Private - Public Cooperation in Transgenic Virus-resistant Potatoes
Monsanto, USA - CINVESTAV, Mexico
Peter Commandeur
Keywords:  Monsanto Company; Mexico; Disease/pest resistance; Genetic engineering; Relation public-private sector; Potato/Sweet potato; Technology transfer; International Service for Acquisition of Agri-Biotech Applications (ISAAA).
Correct citation: Commandeur, P. (1996), "Private - Public Cooperation in Transgenic Virus-resistant Potatoes: Monsanto, USA - CINVESTAV, Mexico." Biotechnology and Development Monitor, No. 28, p. 14-19.

Much of the development in agro-biotechnology is dominated by private companies in industrialized countries. In developing countries, public institutes are still the main players in agricultural research. To facilitate access to proprietary biotechnology for these public institutes, the attention for technology transfer from ‘private North’ to ‘public South’ is growing. A project between Monsanto and CINVESTAV has produced its first results. Is there an alternative emerging to the old public-public model for technology transfer directed to the needs of small-scale farmers?

In 1991, the Mexican public Centre of Research and Advanced Studies (CINVESTAV) started cooperating with the US private biotechnology giant Monsanto on the transfer of gene technology for virus resistance in potatoes. CINVESTAV will incorporate this resistance in Mexican potato varieties. In the late 1980s, Monsanto researchers were able to achieve resistance to both potato viruses X and Y (PVX and PVY) by a single transformation event. To that aim, they developed a vector including the PVX and PVY coat protein genes and a selectable marker gene. In 1990, the researchers reported PVX and PVY resistance in Russett Burbank, a widely grown potato variety in the USA and Canada.
Besides the transfer of the coat-protein genes, and the genetic engineering techniques, the collaboration includes training of CINVESTAV staff at Monsanto’s Life Science Research Center in St. Louis, Missouri, USA. The programme has been a success as the same virus resistance was achieved first in Alpha, the most popular potato variety grown in Mexico. Later, the same resistance was achieved in Rosita and Norteña, two varieties that are especially popular among small-scale farmers. The first field tests of the genetically modified Alpha potato took place in one of Monsanto’s test fields in Washington State, USA. Starting in 1993, a second test, which also included Rosita and Norteña, was conducted in Irapuato, Mexico, following a similar protocol as in Washington State. Since the latter field test was the first one organized and performed by a national institution, the development of biosafety regulation was an essential part of this programme. Earlier field tests in Mexico dealt with imported varieties that passed the complete biosafety procedure in their home country. In this case, one could not rely on earlier biosafety tests since the potato varieties had nowhere passed a complete biosafety procedure. Furthermore, since the transgenic potato varieties are expected to be released in massive amounts in the coming years, also in places where wild relatives of the potato are found, a new series of aspects had to be considered in the risk assessment.
The large-scale field tests of the transgenic Alpha throughout Mexico, which started in 1994, were carried out by CINVESTAV in collaboration with the Mexican National Institute for Research in Forestry, Agriculture and Livestock (INIFAP). This Institute is delegated a main role in distribution of the transgenic potato to the small-scale farmers in Mexico, the target group which is explicitly mentioned in the project objectives.

International cooperation
The programme between CINVESTAV and Monsanto was one of the first mediated by the International Service for Acquisition of Agri-Biotech Applications (ISAAA). ISAAA is a non-profit organization, originating from Cornell University, USA, with further centres in Norwich (UK) and Nairobi (Kenya). It aims at "facilitating the acquisition and transfer of agricultural biotechnology applications from the industrial countries, particularly proprietary technology from the private sector, for the benefit of the developing world" (see also Monitor No. 14). The organization is funded by both public and private sources.
The Rockefeller Foundation, USA, a private foundation that has been active in funding potato breeding in Mexico since the late 1940s, has financed the collaboration. It contributed a total sum of US$ 350,000 for salaries and travel expenses of the Mexican staff outside Mexico, and for equipment and reagents for use at CINVESTAV. In addition, the Foundation provided funds for training of Mexican officials in biosafety.
The collaborative programme could also result in South-South cooperation, since the Kenya Agricultural Research Institute (KARI) already has expressed interest in the transgenic Rosita variety. Rosita is very similar to varieties grown in Kenya. If it results in transfer from Mexico to Kenya, this will most probably be in the form of the already modified potato variety. The training of Kenyan scientists will concentrate on field testing.

Main issues at stake
Because the programme includes such elements as donation of gene technology by a private biotechnology firm to a public research institute in a developing country, South-South transfer of modern biotechnology, and the successful cooperation at the Mexican level between a scientific research institute, the national agricultural research system and potato farmers, it is unique of its kind according to Victor Villalobos, director of CINVESTAV Irapuato. "This partnership vividly demonstrates the ability of biotechnology to be transferred from private industry to non-profit institutions" says Rob Horsch of Monsanto in a press release. But could this donation of the gene technology be considered as a model for technology transfer in the coming years, or will it remain an exception?
The second issue at stake here is how Mexican farmers will benefit from the programme. As Horsch states, "Cooperative efforts like this will help provide a more reliable food supply to resource-poor villages and farms that are beyond the reach of the commercial market." Can we expect that the benefits of this donation will reach small-scale potato farmers in Mexico, the explicitly mentioned target group? To answer these two questions, it might be interesting to analyze the different partners in the programme and assess their interests first. Secondly, a brief study of the potato sector in Mexico might help to assess the potential benefits for small-scale potato farmers.

Of the several actors that have taken part in the cooperation, Monsanto and CINVESTAV are the most important. Monsanto, headquartered in St. Louis, is originally a chemical company and since the late 1980s a global leader in agricultural biotechnology. As part of the agreement, Monsanto trained 3 scientists of CINVESTAV in the USA. One scientist was trained in the adaptation of transformation and regeneration protocols to the Alpha variety at Monsanto’s crop transformation group at St. Louis. A second scientist joined Monsanto’s virology group for training in molecular virology. In this context, an improved vector was constructed, using the same chimeric genes. With this vector the Alpha variety was successfully transformed at CINVESTAV’s laboratory in Irapuato. A third scientist was trained in field test evaluation.
In the follow-up agreement signed by the two parties in November 1995, Monsanto granted CINVESTAV a non-exclusive, royalty free licence to use the Monsanto technology. CINVESTAV is authorized to develop, grow, use and sell further generations of PVX/PVY virus-resistant potato in Mexico, Central America, South America and Africa. Interestingly, Monsanto and Washington University jointly have a pending patent application in the USA, the exclusive rights of which have been granted to Monsanto, on the genes and genetically engineered plants. This pending application does not apply for Mexico. Therefore, in Mexico, the gene and the engineered plants included in the deal are not protected. Export of transformed potatoes to the USA is explicitly excluded from the licence. Because of its US patent, this export can be restricted by Monsanto or be made subject to the payment of royalties.
Besides a geographical limitation, the agreement is limited so far to a list of 10 varieties requested by CINVESTAV and INIFAP: Alpha, Rosita, Montsama, Tollocan, Puebla, Michoacan, Mexiquense, Ireri, Norteña and Monserrat. Alpha occupies about 60 per cent of the total acreage in Mexico, but is hardly grown in moderate climates, where Monsanto’s main markets are found. The other varieties are "coloured" varieties developed by the Rockefeller sponsored potato breeding programme and have an increased resistance to the fungal disease Phytophthora infestans (see below). The list "may be expanded from time to time by Monsanto". The contract explicitly excludes "any processing varieties except Alpha" such as Russett Burbank, Atlantic, Shepody, Superior, Russett Norkodah, Frontier, and HiLite Russet. Of this group, Atlantic is the dominant processing potato in Mexico.
One of Monsanto’s main interests to collaborate in this programme is the positive effects for its own image and that of genetic engineering both in the USA and in Mexico. As quoted above, the programme is presented as an example of biotechnology tackling real problems in the developing world. Besides, Monsanto’s costs are relatively low. It paid for the research costs (except salaries) at its centre in St. Louis, USA. Its indirect costs related to the loss of potential markets for its technology are very limited since in the countries under the agreement the markets are difficult to reach; it has not protected its technology; and the value of virus resistance is limited. In return for these costs, Monsanto is able to test a cooperation with an institute and with scientists which are among the best qualified in biotechnology in Mexico. Another benefit of the programme for Monsanto is that its virus resistance will be tested in a climate with a high pressure of virus infections, and under different socio-economic circumstances.

The CINVESTAV is a network of public research institutes under the Mexican Ministry of Public Education. Since 1986, CINVESTAV concentrated its biotechnology activities mainly in the laboratory in Irapuato. The institute is involved both in basic and applied research. Most of the research is public, but CINVESTAV Irapuato has also been contracted by producers’ associations to carry out rDNA research in, for example, asparagus.
CINVESTAV took the initiative to approach Monsanto for accessing its virus resistance technology together with ISAAA. It succeeded in not only transferring the resistance gene to the variety Alpha, but to some other Mexican varieties as well. According to the agreement, CINVESTAV has the right to "apply for plant breeders’ rights protection (...) in its own name" for the transgenic potatoes it develops within the areas to which the agreement applies. According to Luis Herrera Estrella, research coordinator at CINVESTAV, the institute will most probably apply for this type of protection to prevent others from gaining control over the distribution of the transgenic varieties. CINVESTAV does not intend to charge any premium for the transgenic varieties, and will try to avoid others doing this.
The parties agreed that "CINVESTAV shall obtain or cause to obtain all necessary governmental approvals prior to introduction of Transgenic Potato Plants (...) in any country within the Territory in which the Transgenic Potato Plants or their progeny may be used or sold. Monsanto may, at its option, provide scientific information and/or data in support of such governmental approvals". This requirement especially refers to biosafety and food safety regulations, and is a logical requirement regarding the interest of both parties involved. CINVESTAV received biosafety approval for the production of the transgenic Alpha. According to current Mexican law, the potato does not need a food safety approval. Nevertheless, CINVESTAV will urge a decision of the Mexican government in order to force legislation in this respect.
CINVESTAV invested in the salaries and infrastructure, and dedicated its best people to the programme. Although the gene and transgenic plant were not protected in Mexico, and therefore could have been used by CINVESTAV anyhow, the training and direct transfer means a saving of time and money to develop the transgenic potatoes. The programme includes many benefits for the institute. General knowledge about plant transformation, virology, biosafety and field tests is likely to be useful to other programmes and crops of CINVESTAV. According to CINVESTAV, it now has the capabilities to establish the protocols for transformation of other varieties and species. Moreover, the project enabled CINVESTAV to build its capacity in product development, and work in this together with several institutions.

Mexico’s potato sector
In 1992, Mexico produced around 1.2 million tonnes of potatoes on about 72,000 ha. Of this production, 80 per cent was destined for the national urban fresh potato market, 13 per cent were seed potatoes, and 7 per cent found its way to the processing industry. Both import and export of potatoes are negligible and the import of seed potatoes has been forbidden since 1991. Within the North America Free Trade Agreement (NAFTA) domestic production of seed and fresh potatoes is protected until 2004.
The Mexican potato sector is heterogeneous, but can roughly be divided into two groups. One group of producers cultivates the so-called "white" varieties, of which Alpha is by far the most widespread. This group includes the largest farmers, and is mainly based in North and Central Mexico. In the State Sinaloa, for example, 9 producers control 67 per cent of the acreage planted with potato (with an average of 500 ha.), while the 50 largest producers control 96 per cent. Most growers in this group have access to irrigation, which enables them to yield 21 tonnes per ha. on average (1980-1990). Irrigation also enables potato production all year round, which makes it possible to anticipate higher market prices. Some producers have access to refrigerated storage facilities to store their harvest.
A second group focuses on "coloured" varieties, such as Rosita, Norteña, Monserrat and Mexicana. It mainly consists of small-scale farmers, concentrated in Central Mexico. Their production depends on natural precipitation, which restricts the growing season and results in generally low and fluctuating market prices at the end of it. Their average yield is 10 tonnes/ha.
Both the coloured and white varieties are treated with high levels of chemical fertilizers, insecticides, fungicides and nematocides. The costs of agro-chemicals account for 25 to 30 per cent of the total production costs. The high production costs imply a high level of investment, which restricts many small-scale farmers in the acreage they can plant. Additionally, these investments include a high financial risk given the uncertain market prices. Production cost per hectare of the Alpha variety is about one and a half times to twice as high as of the coloured varieties. An extensive study of ORSTOM and Colegio de Postgraduados on the potato cultivation in Central Mexico gives details about the different strategies farmers have adopted to decrease the level of investment and associated risks. For example, in the Central Mexican States Puebla and Veracruz, around 25 per cent of the small-scale producers cultivate their potatoes in sharecropping, which increases their access to production capital and partitions their risks.
Another strategy is to reduce seed costs, which can be as high as 40 per cent of production costs. The cheapest way to obtain seed for the next season is to save a part of last year’s yield. This practice is widespread among small-scale farmers. Seed saving, however, entails the risk of degeneration of the variety, the accumulation of diseases (especially viruses) and loss of quality because of poor storage facilities. Especially Alpha is known to suffer from these problems, and forces the producers to buy new seed potatoes every year or at least every few years. The best seeds are bought from specialized seed potato producers in Northern Mexico, but a well established alternative is to buy potatoes at the consumption market and use them as seed. The financial situation of an individual farmer is an important factor in the decision which seed to use.

The use of virus resistance
Potato production in Mexico is thus in the first place restricted by the instable potato market at the end of the growing season, the need for high investments, and poor storage facilities for seed potatoes. Diseases and pests follow in order of importance. The most important fungal disease is Phytophthora infestans, the epidemic character of which can reduce yields drastically in a short period. The poor crop rotation contributes to the pressure of diseases and pests, also including the fungal disease Rhizoctonia solani, nematodes and viruses. Nevertheless, when CINVESTAV started with the project in 1990, PVX/PVY resistance was the only technology available at that time.
Since potatoes are reproduced vegetatively, virus infections can easily be transmitted to the next generation and therefore have the tendency to augment in subsequent years. The main potato viruses can be transmitted from one plant to the other mechanically or by aphids. Therefore, virus infections can only be controlled by controlling aphids and by renewing the infected crop by virus free seed potatoes.
Although PVX and PVY viruses resistant potatoes are not addressing the most pressing problems of small-scale farmers in Mexico, and not even the most important diseases, they nevertheless could result in a decreasing need for potato growers to renew their seed material since PVX/PVY virus infections are no longer accumulated in their crop. This could reduce the high investment costs, of which seed costs are, on average, a significant part.
To realize this potential benefit for small-scale farmers, the programme faces the problem of reaching its target group. So far, it has only been the large-scale farmers that have expressed their interest in the PVX/PVY resistant potatoes. Small-scale farmers are difficult to reach, since they generally do not acquire their seed potatoes from the seed potato market.
Horsch of Monsanto hopes that "the smaller benefit of the virus resistance will be the catalyst to bring greater value of clean planting stock to resource poor farmers in Mexico" by "the development of an infrastructure to supply clean certified seed of the best germplasm with improved traits." Indeed, it can be expected that a regular renewal of seed potatoes by small-scale farmers would contribute to higher yields of improved quality, which would go far beyond the benefit of PVX/PVY virus protection. But, such a regular renewal of certified seed potatoes would include a steep increase in seed costs for the individual small-scale farmer. As stated above, in the current context it is the high investments and the great risk due to fluctuating market prices that are the main limitations to small-scale potato production in Mexico. Since introduction of the transgenic potato will not resolve these financial problems, it is unlikely that PVX/PVY virus resistance as a characteristic is interesting enough to convince small-scale farmers to renew their seed potato regularly, or even to invest once in the transgenic potato seed themselves.
The programme is aware of this problem, and is therefore thinking of alternative strategies to bring the transgenic potato to the small-scale farmer. According to Anatole Krattiger of ISAAA, several plans are being considered in collaboration with CINVESTAV, INIFAP, NGOs and small-scale farming communities. For example, ideas exist to charge a premium for Alpha and use that premium to reduce the price of seed potatoes of Rosita for small-scale farmers, or provide credit facilities for interested farmers. However, the programme might wait with a distribution strategy for the transgenic Rosita variety to become available, or even for additional characteristics, such as resistance to potato leaf roll virus (PLRV), to be incorporated into one variety (see below).
Meanwhile, the transgenic potato variety might reach the small-scale potato growers through a ‘trickle down’ effect. The new transgenic variety seems to include benefits for the (large-scale) potato seed producers, since PVX/PVY virus resistance might result in lower costs to produce virus-free, certified seed potatoes. Their main customers, Mexico’s large-scale potato growers, already expressed their interest in the transgenic Alpha variety as well. Consequently, if the share of the transgenic potato increases in the future, it is becoming more and more likely that the potatoes the small-scale farmer buys on the market of consumption potatoes to use as seed, are transgenic ones.

Counting the benefits
The programme included benefits for Monsanto, especially since it had nominal costs. However, the programme seems to be particularly interesting for CINVESTAV, which in a relatively short period has had the possibility to train its scientists in the whole process from the construction of the vector to the evaluation of field tests. The effort of CINVESTAV to incorporate PVX/PVY resistance of Mexico’s potato varieties can be considered as part of a long-term investment in acquiring general knowledge and experience about genetic engineering in potatoes, which it can also apply in other crops and related technologies.
The benefit of the particular characteristic for the explicitly mentioned target group, the small-scale Mexican potato grower, is probably very limited. But this could change in the future since new ideas to continue with genetic engineering have been born at the institute. Recently, CINVESTAV reached an agreement with Monsanto to donate technology to confer resistance to PLRV. It aims to incorporate the trait into the PVX/PVY resistant potato varieties. However, no test results on the effectiveness of this new PLRV resistance gene in the potato varieties are available yet. Another future target might be Phytophthora resistance, of which the importance has already been mentioned. This is likely to be more difficult to achieve, since this trait is possibly multigenic and less understood. Moreover, the target fungus is rather variable. Mogen, the Netherlands, Cornell University, USA and Purdue University, USA, possess a gene expressing Phytophthora resistance in potato that is not protected in Mexico. So far, however, no successful field tests were carried out. At best, it will take a few years before biotechnology may offer a solution. A last target for CINVESTAV, is to combine the various resistances traits in a single variety.

Is there a future for gene donations?
The donation of genes by northern private companies to southern public institutes is not unique, since ISAAA have mediated several of them. If this programme shows that such programmes could include advantages for both donor and recipient, and, depending on the trait, could also benefit small-scale farmers in developing country, is it likely to expect that a new technology transfer model is emerging? Several factors are likely to determine these private public collaborations in biotechnology:

Certainly new private-public cooperation projects will follow the model of the CINVESTAV-Monsanto programme. It can be expected, however, that the character of these collaborations will slowly change. Because of the interests of both the receiving organizations and the target groups, it is likely that the content of these cooperations will show moderate growth in importance and economic value. But along with a growing value of these gene donations, the donor company will want to share in the profits. Consequently, the agreements are likely to become less altruistic, and will gradually evolve into commercial agreements between Northern private companies and Southern partners following more and more the principles of the market.
Peter Commandeur

Editor Biotechnology and Development Monitor.

Rafael Rivera Bustamente (1995), "An Example of Transfer of Proprietary Technology from the Private Sector to a Developing Country." In: D.W. Altman and K.N. Watanabe, Plant Biotechnology Transfer to Developing Countries. Austin, Texas, USA: R.G. Landes Company. pp.159-168.

Anne Biarnès, Jean-Philippe Colin and Ma. de Jesús Santiago Cruz (eds.) (1995), Agroeconomía de la Papa en México. Mexico: ORSTOM/Colegio de Postgraduados.

Press Releases Monsanto/CINVESTAV/ NatureMark, November 1995.

Personal communications with Victor Villalobos and Luis Herrera Estrella, (CINVESTAV Irapuato); José Luis Solleiro (Technology Innovation Center, UNAM, Mexico); Anatole Krattiger (ISAAA); Rob Horsch (Monsanto).

Contributions to the Biotechnology and Development Monitor are not covered by any copyright. Exerpts may be translated or reproduced without prior permission (with exception of parts reproduced from third sources), with acknowledgement of source.


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