Since the 1960s, growth in world food supplies outpaced even the unprecedented increases in food demand caused by jumps in incomes and the doubling and redoubling of population. Moreover, additional production came from virtually the same cropland base: 1.4 billion hectares of land was planted to crops in 1961 compared with the 1.5 billion hectares that in 1998 yielded twice the amount of grain and oilseeds. At 1960 crop yields, current levels of supply would likely have required at least an additional 300 million hectares of land, an area equal to the entire landmass of Western Europe. Food prices too have declined to their lowest levels in history. Consumers are able to eat better while spending less and less of their budgets on food, diversifying demand for other goods and services. Changes in demand have spurred countries’ specialization in production, fueling world trade and investment flows.
The currently favorable dynamic balance between overall food supply and demand was not inevitable, however. Nor should it be taken for granted that the balance will persist without public intervention. Progress in the past century resulted from successful interaction between farmers, input suppliers, and a publicly supported research and extension system that furnished innovations and knowledge to the world for free. Little land now remains on which to expand agricultural production, so crop and livestock yields must continue to increase for the next several decades. Production must be sustained, at these much higher levels, for the foreseeable future in the face of environmental, biological, and other factors that may undermine past gains.
Continued strong performance in research and innovation is thus essential to maintain favorable food balances over the next half century. But the likelihood of achieving that must be assessed against significant global changes in the amount and sources of support for research, in public- and private-sector roles, and in the balance between locally provided and internationally traded R&D goods and services (often discussed under the rubric of the “globalization” of agricultural R&D). To confront the challenges of the next decades and the need for long-term investment in R&D, one crucial issue (and the center of one of the most heated controversies in the globalization debate) is the positive and negative dynamics generated by the changing intellectual property rights regimes associated with the new international framework defined in the World Trade Organization (WTO) agreements.
Beginning in the 1980s, a revolution occurred in the effective protection of proprietary claims, particularly in agricultural biotechnology. This has boosted incentives for private-sector investment. However, effective protection comes from patents, which are a mixed blessing. Given the cumulative nature of agricultural research, proliferation of patents makes it difficult for public institutions and private start-ups to be active participants in biotechnology research. Moreover, the needs of industry and agricultural progress are yet to be properly reconciled with the rights of indigenous peoples and poor farmers who maintained many of the landraces on which today’s improved varieties depend.
The private sector tends to be most interested in widely transferable or profitable near-market technologies. But much research with high social value is not privately profitable (largely because the benefits are not easily appropriable by the innovator). Such research requires collective action by governments to help fund and even conduct it. Examples are basic and pre-technology innovations and research that focuses on the ecology-specific needs of poor farmers, on the environmental and food-safety consequences of agriculture, and on the long-term sustainability of agricultural systems.
In agricultural biotechnology, the most visible and controversial field of agricultural research, the portion of the key technology protected as intellectual property is now highly concentrated in the hands of a small number of large, multinational corporations based in North America and Western Europe. Now, the very intellectual property rights that were associated with the surge of private research in biotechnology may block access to new developments by public-sector and nonprofit researchers.
As patenting becomes more prevalent, the number of separate rights needed to produce a new innovation proliferates. If ownership of these rights is diffuse and uncertain, the multilateral bargaining problem can become difficult to resolve. Instead of overexploitation of a common property with low entry costs, there is underexploitation of a pool of intellectual property due to the high costs of access—a manifestation of the so-called “tragedy of the anti-commons” problem that plagues not just agriculture but also health sciences research.
Recent work at IFPRI has addressed the question, “Does the international proliferation of intellectual property rights and regimes impede agricultural research conducted in, or of consequence for, developing countries?” Answering this question requires an understanding of the jurisdictional extent of intellectual property, the geographic pattern of production, and the extent and nature of South-North trade flows. Rights to intellectual property are confined to the jurisdictions where they are granted. There is no such thing as an international patent. Gaining patent rights in the United States confers no intellectual property rights in China; a patent in China must also be sought and awarded to confer rights in that jurisdiction.
The extent of freedom to operate (the ability to practice or use an innovation) in less-developed countries is not well understood. For example, the recent vitamin-A rice innovation reportedly required permission to practice over 70 patent rights. The well-publicized donations made by major corporations of their relevant technologies left a strong impression that enforcement of large numbers of crucial patents was being relinquished in favor of the poor in developing countries. In fact, in some major rice-consuming countries there are no valid relevant patents. At most there are very few in the countries where the majority of poor, malnourished consumers reside.
Freedom to operate depends on specific circumstances. IFPRI’s investigation of the intellectual property rights assigned to the key enabling technologies used to transform crops revealed that these rights are mainly held in, and therefore are primarily relevant to, rich-country jurisdictions. Thus, for most of the staple crops that matter for food security in poor countries, researchers’ freedom to operate in such nations is currently not the main issue. Yet a problem could arise for developing-country research on export-oriented cash crops such as horticultural products, tropical beverages like coffee or cocoa, and dessert bananas. Most certainly, a problem lies ahead for research on some staple food crops as poorer developing countries move into compliance with their intellectual property commitments to the WTO by the year 2005 and as patent applications are increasingly lodged in developing countries.
The debate surrounding intellectual property rights and globalization must be placed in that longer-term framework. The role of the private sector in agricultural R&D is increasing. But even more than in biomedical research, private investment in agricultural R&D covers only a small subset of the needs and is mostly a complement, not a substitute, for continued public and other nonprofit research. For many developing countries, the performance of the latter is now hampered more by lack of funding than by intellectual property rights issues. Continued strong performance of the public and nonprofit research system is needed if world food requirements are to be satisfied over the next several decades while sustaining and protecting the resource base. Foresight is called for, because the lag between investment and output is long.
For further reading see E. Binenbaum, C. Nottenburg, P.G. Pardey, B.D. Wright, and P. Zambrano, “South-North Trade, Intellectual Property Jurisdictions, and Freedom to Operate in Agricultural Research on Staple Crops,” EPTD Discussion Paper No. 71 (Washington, D.C.: IFPRI, 2000), and C. Nottenburg, P.G. Pardey, and B.D. Wright, “Accessing Other People’s Technologies: Do Non-Profit Agencies Need It? How to Obtain It,” EPTD Discussion Paper (Washington, D.C.: IFPRI, forthcoming 2001).
Philip G. Pardey (p.pardey@cgiar.org) is a senior research fellow in the Environment and Production Technology Division at IFPRI, and Brian D. Wright (wright@are.berkeley.edu) is a professor in the Department of Agricultural and Resource Economics at the University of California at Berkeley, USA.