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CGIAR and the private sector:
Public good versus proprietary technology in agricultural research
By
Gigi Manicad
Keywords:  Consultative Group on International Agricultural Research (CGIAR), Relation public-private sector, Patent law.
Correct citation: Manicad, G. (1999), "CGIAR and the Private Sector: Public good versus proprietary technology in agricultural research.". Biotechnology and Development Monitor, No. 37, p. 8-13.

The recently concluded third system review of the Consultative Group on International Agricultural Research (CGIAR) has endorsed further collaboration between the CGIAR and the private sector. In pursuing biotechnology, the CGIAR needs to forge partnerships with commercial industries that are at the forefront of this field. But how can the CGIAR’s goal of global food security be reconciled with the private sector’s profit objectives?
A contradiction and a challenge to this partnership is that technologies developed by the private sector are proprietary in nature, while those of the CGIAR are for the public good.

In the context of globalization, national and International Agricultural Research Centres (IARCs) are confronted with an eroding autonomy of states to determine their own agricultural policies. Moreover, they have to deal with the increasing dominance of private industry’s capital, technology and products. As a major consequence of growing cross-border investments, with access to markets no longer restricted by sovereign boundaries, the public sector faces declining budgets and the increasing privatization of research. In effect, agricultural research is also being globalized. The globalization of biotechnological research is manifested by the realignment of biotechnology industries. Suri Seghal, of the Belgian company Plant Genetic Systems (PGS), explains that nowadays a large number of technologies are involved in the development of a single product, and that many products are dependent on technologies and their corresponding patents owned by several companies. The complexity of these technologies and the proprietary rights involved account for the mergers and acquisitions amongst large corporations (See also Monitor No. 29). By the year 2010, at least US $20 billion per year will be at stake, which is the estimated world market potential of genetically engineered crops alone.
The CGIAR and its National Agriculture Research Systems (NARS) partners are not immune to the reality of globalization of research and the complex technologies, proprietary rights and huge costs that are involved. The 1998 CGIAR’s annual budget of about US$ 350 million only accounts for about four per cent of the total sum spent on global agricultural research in the public sector. In comparison, agricultural research investment by the private sector from countries of the Organisation for Economic Co-operation and Development (OECD) exceeds US$ 7 billion, which accounts for half of the global agricultural research. It is further estimated that at least three quarters of the investment in critical agricultural biotechnology research is in the private sector. Despite the CGIAR’s high priority claims on biotechnology, in reality biotechnology research only accounts for about a mere seven per cent of its total budget.
It is within this context that the CGIAR’s third external systems review (See also Monitor No. 33) recommends that the CGIAR forms strategic alliances with the private sector in order "to provide the best science to developing countries". The CGIAR hopes that collaboration with the private sector would facilitate the transfer of new and superior technologies to developing countries. The private sector is a broad category that includes small enterprises and farming economies. However, this article will only focus on the multinational companies.

Mutual and complex interests
In 1995 the CGIAR established the Private Sector Committee (PSC), composed of private sector representatives. The PSC is not intended to raise funds for the CGIAR; rather, it was designed as a means of improving the dialogue between the CGIAR and the private sector.
Like any other collaboration between different parties, searching for mutual interest between the CGIAR and the private sector requires an understanding of the corresponding costs, benefits and compromises. For example, to improve its collected germplasm and elite breeding materials further, the CGIAR needs to access new technology, expertise and capital in the private sector. However, why should it be in the interest of the private sector to cooperate with the CGIAR? According to Hubert Zandstra, Director General of the CGIAR’s International Potato Centre (CIP), the CGIAR is attractive for the private sector because of its global presence, with 16 centres worldwide plus numerous NARS partners in Africa, Asia and Latin America. For many governments, the CGIAR generally enjoys more credibility and goodwill than the private sector. This complements the private sectors’ interest in expanding its area of activities. Moreover, according to Zandstra, the CGIAR has a broader understanding of agricultural knowledge systems, encompassing the complexity of biological, ecological and social systems in developing countries. In addition, the CGIAR germplasm collection comprises about 600,000 accessions that are stored under ex situ conditions in its centres. This collection is kept in trust under a Convention on Biological Diversity (CBD) regulated agreement with the Food and Agriculture Organization (FAO). The CGIAR’s collection constitutes only about 15 per cent of the estimated 3.8 million samples stored ex situ worldwide, largely by the public sector. However, the CGIAR’s collection is considered to represent about 40 per cent of the unique food crop germplasm. Hence, cooperation with the CGIAR could potentially not only help the private sector to expand in area and clients, but also enhance its access to germplasm. Moreover, according to the PSC, the CGIAR provides an attractive international network for field testing mutually relevant transgenic crops in varied tropical conditions, on the condition of strict compliance with legal regulatory frameworks such as biosafety.
Sam Dryden, chair of the US Emergent Genetics Inc. (EGI), and also chair of the PSC, confirms that one of the private sector’s interests in cooperating with the CGIAR is that this could potentially lead to the development of a new market: those small-scale farmers who are in transition to fuller participation in the market economy. For the private sector, substantial value could be created for these farmers who, while being relatively poor, are great in number. For instance, it is estimated that worldwide only 20 per cent of farmers purchase commercial seed. It would therefore be attractive to tap the market potential of the remaining 80 per cent of the farmers who use farm-saved seeds.
Dryden further states that while many private companies are more comfortable in ‘known markets’ such as North America and Western Europe, the CGIAR could assist the private sector in further expanding their businesses in economies that are undergoing liberalization such as India and Vietnam. If the private sector could create more value-added products for these emerging markets, this could translate into further profit maximization, since the technologies that the private sector has developed for the ‘known markets’ could be applied to the newly emerging markets. For example, the technology for US maize, rice or cotton could respectively be applied to maize in Mexico, rice in India, or cotton in China.
The profit objective of the private sector is key in understanding and in designing collaboration with its actors. In fact, their humanitarian endeavours have always been linked with a good business sense. As Jaques Barman, President of the Swiss Novartis Foundation said "...where people grow, profits grow: this well-tried business rule is applicable to development policy as well". The private sector’s interest in the CGIAR is quite consistent with the private sector’s business policy. Especially in the context of globalization, business has to grow, and to do this it is not enough only to expand sheer capital investments. There should also be economic development to absorb capital and create more market potentials. As Klaus Leisinger, Director of the Novartis Foundation, sharply puts it: "The rich have an enlightened self-interest to help the poor…". He states that poverty, destruction of the environment, and political instability are not independent phenomena at national and international levels, and that political and economic instability in developing countries threatens the industrialized nations.
The private sector’s ‘enlightened self-interest’ based on the interrelation of economies is neither new, nor exclusive to the private sector. In fact, the basic principle holds true for most, if not all, Official Development Assistance (ODA). For example, the technologies of the Green Revolution improved the maize, wheat, potato and rice of both developing and industrialized countries. It is reported that while Italy donates about US$ 18 million per year to IARCs and an additional US$ 4 million to the CGIAR centres, the country has gained an estimated US$ 300 million per year from the improved durum germplasm accessed from the IARCs and NARS. However, there is one main difference: ODA’s organizational survival does not depend on profit, as the private sector does.
Nevertheless, the often bloated and inefficient organizations of the public sector could learn from the private sector’s management principle of organizational efficiency. However, if organizational efficiency is translated to curb research for marginalized client groups such as female farmers, subsistence farmers and those involved in orphan commodity crops, the CGIAR’s mission will be endangered.

Public good versus proprietary technology
At the presentation of the third systems review in October 1998, the CGIAR seemed to be publicly very confident in pursuing further collaboration with the private sector. However, for these partnerships the question of ownership of the technologies developed is of critical importance. So far, negotiations with regard to intellectual property rights (IPR) issues have been on a case by case basis, depending on the individual centres. The CGIAR has a provisional guideline with the principle of safeguarding publicly funded research from monopolistic controls. However, much remains to be done and the CGIAR needs to take a stronger public stance.
The third systems review recommends defensive patenting: "The public nature of the patents held by the CGIAR could be maintained by allowing the use of these patented varieties under a free license".
IPR protection to keep CGIAR’s research products within the public domain contradicts the interest of the private sector. In the meantime, the PSC criticized the CGIAR for its lack of a clear viewpoint and operational stance on IPR. According to the PSC "… it is imperative that the system outlines an operational framework which will eliminate the areas of policy ambiguity which currently plague the system and prevent more effective collaboration with the private sector… a more active approach, rather than passive is required… For example, in biotechnology research… it should develop system-wide positions on key policy areas that ultimately control the delivery of biotech research to those likely to benefit".

Examples of collaboration
It is difficult to get a concise and up-to-date picture of the actual research collaboration between the CGIAR and the private sector. To begin with, the CGIAR itself needs to gain an up-to-date overview. More importantly, the individual centres lack willingness to publicly disclose such activities. This reluctance is caused by factors such as the CGIAR’s deficit of clear IPR policies, the highly competitive nature of advanced research, which tends to keep its ongoing projects confidential, and the possible adverse public reactions to biotechnology. Given these constraints, below are some indications.

In 1996 the PSC conducted a survey of the CGIAR centres and their collaboration with the private sector. A pattern of cooperative arrangement is indicated below: The collaboration with the private sector has already resulted in one commercial spin-off. however, this remains unspecified.

Rather than mere research for the development of specific end products, the collaboration largely pursues ‘enabling technologies’ such as germplasm exploration and exchange, germplasm evaluation, landrace improvement, seed regeneration, molecular marker technology, gene construction for transformation, field trials and evaluation of research and development of transgenic products and methods. Moreover, information is not only exchanged on technical matters, but also on IPR implications for developing countries. Additionally, aside from crops that are both for temperate and tropical areas, such as maize, rice, potatoes and sorghum, many target crops are from the tropics, such as banana, cacao, cassava, pearl millet and pigeon peas. Cooperation also involves tropical trees and livestock. The extent of collaboration between the CGIAR and the private sector has so far been very modest, both in the number of activities and the funding involved. However, the table on page 12 notably indicates that the collaboration concentrates on strategic research that could further enable the CGIAR and their NARS partners to acquire and utilize biotechnology for further strategic purposes. An assessment of the mechanics and lessons from these collaborations would have been greatly relevant for policy making, not only to the CGIAR and their partners, but also to the wider agricultural research community. Unfortunately, such assessment is not available.
 
Current and potential collaboration between the CGIAR, developing country NARS and the private sector in genetic resources research
Centre Collaboration with
the private sector
NARS
involvement
Nature of collaboration Private sector(s) involved Potentials for further collaboration
with private sector
Yes No Yes No
CIAT *   *   acquisition of gene and gene construct for transformation; licensing technologies for transfer to NARS Novartis technology acquisition from private sector; collaboration with private companies for research/development in transgenic products and methods
CIFOR *   *   information exchange no data tree improvement; in situ biodiversity conservation
CIMMYT *   *   evaluation of maize accessions of the genebanks of the Latin American Maize Programme Pioneer germplasm evaluation; gene introgression temperate-tropical maize and vice versa
CIP *   *   development of transgenic potatoes with increased resistance to pest and diseases • PGS
• Axis Genetics
• Smart Plant International
• Monsanto (in future)
development of transgenic potatoes and sweet potatoes with increased resistance to pest and diseases; post harvest and marketing qualities; discovery of valuable genes in germplasm
 ICARDA   * *       joint technology development in DNA markers for genome analysis and transgenic crops
ICLARM   *         genebanking
ICRAF   * *   genetic exploration and conservation of tropical trees which produce medicinal products   genetic selection and improvement of medicinal trees for cultivation in agro-forestry systems
ICRISAT *   *   provision of parent seed lines for hybrid seed multiplication; grain for laboratory analysis; possible feedback of trial data; collaborative evaluation of private sector materials no data application of molecular marker technology to improve hybrid parental lines: constraint analysis and impact assessment; use of sorghum and millet for malting beer and other products;  transfer of hybrid seed production technology in sorghum to private entrepreneurs; cytoplasmic and genomic diversification in sorghum and pearl millet
IFPRI   *        
IITA   * *       project on bananas
ILRI   * *       plant germplasm and improvement of livestock
IPGRI *   *   indirect and ad hoc in nature; informal consultations; information dissemination no data forest management for gene conservation activities; under utilized species; landrace improvement and seed multiplication projects; seed regeneration and expert system development, conservation of cacao genetic resources
IRRI *    *    Bt rice research, Xa21 chitinase yield enhancing genes • Plantech
• Novartis
strengthening genetic resources capabilities of NARS, e.g. training sponsorship, facilitate purchase and upgrading of facilities
ISNAR    *       study on IPR and implications for NARS      
WARDA    *    *         
Sources: PSC (1996), Summary of Responses to the Survey of the CGIAR Centres; Personal communications

Policy making versus the rhetorical quagmire
Much has still to be worked out between the CGIAR and the private sector. If they are to collaborate further, they have to identify each other’s common interest and understand their differences. Moreover, many other members of the private sector have still to get acquainted with the CGIAR. Policy dialogues must continue, but this should not be confined within the CGIAR and the private sector only. Other stakeholders such as the National Agricultural Research Institutes (NARIs), universities, and Non-Governmental Organizations (NGOs) farmers’ organizations and farming communities from whom germplasm has been collected can significantly contribute towards policy regarding CGIAR-private sector collaboration. For instance, the success and failure of such collaboration should be guided and assessed according to its benefit to small-scale farmers .
Despite the gradually increasing dialogue amongst these actors, suspicions remain. Particularly, the NGOs remain very suspicious, and with many good reasons. The Green Revolution has resulted in tremendous increases in yield especially in Asia and Latin America. However, the Green Revolution has also benefited large agro-chemical companies at the expense of the environment and the many farmers who have been further marginalized as a result of increased production cost and decreased prices of their produce. However, polarization of issues, particularly in agricultural research, has never been useful, and certainly not for farmers.
NGOs and the other actors cannot afford to isolate themselves in policy discussions about research collaboration between the public and private sectors. Critics have very legitimate concerns that small-scale farmers in developing countries should not be exploited for the purely commercial gains of private industries. However, it seems counter-productive to criticize public-private sector collaboration simply because of the profit objectives of the private sector. Obviously, profit is the raison d’être of the private sector. They have their vested interest, despite all the philanthropic rhetoric. It would be more productive to influence the public accountability of private industries. Private companies want not only to give their shareholders a return on their investments, but also to maintain a credible public image. Civil societies should continue to exert considerable pressure on the public accountability of private companies.
It is also counter-productive to criticize the CGIAR for failing to eradicate poverty, despite the CGIAR’s ill-advised rhetoric of poverty eradication. The root cause of poverty is the grossly unequal access to productive resources. How can agricultural research ever change this unequal distribution? It simply cannot. Nevertheless, agricultural research plays a very important role in the sustainable improvement of agricultural production for small-scale farmers in developing countries. This alone is a very legitimate goal. Agricultural research needs to be integrated into the wider context of poverty alleviation. For this, the expertise of actors in the broader field of development work is needed, including actors involved in institutional reforms such as land distribution, price and tax reforms and human rights.
Given the direction of agricultural research, and the growing dominance of the private sector, would it not be productive to try, within realistic boundaries, to influence the private sector research agenda for the benefit of the public good? It will help to pursue a vigorous dialogue amongst all the actors concerned. Towards this end, the CGIAR should make public its assessment of actual research collaboration with the private sector, including lessons learned in segmenting markets, IPR regulations, and the implementation of biosafety and management of pest resistance in transgenic crops. In research areas that are identified as being of critical importance to small-scale farmers, but are not covered by such collaboration, the budgets of the public sector should be increased. After all, collaboration could be ideal but dependence of the CGIAR to the private sector would be detrimental for the public good.
Gigi Manicad

Editor, Biotechnology and Development Monitor

Sources
Leisinger, K.M. (1988), "Sustainable Development at the End of the Century: Perceptions and outlook". International Journal for Sustainable Development, Vol.1, No.1.

Novartis (1998), Report of the Novartis Foundation for Sustainable Development. Basel, Switzerland: Novartis Foundation.

PSC (1995 -1998), Several unpublished reports. Washington DC, USA: CGIAR.

Strong, M., et al. (1998), The International Research Partnership for Food Security and Sustainable Agriculture. Third systems review of the Consultative Group on International Agricultural Research (CGIAR). Washington DC, USA: CGIAR.

Wagner, C.K. (1995), "The International Agricultural Research Centre: Poised for change". Technology in Society, Vol. 17, No. 4 pp. 437-451.

Personal communications with: M. Ghislain, H. Zandstra (CIP), M. Lantin, S. Özgediz (CGIAR), M.S. Swaminathan (Genetic Resources Policy Committee, CGIAR), R. Cantrell, W. Padolina (IRRI), C. Falconi (ISNAR), K. Leisinger (Novartis Foundation), and S. Dryden (PSC).



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