How Farmers’ Rights Can Be Used to Adapt Plant Breeders’ Rights
Bees Butler and Robin Pistorius
Keywords:  Farmers' rights; Plant breeders' rights; Access to genetic resources; Food and Agricultural Organization (FAO); General Agreement on Tariffs and Trade (GATT).
Correct citation: Butler, B. and Pistorius, R. (1996), "How Farmers' Rights Can Be Used to Adapt Plant Breeders' Rights." Biotechnology and Development Monitor, No. 28, p. 7-11.

The farmers’ rights issue remains unresolved as donors do not want to generate additional funds to support the role of farmers in maintaining agro-biodiversity. This is illustrated by the outcome of the Fourth International Technical Conference for Plant Genetic Resources. In this article, Bees Butler and Robin Pistorius suggest using farmers’ rights to curb the negative effects of the 1991 Act of UPOV. A remuneration system that would compensate breeders without recognizing property rights is closer to the original idea behind the PBR system: i.e. a contract between the breeder and society. The main benefit of such a system is that farmers have the right to freely use the seed they buy.

The issue of farmers’ rights dates back to debates that began in 1979 within the FAO, concerning the asymmetric benefits derived by the donors of germplasm and the users of the donated plant genetic resources. The starting point of the debates was that commercial varieties are ultimately the product of applying breeders’ technologies to farmers’ germplasm. While the former may generate returns through plant breeders’ rights (PBRs) or other forms of property protection, no system of compensation or incentives for the providers of germplasm has been developed. The debates led to a negotiated compromise: the simultaneous and parallel international recognition of PBRs and farmers’ rights. An FAO Conference Resolution of 1989 (5/89) defines farmers’ rights as "... rights arising from the past, present and future contributions in conserving, improving and making available Plant Genetic Resources (PGRs), particularly those in the centres of origin/diversity..."
However, there is still no sign of support from the side of the industrialized countries. One reason is that these countries refuse to allocate additional funds to support farmers in developing countries, or at least not via the FAO. More importantly, most of the industrialized countries recognize that farmers’ rights are not compatible with the current intellectual property rights (IPRs) based on the International Union for the Protection of New Varieties of Plants (UPOV) in PGRs, or PBRs.
While the entire issue of Farmers Rights could be construed as a North-South debate, it is not our intention to portray it as such since opinions differ considerably among both industrialized and developing nations. Many developing countries, for example, have already adopted, or are developing Northern-style IPR/PBR legislation. In addition, some industrialized countries are sympathetic to the issue of farmers’ rights.

Farmers’ rights in Leipzig
Issues discussed at the FAO’s Fourth International Technical Conference, held in June 1996 in Leipzig, Germany, are both technical and political. Agreement on technical issues can often reduce political tensions, although it is never clear whether technical issues mask or mitigate the political issues. In the case of IPRs in PGRs, a large gap in our knowledge on the technical issues places the issue very much in the political arena. There is a particular lack of information with respect to valuation of genetic resources and/or biodiversity. To make things even more complicated, the roots of the farmers’ rights issue are much deeper and more complex than mere technicalities. Issues as far-ranging as women’s rights, sustainable agriculture, social inequity, social justice and human rights are involved.
Most delegates from industrialized countries had tremendous problems connecting the technical issues with the issues presented by the non-government organizations (NGOs) and some developing countries. In the corridors many delegates even accused the NGOs of using "emotional" arguments, not fitting with the plenary discussions. Many especially felt the question of farmers’ rights was "too arduous". The US delegation, for example, made a point of recognizing the farmers’ rights only as a "concept", not as an existing right. The US stance provoked much resistance from developing countries and NGOs.
While the objectives and principles underlying the farmers’ rights are complex, and not always easily interpretable, one of the major objectives of farmers’ rights is to ‘free’ farmers from the dominant IPR regime. However, again, the farmers rights issue was postponed to an extraordinary meeting on the FAO International Undertaking (in November 1996), and to the third meeting of the Conference of Parties to the Convention on Biological Diversity (in December 1996).

Clashing paradigms
The issue of farmers’ rights can perhaps best be understood as a result of two clashing ownership systems: an age old one based on (farmer) community rights, still prevalent in many developing countries, and a relatively new ownership system based on individual property rights. The community rights system, although attributing value to genetic resources, never resulted in formal ownership as it did in most industrialized countries. The norm has been, and still is, free exchange. More importantly, most legal systems, and particularly formal IPR systems, usually do not recognize community ownership. Hence, since neolithic times, improved landraces had freely circulated among farmers. In this system there was no distinction between a farmer and a breeder: (s)he is both.
In the new system, designed by OECD countries, the products of commercial plant breeding are protected in order to garner remuneration to reward the breeder for his efforts to improve a variety. This, in turn, (at least theoretically) provides incentives to promote further innovative plant breeding efforts. PBRs, notably those under the UPOV Convention of 1991, however, discriminate between farmers (as users of the seed) and breeders (as producers of the new variety/seed), even though in many countries there is no clear distinction between the two groups. The plant breeding industry acknowledges that free access to germplasm fosters innovation. Therefore PBRs do not violate the principle of free access and use of improved seed by competing breeders (through the breeders’ exemption). But PBRs can limit the use and sales of all reproductive material by farmers, depending on the particular interpretation of the latest UPOV. For example, in Europe, under the 1991 Act of UPOV, PBRs allow neither on-farm seed saving nor swapping grain for seed without compensating the breeder.
IPRs also directly affect farmers in developing countries under the World Trade Organization (WTO) Trade Related Intellectual Property Systems (TRIPS) agreement. WTO/TRIPs require all signatories to grant patent protection for all plant material which meets the requirements for patenting, except for plant varieties. Varieties must be protected either by patents or patent-like PBRs, or by an effective sui generis system. This actually means that:

A compromise through sui generis?
Some studies, e.g. of the Swaminathan Foundation, India, and the International Plant Genetic Resources Institute (IPGRI) have attempted to approach farmers’ rights as interpretations of a sui generis system. The studies examine farmers’ rights as a means to enable developing countries to protect their national plant genetic heritage, protect their various landrace varieties, and contribute to the maintenance of agro-biodiversity. How, and at what point farmers’ rights would be incorporated into the currently dominant IPR regime, remains unclear. Farmers’ rights and IPRs are incompatible for several reasons:
First, the IPR system calls for new plant varieties to meet relatively stringently maintained criteria to qualify for protection (distinctness, uniformity and stability, or DUS conditions). The farmers’ rights system, on the other hand, asks for control over, and compensation for, landraces that may not be easily identifiable.
Second, the basic principle of farmers’ rights is free access to, but not individual ownership of genetic resources. Therefore farmers’ rights can never become part of a system that recognizes private ownership and de facto limits access. Why retaliate against something you dislike by adopting a system that is the very root of the dislike? At the extreme, detailed farmers’ rights might limit the open exchange of landraces among communities, which could put national and global food security at risk.
Third, farmers’ rights, interpreted in terms of compensation arising from past, present and future contributions of farmers in conserving and making available PGRs, will invoke very complex negotiations that depend on the willingness of industrialized countries to assess the value of PGRs.
Nevertheless, most industrialized countries support the idea that farmers have played a crucial role in agriculture. As became apparent during the FAO Conference in Leipzig, most OECD countries also recognize that the current IPR system contributes to genetic uniformity and threatens the role of farmers as conservators of PGRs. Industrialized countries want to recognize farmers as conservators; developing countries want to see them as innovators. Industrialized countries want to reward them, but voluntarily; developing countries see farmers’ rights as a means to regain the control over the resources they are losing through the internationalization of the IPR system. The system of rewards advocated by industrialized countries can be implemented only through ‘soft law’, the IPR system may be legislated.

One possible way out
For any industry or technology, the fundamental justification for providing IPR protection is based on two simple but powerful assumptions: (1) innovators are motivated by the prospect of reward; (2) society benefits from innovation by virtue of the economic and cultural growth that ensues. The state grants innovators limited monopoly rights in exchange for making the innovation public; the innovators benefit from the economic power of the monopoly, and society benefits from the generation and dissemination of new ideas.
There are two perspectives that arise out of an examination of the laws applying to IPRs. One perspective is that inadequate IPR protection eviscerates the incentive to innovate, which in the long run, dampens economic growth and cultural advance. Thus, if owners of IPRs are unable to enforce the terms and conditions under which their innovations are made available, then owners of IPRs will not be willing to put their interests at risk. The second perspective is that by allowing the commodification of information, IPR laws facilitate a market in which control over the use and dissemination of information could be accumulated and held by a relatively small number of private entities. Thus, IPRs always involve costs. It restricts access to information and reduces the use of information by allowing owners of IPR to resort to the power of the state to enforce their exclusive rights.
One could take the view that the intention of IPRs is to provide incentives for innovation, and without them, inventive activity would be less than optimal. Or, one could take the view that this perspective is inconsistent with the stated purpose of IPR law, i.e. "...to promote progress of science by securing for a limited time the exclusive right to their discoveries." In this perspective, the state is empowered to grant rights only to the extent that they serve the policies of promoting knowledge and learning.
We do not take either perspective. Our approach is to examine the problem of the incompatibility of farmers’ rights and IPRs, and recognize that a practical solution is possible if certain (admittedly compromising) conditions are met. First, we recognize that IPRs are an accepted method of rewarding or compensating breeders for innovative plant breeding, and creating incentives for further innovative plant breeding. Second, we recognize that the exclusionary clause of IPRs is one method of allowing the inventor to receive compensation or remuneration for her/his innovative efforts. However, it is remuneration, not ownership, that is the main thrust of the exclusive right. Third, we recognize that it is the property right or ownership in the resource that creates most of the negative effects of IPRs, as outlined above.
The challenge then is to devise a system that:

Such a system could be devised with 2 major modifications to current IPR/PBR systems: (1) The elimination of the concept of "ownership/property right" in PGRs, and (2) The relaxation of conditions for the registration of new varieties.

Remuneration without property rights
A system of ‘remuneration without ownership/property right’ would be closer to the original idea behind the PBR system: i.e. a contract between the breeder and society rewarding investments in plant breeding. That a reward system for breeders does not necessarily have to be based on IPRs was corroborated between 1941 and 1966 in the Netherlands. In the Dutch system, all farmers were levied a small tax on each crop based on the number of hectares that they had in that crop. The fund was used to pay plant breeders a remuneration for breeding new varieties. The remuneration was based on the proportion of total hectares planted to the new variety each year, and continued for 25 years. After the seed was released commercially, it could be grown, swapped, multiplied and sold by anyone. The major advantages are that farmers maintain their basic freedom, i.e. to transfer grain into seed and to cross it with their own progeny, plant breeders receive remuneration for their innovative efforts, and the incentives to continue innovative plant breeding efforts remain.
The Dutch system was not developed to address farmers’ rights, but to recognize the "legal status of the plant breeder and the trade in propagation material" as stated in the preamble of the Plant Breeders Decree, 1941. Nevertheless, the principles involved in this old Dutch system provides the beginning of a practical solution to current incompatibility between the formal IPR systems and farmers’ rights.

An immediate question that arises is what happens to a new variety that is incorporated into a breeding programme and is eventually superseded by another variety that incorporates the genetic resources of the original variety? This is a legitimate question, particularly when one recognizes that this is precisely what IPRs prevent. Many would see this an opportunity for some developing countries to usurp the innovations of western nations, and avoid paying the rightful rewards to the innovator. We view this from a number of perspectives. First, if exclusive rights to the original variety are enforced, then it would limit access to it, and would not be incorporated into another breeding programme. Since in many developing countries 60 to 90 per cent of the seed trade is in the ‘informal’ sector, and farmers cannot afford the new commercial varieties, then it would languish in the market. Second, there is some evidence that it is probable that most new, modern varieties are superseded by newer, more suitably adapted varieties in a few years anyway. Third, the limits on access to improved varieties provided by the exclusivity of IPRs can be viewed as contrary to the original intent of IPRs. Fourth, since varieties must be registered to share in the remuneration pool, then the development of a new variety that incorporates the germplasm of the original variety, would also have to be noted in the registration process. Thus, some form of (admittedly diminished) remuneration to the breeder of the original variety would still be possible.
A remuneration system may also have some other disadvantages. The system, of course, does not account for the natural (ownership/property rights) protection afforded to F1 hybrids. Many major crops are increasingly becoming hybridized, which means they have a non-reproducible status. Problems may also arise relating to the assessment of the amount of seed sold subject to remuneration. How to estimate the amount of hectares planted to a certain variety? How to assess which variety it is? And how to share the income of the fund among breeders? These are all institutional problems that are not necessarily intractable. Furthermore, they are not that much different from the problems that arise in the current (imperfect) formal IPR system. There are always disagreements about which resource is being used. Therefore, under such a system, rules of determining sources used, and of dispute settlement would have to be drawn up. The sharing of the income in the fund would of course be an agreement between plant breeders and farmers, and would be an integral part of the proposed legislation.
Towards an innovation remuneration system
These proposals are merely suggestions. They are intended to convey the concept of an "innovation remuneration system" which would provide an alternative to the current UPOV-based PBR system. Such a system would meet most of the conditions necessary to allow farmers in developing countries to exchange seed freely and use commercial varieties purchased in the market for their own breeding programmes, without violating private property rights. It would provide for remuneration to plant breeders (both domestic and foreign) for innovative efforts, including newly developed landraces and modern imported varieties, and continue to provide incentives for further innovation in plant breeding. It could be developed to meet the conditions necessary under WTO/TRIPS to provide for a sui generis system. Finally, and perhaps most importantly, it would be simple to administer, and would not involve the legal paraphernalia that accompanies current IPRs in PGRs. The questions to be researched therefore becomes: Can an innovation remuneration system provide sufficient remuneration and provide the same incentives as the current UPOV-based PBR system? If so, under what conditions?
Bees Butler*/Robin Pistorius**

* Department of Agricultural Economics, University of California-Davis, USA. Phone (+1) 916 752 3681; Fax (+1) 916 752 5614; E-mail ljbutler@ucdavis.edu
** University of Amsterdam, Department of Political Science, Oudezijds Achterburgwal 237, 1012 DL Amsterdam, the Netherlands. Phone (+31) 20 525 2176; Fax (+31) 20 525 2086; E-mail pistorius@pscw.uva.nl

Dan Leskien and Michael Flitner, Intellectual Property Rights and Plant Genetic Resources: Towards a sui generis system. Study commissioned by the International Plant Genetic Resources Institute (IPGRI), Rome (draft May 1996).

M.S. Swaminathan (ed.) (1996), Agrobiodiversity and Farmers’ Rights: Proceedings of a technical consultation on an implementation framework for farmers’ rights. Madras, India: M.S. Swaminathan Research Foundation.

Paul N. Doremus (1995), "The Externalization of Domestic Regulation: Intellectual property rights reform in a global era." Science Communication, special issue on intellectual property rights, Part 1, Vol. 17, No. 2, pp.137-162.

Niva Elkin-Koren (1995), "The Challenges of Technological Change to Copyright Law: Copyright reform and social change in cyberspace." Science Communication, Special issue on intellectual property rights, Part 1, Vol. 17 No. 2, pp.186-200.

The Board for the Plant Breeders Right (1946), Plant Breeders Decree (1941): The Legal status of the plant breeder and trade in propagation material in the Netherlands. The Hague

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