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Home > Focus > Modern Biotechnology in LDCs: governing innovation in India's agricultural markets - Part 5: Policy Implications

Modern Biotechnology in LDCs: governing innovation in India's agricultural markets - Part 5: Policy Implications

by Redazione FGB [1], 6 April 2004

As a member of WTO, India has opted for a sui generis intellectual property legislation stated in The Protection of Plant Variety and Farmers Act of 2001. According to this Act, process patents will be allowed on microbiological, biochemical and biotechnological processes (Sahai, 2004 [2]). This includes Plant Breeders Rights giving formal authority to licensed bodies to market, distribute, import or export a patented seed variety and severe punishments for non-compliers and illegal use of patented denominations. Interestingly the act recognizes the farmer not just as a cultivator, but also as a conserver of the agricultural gene pool (Sahai, 2003 [3]). In order to protect also the famers' rights and avoid them being exploited by formal owners of breeders' right the scheme also envisages involving Non Government Organisation to guide illiterate farmers through the process. Unfortunately drafting of the scheme is still poor and thus prone to conflicting interpretations. For instance, Breeders Rights can only be given to local companies and are limited only to new plant varieties. However, also foreign companies should be treated equally.

The sides of the debate, which manifest themselves as we move from the farmers to the local institutional and legal framework to the international arena are many. The greatest risks seem to come from the introduction of mutually exclusive policies that could increase incoherence in the already uneasy framework governing the innovation and its various residual claimants. Likewise, not only our previous example Monsanto pateting Chapati raises important issues, but also as Devinder Sharma (Sharma, 2003 [4]) points out that something similar is happening with Bollgard. "Ironically", he says, "while cotton growers in the central region of the country find no buyers for their harvest, cotton imports are multiplying from 21,000 tonnes in 1999 to 49,000 tonnes in 2000. With the United States, China and European Union refusing to reduce their subsidies to cotton growers, there is no possibility for Indian farmers to find a footing in the international market".

Unfortunately, it seems that what raises greater concern within the current efforts to govern the innovation it is not how to make such technology as easily and cheaply available, but how to preserve the rents that it will generate to the innovators. But, GURTs and patents alone seem to be ill-suited to deal with the complexity of the issues surrounding the introduction of GM seeds in India. As an innovation, GM seeds hold great expectation and promises that are still to be fully exploited. Whereas the innovators justify their concerns under the grounds that the industry is capital intensive and that very large investments are required to enter it and support research in the area. The Green Revolution was introduced on the grounds of costs reduction and increased productivity, but has produced un-measurable social welfare losses considering the costs of health related diseases, let alone how it has affected the future productivity of the soil ad the purity of the water. Moreover, it has promoted a mentality that is hard to eradicate and the use of mono-culture for cash crops requiring massive amounts of pesticides and other chemical agents.

Therefore, new policies for the agricultural sector should consider not only how to increase in production and productivity, but also the possibility to increase farmers' (as well as others workers in the industry) available incomes together with better employment opportunities. For this reason public-private partnerships need to be assessed not only by looking at the overall increase and benefit of increasing R&D or seed sales, but also in terms of who (or which group of stakeholders) is able to capture the greatest amount of benefits by the introduction of this innovative technology, alias the degree of appropriability. In order for that to happen there will be the need to create better communication channels with technological institutions, forward linkages with markets and lateral linkages among the various groups that will be undertaking special licensing agreements and other public and private institutes.

Thus, patenting and enforcement of property rights legislation should create a hierarchy of ownership, cross-ownership, partnership arrangements and royalty payments that by all means aims to reduce market concentration and maximise diffusion of the new technology. In reality, the risks are high if legislastive measures will not be taken soon to ensure the former. Finally, future policies should aim at reducing the costs of making available less polluting and innovative farming methods by drafting a scheme which allows for a certain degree of appropriability to be kept by the farmers, and avoid them from being scavenged by formal Breeders Rights holders. In nuce both farmers and consumers should be able to make the choice by being informed about the origin of the product, its processes and the share of the price that each step of production will appropriate on the label of the end product.

Link to part 4 [5]

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  1. 1] /schedabiografica/Redazione FGB
  2. 2] http://www.ias.ac.in/currsci/feb102003/407.pdf
  3. 3] http://indiatogether.org/2003/may/agr-ppvlaw.htm
  4. 4] http://www.indiatogether.org/2003/oct/dsh-riggedbt.htm
  5. 5] /en/navarra/2004/04/modern_biotechnology_in_ldcs_g_3.html
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Articles by:  Redazione FGB
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