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Viv Anthony and Ian Barker, SFSA
New approaches to sustainable funding of plant breeding in developing countries Viv Anthony and Ian Barker, SFSA
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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
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Outline Exploring funding and remuneration systems in developing countries Catalysing private sector entry New ideas and opportunities Conclusions
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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 ) P. Schreinemachers et al; IFPRI (2017)
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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 Okra Potatoes Source: Prof Walter Alhassan, SFSA database
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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
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Developed countries funding model
Public sector Private business National government Public consumers (tax) Public breeding New varieties Pre-breeding Growers Production levies
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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
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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
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Developing countries funding
Philanthropy sector Public sector Private business National governments Public consumers (tax) Public breeding New varieties Pre-breeding
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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)
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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)
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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
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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
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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
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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
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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
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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
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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
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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
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Thank you for your attention
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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
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