Business Potential for Agricultural Biotechnology - Asian Productivity ...

Business Potential for Agricultural Biotechnology Products
for SMEs and large-scale firms in this industry. The production of orchids via tissue culture is
another example of activities carried out by SMEs with an eye to the potential market. Annual
production of orchids via tissue culture alone was estimated at USD13 million for 2003, of
which USD8.7 million was for the export market.
To spur growth and further development of the biotechnology industry, the government
offers attractive investment incentives to local and foreign-owned companies. Besides those incentives,
Malaysia has established the Malaysian Biotechnology Corporation, a one-stop agency
that has as its primary objective developing the country’s biotech industry. The government has
also extended attractive tax incentives to further spearhead the modernization and commercialization
of the agricultural sector. These include a 100% deduction on capital expenditure, pioneer
status, or investment tax allowance. To further expand food production, companies are provided
with an investment allowance or group relief, while their subsidiaries undertaking the projects
are given 100% tax exemption until 2010. These incentives also apply to all foreign companies
investing in Malaysia.
Business Potential for Agricultural Biotechnology Products in the Philippines: The
National Agricultural Research System Experience
While the Philippines has experienced several challenges over the past two decades in
embracing of modern biotechnology, it has nonetheless achieved a number of milestones necessary
for the growth of the agricultural biotech industry, specifically in areas relating to capability
building, regulation, IPR, and public acceptance. Core competencies have been established in
developing and evaluating biotechnology products produced in the country as well as those from
other countries. The National Committee on Biosafety of the Philippines was established and the
commercialization guidelines for modern agricultural biotechnology products were issued. The
country responded to the threat of biopiracy with Executive Order 247 and Republic Act 9147,
ensuring that benefits accrue to the appropriate stakeholders. Likewise, the Plant Variety Protection
Law was enacted to protect the intellectual properties of technology generators. Public
acceptance was clearly attained last year when the Philippines joined for the first time the megacountry
group producing agricultural biotech products. The Agriculture and Fisheries Modernization
Act passed in 1997 provides for the allocation of specific funds for the development of
modern biotechnology, more open and transparent dialogue among key stakeholders, including
government, the private sector, academia, NGOs, and farmers. Recently the President approved
the formation of a biotechnology industry cluster.
Most agri-biotech products that have reached the market are conventional biotechnologies.
These include biofertilizers, biopesticides, tissue cultured planting materials, enzyme products,
vaccines, and diagnostic and detection kits. Most of these products were developed by the University
of the Philippines at Los Baños-National Institute of Biotechnology and Molecular Biology
(UPLB–BIOTECH), funded by the government. Commercialization was carried out primarily
by UPLB–BIOTECH, with limited private sector participation. Currently, among genetically
modified products, only Bt corn has been commercialized. Major challenges impacting
the commercialization of these products include a lack of awareness by the general public on
product benefits and safety, the absence of market orientation from research to enterprise, and
limited policy support on price, transport, microfinancing, and technical assistance. Initiatives
being undertaken to address these challenges include the education of local government units on
biotechnology, the formation of bio-industry clusters and e-networks, policy advocacy on important
enabling mechanisms to support industry, and intensive retooling for developing global
entrepreneurial scientists and corporate public servants.
– 16 –