The International Consortium on Agricultural Biotechnology Research (ICABR)
The Importance of Policies and Regulations in the International Spread
of Agricultural Biotechnology
Carl E. Pray, Ann Courtmanche and Margaret Brennan Rutgers University, U.S.A.
Almost all of the new agricultural biotechnology is spreading to farmers embodied in seeds. A few large life science companies based in the U.S. and Europe have been the main suppliers of agricultural biotechnology around the world. So far, transgenic plants are being grown commercially in the U.S., Canada, Australia, Argentina, China, Mexico, and South Africa. Three quarters of the commercial area under transgenic plants is from Monsanto and most of the rest is by other life science companies. Transgenic plants are being tested in government-approved field trials in at least 43 countries, but testing is not dominated by one company and many public sector institutions are also active.
If governments of developing countries hope to design effective policies to either encourage or discourage the use of biotech they must understand the role of these life science companies and what factors influence their decisions to introduce this technology. Policy makers especially need information on the importance of the policy instruments that they have available.
This paper uses a model of private sector R&D derived from the industrial organization literature to analyze the spread of agricultural biotech. Private biotech R&D as measured by the number of field trials of transgenic corn, soybeans, cotton and rice in the 43 countries (including 23 LDCs) will be analyzed. First we will look at the relative size of the public and private biotech R&D and the importance of individual companies. Then we will analyze the importance of policies in an econometric model in which private R&D by country, crop and company is a function of policy variables, economic variables, cost of research and company characteristics. The policy variables will include intellectual property rights (UPOV membership, patents on plants), public sector research expenditure by crop(national and International Centers) and number of field trials of transgenic plants by public research institutes, restrictions on use transgenics as food or in the field, and restrictions on foreign investment and seed imports. The economic variables will include the size of the seed market, current insecticide and herbicide use, and growth in rural wages. In addition variables on the cost of doing research such as scientists salaries will be used. Firm specific variables will include firm's headquarters, how long it has been in the country, firm size, and R&D as percent of sales.
We have collected field trial data. Data on other variables is currently being collected at ISNAR, from FAO and from company websites and annual reports. Some of the independent variables and some countries may have to be dropped for lack of data. But key variables for corn have already been collected by CIMMYT in their studies of the maize seed industry. Thus, we should be able to do some modeling of private research in that crop if not for all four crops.