Riesgos, oportunidades y beneficios de la biotecnología para los países de las Américas

1. Riesgos, oportunidades y beneficios de la biotecnologíapara los países de las Américas Greg Traxler Auburn University El Foro Técnico “Riesgos, oportunidades y beneficios de la biotecnología para los países de las Américas” --convocado por el Instituto Interamericano de Cooperación para la Agricultura (IICA) el martes 11 de diciembre, 2007

2. Outline Introduction The context and experience of Biotechnology in LAC A model of biotechnology research and access The Risks: Necessary Institutions and Institutional Capacity in LAC Conclusions

3. Opportunities: What is Biotechnology? • GMOs • Most visible (notorious) aspect • Widespread public interest; concern from some • Most studied aspect of biotechnology; most data • Focus of this presentation • Molecular Techniques for Genetic Improvement • Marker Assisted Selection, cellular biology • Vaccines and Diagnostic Tools for Animal agriculture • Advances in Basic Science • New avenues of science; new scientific horizon

4. LAC had 78% of the total DC GMO area in 2006Near doubling in GMO area in 5 years, Use still concentrated in temperate/subtropical South Cone

5. Average number of chemical pesticide applications 12 10 Total BBW 8 Other Number of pesticide applications 6 Farmers 84% 4 2 0 1995 1996 1997 1998 1999 2000 Year GMO Impact studies have been completed in more than a dozen countries Findings consistent in reporting: Large economic and environmental benefits, large benefits to farmers Benefit distribution, 1997-1998 Monsanto 16% Source: Traxler, et al., 2004 Pesticide use and benefit distribution from Bt cotton in Mexico

6. Broad Summary on GMO impacts: A Paradox Large benefits from GMOs Economic benefits broadly distributed among producers and industry Large Environmental Benefits from reduced pesticide use and facilitation of reduced tillage But … High geographic and crop concentration in access to GMOs Three crops Seven countries out 34 in LAC What guidance does this paradox give for accessing the potential of biotechnology science?

7. A model of biotechnology research and access

8. A three step model to analyze biotec Risks and Opportunities Genetic Improvement Research & Technology Roles Technology Delivery Applied & Adaptive Research Basic Science Seed Distribution Low High Research cost and Spillover potential Spillover definition: The use of technology that was developed elsewhere, thereby avoiding or reducing R&D investment costs. Example: RR soybean in Argentina developed in US

9. Genetic Improvement Research & Technology Roles Technology Delivery Applied & Adaptive Research Basic Science Seed Distribution Institutions with primary responsibility for research in each area: Multinationals CGIAR Centers NARSs Local private sector Farm input companies Large NARSs Regional networks, etc. Indust. Country R&D Farmer-Farmer

10. Genetic Improvement Research & Technology Roles Technology Delivery Applied & Adaptive Research Basic Science Seed Distribution Institutions with primary responsibility for research in each area: Multinationals CGIAR Centers NARSs Local private sector Large NARSs Farmer-Farmer Regional mechanism, etc. Indust. Country R&D Critical Institutional Capacities for biotechnology • Basic Science capacity • Applied Science capacity • Biosafety Regulatory institutions • Investment Capital • IPR institutions / incentives for technology sharing

11. The Risks: Necessary Institutions and Institutional Capacities in LAC • Basic Science Capacity • Applied (agricultural) science capacity • Biosafety regulatory institutions • Research Investment capital • Public sector • Private sector • IPR institutions / financial incentives for technology discovery

12. Tremendous Diversity in Size of LAC Systems, 1996 • Three countries account for 85% of LAC expenditures • 2/3 have less than 100 agricultural scientists Mexico Argentina Brazil Source: Beintema and Pardey

13. Research Output: Basic Science and Applied Science publications in LAC(Annual Average 1997-2006) Source: SCOPUS online database

14. Implications of the great diversity in size and capacity among LAC countries Institutions that facilitate the sharing of research discoveries are critical given the country-country discrepancies in capacity. IP sharing is a key issue given the number of small countries with limited research capacity. Public sector lagging the private sector in progress in sharing IP. Intense amount of licensing of IP within the private sector.-

15. The Risks: Necessary Institutions and Institutional Capacities in LAC • Basic Science Capacity • Applied (agricultural) science capacity • Biosafety regulatory institutions • Legislation • Experience in overseeing biosafety field trials • Research Investment capital • Public sector • Private sector • IPR institutions / financial incentives for technology discovery

16. Status of Biosafety legislation in LAC Countries Source: Tewolde

17. Experience in overseeing biosafety field trials: Concentrated in a few countries

18. 7 LAC countries have approved at least one GMO event for commercial use

19. Same data as previous slide: GMO commercial approvals by year No increase in the pace of GMO approvals over time

20. Private sector has conducted 89% of all field trials

21. The Risks: Necessary Institutions and Institutional Capacities in LAC • Basic Science Capacity • Applied (agricultural) science capacity • Biosafety regulatory institutions • Legislation • Experience in overseeing biosafety field trials • Research Investment capital • Public sector • Private sector • IPR institutions / financial incentives for technology discovery

22. Global R&D Expenditures on Crop biotechnology, 2001-Concentrated in Industrial Countries-Dominated by the private sector Source: James, 2003

23. GMO royalties generated (US$ million) US total= $1,043 $ 942 $ 745 Argentina Other DCs Source:NASS/USDA and author’s calculations

24. 2000 Annual Expenditures on Agricultural Research Total annual Public Expenditures higher in Developing Countries than developed countries Public sector spending 12 10 DC spending skewed by large investments by “Super Nars” (Brazil, India, China) 8 Billions 2000 int.$ 6 4 2 0 Industrialized Developing Source: Pardey (2006)

25. BUT, Near Absence of Private Funding in Developing countries means that total ag research is nearly twice as high in industrial countries Public sector spending Private sector spending 12 10 8 Billions 2000 int.$ 6 4 2 0 Industrialized Industrialized Developing Developing Source: Pardey (2006)

26. Total ag research spending Public and Private Industrialized Total research expenditures far higher in Industrialized countries because of private sector investments. Private investments are a compliment to public investment, not a substitute Developing 12 10 8 Billions 2000 int.$ 6 4 0 2 Source: Pardey (2006)

27. Agricultural Expenditures by Public or Private Sector

28. The Risks: Necessary Institutions and Institutional Capacities in LAC • Capital for Research Investment • Public sector • Private sector • Basic Science Capacity • Applied (agricultural) science capacity • Biosafety regulatory • Ability to generate revenues from seed use

29. Mobilizing resources to Finance Biotechnology and Seed research: The Traditional Way Research leading to a transformation event “Biotech” Companies Field Testing Regulatory/Biosafety Approval $$$ IP negotiation Seed Markets (Royalty collection) Adapted Transgenic Variety Genetic Resources Plant Breeding Farmers $$$ Seed Companies

30. Difficulty in collecting royalties in developing countries blocks private sector investment Research leading to a transformation event “Biotech” Companies Field Testing X Regulatory/Biosafety Approval $$$ IP negotiation Seed Markets (Royalty collection) X Adapted Transgenic Variety Genetic Resources Plant Breeding Farmers X $$$ Seed Companies

31. Institutional Innovation: End Point Royalty Scheme - IP Royalties Collected When Grain is Sold Transformation event $$$ 1. Biotechnology Research Regulatory/Biosafety Approval IP negotiation End point Royalties X Royalty collection Adapted Transgenic Variety Genetic Resources Plant Breeding Grain Dealers Farmers End point Royalties $$$ 2. Plant breeding Research

32. Seed Sale versus Endpoint Royalty collection scheme Seed Sales • “Royalty” included as part of seed price • Seed companies pay GM gene license fee to Monsanto • “Bolsa Blanca” seed sales destroy private sector investment incentive Royalty Collection at Grain Sale (endpoint) • Royalty collected at elevator when grain sold • Royalty based on % of grain value • Administrative fee paid to elevators for collecting fee • Examples: Australia, France, UK, South Cone GMOs

33. Royalties in Paraguay • Adoption 50% (1.8 million ha) • Collection begun in 2005 • $3 - $6 ton, increasing over time • Distribution of Royalties • 53% Monsanto • 17% Seed Companies • 8% Grain handlers (50 firms) • 10% Public Research Foundation • 12% Administrative expenses • Source: http://www.inbio-paraguay.org/html/acuerdo_marco.htm

34. Summary: Necessary Institutions and Institutional Capacities in LAC • Basic Science Capacity • Applied (agricultural) science capacity • Biosafety regulatory institutions • Legislation • Experience in overseeing biosafety field trials • Research Investment capital • Public sector • Private sector • IPR institutions / financial incentives for technology discovery

35. Perspective: Opportunities to Support Biotechnology Support for new mechanisms for mobilizing private sector R&D investment Endpoint royalties is one experiment Improved institutions/mechanisms for Public-Public sharing of IP Public sector has more difficulty sharing IP than private sectot Continued support for biosafety capacity Public sector agricultural research must not be reduced, even if private sector investment increases – Distinct roles for each class of institution Large opportunities for payoffs from biotechnology research in areas other than GMOs, but data on impacts to date lacking • Molecular Techniques for Genetic Improvement • Vaccines and Diagnostic Tools for Animal agriculture • Advances in Basic Science

36. Gracias