World Investment Report 2009: Transnational Corporations - Unctad

184 World Investment Report 2009: Transnational Corporations, Agricultural Production and Development
Public-private partnerships (PPPs) for R&D
that involve TNCs can be a principal policy instrument
to foster innovation, to make agricultural R&D more
responsive to local needs, to reduce costs and to
spread the project risks between the partners involved
(chapter IV). 31 However, PPPs may create costs as
well as benefits. A major challenge is to connect
the knowledge generated in TNCs, universities and
national research institutes with the knowledge
nurtured and held by farmers themselves, although
indigenous knowledge and traditional practices may
need to be specifically protected. Policymakers
can facilitate these PPPs by providing incentives
for innovation through low-interest grants that cofinance
both R&D and the pilot testing of innovation.
In fostering such PPPs, a typical option is to promote
collaboration with international agricultural research
institutions, such as the Consultative Group on
International Agricultural Research (CGIAR). 32
Establishing seed and technology centres in
the form of PPPs can ensure the required technology
transfer and capacity-building to adapt seeds
and related farming technologies to local needs and
conditions, distribution to local farmers, as well
as build long-term indigenous capacities. This is
especially important with regard to bringing the
“green revolution” to Africa. A sound institutional
framework needs to be put in place that supports
these strategies, and at the same time addresses the
dependency concerns that have arisen with them.
Investing in trade (and investment) facilitation is
equally important.
Third, if the above conditions of general
acceptance of agricultural R&D and sufficient
domestic endowments are fulfilled, policies need to
aim at ensuring that TNCs’ research activities take into
account the host country’s development needs (box
V.12). In this context, the International Assessment
of Agricultural Knowledge, Science and Technology
for Development (IAASTD, 2009) pointed out
that agricultural science and technology should be
redirected to ensure that it addresses the needs of
smallholders in developing countries, and that it
meets the challenge of sustainability, particularly in
the context of climate change. 33 This includes, for
instance, the issue of which crops to promote. They
should be considered in the context of the economic
and ecological environments of the host country, and
their role in the livelihoods of the poor. Also, problems
such as availability and cost of good quality seeds, soil
degradation, and post-harvest losses, could be tackled
with relatively simple technologies and investments,
provided the diffusion of such technologies and such
investments are redefined as a priority. International
agricultural research projects with substantial payoffs
for a large number of beneficiaries should be given
priority.
The CGIAR centres have identified examples
of “best bets” in agricultural research. These include
programmes to revitalize yield growth in the intensive
cereal production systems in Asia, ensure productive
and resilient small-scale fisheries, address threatening
pests such virulent wheat rust, tackle cattle diseases
such as East Coast Fever, breed drought-resistant
maize in Africa, and scale up bio-fortification of food
crops (von Braun et al., 2008). Many of these projects
offer considerable opportunities for PPPs in planning
and execution, with shared costs, risks and benefits
(Spielman, Hartwich and von Grebmer, 2007).
Host-country policies also need to consider
the role of intellectual property rights (IPRs) in the
promotion of agricultural research. The major forms of
IPRs that concern TNCs’ activities in agriculture and
related R&D are patents on life forms, pesticides, and
fertilizers; plant variety rights; and marks, including
certain trademarks and geographical indications. It
is not evident that agricultural development in the
developing world would benefit from a stronger IPR
regime, since public sector involvement in agriculture,
development assistance, and trade and investment
flows may suggest that IPRs are not the most critical
factors for promoting innovation in many developing
countries (Falck-Zepeda et al., 2008; Lesser, 2003).
Furthermore, there is considerable controversy
about how TNCs, which are often the holders of the
exclusive rights conferred by IPRs, manage their
intellectual property (IP) in the field of agriculture. 34
This WIR does not take a position as to whether or not
such exclusive rights ought to be granted; instead it
focuses on the interests that need to be balanced by
host countries in order to maximize the contribution of
TNCs to a developing country’s needs in agriculture.
Host countries that seek to attract TNCs
that undertake agricultural R&D need to design
an appropriate legal framework for IP, including
enforcement of rights. The WTO Agreement on
Trade-related Aspects of Intellectual Property Rights
(TRIPS Agreement) imposes on member countries
an obligation to provide a minimum standard of
protection for a range of IPRs. The actual standard
of protection, however, differs significantly among
WTO members. Developing countries could use
their regulatory discretion under the WTO to adapt
their IP legislation to their needs. For instance, they
could opt to provide plant variety protection in lieu of
permitting the patenting of plants. Such plant variety
protection systems are “sui generis rights”, which
can be tailored, for example, by explicitly mandating
open access to protected varieties for purposes of
adaptation and breeding of new varieties, and granting
farmers privileges to reuse seeds, thereby allowing
the diffusion of seed technologies.
M&As of biotechnology companies that aim at
creating alliances and cooperation across the industry
and globally have often led to the concentration of
IPRs, which may affect the ability of developing
countries to negotiate for access to proprietary