The Changing Global Private Funding Landscape focussing on the roles of Brazil, China and India Carl E Pray With lots of help from but no blame to Keith Fuglie, Jose-Maria da Silviera and Latha Nagarajan

Outline Global trends in private agricultural research Trends in research expenditure in China, India, Brazil Impacts on agriculture in these countries Major impact in Brazil Some impact in India Limited in China Technology transfer from these countries Future trends

Private Ag R&D funding growing slowly in high income countries and much more rapidly in others Fuglie 2016

Much of the research of largest firms is focused on low income agriculture Fuglie 2016

Chinese government agricultural research expenditure biggest in world   China USA Brazil India R&D Expenditure Million US$ converted from local currency using 2009 PPP exchange rates 1960 294 1,254 345 220 2011 4,723 4,403 1839 3771 2011/1960 16 3.5 5 17 Rank 2011 1 2 3 Philip G. Pardey, Connie Chan-Kang, Steven P. Dehmer and Jason M. Beddow Agricultural R&D is on the move Nature September 14, 2016,

Private sector research not as large but growing rapidly China ---very limited in 2000 up to11% of total R&D in 2006 $244 million Chinese firms + pesticide and agricultural machinery + a few foreign firms (privatization and SOEs) Brazil --- 20% of total public private R&D 2012 $50 million 1996 to $377 million 2012 Mainly foreign multinational India --- 25% total public private R&D 2009 From $44 million 1995 to $271 million 2009 38% foreign firms

Chinese commercial enterprises’ R&D 2016 Ag Machinery – First Tractor between US $51 million and 1,500 R&D personnel Foton–Lovol tractors don’t know expenditure by 1,400 scientists, engineers and technicians in R&D John Deere engineering R&D Ag Chemicals ChemChina= Anhui Research Institute of the Chemical Industry+ADAMA $33 million + Syngenta $1.38 billion SinoChem added the major government research institutes northern research pesticide center. Livestock Chia Tai (C-P Thailand) animal feed, poultry breeding and aquaculture Ringpu Biologicals – veterinary pharmaceuticals and vaccines $13 million

In addition to research, private sector an important importer of technology “Borrowing” India – late 1990s NavBharat brings in Monsanto’s Bt trait for cotton China –2016 Dabeinong’s seed company’s US director pleads guilty to stealing proprietary maize lines from Pioneer and Monsanto Bt maize and RR soybeans in North China Imports of inputs and technology Seeds – vegetable seeds in India, sunflowers and grass seed in China Pesticides - all from active ingredients discovered abroad –some paid for. Tractors – technical partnership with foreign firms (next slide) Biggest imports are fertilizer – not new tech – also import factories Purchases of companies India UPL (generic pesticide co.) buys Advanta (seed, biotech) in 2008 ChemChina buys Makhteshim in 2011 and now Syngenta

Total Factor Productivity Growth in China, India, Brazil

Imports and exports of fertilizer, pesticides and tractors.. Table 1. Imports and Exports of Fertilizer, Pesticides and Tractors CHINA INDIA Fertilizer 2015 Value in US$ Global Imports of Fertilizers 67,151,565,274 Fertilizer imports by country 3,928,515,015 7,459,460,149 Share in global imports 5.9% 11.1% Global Exports of Fertilizers 57,808,259,078 57,808,259,078.00 Fertilizer exports by country 10,878,119,513 96,877,924.00 Share in global exports 18.8% 0.17% Pesticides: 2014 Global value of pesticide imports 34,959,370,800 Pesticide imports by country 770,625,960 990,318,950 % of share in global pesticide imports 2.2% 2.8% Global value of pesticide exports 34,727,809,340 Pesticide exports by country 4,146,984,440 1,939,991,000 % of share in global pesticide exports 11.9% 5.6% AgMachinery: 2015 Global value of ag tractors imports 46,578,988,751 Ag tractor imports by country 302,610,139 34,487,518 % of global ag tractor imports 0.65% 0.07% Global value of ag tractor exports 52,373,540,320 Ag tractor exports by country 1,582,677,906 10,001,841,820 % share in global ag tractor exports 3.02% 19.10% Sources: Fertilizer and AgMachinery UN-COMTRADE: Pesticides; FAOSTAT

Chinese glyphosate exports

Chinese pesticide exports to Africa

Speculation about future

Factors determining growth of R&D Economic factors Crop prices drive R&D all countries Growth of private sector - China - officially private firms allowed in 2000; shifting government research institutes to SOEs. Biotech + regulatory change + “intellectual property rights(IPRS)” Brazil and India IPRs on biotech – Brazil and India Science and education --- MNCs’ R&D investments in India, Brazil and China to access scientists

China example/puzzle

Future trends – indications from US VC investments Fuglie 2016

Industrial policies that affect agricultural inputs Quid pro Quo: technology for markets – foreign firms must provide technology and be minority owners India and Brazil stop by 1990 China continues to have them Consolidation of local industry China - “Grasp the Large, Let Go of the Small” policies 1990s. Large SOEs buy small SOEs…. India - Large Indian companies and MNCs buy smaller firms Brazil – MNCs bought local companies Developing global champions for export and outward FDI China – explicit in “Made in China 2025” policy India – encouraging private companies through financing and subsidies

Developing global champions using state owned enterprises Agricultural chemicals dominated by SOEs ChemChina and SinoChem formed in early 2000s Government finances acquisition of Syngenta by ChemChina Talks to merge ChemChina and Sinochem Seeds/biotech – ChemChina purchase of Syngenta will create first modern Chinese seed company China National Seed Group – owned by SinoChem, collaboration with Monsanto on maize, HuaZhong Ag University for rice. Yuanlongping Tractors YTO – First Tractor Foton – Lovol