Hope Not Hype - Third World Network

106 Hope Not Hype
From new drugs to better seeds, the best of the new technologies are priced for those who can
pay. For poor people, they remain far out of reach (UNDP, 1999, p. 6).
The consolidation of the seed industry has been led by the agrochemical companies
which are rapidly converting into biotechnology companies as a result of IPR law changes.
The large multinational agro-chemical companies were the early investors in the development
of [transgenic cotton, corn, canola, and soybean] crops. One of the reasons that agro-chemical
companies got into the act was that they foresaw a declining market for pesticides. The chemical
companies got a quick start in the plant improvement business by purchasing existing seed
companies, first in industrialized countries and then in the developing world…Acquisitions
also represented an efficient means of obtaining the smaller firms’ intellectual property and
know-how, much simpler than replication or ‘inventing around’ it. The industry can now be
characterized by a few ‘mega-firms’, with combined capabilities in biotechnology,
agrochemicals, and seeds (Pingali and Traxler, 2002, p. 227).
The private sector in developed countries outspends the public on agricultural
innovation 55% to 45%, with the top six agrochemical/biotechnology companies spending
US$3.5 billion, or eight times the research budget of the Consultative Group on International
Agricultural Research (CGIAR) system (Spielman, 2007). The combination of agricultural
innovation shifting to the “mega-corporations”, and the appropriability made possible
through the unprecedented changes in IPR laws, is altering long-term and successful
agricultural practices and farmers’ rights such as seed saving, while threatening long-term
sustainability of agricultural innovation coming from both the private and public sectors.
The Assessment came to agree that:
Much of the economics discussion of agricultural R&D and agricultural R&D policy refers
to the public goods nature of agricultural R&D, and the market failures associated with the
reliance on private provision. It would seem to follow that the natural solution is for the
government to intervene to correct the market failure by providing agricultural R&D, like
other public goods, financed by general government revenues. Such analysis and prescription
is too simple, however, because most forms of agricultural R&D are not pure public goods;
and, consequently, other interventions may be fairer, more effective, or more efficient ways
to correct problems of underinvestment (Pardey et al., 2007, p. 38).
To achieve a path where investment in agricultural innovation follows the needs of
the majority, there will have to be systematic and far-ranging changes. These must extend
well beyond tinkering with IPR laws. The changes will require that trade policies and
subsidies be the subject of major renovation. The details of trade policy revision are beyond
the scope of this book. What will be discussed below are the immediate prevailing costs of
the current and growing concentration of legal and economic power in the megacorporations.