Patenting Agriculture and Impact on Food Security

Patenting Agriculture Inputs and its impact on Food Security, Inflation and Public Health

Supreme Court has delivered an important judgement on Pharma sector.

In earlier article we discussed, in brief, various dimensions of agriculture patenting and its implications. In this article we will continue with the discussion with a focus on what is likely scenario in future for food crops.

Patenting genes and DNA and food security and inflation

Genes are fundamental to life and they hold the key information about the express or functioning of certain key characteristics in the plant. It means they cannot be invented but they can be discovered. At the same time, genes themselves are now routinely patented, typically with claims that cover the isolated gene, various constructs that include the gene, plants transformed with those constructs, and the seed and progeny of those plants.

Plants that naturally contain a given gene are not novel and therefore the patent does not apply to them or to breeding with them. But any other use of the gene, its constructs, seeds, or progeny may be prohibited. For example. The University of California patent on the Xa21 Kinase gene, which makes grains resistant to disease. The work which was done at IRRI was important to identifying the gene, and the university arranged to protect IRRI's right to use the gene.

In the knowledge intensive commercial world, everything is not in public domain, the rights to some other genes are securely in private hands, with no commitment to make them available. This is the case for some of the patents for inserting into plants the genes that code for viral coat proteins, which confer resistance to plant viruses.

A well-known case in agriculture patent debate is for many of the patents for Bacillus thuringiensis (Bt) technology, in which bacterial genes inserted into plants code for toxic proteins that kill insects. Loose granting of Bt claims has led to hundreds of often overlapping patent rights that have been the subject of substantial litigation. At least four different companies, for example, have laid claims to Bt-transformed maize. It is almost impossible for a researcher to find ways through this patent thicket.

Loose patenting on minor modifications is a serious threat to food security:

Loose granting of patent is a dangerous trend for the agriculture research systems because it not only creates unnecessary litigation but also discourages other researchers to work in and around that activity. This leads to a sub-optimum use of the bio-resources by few selected and deprive the society in advancement in the scientific research.

In fact the situation is very complex; most of the Genomic information is typically protected through trade secrecy practices, not even by patents. In this system, a company that creates a substantial database or map of a genome provides access only under agreed terms, which might include a mechanism for compensation. It has good and well bad implications. This model is also the basis for important international non-profit cooperation. For example, because rice is so important to the world's poor and its genome is smaller than that of some other cereals, a global genome sequencing effort is being carried out by Japan, Korea, China, the United States, the European Union, and the Rockefeller Foundation through the International Rice Genome Sequence Working Group. Information will be placed into public databases, and the participants have agreed not to file patent applications on the sequences.

Many private sector companies has also developed a gene sequence of its own and has agreed to make its genomic rice information available for public breeding in developing nations but the many other companies completed a rice sequence and have promised to provide information and technology for developing world subsistence farming, but they are not putting their sequences in the public domain. Moreover, many of the important rice genes may be patented, and it is not clear that other genomes or the genomes of major pathogens will be as readily available. It means commercial interest, not the society’s interest, will decide the introduction of technology.

Growing threat of Monopoly behaviour of cartels in Agriculture Production System:

The way trends are going, the fittest of survival will be the deciding factor and all options will be used to kill the emerging threat or competition. The patenting trend is paralleled by an enormous concentration of agricultural biotechnology. Large crop research companies--Aventis, Dow Chemical, DuPont, Monsanto, Syngenta, etc. -- now control a substantial piece of the agricultural patent portfolio.

How these companies are gaining monopoly powers:

Big companies have big plans and well thought out strategy. The execution of these game plans is also very well crafted.

1.As first phase of the strategy these firms have been purchasing smaller biotechnology companies in developing world in order to obtain the technologies those companies have developed and to avoid present and future competition.

2. In Phase two of the strategy of these companies, it is important to acquire or merge with chemical and pharmaceutical companies for access to production capacity and chemical markets, and

3. In the third phase of the strategy is to buy seed firms throughout the world to improve their ability to market new products at low cost.

In this process, they have assembled broad intellectual property portfolios.

If business corporations are the gainers, who is the looser?

As the concentration of the industry is growing, the amount of agricultural research is shrinking. Government departments have not delivered due to various reasons. The reduction may in part be a response to recent environmental and consumer criticism of bioengineered foods, but it may also stem from decreased incentive for research because of industry consolidation. Policy makers are thinking, when there is no outcome from the R&D systems and they cannot deliver better than commercial research organizations, why to spend more on research?

Developing Countries growing food system is the next target:

In the past few years, several of these large firms have actually begun to take an interest in developing world markets. The interest is strongest in soybeans and the major grains (maize, wheat, and rice), where developing-world markets are large and where there may also be major export potential, but it also extends to rice, the seed of which was viewed until recently as a fundamentally non-commercial product, supplied by public institutions on a free or low-cost basis.

During the Green Revolution, better varieties were developed under donor funding at public funded research institutions. The institute freely transferred new varieties and innovative breeding materials to national research centers. They, in turn, further bred varieties that were optimized to local growing conditions and released them to national systems for production and distribution to farmers.

These public varieties dominate in developing world including India.

Now big giants are companies are moving in. Pioneer, now owned by DuPont, has established research programs in India. Private hybrid rice breeders such as Mahyco also have emerged there. Monsanto has undertaken collaborative research with the Indian Institute of Science. Japan Tobacco became interested in rice seed. And the developing-world components of Cargill had already begun a hybrid rice-breeding program before being acquired by Monsanto.

Patent systems and customized action plan:

Global patent searches show that these and other agricultural majors are seeking to protect their intellectual property positions in large developing nations, including China, India and Brazil, where ensuring security is always a challenge. Even though these nations may not issue the full legal protections available in the United States, but these companies may patent important research procedures, tools, and gene constructs so that others may not be able to proceed with research by using alternate options.

Challenge for domestic seed and chemical companies is round the corner:

Seeds Market:

The private sector's interest in providing rice seed to developing nations reflects the growth of substantial commercial markets in developing countries. The total value of the rice produced in the two leading Asian markets is easily more than that of the U.S. maize crop that has induced so much private research. This does not immediately convert into a seed market, because harvested rice can generally be used as seeds. Private-sector investment will depend on some form of proprietary position: successful hybrids or plants protected by either intellectual property rights or by a "terminator" technology that makes the rice plants infertile. There may be difficulties in achieving this position, but the Asian rice potential is big enough for companies to want to try.

Agro-chemicals market and seed markets are now with same companies:

Interestingly, these large firms also have a commercial interest in marketing chemicals. By transferring into national crop lines the genes necessary for herbicide resistance, a firm can create a larger market for the herbicide. China has already made intellectual property rights available on herbicides. India has granted exclusive marketing rights and its laws require granting full patents are also amended in 2005.

Challenge for developing countries to manage food security:

When the multinational firms enter markets such as the Indian rice seed market, they will probably come with seeds that are better than those now available to farmer. No one can question this and it is good as well. Many scientists argue that the use of herbicide-resistant plants is environmentally better than the alternative ways of fighting weeds. The private-sector seeds will probably be developed only for the larger scale commercial seed markets; it will be a long time before the private sector improves small crops or serves subsistence farmers. Rightly so where is the incentive to do the same?

More important, there is a very serious possibility that, because of patent rights and the small number of large seed companies, the multinational industry will hold a monopoly or oligopoly on transgenic seeds, keeping out competitors and even the public sector. Prices will therefore also be higher than current prices. Finally, it may be impossible or at least very expensive or difficult for the public sector to gain access to patented technologies or to use protected varieties for research in developing new applications for the smaller crop or subsistence farmer.

High cost of production due to patented seeds and agro-chemicals is going to add to inflation. Who is going to suffer and at what cost?

Question to be answered by policy makers and experts:

1.   Who will provide the better seeds at affordable price to poor and subsistence farmer to compete with progressive and rich farmers in free market place?

2.   Should there be a Pricing policy like we have in case of generic drugs for agriculture inputs?

3.   Can Competition Commissions around the world investigate these issues?

There are many more dimensions to Patenting of modern agriculture practices which I will discuss in other articles. I request you to have your own evaluation of the issue and situation and express your views on the blog. The series of articles on “Managing Intellectual Property” is an attempt to create awareness about the emerging issues, opportunities and challenges due to intellectual property regime.

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