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Developing Nations and Agricultural Biotechnology: Poverty, Possibilities, Patents Drew L. Kershen Earl Sneed Centennial Professor of Law University of Oklahoma Copyright 2003, Drew L. Kershen all rights reserved
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The Seed The agronomic traits are in the seed – no other input needed to gain access to the technology – not all biotech traits equally useful to poor farmers or every farmer Similarity to hybrids but hybridization is primarily about yield directly and the trait diminished rapidly from one plant generation to the next Farmers may save seeds – IPRs, GURTs Contrast to Green Revolution – fertilizers, irrigation, pesticides, herbicides – extraneous inputs
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Structural & Economic Implications Scale neutral – the seed advantage accrues equally to any sized farmer Economic calculation – more expensive seed versus potential return – ordinary calculation Hybrid calculation is identical on cost of seed versus potential return No changes in horticultural practices – farm as before with transgenic seed
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Structural & Economic Implications Scale positive – may benefit the smaller farmer more than larger farmer Minimal learning curve No additional inputs – wealthier farmers already use inputs Increased yield – not the trait itself but the protection from loss Reduced labor requirements – other opportunities with labor Increased safety with reduced pesticide use – people, water Greater food security; greater flexibility in farming – subsistence farmers especially Starvation Malnutrition Key – access to seeds – assistance for the poorest farmers to acquire the seeds Public research Private seed companies Not a magic bullet for economic development Infrastructure – Roads, Markets Governmental reform – political instability, corruption, agricultural policy Free trade Technology as Poverty Alleviation --
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Structural Stabilization Niche markets – value-added crops Functional foods; pharmaceuticals; alternative crops Environmental constraints Adapted for drier climates – drought tolerance Salt-tolerant Metal tolerant -- aluminum Environmental compliance No till cropping Environmental compliance, regulatory compliance is not scale neutral – small entities adversely affected Reduction of the footprint of agriculture – impact on forests, habitats, biodiversity May allow smaller farmers to have better risk management and slow the pace of structural change High-yield agriculture and Environmental Benefits
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Hypothesis If separate the technology from the structural changes The technology itself appears scale neutral and potentially scale positive The technology itself holds great promise for environmental benefits If the hypothesis is accurate Implications for developing world – In 2001, 75% of farmers growing transgenic crops were resource-poor farmers (i.e. 2 hectares or less) in the developing world Major constraint is governmental policies that encourage or discourage adoption Good reasons for farmers and nations to be positive and early adopters of the technology
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Case Studies -- Countries China Bt cotton – commercialized 4/5 Million small farmers Rapid adoption – 33% ½ - 2/3 reduction pesticides 10% yield increase Fewer insecticide poisonings Increased income – 85% of benefits to the farmers Technological capacity Public investment $100M to $450M in 2005 Private investment Seed market South Africa Bt cotton – commercialized KwaZulu Makhathini Flats 3,600 poor farmers – cash crop 92% adoption rate – 2001 11 sprays to 4 sprays – fewer poisonings 24% to 48% yield increase Increase income (approx. 30%) Bt white corn – significant yield increase and pesticide reduction HT soybeans Technological capacity Most advanced in Africa Biosafety law functioning
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Case Studies -- Countries India Bt cotton – field trials Yield increase 37% to 90% Spray reduction – ½ to ¾ Significant income increase Bt cotton – commercialized Private and boot-legged 2002 – debate about results 2003 – watch farmers – in Andhra Pradesh from 8300 h. (2002) to est. 100,000 h. (2003) Technological capacity Indian Land-grant system Transgenic mustard, peanut, chickpea, pulses, eggplant Philippines Bt corn Commercialized 2003 Field trial data Yields increased 41% Production cost – poor farmers had 38.5% lower costs Income increase – poor farmers 86% increase Rice Ex ante study on Golden Rice – significant health benefits -- blindness and deaths prevented Ex ante study on Bt Rice -- $296.6M – 66.5% captured by producers Technological capacity – IRRI, Land-grant universities
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Case Study -- Crop Rice Golden Rice – vitamin A – blindness, death High Iron Rice – anemia High-Quality Protein Rice – improve essential amino acids Potato Transgenic potato for nematode control – Bolivia – University of Leeds, UK Protato – Improved protein – protein genes from amaranth – Indian Institute of Science, Bangalore, India Banana Black sigatoka mold – 50% yield loss common – Uganda Transgenic resistant – e.g. Dr. Rony Swennen Catholic University of Louvain, Belgium – created in 1994 but no field trials
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Constraints Pressure Groups & Scientific Ignorance Ingo Potrykus: “Genetic engineering – contributions to food security depends nearly exclusively upon the failure of a radical anti-GMO industry.” Food Scares – Greenpeace lies include claims that using transgenic crops and their products will cause sterility (India) or homosexuality (Philippines) Food Aid -- Zambia Governmental Policies Promotional, Permissive, Precautionary, Preventive Regulatory Burdens Cartagena Protocol on Biosafety – Codex Alimentarius Ingo Potrykus: regulatory delay of 3 to 4 years for transgenic rice – “in essence causing the unnecessary deaths of millions of people”
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Poor Farmers and Patents Patents are domestic law No international patent exists U.S. patent or E.U. patent has no legal validity outside Developing nations generally do not protect patents Poor farmers unlikely to have legal concerns Commercial agriculture and trade Patents for Poor Farmers Humanitarian clauses Licensing – concessionary terms Freedom to Operate opinions and agreements Golden Rice as the example
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Poor Farmers and Patents Public Research CGIAR and NAR institutions China, India, and Philippines Declining support – funding needs to be increased greatly Universities – basic research and applied research Farmers and Saving Seeds Legal in most nations; patent law generally says “no” Farmers as plant breeders – adapt to local varieties Farmers as knowledgeable participants – needs and interests Gujarat, India – significant % in Bt-cotton from non-authorized varieties Brazil – commercial soybean farmers
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Conclusion Agricultural Biotechnology – greater benefits to developing nations for food security and food safety Urgency of the situation Opportunity lost? Ideology triumphant? Greatest Risk is the risk of not using Patents are not a significant barrier to access to the technology for poor farmers
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References Asian Development Bank, Agricultural Biotechnology, Poverty Reduction and Food Security (May 2001) Economic Commission for Africa, Harnessing Technologies for Sustainable Development in Africa (August 2002) Clive James, Global Review of Commercialized Transgenic Crops: 2001 (ISAAA, Dec. 2002) Carl Pray et. al, Impact of Bt Cotton in China, World Development (May 2001) 29(5), 1-34 Carl Pray et. al, Five years of Bt cotton in China – the benefits continue, The Plant Journal (2002) 31(4), 423-430
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References Yousouf Ismael et al, Biotechnology in Africa: The Adoption and Economic Impacts of Bt Cotton in the Makhathini Flats, Republic of South Africa, Biotechnology Conference for Sub-Saharan Africa (Sept. 26-27, 2001) Matin Qaim & David Zilberman, Yield Effects of Genetically Modified Crops in Developing Countries, Science (2003) 299:900-902 Howard Atkinson et. al, The case for genetically modified crops with a poverty focus, Trends in Biotechnology (March 2001) 19(3), 91-96
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References Leonardo Gonzales, Likely Transcendal Effects of Agri- Biotechnology: The Case of Bt Hybrid Corn in the Philippines, Symposium on Bt Technology, UPLB-CA Foundation (Laguna, March 2002) Roukayatou Zimmermann & Matin Qaim, Projecting the Benefits of Golden Rice in the Philippines, ZEF Discussion Paper 51 on Developmental Policy (Bonn, Sept. 2002) Cesar Mamaril, Transgenic Pest Resistant Rice: An Ex-ante Economic Evaluation of an Adoption Impact Pathway in the Philippines and Vietnam for Bt Rice, M.A. Thesis in Agricultural & Applied Economics (VPI, Jan. 2002)
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