Viv Anthony and Ian Barker, SFSA New approaches to sustainable funding of plant breeding in developing countries Viv Anthony and Ian Barker, SFSA

Syngenta Foundation for Sustainable Agriculture “Create value for resource-poor smallholders in developing countries through innovation in sustainable agriculture and activation of value chains”. No good growth plan

Outline Exploring funding and remuneration systems in developing countries Catalysing private sector entry New ideas and opportunities Conclusions

Public researchers by income group of countries Fruit and vegetables c.USD 1 trillion Food grains USD 837m (farm gate) Higher household income > demand for fruits and vegetables Greatest need for nutrition and health in lowest income countries Least investment in R&D/breeding (Mean 2008-2014) P. Schreinemachers et al; IFPRI (2017)

West African public vegetable breeders (2017) NARS/CG/IARC survey: 9 countries and 214 breeders Only 26 vegetable breeders Vegetable Number breeders Tomatoes 13 Peppers 3 Okra Potatoes Tomatoes 13 Peppers 3 Okra 3 Potatoes 3 Source: Prof Walter Alhassan, SFSA database

Investing in plant breeding Plant breeding creates tangible products Needs to be rebranded in public circles from a cost to investment opportunity But ....public breeders must deliver varieties with value for farmers, seed businesses, and value chains to win their financial support Variety benefits (value) Seed production (cost) key drivers for design

Developed countries funding model Public sector Private business National government Public consumers (tax) Public breeding New varieties Pre-breeding Growers Production levies

Developed countries funding model Public sector Private business National government Public consumers (tax) Seed companies Company and profit tax Germplasm royalties (varieties, parental lines) Public breeding Pre-breeding Private breeding Growers Production levies

Developed countries funding model Public sector Private business National government Public consumers (tax) Seed companies Company and profit tax Germplasm royalties (varieties, parental lines) R&D service contracts Public breeding New varieties Pre-breeding Growers Production levies

Developing countries funding Philanthropy sector Public sector Private business National governments Public consumers (tax) Public breeding New varieties Pre-breeding

Developing countries funding Philanthropy sector Public sector Private business National governments Public consumers (tax) Public breeding New varieties Pre-breeding Non-profits (NGOs) Foundations Trusts International/overseas governments

Developing countries funding Philanthropy sector Public sector Private business National governments Public consumers (tax) Seed companies Company and profit tax Public breeding New varieties Pre-breeding Non-profits (NGOs) Foundations Trusts International/overseas governments

Developing countries funding Philanthropy sector Public sector Private business National governments Public consumers (tax) Seed companies Company and profit tax R&D service contracts Public breeding New varieties Pre-breeding Non-profits (NGOs) Foundations Trusts International/overseas governments

Developing countries funding Philanthropy sector Public sector Private business National governments Public consumers (tax) Seed companies Company and profit tax R&D service contracts Public breeding New varieties Pre-breeding Non-profits (NGOs) Foundations Trusts Germplasm royalties (varieties, parental lines) Growers Production levies International/overseas governments

Farmer levies to support breeding Management organisation e.g. Horticulture Innovation Australia Funded by growers and other beneficiaries in supply chain Levies set each crop (but not all) First point of sale (by weight, volume, % sale price, low < 0.5 %) Works due to scale,structured markets Ring-fenced for breeding, marketing, quaratine and emergency response

Farmer levies to support breeding Management organisation e.g. Horticulture Innovation Australia Funded by growers and other beneficiaries in supply chain Levies set each crop (but not all) First point of sale (by weight, volume, % sale price, low < 0.5 %) Works due to scale,structured markets Ring-fenced for breeding, marketing, quaratine and emergency response AUD 1million R&D 2016/7 AUD 9 billion  54million  104m  R&D 58m/annum

Developing country production levies Many, geographically dispersed smallholders are costly to collect Used to finance local government not R&D Road-side collection tried and failed in Zambia Need aggregation points and low cost mechanisms e.g. daily market entry payments, Electronic payments prevent handling cash and give transparency e.g.in Kenya

Private seed business entry Crops New crops Markets New countries Performance traits Technology Low Risk/Cost High Growth is very attractive But always balance of cost and risks Market expansion for genetics first step R&D for new crops, in new markets in developing countries almost never

Private seed business entry Crops New crops Markets New countries Performance traits Technology Low Risk/Cost High Growth is very attractive But always balance of cost and risks Market expansion for genetics first step R&D for new crops, in new markets in developing countries almost never

SFSA Innovative licensing model For public bred varieties and sales by registered SME seed companies NARS register in own name and claim Plant Breeders Rights Non-exclusive licences NARS charge a royalty (+ proposed voluntary 0.7% seed company payment to international treaty) Smallholder friendly clauses – pack size and farmer-saved seed Licensing Kenyan public potato varieties could raise USD 400,000 per year for breeding alone (20% market share)

Innovative licensing in Kenya (2017) CGIAR/NARS to local seed companies Kenyan new public potato varieties Public-private distribution deal Non-exclusive can work Broader reach to smallholders, small packs Royalties returned to public breeding Facilitated by SFSA Kisima Farm and Suera Ltd CIP/ KALRO potatoes KALRO >USD 220,000 (by 2021)

Private breeding entry Major crops Public breeding Public-private partnerships Seed companies Private breeding Pre-breeding Gene and trait discovery Genetic diversity and characterisation Parental lines Only public breeding (if any?) Minor crops

Private breeding entry in developing countries Transition timescales are too long to serve Africa! New compelling ways are needed to release creativity and economic growth

Drivers for entrepreneurship Urban demand escalating for quality fruits and vegetables Consumers are prepared to pay Royalty based remuneration is proving possible Seed companies are slow to start breeding investment Talent > 200 new PhD trained breeders in Africa Low pay in public R&D institutions Governments are interested to support new enterprise International donors want to see greater financial and social impact from breeding Opportunity for social impact investors

Start-up plant breeding enterprises Commercial or Non-profit Organisations Market led, entrepreneurial Effective, low-cost breeding Highly focussed on clients Professional salaries Products Services Germplasm trialling Characterisation Market information OPVs and hybrids Parental lines Traits

Start-up plant breeding enterprises Commercial or Non-profit Organisations Investment Start-up funds Donor grants Impact investors Remuneration Seed royalties Tech transfer Service contracts Market led, entrepreneurial Effective, low-cost breeding Highly focussed on clients Professional salaries Products Services Germplasm trialling Characterisation Market information OPVs and hybrids Parental lines Traits

Start-up plant breeding enterprises Commercial or Non-profit Organisations Investment Start-up funds Donor grants Impact investors Remuneration Seed royalties Tech transfer Service Contracts Enabling environment Market led, entrepreneurial Effective, low-cost breeding Highly focussed on clients Professional salaries Products Services Germplasm trialling Characterisation Market information OPVs and hybrids Parental lines Traits Government support Plant breeders rights Regional seed release regulation Germplasm access Partnerships with NARs Tax incentives

Conclusions -1 Plant breeding needs to be seen as an investment with a return ...not as a cost More of the same will not deliver growth in productivity and quality needed More market-led approaches that focus on supplying demand, rather than pushing technology Public breeders need to reach out and partner with seed organisations and value chain players

Conclusions -2 No simple quick fix to stimulate private sector entry Calalysing innovation to prime investment is essential Electronic levy collection at markets,aggregation points New licensing models for public varieties and royalities Breeding start-up organisations Favourable enabling environment and government support is key for all True sustainability – vibrant markets that can finance R&D Many horticulture/minor crops public funding is needed

Thank you for your attention

Market-led approaches to plant variety design in Africa (2017) Mellissa Wood General Manager, Global Programmes, ACIAR Authors at TropAg17 Jean Claude Rubyogo, CIAT Agyemang Danquah, WACCI Paul Kimani, Uni. Narobi Nasser Yao, BecA/ILRI Shimelis Hussein, ACCI