by Ruchi Tripathi
Food Trade Research Officer,
ActionAid
Berne, Switzerland; 13th October
2000
Introduction
There are a number of concerns in respect to
the potential impacts of the patenting of food and farming crops on
agricultural livelihoods and the ability of poor people to feed themselves in
developing countries.
In this paper I will try to raise some of
the concerns around patent protection of genetic resources for food and
agriculture. The paper looks at some of the potential impacts of the Trade
Related Intellectual Property Rights (TRIPs) Agreement of the World Trade
Organisation (WTO). In particular I would focus on the impact of Intellectual
Property Rights (IPR) regime on small farmers and food security in developing
countries. The paper also explores the link between IPRs and investment,
competition, innovation. The final section makes some specific
recommendations on IPRs within the TRIPs context.
TRIPs : One size does
not fit all
The TRIPs agreement was primarily drafted
keeping in mind the corporate interests of the developed countries in mind.
The ability to benefit from IPRs is very much a function of the level of
development of the economy, and is more advantageous to owners of technology
vis-à-vis users.
Intellectual property rights on plant
genetic resources are not appropriate for farmers in developing countries to
protect diverse, heterogeneous biological materials. Patents on plants
discriminate against traditional and communal methods of breeding, recognising
only individual breeding as innovation.
Discussions are underway at the WTO’s TRIPS
Council on Article 27.3 (b), which deals with biotech patents and plant
variety protection. The developing countries and in particular the African
Group have put forward a proposal to clarify ‘that plants and animals as well
as microorganisms and all other living organisms and their parts cannot be
patented, and that natural processes that produce plants, animals and other
living organisms should also not be patentable.’
The Africa group has tabled another paper at
the September 2000 TRIPs council meeting requesting that the review of Article
27.3 (b) examine the link between IPRs and development, it raises questions
about sui generis system of plant variety protection, focuses on ethical and
other issues arising out of the patentability of life. The paper also raises
the issue around conservation of biodiversity, equitable benefit sharing,
traditional knowledge and farmers rights. India and Kenya in separate
submissions highlighted the interpretation that the dispute settlement panel
is talking in favour of producers of technology to the detriment of users.
They also highlighted the fact that the WTO objectives of increasing welfare
and the TRIPs objectives of balancing private and public interests and
promoting technology transfer and development have failed.
India earlier tabled a paper on indigenous knowledge both in the TRIPs Council
and in the Committee on Trade and Environment. The issues we are discussing
in this Public Conference today and very much alive and would gain immensely
by our support.
Conflict with food
rights: Exclusion of patents for food and farming crops
ActionAid like many of you believes that
poor people have a right to food. Patenting of food and farming crops affects
the control over and access to the resources that secure the right to food.
The critical rights include:
· Rights to save and exchange
seeds and breed from them.
· Rights to have indigenous and
community knowledge protected and acknowledged.
· Rights to land.
· Rights to real choice in the
market, not monopolies.
· Rights to be protected from
risks.
· Rights to public research
directed towards the need of the poorest farmers – rights to knowledge about
alternatives and an enabling environment for those alternatives.
· Rights to participate in
decisions and influence policies that affect them.
We believe that patents on genetic resources
for food and agriculture – particularly staple foods, should not be allowed
under TRIPs legislation. In our analysis and that of others, they
can undermine the right to food recognised in Article 25 of the Universal
Declaration on Human Rights, and reaffirmed in the International Covenant on
Economic, Social and Cultural Rights (Article 11) and the Convention on the
Rights of the Child (Articles 24, 27). It is important to note that the United
Nations Commission on Human Rights, designated a Special Rapporteur to study
the human right of access to food earlier this year. The latest Human
Development Report 2000 of the UNDP, Human Rights and Human Development
points out the contradiction between human rights and TRIPs. Further the UN
Sub-Commission for the Protection and Promotion of Human Rights passed a
resolution stating that TRIPs Agreement could infringe on poor peoples right,
specially their access to seeds and pharmaceuticals.
Not only can the patenting of food and
farming crops lead directly and indirectly to a denial of the right to food,
but in granting decades long monopolies on ‘inventions’ relating to food and
farming crops – particularly staples, we are sacrificing the free and public
exchange of technologies that may benefit poor people.
There are those who argue that as with the
human genome, the knowledge held in all genetic material of whatever origin is
foremost a public good whose application to the furtherance of humanity should
be held in the public domain. ActionAid believes that knowledge and
technologies which can be appropriately applied for eradicating poverty and
protecting basic human rights should be held publicly and should be freely
available, just as was the material from which it was derived. Additionally,
because of the dependence of the many millions of poor people on staple crops,
neither the crops nor developments of these crops should be subject to private
monopoly. We do believe that this is a serious issue of ‘public policy or
morality’.
IPRs and livelihood
security
Traditionally, national legislation in
developing countries has excluded plants and animals, including their
varieties, from IPR protection. There are many reasons for this.
Agriculture is the backbone in most
developing countries. Access to the means of production and seed in
particular is vital for largely agrarian economies. The majority of people in
developing countries depend on agricultural production to sustain their
livelihood and food security. Agriculture also has deep cultural, social and
religious significance.
The sophisticated knowledge of poor farmers
working in high risk, marginal environments in relation to soils, seeds,
weather patterns, pests, diseases and markets means that generally they are
best placed to make prudent decisions regarding agricultural production.
World wide, 1.4 billion farmers depend on farm saved seed as their primary
seed source. They save a portion of their produce as seed for planting in the
next season. They have over centuries exchanged freely within communities and
have provided the basis for selective breeding to encourage positive traits.
The varieties produced and conserved by subsistence farmers are designed to
cope with local pest problems and weather conditions to provide at least a
minimum harvest even in the most difficult times.
These varieties and the knowledge has been
developed over centuries jointly by the community as a whole and is not
subject to individual ownership. Farmers right to seed is being threatened by
the TRIPs Agreement. IPR protection of plants and seeds transfers the control
over, and access to, the resources that secure the right to food from poor
farmers and communities to private hands. It is feared that TRIPs will impact
on the ability of farmers to obtain new varieties to adapt to local conditions
and demands.
Farmers voices
· A
farmers jury on GM crops in its verdict stated that ‘any new innovations in
agriculture should ensure the farmers right to save, breed from and exchange
all his/her seed.’
This right is instrinsically linked to livelihood security of poor farmers.
·
Verdict from farmers in a Seed Tribunal from India held on 24th and 25th
September 2000, highlighted the despair surrounding the livelihoods of farmers
in India and the growing vulnerability of farmers the world over. The
tribunal stated that “Patent and IPR’s regime as system of monopoly control
will further aggravate the severe crisis the farmers are facing. The Trade
Related Intellectual Property Rights (TRIPS) regime of the WTO will therefore
create conditions for a deepening of the economic crisis of the farming
community in India. The farmers highlighted the “traditional rights of the
farmers to freely conserve, develop, use, share, exchange their seeds are
fundamental rights which cannot be alienated by any IPR law. We must develop
our indigenous “sui generis” system to protect farmers seed sovereignty.”
IPRs and biodiversity
Traditional variety of seeds not only
ensures the livelihood security of poor farmers by hedging their bet against
uncertainties of agriculture, but also has a vital role in ensuring that
biodiversity is maintained.
Genetic diversity in agriculture enables
poor farmers to select varieties of plants and animal breeds that are best
adapted to changing environmental, economic and social pressures. Over
centuries a huge range of seed varieties has been developed at local level,
many of which are unique to a small area and produce local food crops that are
not extensively traded. Furthermore, in the poorest and most marginal
locations, traditional diets often contain a finely balanced mixture of
domestically produced crops and plants and fruits found in the wild as well as
cultivated by them. Agricultural biodiversity is crucial for livelihood and
nutritional security of the poor.
A wider genetic base is the pedestal on
plant breeding and farming is based. Maintenance of plant genetic diversity
is a shared heritage and responsibility of all humankind. Historically, we
have used about 5,000-plant species world wide to meet food and other needs,
which in itself is a fraction of the worlds flora and fauna. Today, only about
150 plant species are important in meeting the food (calories) needs of
humans’ worldwide. Hence, greater dependence on fewer plant species, 20 to 30
in global context gradually, has resulted in the loss of native genetic
resources which are otherwise essential as building blocks of genetic
diversity.
The technological bind of improved varieties
with support from intellectual property protection leads to the elimination of
the resource upon which they are based. The narrowness of the genetic base is
responsible for greater risk of crop failure as occurred in the wheat stem
rust of 1954 or the southern corn blight of 1970 in the US. The Irish potato
famine in the 1840s is a classic example of genetic vulnerability. (R.S.
Paroda and R.K. Arora)
Intellectual property rights provides
incentives for a particular kind of agriculture which is detrimental to
biodiversity protection and livelihood security of poor farmers. Jaffe and van
Wijk in their study of 5 developing countries plant breeders’ rights law make
the following observations: ‘In most developing countries, the use of
certified seed of modern varieties is either recommended by extension
services, linked to credit facilities, or is obliged by the processing
industry. The marketing of seed of traditional varieties may also be reduced
by mandatory registration of varieties.’
In the UK farmers’ varieties of seeds sold
in brown bags are illegal as they are not on the National seeds list. Its
ironic that farmers natural right to save, exchange and sell seeds becomes a
legal privilege to be granted to them by the governments if they so choose to
in their national laws, under the TRIPs agreement and sui generis laws of the
UPOV 1991 kind.
The argument that farmers can use improved
and proprietary varieties of seed and its only a question of their choice,
overlooks the genetic richness of the seeds being used by subsistence farmers.
For many companies seed is seed – one variety fits all. Yet the genebanks of
international agricultural research centres have built up over the past 25
years large stocks of local farmer varieties collected from all over the
world. Plant breeders have used these collections, which represent the
natural biological diversity of crops, as the raw material for fashioning new
crop varieties. In fact an FAO official states that “Every major commercial
crop grown in developed countries today originated in what are now termed
developing countries, restoration of seed would be one small way to repay what
is by any measure a very large debt.” (www.fao.org/WAICENT/FAOINFO/AGRICULT/magazine/9810/spot2.htm)
IPRs and biopiracy
Another strong argument for considering the
exclusion of patenting of genetic resources for food and agriculture is what
some call bio-piracy, ‘licensed theft’, or privatisation of common, cultural
or indigenous knowledge relating to the economic and other benefits of plants.
Bio-piracy is a term used to express the
expropriation and licensing of genetic resources which are common property
(freely available) in developing countries, without any recognition or
recompense to the countries or communities who have traditionally used and
developed them.
UNDP’s Human Development Report 2000 refers
to TRIPs as entailing the “silent theft of centuries of knowledge from some of
the world’s poorest communities in developing countries”. (p. 6)
These patents are increasingly being subject
to successful legal challenge. The following boxes give examples.
Biopiracy Case Study 1: Turmeric
In March 1995, two
expatriate Indians at the University of Mississippi Medical Centre, were
granted a US patent (US 5,401,504) for turmeric to be used to heal wounds.
The Indian Council for Scientific and Industrial Research (CSIR) filed a
case with the US Patent Office challenging the patent on the grounds of
‘prior art’. CSIR said turmeric has been used for thousands of years for
healing wounds and rashes and therefore its use as a medicine was not a new
invention. The claim had to be backed by written documentation claiming
traditional wisdom. The CSIR went so far as to present an ancient Sanskrit
text and a paper published in 1953 in the Journal of the Indian Medical
Association. The US Patent Office upheld the objection and cancelled the
patent.
It also cancelled several
other patent applications pending for turmeric.
Biopiracy Case Study 2: Neem
Natural extracts from the
seed of the neem tree that is found across Asia, especially India are the
subject of patents by US Company WR Grace. The products, to control insects
and fungi at the same time, developed under a cooperative research and
development agreement between ARS and WR Grace and Company of Columbia have
been registered for commercial use by the US Environment Protection Agency
for pest and disease control. (patents US 5,298,251; US 5,356,628; US
5,372,817; US 5,405,612; US 5,409,708) (www.ars.usda.gov/)
WR Grace and United State
Department of Agriculture filed a European Patent application with the
European Patent Office (EPO) on the basis of a US priority application of
December 26, 1989, covering a method for controlling fungi on plants by the
aid of a hydrophobic extracted neem oil. The EPO granted a European patent
for this application on September 14, 1994. A legal challenge on this
patent was filed in June 1995 on basis of not fulfilling two criteria’s of
patentability: novelty and inventiveness. On 10 May, 2000, the EPO upheld
the objection on the basis that the technique was well known to local
farmers in India, lacked any inventive step and that such indigenous
knowledge could therefore not be patented.
Overall, there are 90
patents granted on process and products from the neem tree worldwide and 40
patent applications received at the EPO. Dried neem leaves have been used
for centuries in India to protect clothes and grains against fungus and the
‘find’ is not new. Patents encourage such misappropriation of indigenous
knowledge.
Biopiracy Case Study 3: Basmati
In 1997, the Texas-based
RiceTec Inc. was granted US patent 5,663,484 on Basmati rice lines and
grains. This patent allows RiceTec to sell a ‘new’ variety of Basmati,
which it claims to have developed under the name of Basmati, in the US and
abroad. The Basmati variety, on which RiceTec has claimed a patent has been
derived from Indian Basmati crossed with semi-dwarf varieties,
including indica varieties. Thus the patent is for a variety that is
essentially derived from a farmers’ variety. It is simply cross-breeding,
and therefore it should not be treated as novel. The patent falsely claims a
derivation as an invention. The Indian government challenged the case and
has recently managed to get Rice Tec to withdraw claims related to the rice
grains which are not novel and are well within accepted standards for a
basmati grown in traditional regions. Rice Tec has withdrawn 4 of the
claims in its patent application. (Economic Times of India, 26/9/2000)
Though this still leaves the rest of the patent intact with exclusive rights
for Rice Tec to grow Texmati in the Americas. It is crucial to also
remember that it is very expensive to challenge cases of biopiracy on a
case-by-case basis. American lawyers had demanded a deposit of £300,000 from
Pakistan to fight the case.
We would argue that the threat to
internationally agreed food rights, the increasing number of successful
challenges to patents on developing country food and farming crops, and the
arguments on public policy and morality leads to a need for exclusion
of genetic resources for food and agriculture from patentability.
Furthermore, there needs to be a process to
comprehensively review all existing patents and patents pending in the light
of recent legal findings (it is simply not feasible for civil society to
legally challenge – for example, the 90 patents granted on process and
products from the neem tree worldwide or the over 70 patents on Vitamin A
Rice).
Patenting and
commercialisation of agriculture
As discussed, patenting food and farming
crops promotes a form of genetically modified (GM) and commercially controlled
agriculture that can threaten the rights to food in a number of ways:
· GM agriculture could intensify
the trend towards large-scale single-crop farming and concentration of land
holdings – poor farmers depend upon a great variety of crops as a safety net,
and need security over marginal lands.
· Patents promote the
consolidation of global seed and agri-chemical businesses, concentrating power
over seeds and seed choices in a very few hands. Poor farmers are already
vulnerable players in the marketplace – to be operating in an inefficient
market biased against them, increases vulnerability.
· Seed patenting – the guarantee
of monopoly profits threatens the practice of farmer saved seeds and is
transferring the community knowledge and biological resources of the south
into private industrialised hands. Patents are being granted on plants or
plant products that have been developed using biological resources which are
the result of generations of cross-breeding – that is the intellectual
property – of farmers in developing countries. Creating private property
rights over the intellectual rights of many previous generations of farmers
(which they have shared as common property for the common good) raises serious
questions in respect to ‘prior art’, and can also viewed as a form of
intellectual property theft - so called ‘bio-piracy’.
· Aggressive marketing and easy
credit, promising high yields and big profits entices farmers onto a high tech
treadmill. Farmers are not made aware of the risks.
IPRs and consolidation
Three quarters of patent filings received by
WIPO in 1999 were from five countries, US, Germany, Japan, UK and France.
This figure becomes even more skewed with 97 per cent of all patents are held
by nationals of OECD countries. What is more alarming is that 90 per cent of
all patents in the world are held by global corporations. Patents are kept
within a family, they are not as in theory to share knowledge, encourage
innovation. This fact is well supported by the figure of 70 per cent of all
patent royalty payments being made between subsidiaries of parent enterprises.
(RAFI, 2000)
The private sector companies are on a roll,
acquiring local firms or forming strategic partnerships with them. Agrevo
last year acquired the Delhi-based Proagro group of companies at nine times
its turnover while Monsanto acquired a 26 percent stake in Maharashtra Hybrid
Seed Company valuing it at five times turnover, according to newspaper
reports. (Anshuman Daga, Reuters. 22/5/2000)
ActionAid along with Bern Declaration, Gene
Watch and Swedish Society for Nature Conservation released a report on 11th
October highlighting the merger of AstraZeneca and Novartis into Syngenta to
form the largest GM company in the world. The multinational will be ranked
number one in the world for agrochemicals (herbicides, fungicides and
insecticides), number two for seed treatments and will be the third largest
seed supplier – with combined sales of $7.34 billion.
There is the argument that farmers are free
to continue saving their seeds and have a choice of not puchasing proprietary
seeds. Companies point out that farmers will buy seeds only if they want to
and if they see a benefit in growing them. However, in the context of large
multinational corporations buying up local seed companies, the question of
choice becomes really limited. For example 60 per cent of the corn market in
Brazil is controlled by Monsanto.
Five biotech companies, or the so-called
Gene Giants control 30 per cent of all plant biotech patents. Though, in
reality this figure might be as high as 50 per cent or more as it does not
reflect exclusive licensing arrangements made with these corporations of the
patents held by institutes.
Certain classes of bio-technologies, such as
‘Terminator Technologies’ or technologies deliberately designed to tie farmers
into a dependence on specific packages of inputs (Genetic Use Restriction
Technology( GURT)) should not be encouraged through patents, since they are
issues of public policy and morality (let alone raising issues in
respect to monopoly practice analogous to Microsoft’s packaging of Internet
Explorer).
The report on Syngeta uncovered patents that
would tie the farmer into a dependent relationship where every year they would
need to return to the agrochemical supplier to ‘activate’ seed. What was
quite alarming to note was that Syngenta own’s over 50 per cent of the patents
on GURTs.
‘Novartis was not achieving the sales it
wanted because farmers insisted on saving seed. This, the report states, ‘is
the clearest indication of the corporation’s desire to circumvent the age-old
practice of saving seed. While this is becoming rarer in the developed world,
at least 1.4 million people rely on farm-saved seed worldwide.’ (ActionAid,
Berne Declaration et. al, October 2000)
Public sector Vs.
private sector: question of incentives to agriculture
The importance of public sector research for
food security and increased productivity of crops of interest to poor farmers
cannot be over-emphasised. The public sector with all its ills has invested
heavily in research on food crops in developing countries. While public
funding for agriculture is declining, private investment into agriculture is
booming. 80 per cent of public sector research is oriented to the farmer,
whereas only 12 per cent of private sector research is for farm-level
technologies.
Extension of the intellectual property system to agriculture has been an
important factor in the shift to the private sector.
Over 90 per cent of the seed requirements
are met by farmer saved seed in India. Only 7-10 per cent of the seed
requirements is met by the organised sector (public and private seed
companies). This is changing, a study carried out by ActionAid India on the
seed sector, shows how favourable legislation and policy changes are
encouraging the private sector seed industry. The scope for expansion for the
private sector seed companies in India is tremendous given their low
penetration historically. The study highlights marketing strategies of
companies: ‘A few of them issue advertisements in newspapers to promote their
seed, some others interact with farmers and still others issue free of cost
sample seed packets to farmers to grow on an experimental basis. There are
still others like ITC Zeneca who identify a few farmers who have had a good
crop the previous year and ask them to use their seed along side with local
varieties. Cargill invites farmers to see the good crop in other Cargill
farmer-customers fields.’
Plant
Variety protection, ‘the availability of Plant Variety Certificates, plant
patents, and the extension of utility patents to cover new varieties as well
as plant tissues and genes has contributed to industrial interest in the
area.’ This has led to several plant breeders having difficulties with
obtaining "protected genetic stocks" from companies and has harmed plant
breeding in the public sector states Steven C. Price, from the University of
Wisconsin, Madison. In a
survey conducted by Price, out of the 86 respondents representing 25 US
universities and 41 crops, forty-eight percent of public plant breeders (out
of 86) indicated that they had experienced difficulty in obtaining genetic
stocks from private companies; 45% indicated that this had interfered with
their research; 28% felt that it had interfered with their ability to release
new varieties, and a shocking 23% reported that it had interfered with the
training of graduate students.
This
according to him, this raises serious questions about the role of public
breeding, danger of having future varietal releases done predominantly by
industry, especially in light of the industry consolidations, with a
concomitant potential decrease in genetic variability. In the end Price
states, the public may be hurt by decreased genetic diversity resulting in
fewer varietal choices.
Challenging the links
between patents and innovation and competitiveness
The argument that Intellectual Property
Rights (IPR) protection is required for innovation is not well placed. The
economic benefits and costs of IPRs are not clear-cut.
IPRs and competition
Patents can have anti-competitive effects by
securing and strengthening the position of market leaders and limiting the
entry of new competitors. The World Bank admits that “tighter IPRs can
disadvantage developing countries in two ways: by increasing the knowledge gap
and by shifting bargaining power towards the producers of knowledge, most of
who reside in the industrial countries”.
For example, partly as a result of the extension of plant variety
protection and the willingness of US courts to extend utility patents to
organisms, the number of independent seed companies worldwide has declined
markedly over the last two decades.
An OECD
report, Patents and Innovation (p. 29,1997) states ‘Blocking technology’ has
become the strategic function of patents.
The Economist of April 8th 2000 (pg. 99) writing about the
madness in the method states, “The rush of new patents has given rise to two
sets of complaints. The first is that a lot of “bad” patents are being
issued. The second is that the pendulum has swung too far: after decades when
patents did not afford investors and companies enough protection, they now
offer too much.” It further states, “Critics object to these patents on two
main grounds. They are too broad, and will keep competitors out of large
potential areas of business; or, if the patent-holder licenses the
technologies, they will put up prices to consumers.” Another important
question to raise is “are too many monopolies being granted for too long?”
The Harvard Business Review of
January-February 2000 writing on Discovering New Value in Intellectual
Property, states “whether a company is trying to block a competitor’s
product development plan, gain entry into a hotly contested new market, find
the most attractive acquisition opportunity, or reduce the risks involved in a
high-stakes merger, patents can be potent weapons-and quite possibly the
greatest source of competitive intelligence on earth.” More often than not,
companies, take out patents to block other competitors to enter the field. Patents
are described as ‘trump cards’ to negotiate licences. This is quite common in
the biotech world where the recent spate of mergers and acquisitions are
partly triggered by the patent portfolio of the company.
IPRs and
innovation
The
economic and democratic costs of IPR as an incentive to innovate – from higher
priced goods to reduced access to information – are extremely high and
developing countries can least afford to rely primarily on this one tool. Much
innovation occurs inspite of the patent system. ‘Intellectual property
policies are not the only, nor necessarily the most important, government
policy affecting innovation. The ratio of patents to real research and
development expenditures in the United States and elsewhere has been
declining.’
‘The
liberal economic argument for adopting IPRs because they supply the prime
incentive to invent is premised on the assumption that private companies are
responsible for all technology generation. This is not true, as state
intervention plays an enormous role in developing technological capability.’
(Grain/Gaia) Moreover, in developing countries it is the small farmers who
innovate and their incentive largely is their zeal to survive and ensure their
livelihood security.
Moreover, proprietary technology generation is concentrated in ten countries
accounting for 84% of global R&D spending per annum with industrial countries
accounting for 97 percent of all patents worldwide.
A 1985 UNCTAD study covering 100 corporations failed to find a uniform cross-sectoral
link between IPRs and innovation. Studies have shown that competition for
market share was the biggest influence on R&D investments by firms. (Kamien
and Schwartz, and Firestone quoted in Grain and Gaia)
IPRs and
investment
Correa
(2000) points out that ‘whatever the current importance of IPRs as
determinants of FDI flows may be, once the Agreement becomes fully applicable,
other factors (availability of skills, R&D infrastructure, macroeconomic
policies, etc.) will have an overriding influence as determinants of such
flows and activities. In other words, compliance with TRIPS Agreement will
not ensure by itself greater attractiveness of a particular country
vis-à-vis other countries competing for the same investment.’
Infact
IPRs end up being a resource constraint in many cases. UNCTAD (1996)
highlights that ‘a serious constraint on patent policy-making in developing
countries is likely to be the high cost of maintaining administrative
capabilities to implement the new standards on a case-by-case basis and of
training skilled personnel.’ A study by UNDP puts a figure of US$300 million
in unpaid royalties for farmers’ crop seeds and over US$ 5 billion in unpaid
royalties for medicinal plants if a 2 percent royalty was charged on
biological diversity from the South.
IPRs and price
A recent World Bank study does concede that
‘with an increased reliance on the patent system for protecting agricultural
products, monopolistic pricing may very well become a serious cause of concern
in the future’. In fact the report also points out that a recent study on
Argentina, Chile, and, Uruguay found that the introduction of plant breeders’
rights protection improved the ability of private breeders to control local
seed markets and prevent unauthorised trade in protected plant varieties. In
consequence, seed prices appeared to have risen, although it was not reported
by how much. (World Bank, 2000)
Case study of PBRs in
the UK
Our research in a related field, plant
breeders rights, reflects a lot of the thinking above and suggests that
creation of monopolies is not necessarily linked to inventive activity, so the
trade off society makes in granting 20 year monopolies, between free exchange
of ideas and future gains from invention, may be a false one.
A recent study commissioned by ActionAid,
‘Intellectual Property Rights and Agriculture: An Analysis of the Economic
Impact of Plant Breeders’ Rights’
highlights the following:
Plant
breeders rights Vs patents
The EU and UK
chose to protect their plant varieties through plant breeders rights
instead of patents primarily as a result of opposition from lobby groups
representing patent lawyers, who were afraid that including plant varieties
within patent law might weaken the patent system. It was thought plant
breeding might not be able to meet the crucial requirements for the grant of a
patent – novelty, invention and industrial applicability. The problems of
novelty (Vs prior art/biopiracy), invention (Vs discovery), utility
(industrial applicability) exist even today.
Investment
On the link
between IPRs and investment, the study points out that older firms that
pre-existed Plant Breeder Rights legislation have been most active. Moreover,
private investment appears to concentrate on select crops, suggesting that the
profitability of the crop is more crucial in bringing forth private
investment.
New
plant varieties
The study notes
lack of a clear link between increased number of new plant varieties
and PBRs. More significantly, the new varieties should be demonstratively
better in quality rather than a mere increase in number of similar varieties
or some ornamental changes. The study points out that companies are
constantly replacing their portfolio of varieties as it is in the breeders’
interest to reduce the life-span of older varieties and continuously release
new ones. Consequently, there are a number of periods when the market
experiences a net withdrawal of varieties. This evidence undermines claims
concerning PBRs positive impact on inventive activity.
Consolidation
The study failed
to provide evidence of greater competition or increased number of firms
active in plant breeding as a result of Plant Breeders Rights (PBRs). In
fact, there is compelling evidence of seed industry consolidation, which is
well supported by reports of widespread mergers and acquisitions within the
industry.
Statistical evidence on the
distribution of PBRs grants confirms the suspicion of a highly concentrated
market. Five per cent of the applicants controlled between 68-89 per cent
of the wheat PBR grants issued between 1965 and 1995 in the UK. The study
concludes that the main beneficiaries of the PBRs system have been the older
breeding firms that have been subsequently consolidated within multinational
companies. An ActionAid study from Brazil establishes further evidence of consolidation of
the seed sector as a result of Plant Variety Protection (PVP). Similar
studies on potential impact of TRIPS and PVP have been carried out by
ActionAid in Nepal, Ethiopia and Uganda.
The high level of
concentration in the distribution of grants is reflected in market shares. One
reflection of market power is the behaviour of seed prices. The study
highlights that in the UK, seed prices (aggregated for all species) increased
by 34 per cent between 1985-93 – an increase second only to the increase in
price of plant protection chemicals. The increase in royalty rates (a result
of PBRs) has been higher than the increase in seed prices. This study focuses on Plant Breeders’ Rights as patents are a new
phenomenon and data on their impact would be limited. Also, since patents are
a step forward from PBRs we felt it would be useful to review the role of PBRs
in the UK to help us pre-empt some of the implications they might have for
developing countries.
Recommendations
The following are some recommendations for
the review of the TRIPs agreement:
1. Clarifies that the
WTO rules including the TRIPs agreement must be consistent with human rights
law, in particular the UN Covenant on Economic, Social
and Cultural Rights, and acknowledges the points made by the UN Sub-Commission
on the Promotion and Protection of Human Rights on 17 August 2000
2. In relation to the review of
Article 27.3b, support developing countries’, and in particular the African
Group’s proposal, to (a) clarify 'that plants and animals as well as
microorganisms and all other living organisms and their parts cannot be
patented, and that natural processes that produce plants, animals and other
living organisms should also not be patentable’; (b) maintain flexibility for
countries designing sui-generis systems; and (c)
support the inclusion of disclosure of the
source of genetic material within TRIPS as proposed by India
3. Clarifies that the WTO TRIPs
Agreement must be consistent with (a) provisions in the CBD to conserve
natural resources, ensure prior informed consent and benefit sharing; and (b)
the International Undertaking
of the FAO on Plant Genetic Resources and Farmers Rights
4. Instead of
instituting a global patenting regime, encourages the international community
to develop alternative methods of recognising and protecting the traditional
knowledge, innovations, practices and technologies of indigenous people and
farming communities.
5. Supports developing
country calls to refrain from invoking a dispute settlement procedure with
regard to the implementation of article 27.3b during the period of the review
of the provisions of this article and the review of the Agreement itself under
article 71.1.
6. Works to ensure that
the review of Article 71.1 retains the option to amend the TRIPs to
exclude genetic resource for food and agriculture from patentability and in
order to ensure a better balance between the interests of inventors and the
greater public good.
References
ActionAid. ‘Trade Related Intellectual
Property Rights and Farmers Rights.’ A recipe for change. Food security – the
key issues for the WTO Ministerial Conference, Seattle. London, November
1999.
ActionAid India. Farmer Foresight – A
Participatory Biotechnology Assessment by Indian Farmers. Report of the
Farming Jury on the Future of Agriculture in
India. New Delhi, 2000.
ActionAid Nepal. Seed Management System
in Nepal: Where Does it
Stand! An Assessment of Existing Seed Situation and Related Policies in Nepal. Kathmandu, April 2000.
Adhikari, Belbase and Ghale (ActionAid).
Seed of Monopoly. Impact of TRIPs Agreement on
Nepal. ActionAid Nepal and Pro Public. Kathmandu, May
2000.
Berhan Gebre Egziabher, Tewolde. The
Inappropriateness of the Patents System for Life Forms and Processes.
Paper presented at Seminar on “Current Developments in the WTO: Perspective of
Developing Countries”. Organised by Third World Network. Geneva, September
14-15, 2000.
Braga; Fink and Sepulveda. Intellectual
Property Rights and Economic Development. World Bank Discussion Paper No.
412. The World Bank, Washington, D.C. 2000.
CIDSE. Biopatenting and the Threat to
Food Security – A Christian and Development Perspective. International
Cooperation for Development and Solidarity. 2000.
Correa, Carlos M. Intellectual Property
Rights, the WTO and Developing Countries. The TRIPS Agreement and Policy
Options. Zed Books, Third World Network. Malaysia, 2000.
The Crucible II Group. Seedling
Solutions. Volume 1. Policy options for genetic resources: People, Plants,
and Patents revisted. Copublished by the International Development
Research Centre, the International Plant Genetic Resources Institute and the
Dag Hammarskjold Foundation. 2000.
GAIA/GRAIN.
Intellectual Property Rights and Biodiversity: The Economic Myths. Global
Trade and Biodiversity in Conflict. Issue No.3, October 1998. (http://www.grain.org/publications/gtbc/issue3.htm)
Hirshorn, Ronald. ‘Foreign Direct Investment
and Market Framework Policies: Reducing Friction in APEC Policies on
Competition and Intellectual Property’, Strategis, No. 4, October 1996,
Canada,
http://strategis.ic.gc.ca/
Jaffe, Walter and Jeroen van Wijk. The
impact of plant breeders’ rights in developing countries. Debated and
experience in
Argentina, Chile, Colombia, Mexico and Uruguay. Inter-American Institute for Cooperation on
Agriculture, University of Amsterdam. October 1995.
Kremer, Michael. ‘A Mechanism for
Encouraging Innovationa’, HIID Discussion Paper No. 533, May 1996.
Paroda, R.S. and R.K. Arora Plant Genetic
Resources: General Perspective in Plant Genetic Resources Conservation and
Management – Edited by RS Paroda, and RK Arora. IBPGR Regional Office, New
Delhi (copied a few chap)
Rangnekar, Dwijen Research Associate, School
of Economics, Kingston University, UK ‘Intellectual Property Rights and
Agriculture: An Analysis of the Economic Impact of Plant Breeders’ Rights’.
ActionAid, March 2000.
Rural Advancement Foundation International,
Conserving Indigenous Knowledge: Integrating Two Systems of Innovation,
UN Development Program, New York, 1994, p 17.
RAFI. In search of Higher Ground. The
Intellectual Property Challenge to Public Agricultural Research and Human
Rights and 28 Alternative Initiatives. The Occasional Paper Series – Vol. 6.
No. 1 September 2000.
Rao, Shyla. State of the Seed Report.
ActionAid India. New Delhi, September 1999.
Steven C.
Price, Public and Private Plant Breeding. University of Wisconsin, Madison, WI
53705. e-mail: scprice@facstaff.wisc.edu
United Nations Conference on Trade and
Development. The TRIPS Agreement and Developing Countries. United
Nations. New York and Geneva, 1996.
Warwick, Hugh (Genetics Forum). Syngenta
Switching off farmers’ rights? ActionAid, Berne Declaration, Gene Watch,
Swedish Society for Nature Conservation. October 2000
Wilkinson, John and Pierina German Castelli.
The Internationalization of Brazil’s Seed Industry. Biotechnology, patents
and biodiversity. ActionAid Brazil. Rio de Janeiro, 2000.
World Bank. World Development Report,
Knowledge for Development, pg 34-35. 1998/99.
NOTAS:
Hamlyn House, MacDonald
Road; Archway, London N19 5PG. Ph: 00 44 20 7561 7561; Email: Rtripathi@actionaid.org.uk
