Policy Options for Developing Countries:
Getting into the agricultural biotechnology act?
Carliene Brenner
Keywords:  Policies/Programmes; Relation public-private sector; Organisation for Economic Co-operation and Development (OECD). 
Correct citation: Brenner, C. (1996), "Policy Options for Developing Countries: Getting into the agricultural biotechnology act?" Biotechnology and Development Monitor, No. 29, p. 16­18. 

Biotechnology offers the potential of more environmentally-friendly agricultural production for developing countries than the chemical-intensive model of the Green Revolution. However, its potential will be realized only if certain conditions are met. These may involve difficult policy choices and trade-offs, of which countries need to be aware.

The Development Centre of the Organisation for Economic Development and Co-operation (OECD) has conducted a number of policy-oriented research projects, including country studies in Latin America, Asia and Africa, related to biotechnology over the past several years (see box). The research has focused on a diversity of countries, with varying levels of technological development in agriculture, agricultural research capacities and biotechnology research. Nevertheless, common problems are found in the different countries, such as isolated and uncoordinated research, scarce public funds, and the lack of comparison with conventional alternatives.

Isolated research
Thus far, biotechnology research in developing countries has generally been science-driven and ad hoc. Countries have focused attention essentially on the supply side of biotechnology and, in particular, on the training of scientists in the relevant disciplines: molecular biology, biochemistry and microbiology.
In contrast, little effort has been made to set clear priorities and to integrate research efforts with the broader objectives set for agricultural research. Virtually no attention has been paid to the demand side of the products of biotechnology and to the ways in which biotechnology could best contribute to solving farmersí production problems. Furthermore, in most countries there is little interaction among the different actors and institutions most closely involved with biotechnology R&D and diffusion: for example, among biotechnologists and plant breeders; the public and private sectors; scientists and farmers; and among the scientific community and policy-makers.

Low public budgets
In the growing number of countries that have opted for structural adjustment and liberalization, public budgets for R&D and the diffusion of new technology (through national extension systems) have decreased. While in principle, privatization of public sector institutions and activities is being encouraged, biotechnology research remains largely in the public sector. Indeed, public research institutions at times compete (rather than collaborate) for scarce resources. More important, there is little interaction and/or collaboration between the public and private sectors. In addition, few incentives have been provided to encourage private sector interest in the development and application of biotechnology products. Thailandís efforts in this direction include a system of soft loans for public-private research initiatives. Tax incentives in the form of reduced import duties for research equipment and material have been introduced and it is also possible to deduct R&D costs at the rate of 150 per cent before taxation.
In Colombia, the Colombian Corporation for the Industrial Development of Biotechnology (CORPOBIOT) is an institutional innovation which regroups three public research institutes and seven important enterprises. CORPOBIOT was created to link public research centres and industry in biotechnology product development and the up-scaling of related bio-processing.

No comparison with traditional methods
Despite scarce and increasingly stringent financial resources, little attention has yet been paid to the costs or benefits of biotechnology over other technologies or over more traditional methods. Furthermore, little pressure has been exerted to ensure accountability with respect to biotechnology research projects and programmes. Very little evidence was found on the costs of biotechnology research, the comparative costs of final biotechnology products, or of the actual or potential cost/benefit to farmers.
In Zimbabwe, studies on the use of fertilizer and inoculants in soya beans suggest that, depending on soil fertility and rainfall, inoculant use can be considerably more cost effective than fertilizer application. In India, studies on the use of biopesticides in cotton and paddy indicated savings of only 5 per cent on total input costs and productivity gains in the range between -5 and +5 per cent. This fragmentary evidence indicates a pressing need for more in-depth analysis of short and long-term economic and social costs and benefits.

National systems of innovation
Thus one of the major lessons learnt from combined country experiences is that there is little realization of the strengths and weaknesses inherent in the national system of innovation and, hence, of the factors which will largely dictate the success or failure of developments in biotechnology beyond the laboratory. Perhaps the single most important finding of this accumulated research experience is that the path from research to development and to the dissemination of a biotechnology product is fraught with uncertainty. Successful transfer from the laboratory to the farmerís field depends on a number of crucial links and interactions among public and private entities involved, both national and international, and between government policies and market forces.
Clearly each country should formulate its own strategy or policy for biotechnology in agriculture. This would need to be a function of the priorities set for agriculture and of its particular agricultural production system, its particular institutions and the level of its scientific and technological capabilities. Basically, countries have a range of policy options between two opposite approaches: ad hoc and integrated.

The OECDís Development Centreís research

The OECD Development Centreís involvement in research related to biotechnology dates from a project on Biotechnology and Developing Country Agriculture: The case of maize, undertaken in 1987-89. This study, which includes 4 developing country studies, addresses the impact of new developments in maize biotechnology in industrialized countries on the relative position of developing countries. 

A second project, Technology and Developing Country Agriculture: The impact of economic reform (1990-92), focused on the implications of structural adjustment, liberalization and changes in the public/private sector balance for technological innovation and productivity in developing countriesí agriculture. This research includes studies concerned with a wider range of technologies and a study on biotechnology in cocoa. 

A third project entitled Integrating Biotechnology in Agriculture: Incentives, constraints and country experiences (1995) examines the nature and scope of biotechnology research by comparing the situation in different countries. It also studies the mechanisms and structures impeding or facilitating the transition from the laboratory to the farmerís field. Among the countries included in this research are: Brazil, Colombia, India, Indonesia, Malawi, Mexico, Thailand, Zambia, Zimbabwe. 

The prices of the reports of these studies range from US$ 19 to US$ 24. A full list of publications, and most case studies and technical papers can be obtained free-of-charge. For orders and information: OECD Development Centre, Publications and Information, 94 rue Chardon-Lagache, 75016 Paris, France.

The ad hoc approach
The ad hoc approach may have some advantages, at least in the short term. The most obvious of these would be the free rein given to the scientific community to advance scientific frontiers in their particular field, provided sufficient financial resources can be raised and the appropriate research infrastructure is in place.
On the other hand, a number of risks are inherent in this approach. These include the dispersal rather than concentration of effort on disparate, unrelated projects and programmes and, consequently, a risk of duplication of effort or even of "reinventing the wheel". The net result is likely to be inefficient use of scarce resources.
An additional disadvantage of this approach if that scientists are likely to work on projects of their own design, in their areas of personal interest, with little effort concentrated on research leading to technologies for which demand may be strongest.
A third risk arises when biotechnology research is essentially science-driven and remains increasingly concentrated in universities which, in most developing countries, have little tradition of interaction with farmers or with the private sector. It is then likely that research will be unrelated either to the perceived needs of agricultural producers, or to the development of technologies which are perceived as having strong market potential and therefore of interest to private firms.

The integrated approach
If, on the other hand, countries opt for the integrated approach for biotechnology, policy intervention will be required. In this approach effort is made to ensure that biotechnology research is at the service of problems confronting agriculture and agricultural producers. However, the options within this approach are neither clear nor straightforward.
A diversity of interest groups and/or stakeholders should be involved in the formulation of a national biotechnology strategy, policy or plan, in deciding on the broad lines of the strategy and in awarding broad priorities. These stakeholders should include, at the very least, agriculture, science and technology, and education decision-makers; agricultural producers and producer associations; public research institutions, particularly the traditional agricultural research institutes; the appropriate regulatory bodies; and the private sector.
This representative group of stakeholders - or National Biotechnology Forum - would be called upon, inter alia, to make proposals regarding, for example, the kinds of institutional arrangements for biotechnology most appropriate in the particular country circumstances. For example, should a separate, centralized national biotechnology institute be envisaged? Or should biotechnology research be decentralized, with biotechnology integrated in traditional agricultural research programmes?
Most of the countries studied have moved beyond a purely "ad hoc" approach. However, non as yet has a clearly-defined national policy for agricultural biotechnology. Colombia, India, Thailand and Zimbabwe have set up national biotechnology institutions. Only the latter three countries have biosafety procedures in place and the question of IPRís related to biotechnology is still unresolved in most countries.

Scarce resources
One major policy issue to be addressed would be the share of scarce public resources (both financial and human) to be diverted to biotechnology research. To what extent should resources be allocated to biotechnology R&D rather than to the consolidation of underpinning technologies and infrastructure (for example, plant breeding, seeds production, quality control and certification)?
Given the scarcity of financial resources, ways need to be explored for seeking new sources of funding or for sharing research costs. These ways might include: collaborative research, either between public and private sector local partners or between public and foreign private partners; national, regional or international joint research consortia; public research on crop-specific problems paid by levies raised from producer associations.
While a major share of funding for research is from public sources, private producer associations are a significant source of funding in Colombia, Kenya and Zimbabwe. Colombian public research institutions are also conducting research on passion fruit and cotton which has been commissioned by private companies or by groups of processors and exporters.
One necessary policy decision concerns the extent to which countries should conduct their own biotechnology research and attempt to develop their own technologies versus import and adaptation of biotechnologies developed elsewhere. Even if a country decides against developing its own biotechnologies, a minimum of technological capacity is required to adapt an imported technology to local climatic, ecological and production conditions.
A country might also make the deliberate choice of concentrating on the upgrading of its existing agricultural research infrastructure and institutions, developing its adaptive research capacity and taking advantage of being a "latecomer" to biotechnology. In this way, it could be reasonably assured of importing tried and tested biotechnology products, possibly at a lower cost.
Specific policy incentives to stimulate involvement of the private sector at all stages of the innovation process will also be required. Private technology markets are undeveloped in many countries. Therefore, specific measures, such as tax incentives and exemptions, will be needed to stimulate the development of technology markets and the creation of local firms.

Making a policy commitment
Whatever strategy is adopted for biotechnology, policy decisions need to be made to provide a clear regulatory framework, particularly with respect to biosafety and intellectual property rights. This will be particularly important in stimulating private sector involvement.
In the current environment of liberalization and privatization, innovative policy measures may be required for the development and diffusion of public good technologies, such as biopesticides. These technologies may have major long-term benefits but are unlikely to have short-term profitability and will therefore not be of interest to the private sector. These policy measures might involve support for innovative public/private sector partnerships or short-term guarantee of the purchase of a share of private production in order to stimulate demand.
Donor agencies will be called upon to provide both financial and technical assistance, particularly if low-income countries are to get into the biotechnology act. However, in the final analysis countries should make their own policy choices and their own decisions as to the level and scope of national commitment to biotechnology in agriculture.
Carliene Brenner

OECD Development Centre, 94 rue Chardon-Lagache, 75775 Paris Cedex 16. Fax (+33) 1 45247943. E-mail carliene.brenner@oecd.org

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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