumulated stocks of naturally generated information within the landraces, but that it is the supply of information generally which is essential, not the conservation of any given stock. There is no value to maintaining a particular set of resources at least cost if these are not the resources that will be needed to solve a problem that arises at a future point in time. The optimal conservation mechanism must conserve the mechanisms which supply solution concepts for time-dependent problems, not a particular set of germplasm.

The Extent of Agricultural Reliance upon Biodiversity: a Case Study

To what extent does the agricultural industry rely upon biological diversity as an informational input? Table 4.1 lists the results from a study conducted on this question. A quick glance at this table might create the impression that wild resources play a relatively unimportant role in the agricultural R&D process; this is not the case. Landraces and wild species together contribute only 6.5% of all genetic resources. The figure of 6.5% is not a measure of relative importance of diverse compared with other sources of germplasm; it is instead an indicator of the rate of input from diverse resources required over time in order to sustain the existing system of R&D.

The vast majority of R&D (here, 82.9%) will always be undertaken on those varieties which are already standardized and well understood, and within the system. This is not a substitute for the input of new germplasm; it is merely the continuation of a programme of research on germplasm that was input into the system at an earlier point in time. This is R&D at the end of the pipeline: it represents an attempt to produce the maximum number of useful innovations from a given stock of information.

Genetic diversity serves a distinct function within the R&D process. It acts as a source of new stocks of information, which can then serve as the base from which to develop new innovations. Once brought within the process, it is assimilated bit by bit into the commercial sector and investigated as such. However,

Table 4.1. Source of germplasm used for all development of new varieties.

Crop group

Table 4.1. Source of germplasm used for all development of new varieties.

Crop group

All

Potatoes

Cereals

Oil

Vegetables

Commercial cultivar

81.5

50.0

87.0

78.8

95.7

Related minor cropa

1.4

8.0

0.6

1.2

0.3

Wild species

ex situ gene bank

2.5

19.0

12.0

1.0

1.4

maintained in situ

1.0

0.0

0.7

0.1

0.1

Landrace

ex situ gene bank

1.6

1.7

1.7

2.3

1.7

maintained in situ

1.4

0.0

0.7

2.8

0.4

Induced mutation

2.2

3.3

0.7

7.2

0.3

Biotechnology

4.5

17.7

3.5

6.8

0.1

Source: WCMC (1996).

Note that all columns are percentages, but that not all columns sum to 100% as some Innovations defied categorization under a single source.

a'Related minor crop': minor crop cultivated on a small scale with some Improvement over wild ancestors.

Source: WCMC (1996).

Note that all columns are percentages, but that not all columns sum to 100% as some Innovations defied categorization under a single source.

a'Related minor crop': minor crop cultivated on a small scale with some Improvement over wild ancestors.

all stocks of information must originally derive from outside of the process, and it is essential to input new supplies at the optimal rate necessary in order to sustain the R&D process. This is what the rate of input from non-commercial species represents: the need for inputs from outside the system.

The stock of existing commercial varieties may be seen as the information base from which bio-industries develop innovations whereas the sources of new diversity (wild species, induced mutation) may be seen as the sources of increments to that information base. Then the figure of 6.5%, relative to 82.9%, indicates that at present the R&D system is requiring annual injections of 'new' genetic material from natural sources amounting to approximately 7% of the stock of material currently within the system. This material both replenishes 'depreciated' germplasm and adds to the stock of available genes.

In sum, the stock of germplasm relied upon by society for the maintenance of its agricultural system may be seen as a continuously eroding asset. R&D is constantly required in order to maintain the current production system against the forces of biological invasion; this is what the industry terms research into 'resistance' and 'stress'. The industry reports that the life cycle of any given product is only about 5 years in duration, with pests and disease being primary factors for the obsolescence of the product (WCMC, 1996). The primary result of this study is that it has estimated the industry's current annual rate of utilization of diverse germplasm at 7% of the germplasm base.3

The Public Good Nature of the Problem: Externalities and Agriculture

To what extent does the agricultural industry itself manage optimally all of the values of genetic resources for agriculture? The previous discussion indicates that the plant breeding industry is both addressing this fundamental problem and supplying and using genetic resources in order to do so. Stability has been maintained for thousands of years of agriculture, without the need for intervention from the public sector; why would it be necessary to do so now? This section sets out a broad framework for the conceptualization of all of the values of genetic resources, and then compares the private sector's management objectives with those of society generally

There are two broad forms of values which best describe the role of genetic resources in agriculture: insurance and information (Swanson, 1992). Insurance refers to the value of genetic diversity in providing a broad base of independent assets on which to build production. It is the motivation to which the individual isolated farmer responded when planting a wider range of varieties to ensure his crop. In the past, if the crop failed, then the society depending upon it faced collapse as well. Investing in diversity provided the portfolio of different assets which insured against complete crop failure.

Information refers to the uncertainty that exists about the future and what will be revealed with the passage of time. In the context of agriculture, information arrives whenever the nature of the next invading pest or disease is revealed, or when the nature of the best strategy for resistance is identified. Diversity is useful in this context because it acts as a receiver, capturing information on the nature of successful resistance strategies through the process of selection. A greater diversity of plant varieties increases the prospects for the survival of at least one variety when a pest or disease passes through, and this provides the necessary information for the development of a successful resistance strategy against the prevalent pest. It signals the traits and characteristics that are successful in the new environment. When these signals are used, or accumulated, they provide the basis for continuing stability in agriculture.

How well does the agricultural industry address these fundamental values in their broadest sense, and how well does it manage genetic resources for these purposes? It is necessary to outline these various values and to consider the management implications of each.

Externalities in Agriculture

We will assume that the supply of genetic resources in agriculture will correspond directly to the objective function of the producers in agriculture. We will look to the individual decisions that are determining the production choices in agriculture and attempt to identify which, if any, of the values of genetic resources are external to this process. These external values determine the public interest in conserving biological diversity for agriculture.

Expected Agricultural Yields

Expected (average) yield is the fundamental criterion used in the determination of the vast majority of crop choice and land use decisions in recent times. The beneficial impact of this decision-making criterion is unquestionable. The impact in aggregate has been the 'green revolution': the increase in worldwide grain yields at a rate of nearly 3% per annum over a period of 30 years. What has been the impact of this criterion on genetic resource supplies? Empirical studies indicate that there is an opportunity cost implicit in the retention of a diversity of genetic resources in production (Hartell et al., 1997). Nevertheless, many times local demands of consumers and producers lead to the retention of some amount of diverse genetic resources (Altieri and Merrick, 1987). In sum, with the dissipation of the need for diversity as an individual insurance good, there has been an increasing focus of production choices and land use decisions on a small set of the highest yielding varieties across the globe.

What other values might be left out of the calculations of so many decentralized choices concerning crop varieties and land use?

Portfolio Value

This is the static value (available in a single growing season) derived from the retention of a relatively wider range of assets within the agricultural production system. It is the value which individual farmers formerly pursued when they had few other assets to rely upon. Now that individual farmers rely upon other assets for their insurance needs (access to markets, crop insurance programmes, etc.), the public sector must consider the cumulative impact on yield variability deriving from individual farmer's land use decisions. So long as society is averse to risk and thus has a distaste for yield variability, there will be value to investing in a greater diversity of production methods than would any individual farmer. Yield variability is smoothed by reason of non-conversion because this implies: (i) a broader portfolio of assets (varieties) within the species; (ii) a wider portfolio of assets (agricultural commodities) within the country; and (iii) a wider portfolio of assets (available methods of production) across the globe.

A topical example of a harmful 'portfolio effect' is the current bovine spongiform encephalitis (BSE) problem in the UK. Disease within the food chain is problematic in any event, but when disease becomes endemic within a crop in which a country is heavily invested, the costs of the pathogen become extremely heavy. 'Mad cow disease' is a portfolio problem because it is the UK's investment strategy that has made it possible for this single pathogen to have such a substantial impact on such a large proportion of the agricultural industry. The country is so heavily invested in this single species that it is difficult for it to absorb alone the costliness of the eradication campaign that is probably necessary to restore consumer confidence.

The most important level at which this externality operates is the global one. Any given country has the same incentives as the individual farmer to rely upon other national assets for insurance in times of crop failure. The level at which this obviously does not work is the global one; if all countries plant common varieties expecting to rely upon one another's harvests in the event of a national crop failure, then the fallacy of their reasoning would be revealed only in the context of a global crop failure. This would occur, for example, if the four primary carbohydrate crops (rice, wheat, potatoes and maize) which now provide the majority of the world's diet were subject to severe pest invasions in the same year. The continued narrowing of the range of production methods, crops and crop varieties in use across the globe continues to enhance the cumulative probability of such an occurrence.

There is another more fundamental level at which this portfolio value operates. One of the ecological functions of diverse genetic resources is to perform as 'fire breaks' in the event of pest and pathogen epidemics. As agriculture intensifies, these breaks are removed, enhancing the risks of the mutation of virulent strains of pests. The ecological portfolio value of genetic resources is positive by reason of the manner in which it reduces this contagion effect.

There is empirical evidence that demonstrates that modern intensive agriculture has had a systematic impact on correlated yields across the globe. The studies of crop yield variabilities have indicated that there has been a corresponding increase in variability going hand-in-hand with the increased average yield. The coefficient of variation in global grain yields has nearly doubled when comparing the experience of the 1960s with that of the 1970s (Anderson and Hazell, 1989). The vast majority of this enhanced variability is traceable to the reduced portfolio effect across space (international and intranational) rather than within species; that is, it is the adoption of a smaller number of crops and methods (rather than genetic uniformity itself) which is most contributing to the increase in variability. This is indicative of the externality that exists across countries when they are making their land use decisions.

Quasi-option Value

This is the value of retaining a wider portfolio of assets across time given that the environment is constantly changing and rendering known characteristics far more valuable than they are currently considered to be. That is, this is the value of retaining options currently thought to be of little value, when it is known that circumstances may change to alter that valuation (Arrow and Fisher, 1974; Conrad, 1980; Hanneman, 1989). For example, this is the value of the retention of certain varieties of cultivated species not known to be of any substantial expected value, but which are found to be of enhanced value when a particular form of pest or disease becomes more prevalent. It is the change in the value of a known characteristic by reason of an unforeseeable change in the environment. Clearly, this is a value that is not addressed by means of expected (mean) yield forms of decision making.

There is also an ecological quasi-option value. This is the value of the retention of some manner of evolutionary process intact, in the event that some trait for resistance might be identified via natural selection. That is, it is the basis for a distinct value to in situ conservation. For example, the continued cultivation of a wide range of varieties of wheat within a natural environment would allow natural selection to signal which of these varieties has the characteristic providing resistance to a newly invading pest. In situ conservation allows nature to signal this information and identify the important trait in the most direct fashion.

Although individual farmers utilizing the expected yield form of decision making do not consider these values, there are other parts of the agricultural industry which do. It was argued above that these sorts of quasi-option values are one of the driving forces within the plant breeding industry. Plant breeders retain genetic resources and continue to breed them into their lines of high-yielding varieties, for the express purpose of addressing this recurring problem of declining resistance.

Are there any externalities at work within this process? One thing is certain: society would supply a much wider range of genetic resources than those which would be perceived as imminently profitable by a plant breeder. This is indicative of the difference in the discount rates in use in evaluating supply decisions. Clearly a business firm will use its financial rate of return (usually in the range of 10-20%) in order to evaluate investment options. Most economists agree that a social investment decision should be evaluated at a rate nearer to 2-5% (Pearce and Ulph, 1995) while there is an argument to be made that the social discount rate should be even lower (or possibly zero) when the survival of future generations is at stake (Broome, 1995). This difference in discount rate will make a huge difference in the amount of genetic resources that would be supplied by the public sector which would not be supplied by the private. It means that a business firm would be considering a time horizon of not more than 5-10 years in making its decisions, while the public sector should be considering possible problems arising well beyond this time period.

It is also important to note that private firms are less likely to focus on a range of information-generating mechanisms than would an idealized public sector. This is both on account of the need to have the information in immediately appropriable form (since appropriation after 10 years would be discounted to nothing) and investments in information production must be relatively secure from the standpoint of the private investors concerned (i.e. they are concerned about the distribution of any informational gains as much as the production). These sorts of considerations mitigate in favour of conservative forms of investments in the industry. Information is difficult enough to generate and appropriate without making investments which are relatively insecure. A public sector which was less concerned with issues of distribution and appropriation would probably invest in very different methods. This is one reason (explored further below) for the investment in storage methods of supply rather than the usage-based methods of supply of information.

There is no doubt that change will occur over time (in the environment, in technology), and one of the values of genetic diversity is the flexibility it allows for response to future changes in circumstances. The agricultural industry definitely recognizes this value and provides against many eventualities, but there are clear instances in which there is a difference between what the private and the public sector would supply in terms of this value of genetic resources. These differences identify one of the most important public interests in the conservation of genetic resources.

Exploration Value

This is the value of retaining a wider portfolio of assets across time given that the exploration and use of little-known assets will generate discoveries of currently unknown traits and characteristics (Pindyck, 1991). This is a 'Bayesian' sort of value, where information derives from the process of converging expectations. Long analysed resources will no longer divulge as much information as will those that are little analysed, even though the former might have much higher expected yields. For example, this can be conceived of as the value of the retention of a given land area in 'unused' status, because it is possible that certain wild relatives of cultivated varieties will be found within that area, and these relatives may generate new and valuable characteristics if investigated. The same idea may also be applied at the field level and the species level. Any non-modern production method or crop will be relatively unknown (compared with the heavily researched crops and crop varieties). It is important to continue to hold on to some of these little-known wildernesses, crops and crop varieties, if only because we must admit that these have received little exploration while the other paths have been much pursued.

Once again there are good reasons to expect that private industry will take some of this value into account in its approach to conserving genetic diversity, but there are also good reasons why their approach will be inadequate. As with individuals, private industries (even those focusing upon informational values) will be using a criterion based on expected profitability, yet an argument could be made that the appropriate objective should be to maximize the amount of information derived per unit of expenditure (see e.g. Weitzman, 1993). The public sector has a much wider range of social objectives that it may consider than the private sector, and one focused on the informational rather than the current production value of the resource would favour a much greater supply of genetic resources.

Another reason is based more on national externalities. Even if private companies should wish to invest in the conservation of certain land areas in certain countries, they may find it very difficult to obtain any return from doing so across political boundaries. The absence of universally recognized property rights in informational values renders investments across borders highly dubious. Most of the plant breeders mentioned 'insecurity of investment' as the primary reason that more investments in in situ conservation did not occur. This is one of the primary reasons why private firms place relatively little effort into in situ conservation strategies (Swanson, 1996). This property right failure is another example of a private sector failure that implies the necessity of public sector intervention.

The Public Interest in Genetic Resource Conservation for Agriculture

This section has demonstrated the values of genetic resources which the private sector probably will and will not take into account systematically in making their conservation and use decisions. It is then the role of the public sector to intervene to conserve genetic resources for agriculture for those values which are under-appreciated by the private sector.

This framework helps to identify the values of genetic diversity which should be the subject of public interest and investment in order to insure the future of modern agriculture. The nurturing and advancement of the green revolution has been an important event in human history, but it is equally important that a scientific basis for conservation is developed in order to ensure the sustainability of this advance.

Conclusion

The fundamental values of genetic resources for agriculture lie in their contribution to the solution of the fundamental ecological problem underlying the system. They provide the source for the strategies required to address the evolving problems of pest resistance (virulence) which develop naturally through the process of natural selection. Genetic resources are not uniform in their informational value, however. Previously selected varieties are valuable on account of the resistance that such selection connotes, and stocks of these varieties are valuable as wells (i.e. stocks) of potentially useful information on resistance. On the other hand, varieties that are being selected now, or at some time in the future, provide flows of information. They provide information on the nature of the current threats to the system, and the nature of the traits and characteristics which currently provide the best response to these problems.

Both types of information should be conserved, and the plant breeding industry has incentives to do so. The interesting question is whether this industry and the public sector together have the complete incentives for supplying all of these values. For this reason, we look at the sector closely in order to identify any gaps or 'market failures' that might prevent some of these values from registering. This is the fundamental nature of the public interest in genetic resource conservation: supplying those values which the private sector has little or no incentive to pursue. We have attempted to identify here the potential gaps in the framework used by the private sector in conducting this research, and we have indicated briefly the nature of the public sector policies (property rights, conservation strategies) that are required to redress them.

Notes

1. Named after the Red Queen in Alice in Wonderland, who said that it was necessary to keep moving just to stand still.

2. Smale (1996) identifies a certain level of such 'background resistance' in the wheat landraces held by CIMMYT. These are general traits of resistance which are unidentified but are found to exist at greater than random rates within previously used varieties of wheat.

3. A similar finding (of 7% wild input requirements) was reported by a survey undertaken by CIMMYT in relation to wheat genetic resources utilized in the modern plant breeding industry (Rejesus et al., 1996).

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Part II

Empirical Studies: Plant Breeding and Field Diversity

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