14
Conflicts Over Ownership, Management, and Use

Outside the relatively small community of breeders, evolutionary biologists, and geneticists, recognition of the importance of germplasm as a crucial resource has been recent. Major factors that led to this change in perspective include the successes of the green revolution in developing countries, which, in part, were based on plant breeders' combining crop plant genes from diverse locations (Plucknett et al., 1987), and the rapid degradation of many natural habitats by development, deforestation, and desertification, raising the specter of the irreversible loss of countless numbers of plant and animal species (Office of Technology Assessment, 1987a). Awareness has also been heightened by controversies over proprietary rights, control of resources, inadequacies of conservation programs, and concerns about genetic vulnerability and genetic erosion.

POLITICS AND GEOGRAPHY

The conservation, management, and use of crop germplasm have become highly politicized in recent years. The difficulties of conserving food crop germplasm and the political controversies over the distribution and use of genetic resources ultimately have their origin in the vagaries of biology. The ancestors of modern crop species were unevenly distributed. Much of the world's diversity in wild and primitive crop plants is concentrated in the tropics and subtropics, where food crop plants were first domesticated. Only one of the world's 40 major food and industrial crop plants, the sunflower, is



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Managing Global Genetic Resources: Agricultural Crop Issues and Policies 14 Conflicts Over Ownership, Management, and Use Outside the relatively small community of breeders, evolutionary biologists, and geneticists, recognition of the importance of germplasm as a crucial resource has been recent. Major factors that led to this change in perspective include the successes of the green revolution in developing countries, which, in part, were based on plant breeders' combining crop plant genes from diverse locations (Plucknett et al., 1987), and the rapid degradation of many natural habitats by development, deforestation, and desertification, raising the specter of the irreversible loss of countless numbers of plant and animal species (Office of Technology Assessment, 1987a). Awareness has also been heightened by controversies over proprietary rights, control of resources, inadequacies of conservation programs, and concerns about genetic vulnerability and genetic erosion. POLITICS AND GEOGRAPHY The conservation, management, and use of crop germplasm have become highly politicized in recent years. The difficulties of conserving food crop germplasm and the political controversies over the distribution and use of genetic resources ultimately have their origin in the vagaries of biology. The ancestors of modern crop species were unevenly distributed. Much of the world's diversity in wild and primitive crop plants is concentrated in the tropics and subtropics, where food crop plants were first domesticated. Only one of the world's 40 major food and industrial crop plants, the sunflower, is

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies native to North America, and only two, oats and rye, are native to northern Europe. The original genetic material of landraces and high-yielding varieties of crop plants can be traced to several relatively small regions in Asia, Africa, and Latin America. These areas are still characterized by rich genetic diversity. Before the 1960s, this genetic material was collected in developing countries by explorers, military officials, scientists, and agriculture ministry personnel from developed countries. In the early 1970s, when the green revolution for wheat and rice was less than a decade old, there was a major conference on conserving crop genetic resources sponsored by the Food and Agriculture Organization (FAO) of the United Nations (Frankel, 1985b). O.H. Frankel (1970) and other scientists were beginning to predict that genetic erosion would occur as a result of the deployment of modern varieties (see also Frankel, 1985b,c, 1986, 1987). Genetic erosion inside germplasm banks can also contribute to the loss of traditional germplasm. The International Board for Plant Genetic Resources In the early 1970s, the Technical Advisory Committee of the Consultative Group on International Agricultural Research (CGIAR) established a means of coordinating and supporting the conservation of genetic resources. The International Board for Plant Genetic Resources (IBPGR) was established for this purpose in 1974 as one of the international agricultural research centers (IARCs) that now total 17 in the CGIAR network (Baum, 1986). Awareness of the need to conserve genetic diversity increased in the years following the establishment of IBPGR, and progress was made in organizing a global network of cooperating germplasm banks. However, the IBPGR budget has remained modest (about US$7 million in 1989) (International Board for Plant Genetic Resources, 1990). In addition, national financial resources committed to conserving genetic resources in developing and developed countries have increased only marginally, if at all. Furthermore, it should be stressed that many of the successes of the commodity-based IARCs in germplasm preservation and distribution have been due primarily to their own efforts rather than to those of IBPGR. Origins of the Conflict over Germplasm In the late 1970s, some of the basic parameters of the global movements of raw and finished plant germplasm were questioned (Mooney,

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies 1979, 1983). It was argued that there was a pattern of genetic resources being exported from the developing world, with the benefits of these resources accruing disproportionately to the developed world. In some instances, it was argued that finished varieties, consisting primarily of germplasm that originated in developing countries, were being imported by developing countries at high prices (Mooney, 1979, 1983). The assertion was made that the developing world (the South) was being exploited by the industrialized countries (the North). This chapter examines these concepts, giving principal emphasis to food crop germplasm, with less attention given to industrial crops, such as rubber and oil palm. It should be stressed, however, that the geographic movement of food crop germplasm differs substantially from that of industrial crops. The centers of diversity for food crops are located primarily in developing countries. Accordingly, the principal flow of food crop plant germplasm has been from developing (south) to developed (north) countries. By contrast, industrial crops exchange is largely south to south (Kloppenburg and Kleinman, 1987a), although often mediated by the north. It is important to recognize that genetic resources became an issue for social activists following the passage of the Plant Variety Protection (PVP) Act (codified at 7 U.S. Code Sections 2321-2583) of 1970 Workers harvest watermelons at a farm in the Sao Francisco Valley, Brazil, Credit: Food and Agriculture Organization of the United Nations.

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies in the United States. This also roughly coincided with the development of genetic engineering. Both the controversy over PVP and the rise of genetic engineering increased global interest in genetic resources. The passage of PVP brought the United States broadly in line with the European systems of plant breeders' rights providing limited protection, analogous to a patent, for sexually reproduced crop varieties. Many independent seed companies in the United States and elsewhere were absorbed into large multinational firms during the decade after passage of PVP (Doyle, 1985; Kloppenburg, 1988; Kloppenburg and Kleinman, 1987b; McMullen, 1987). There are major differences of opinion about the social and conservation implications of restructuring of the seed industry. Some argue that restructuring led to increased investment in private plant breeding, increased the pace of development of improved cultivars, and increased corporate interest in genetic resources conservation (McMullen, 1987). Others see restructuring as less benign (Doyle, 1985; Fowler and Mooney, 1990; Mooney, 1979, 1983, 1985) and have expressed concerns about the distribution of genetic resources. It was feared that large companies would take a short-term, opportunistic view of genetic resources conservation, and would not exchange genetic material (especially proprietary material) with public and private plant breeders. Concern existed that monopolies would be furthered by breeding new crops dependent on the use of agricultural chemicals produced by the multinational corporations that now owned the seed companies. The emergence of genetic engineering also had a major influence on genetic resources activism. The rise of biotechnology demonstrated how a single gene for tolerance to a broad-spectrum herbicide might be worth millions of dollars. The development of biotechnology raised the perceived value of crop genetic resources and reinforced the perception that developing countries could be increasingly exploited (Fowler and Mooney, 1990; Goldstein, 1988). INTERNATIONAL DIALOGUE ON PLANT GENETIC RESOURCES During the twenty-first Biennial Conference of FAO in 1981, Resolution 681 was proposed, which requested the director general to draft an international convention "including legal provisions designed to ensure that global plant genetic resources of agricultural interest will be conserved and used for the benefit of all human beings, in this and future generations, without restrictive practices that limit their availability or exchange, whatever the source of such practices" (Food and Agriculture Organization, 1981). At that conference, a number of

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies developing country governments argued for the creation of an international germplasm bank at FAO and for legally binding commitments by all countries to make germplasm freely available (Mooney, 1985; Witt, 1985). Feasibility studies were requested on each and were considered in advance of the 1983 FAO conference. The fact that the developing countries supported these feasibility studies while most developed countries opposed them was a harbinger of the conflict that was to be manifest at the next FAO convention in 1983. A draft report presented to the 1983 FAO conference led to the establishment of the FAO Commission on Plant Genetic Resources (Frankel, 1988; Mooney, 1985; Witt, 1985). At that conference, the issue of what were to be considered genetic resources covered by the resolution was hotly debated. Several developing country ambassadors actively supported the inclusion of finished varieties, mutant stocks, and breeders' lines, and none of them opposed their inclusion. This position was advanced by developing country FAO ambassadors, because including advanced breeding materials in the resolution would reinforce the free flow of genetic materials, make a wider range of germplasm available to plant breeders in the developing world, and reduce developing country expenditures on imported seed. Developed countries, notably those with private seed industries and plant breeders' rights legislation, argued that only wild relatives, landraces, and varieties not covered by patent or patentlike protection should be included. It was argued that breeders' lines represented combinations of genes unavailable in the landraces and wild relatives and therefore constituted original genetic variation. If private industry was to play a role in plant breeding, a reasonable protection of finished varieties was appropriate, since plant breeding required extensive investments. Furthermore, it was pointed out that use of protected varieties for the purpose of plant breeding was not prevented by plant breeders' rights legislation. Moreover, governments could not require breeding lines held by private industry to be available for exchange. Nevertheless, the 1983 FAO conference adopted Resolution 8/83, the International Undertaking on Plant Genetic Resources (Frankel, 1988; Mooney, 1985). Article 1 of the annex to the resolution stated that the objective of the undertaking was to ensure that plant genetic resources of economic or social interest, particularly for agriculture, would be explored, preserved, evaluated, and made available for plant breeding and scientific purposes (Food and Agriculture Organization, 1983a). It was based on the presumption that plant genetic resources are a heritage of humankind that should be available without restriction. The resources would include native cultivars, landraces,

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies wild relatives, newly developed varieties, and special genetic stocks (including elite and current breeders' lines and mutants). Thus, the undertaking asserted that proprietary germplasm was part of that available through the principle of common heritage. After acrimonious debate, the undertaking was passed by a vote in which the developing country majority voted for and the developed countries voted against. Nonetheless, it is significant that the issue required a vote, because FAO work is generally accomplished through consensus. Continuing International Controversy In the aftermath of the passage of the undertaking there has been continued geopolitical controversy. Some advocates for developing countries have continued to contend that current germplasm arrangements are unsatisfactory (Fowler and Mooney, 1990; Mooney, 1985). They argue that the concerted efforts of the governments of developed countries to preserve crop genetic resources demonstrates the value of these resources, even in their unfinished forms (landraces, wild relatives). Because finished varieties and elite breeding lines are in part derived from germplasm of developing country origin that was obtained without a fee, they should be freely available to developing country researchers. The position of developed countries generally has been that, although most agricultural crop germplasm originated in the developing world and that the developed world has benefited from this germplasm, these arrangements are not inequitable (Brown, 1988). Primitive forms of germplasm have little economic value without evaluation and enhancement, the lengthy process of incorporating genes through breeding into advanced lines to develop improved cultivars. Moreover, it is argued that developing countries lose nothing, because only a small number of seeds is gathered by collecting and duplicates are placed in their seed banks whenever possible. Advanced breeding lines and proprietary varieties from developed countries are very seldom directly useful in developing countries. Thus, it is maintained that although unimproved germplasm is the common heritage of humankind, improved germplasm is not. Those who support farmers' rights take the position that landraces are, in fact, improved germplasm and could legitimately be regarded as no more the common heritage of humankind than the advanced cultivars of the developed world. It was demonstrated earlier (see Chapter 13) that there is a potential economic benefit in obtaining the landraces and wild species that are not in present collections. However, this benefit cannot be realized

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies without investment in the research, testing, breeding, and selection that are integral parts of germplasm enhancement. Despite objections over what was to be included as common heritage, FAO member countries were allowed to sign the undertaking and, by stating their reservations on specific articles, indicate the extent to which they were prepared to concur with its principles. No industrial country with a well-established private seed company sector agreed to support the undertaking without reservations (although many have ratified the undertaking with reservations) (Table 14-1). The central point of the geopolitical debate over crop genetic resources is, as Kloppenburg and Kleinman (1987a:196) have noted, that in a world economic system based on private property, each side in the debate wants to define the other side's possessions as common heritage. The advanced industrial nations wish to retain free access to the developing world's storehouse of genetic diversity, while the developing nations would like to have the proprietary varieties of advanced nations' seed industry declared a similarly public good. It can be argued that neither side in the debate has a fully defensible or realistic position. As noted earlier, some representatives to FAO from developing countries have pointed out that governments of developed countries cannot logically advocate that unfinished genetic resources in other sovereign states are common heritage when some of these developed country governments have declined to recognize the resources of the ocean floors or Antarctica as common heritage (even when these resources do not even lie within the boundaries of another sovereign state). Likewise, it makes little sense for developing countries to place so much emphasis on access to elite breeding lines and finished varieties developed by firms in developed countries for use by a developed country when little of this material would be of use in the agroecological contexts of developing countries (Brown, 1988). In a world economy dominated by market relations one may ask if it is likely that the major industrial powers would relinquish a resource as valuable as proprietary germplasm. Indeed, these inconsistencies in each side's claims in the debate strongly suggest that the debate, at least to some degree, reflects deeper political antagonisms and differences of economic interest. The north-south genetic resources debate has been based at least as much on premises that apply more to larger issues of the fairness of the global economy, monetary system, and foreign aid apparatus, as on the genetic resources issues that are the major concern of this report.

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies TABLE 14-1 Countries That Joined the Commission on Plant Genetic Resources of the Food and Agriculture Organization (FAO) or Agreed to Support the International Undertaking on Plant Genetic Resources Regions and Country Member of FAO Commission Supports Undertaking Africa     Angola • — Benin • • Botswana • — Burkina Faso • • Cameroon • • Cape Verde • • Central African Republic • • Chad • • Congo • • Côte D'Iviore — • Equatorial Guinea • • Ethiopia • • Gabon — • Gambia • — Ghana • • Guinea • • Guinea-Bissau • — Kenya • • Liberia • • Madagascar • • Malawi — • Mali • • Mauritania • • Mauritius • • Morocco • • Mozambique — • Niger • • Rwanda • • Senegal • • Sierra Leone • • South Africa — • Sudan • • Tanzania • • Togo • • Uganda • — Zaire • — Zambia • • Zimbabwe • •

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies Regions and Country Member of FAO Commission Supports Undertaking Asia and the Southwest Pacific     Australia • • Bangladesh • • Fiji — • India • • Indonesia • — Japan • — Korea, Democratic People's Republic of • — Korea, Republic of • • Malaysia • — Myanmar • — Nepal — • New Zealand • • Pakistan • — Philippines • • Samoa • • Solomon Islands — • Sri Lanka • • Thailand • — Tonga — • Vanuatu • — Europe     Austria • • Belgium • • Bulgaria • • Cyprus • • Czechoslovakiaa • • Denmark • • Estonia • — Finland • • France • • Germany • • Greece • • Hungary • • Iceland • • Ireland • • Italy • • Liechtenstein — • Lithuania • — Netherlands • • Norway • • Poland • • Portugal • •

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies Regions and Country Member of Fao Commission Supports Undertaking Romania • • Russia — • Spain • • Sweden • • Switzerland • • United Kingdom • • Yugoslaviaa • • Latin America and the Caribbean     Antigua and Barbuda — • Argentina • • Barbados • • Belize • • Bolivia • • Brazil • — Chile • • Colombia • • Costa Rica • • Cuba • • Dominica • • Dominican Republic • • Ecuador • • El Salvador • • Grenada • • Guatemala • — Guyana • — Haiti • • Honduras • • Jamaica — • Mexico • • Nicaragua • • Panama • • Paraguay — • Peru • • Saint Christopher and Nevis • — Saint Lucia • — Saint Vincent and the Grenadines • — Suriname • — Trinidad and Tobago • • Uruguay • — Venezuela • —

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies Regions and Country Member of FAO Commission Supports Undertaking Near East     Afghanistan • — Bahrain — • Egypt • • Iran • • Iraq • • Israel • • Jordan • — Kuwait — • Lebanon — • Libya • • Oman • • Syria • • Tunisia • • Turkey • • Yemen • • North America     Canada • — United States of America • — NOTE: Of the 135 countries listed, 118 are members of the commission and 107 have adhered to the International Undertaking as of April 18,1993. a Information pertaining to the republics formed from the dissolution Czechoslovakia and Yugoslavia was not available. SOURCE: Unpublished information from the Food and Agriculture Organization of the United Nations. Nonetheless, although the rhetorical debate is rooted in fundamental differences of interest and opinion, there is room for common ground on the genetic resources question. More specifically, there is room for developed countries to accede to developing countries on common heritage in a modified form, and for countries of the south to do likewise with respect to plant breeders' rights. This would enhance the interests of both sides. Krasner (1985) has provided a useful examination of the fundamental geopolitical differences of interest between developed and developing countries. There are several clear respects in which developed and developing countries' interests depart substantially and with little hope of resolution. Unfortunately, these divergent views have become manifest in genetic resources issues, an area in which there is room for compromise

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies the genetic uniformity necessitated by the criteria that are generally necessary to receive propriety protection. Finally, it is argued that the current system avoids an economic linkage between crop varieties and chemical inputs (pesticides, herbicides, fertilizers). Furthermore, heavy dependence of national seed supplies on transnational corporations may not be in the best interests of many countries. Typically, the major disadvantage of public-dominated plant breeding systems in the developing world is in the area of seed production and distribution, particularly their tendency toward a lack of efficiency and effectiveness compared with that of private industry, However, intermediary forms of public and private institutional arrangements may well be possible in this sphere. It is also argued that some form of propriety protection will be necessary if private industry is to play a role in plant breeding in these countries, as may well be considered desirable at some point in their development. Protagonists of such protection argue that public sector breeding programs may benefit from such arrangements by receiving additional funding. How, then, do these different systems affect the conservation of genetic diversity? private industry in Europe and North America, with some notable exceptions, has so far contributed little to the conservation of genetic resources. Germplasm collections in Europe and North America generally were, with only few exceptions, limited to material essential for ongoing breeding programs. Little known about the germplasm collections of private industry, but it is doubtful that they constitute much beyond what is available in publicly supported collections. The notion that international commercial plant breeding interests try to monopolize genetic resources thus far has little foundation. The notion that private industry has and interest in the loss of crop genetic diversity also has no basis. However, commercial plant breeding largely has short-term objectives and greatly values the use of materials that already satisfy most of the requirements being sought. Thus, private firms have little incentive to devote resources to genetic resources conservation and, with few exceptions, have little direct concern for this activity. The use of genetic resources such as landraces and wild relatives takes place primarily in university and government research programs, which release improved breeding materials for practical plant breeding in later stages of development. RESPONSES TO THE CONFLICT OVER GENETIC DIVERSITY Much that has been written on the basic conflict over genetic diversity deals with a conflict of principles. On one side is the principle

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies of free flow of genetic resources, while on the other, albeit with a somewhat greater internal diversity of opinion, is the principle of establishing and enforcing property rights as incentive to innovation. Under the principle of free flow of genetic resources, many genetic materials move freely from nation to nation. During the first three decades after world War II, this free flow of genetic resources was primarily from the developing to the developed world. More recently, however, there have been greater movements of germplasm in the opposite direction. Under intellectual and private property principles, some germplasm materials may not, because of fees or propriety restrictions, be readily exchanged. The conflict is also one of outcome and process, however. The two sides have different judgments about the national and international institutions involved. One side is more optimistic about the international political process; the other side is more optimistic about informal interchange among scientists. Moreover, the two sides have different interpretations of the impact of international intellectual property right as they relate to the developing world. In large part, these rights can be legally enforced only in nations in which the relevant patents or plant breeders' rights are issued. Thus, the direct effect of patents and plants breeders' right on developing nations may be minor, although there may be indirect effects associated with the confidentially and the commercialization of research A Basis for Resolution The disagreements are real, and the issues are already complex and difficult to resolve. The issues will become more complex as questions of plant genetic material and plant breeders' rights give way to questions involving all forms of genetic material and the proprietary rights associated with biotechnology. They will also become more difficult as the developed countries become less willing to support public sector agricultural research both at home and in the developing countries and as such research becomes more and more centered in the private sector (de Janvry and Dethier, 1985; Ruttan, 1982). Nonetheless the following facts show promise for progress: Developing countries need increased foreign technical assistance to enhance their ability to conserve genetic resources and to do the research necessary to incorporate genes into new, more productive cultivars rather than to acquire advanced foreign breeding lines, proprietary genetic material, and varieties developed by private firms for the agronomic environments of developed countries. There is a

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies growing realization that the locally adapted landraces are usually the most important base materials for breeding, specially for areas with less favorable production environments and where low levels of external inputs are used. The basis for expecting assistance from the developed world are (1) developed countries and some of their firms have benefited greatly, at minimal cost, from transfers of genetic material from developing countries, and (2) it is in the long-term interest of the developed countries to encourage agricultural and overall economic development in the developing world. The bulk of the crop genetic resources material derived from developing countries consists of landraces that have been developed and improved by generations of farmers. Thus, it may be argued that these resources have value and their use may merit either compensation or contributions to an international fund. Developed countries are extremely unlikely to negotiate over any treaty or other international agreement that would have the direct or indirect effect of making improved genetic material a common property resource. Although it is in the scientific interest of both developed and developing countries that access to genetic resources remains open, it is in the interest of developing nations that access be available only for a fee—and such a fee may provide some incentive for conserving genetic resources. Ideally, global rules governing plant genetic resources should have the effect of encouraging conservation and utilization activities in the future, rather than relying largely or entirely on realizing rents from previous activities and investments. The royalty rights of intellectual property are normally justified because they provide forward-looking incentives to encourage invention and innovation, although it should be recognized that, in practice, proprietary rights in plant genetic materials may serve to protect marketing investments and augment the value of previous breeding investments. The need for a forward-looking incentive system was recognized as well at the Keystone dialogues. A consensus emerged that a desirable compensation system would be one that would provide incentives to developing countries to conserve and use plant genetic resources in the future. Avenues for Resolution It is therefore essential to look for solutions. The committee envisaged three possibilities. The first is to negotiate a treaty that defines a compromise position on intellectual property and free flow of

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies crop germplasm. The second is to create an international payment mechanism, most likely a system linked to the value of seed sales, whose proceeds would support genetic diversity conservation programs. The third is to focus attention on strengthening plant breeding and building biotechnology research capacity in the developing world rather than on legal arrangements. This would restore reciprocity between the industries of the developed and developing countries and would remove some of the difficulties that now make the problem so intractable. Treaty Solution It might be possible to achieve a compromise between developed and developing countries to create an intellectual property and free-flow regime. This would require that a set of principles, which make scientific and institutional sense, be found; and it would almost certainly involve an agreed boundary between the following two regimes: (1) a free-flow regime for some materials, including those traditionally handled through free scientific exchange, as well as, presumably, access to genetic materials that are found in wild form or purchased in markets; and (2) an intellectual property or property rights agreement (at least one that nations may optionally choose if they so desire). This compromise would permit private industry to appropriate a portion of the benefits of innovation under some circumstances. Such appropriation might be accomplished by patent or breeders' rights or by recognition of private property. A similar compromise was achieved at the United Nations Conference on the Environment and Development (UNCED) at Rio de Janeiro in June 1992. Under its terms, genetic resources already in the international germplasm banks or international research system would continue to be freely available. Looking to the future, however, genetic resources will be subject to the control of national governments. Access, "where granted," is to be on mutually agreed terms" (United Nations, 1992). Thus, this agreement breaks with the pattern of the International Undertaking on Plant Genetic Resources— genetic resources will no longer be freely available and developing nations may attempt to charge for access to their resources. The corresponding intellectual property issues are dealt with in separate articles on technology transfer (Article 16) and biotechnology (Article 19). In general, both create an obligation on the part of the developed world to make the relevant technology available to developing nations. In additions, the technology transfer article requires respect for intellectual property rights and also requires cooperation

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies to ensure that those rights be supportive of the objective of the convention. Thus the end of free access is accepted, together with what appears to be a relatively superficial resolution of the intellectual property issues. Although the convention was rejected by the United States at that time, it was accepted by most nations. Developing nations may restrict access to their genetic resources, regardless of the U.S. position, in which case, future access would depend on compensation. International Payment If there is broad agreement that nations should be paid in some fashion for germplasm that derives in part from within their boundaries, the compromise solution may encounter difficulty because the mechanisms of payment may become the central issue. The design of a payment system is not an easy task (Barton and Christensen, 1988). Part of the question is what the payment should be for. It could be an equitable compensation for all the material provided in the past or for costs imposed by the plant breeders' rights system. Alternatively, it could be an incentive compensation designed to encourage future collection and management (including evaluation) of genetic material. Systems developed on the basis of these two patterns would look very different and would distribute revenues quite differently. The total benefit derived from germplasm that originated in developing countries is beyond any form of practical calculation. Likewise, the actual cost of plant breeders' rights to the developing world is also difficult to estimate, but an order-of-magnitude approximation is feasible. At one extreme, there may have been net benefits to the developing world because plant breeders' rights in the developed world may have led to breeding innovations that have been shared with the developing world. At the other extreme, there may have been a net cost to the developing world. Limited data from the U.S. seed industry was used by Barton and Christensen (1988) to develop and "extremely approximate estimate" of the cost impact of proprietary rights. There is anecdotal evidence that, in one area, protected varieties cost about twice as much as competing unprotected varieties (Barton and Christensen, 1988; Butler and Marion, 1985). By aggregating available data on protected and unprotected varieties (including hybrid maize as effectively protected), it can be estimated that of the almost $4 billion in U.S. seed usage in 1979 about $1 billion was in protected varieties. If the protected

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies seeds did cost twice as much, proprietary protection led to a 12 percent increase in overall seed costs in 1979. The impact of this on the developing world would be indirect, because the rights are not enforceable beyond national borders. Assuming that this indirect effect is perhaps one-tenth of the direct effect, or an effect of about 1 percent on sales, and the total annual seed sales in the developing world are about US$10 billion, the greatest plausible annual cost of plant breeders' rights to developing nations (remembering that there may actually be net benefit rather than a cost) would be about US$100 million. This sum is larger than total global expenditures on seed bank maintenance in 1989 (about US$50 million), but somewhat smaller than the roughly US$220 million spent on public international agricultural research in that year (J. Barton, Stanford Law School, personal communication, September 1990). Although approximate, these numbers suggest that providing an incentive is a potentially more successful mechanism. Discussions of compensation approaches during the late 1980s generally focused on devising a formula that would reimburse developing countries for their past activities or for past acquisitions of their genetic resources by developed countries. This type of system would have been essentially retrospective and difficult to apply. As noted earlier, the Keystone dialogues recognized and difficulties of implementing a retrospective compensation system and developed a consensus that compensation should be forward looking and provide incentives to the developing countries to conserve and use their genetic resources in the future. Incentives could bring benefits in the form of increased conservation of genetic resources. These new conservation incentives would balance the innovation incentives provided by intellectual property protection. Thus, it is reasonable to create a fund on the order of US$300 million or more to increase efforts to conserve genetic resources. In the absence of any global financing agreement, nations will probably exercise their control over genetic resources by refusing to permit access unless the collector accepts a material transfer agreement. Most likely, such an agreement will require the collector to agree to discuss compensation and pay a royalty in the event that a commercial product derives from the material— and will of course prohibit the collector from transferring the material to any third party without exacting a similar agreement. Those negotiated agreements will roughly reflect a portion of the economic value of the material, just as patent royalties reflect a portion of the economic value of the innovation. Alternatively, the international community could create

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies a fund to be used to support the conservation of genetic diversity. This fund, perhaps gained through national contributions linked to seed sales, would be disbursed to developing nations to help them conserve genetic materials. Although most economists prefer a solution in which the market defines the size of the payment, the tax on seed sales is probably the more feasible. Even though developing nations could carry out the first approach unilaterally or by agreement among themselves, they are likely to gain more effective enforcement through an international convention. However, a convention of this kind will need to recognize intellectual property rights as well as supplier's rights in genetic material, but these are the issues that make the treaty solution difficult. The allocation of payments for a cultivar that contains genes from many different sources will be difficult. Comparable problems with copyright payments for musical recordings played on the radio are sometimes handled by creating a fund and dividing the proceeds according to formulas that reasonably approximate what the complicated and expensive negotiations might produce. Note, also, that existing public sector germplasm banks may be placed in a very awkward position with respect to accepting material under the agreements likely to be imposed by developing nations just as they would be by accepting patented materials (including genes) from the private sector. In contrast, a fund can be created and used to support the conservation of genetic diversity. The most logical source for a fund is the Global Environment Facility (GEF), created by the United Nations Environment Program, United Nations Development Program, and World Bank and recognized as the primary source for funding genetic resources in developing nations. It ran US$1.3 billion before the UNCED meeting and was both expanded and restructured at that negotiations (Bureau of National Affairs, 1992). The GEF's basic concept to provide international funds for those situations in which a project cannot be justified in term of domestic costs and benefits but can be justified in terms of global costs and benefits (Anonymous, 1991). Should this not be practical, one might consider a seed tax or its equivalent. Assuming that US$300 million is the minimum amount for such a fund, a global tax on seed sales of about 1 percent would be sufficient. This approach would provide secure long-term funding for the conservation of genetic diversity. It would also facilitate participation by developing nations without asking them to undertake the primary expense. The expense is borne, ultimately, for the good of all, not just of developing countries.

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies The disadvantages are those inherent to an earmarked tax. The fund will develop its own constituencies and survive at a predetermined level, whether or not that level remains rational. There will also be political conflict over whether control should be through a technical body like the IBPGR, or through one reflecting greater political input, such as FAO's International Fund for Plant Genetic Resources, or under the control of a higher commission of the United Nations. These will not be simple conflicts between interested parties, but will reflect fundamental differences over the form of international review essential to ensure that the funds are used well. Such differences were a central part of the funding diplomacy at UNCED. Scientific Balance The third approach changes the terms in which the problems is defined. To the extent that the concerns of developing countries about genetic are a reflection of their concerns about the status of their plant breeding and biotechnology sectors, it may be better to work directly to improve the positions of developing countries in these sectors by providing them with the means of using their own resources more effectively. An immediate answer is that the developing world does not have a chance against the large multinational corporations, but there are reasons to believe that this is not the case. First, as demonstrated by the existence of the Seminario Panamericano de Semillas (Pan American Seeds Seminar), there is already an industry in Latin America. The same is true of some areas of Asia: The needs for local multiplication and testing and for adapting varieties to meet local needs provide a foundation for developing nations in specific sectors of the seed industry. As they build on that, some of them could begin to export their seeds. Second, as new biotechnologies are adopted, there is a good chance for some new developing world firms to be successful globally. In the United States, small firms may take the leadership in new technologies and, in turn, supply them to the larger multinational corporations. Some of these new small firms could be from developing countries. To make this happen, a public sector scientific, regulatory, and economic infrastructure is needed. A scientific infrastructure that provides education, basic research, and travel to ensure the integration of scientists and technologies from the developing world into the global scientific community is crucial. To be successful, it must be built with national or international funds. The public sector must also orient research toward subsistence farmers, who are otherwise

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies likely to be ignored by the private sector. Finally, the business infrastructure is equally important and requires access to management skills, venture capital, avoidance of overly restrictive regulations, and assurance that domestic and international markets are open. These considerations may not be generally relevant to all types of economies, however. Many firms in developing countries have a good understanding of their own markets but need to know what technologies may be useful and when to apply them. First, they will need formal ties to technology suppliers, such as national agricultural research programs or firms in developed countries. They may then require ties to foreign markets, either through marketing arrangements similar to those of small biotechnology firms in developed countries, or through new marketing organizations in developing countries. Public programs in developing countries will require support for education and will need access to advanced scientific information. It is also crucial to ensure that access technology and markets is not closed off by reluctance on the part of developed countries that worry about providing technology to create new competition. It may be necessary to negotiate agreements to ensure continued access to technology and markets. This business infrastructure approach deals directly with the underlying problem and provides an answer in the real world rather than in the legal world. It expends resources on the development of a global scientific and technological community rather than on new bodies of law. It takes advantage of the opportunities available from biotechnology, avoids complicated intellectual property negotiations, and builds on the rapid evolution of the seed industries of developing countries. However, this solution does not have a clear endpoint. It is focused on science and technology rather than on genetic resources and has no single agreement or step to which political leaders can point. It could benefit some countries much more than others because, for example, not all countries will build a biotechnology industry. In the poorer nations, international public sector programs may have to be the dominant source of technology for the foreseeable future. RECOMMENDATIONS What earlier seemed to be an increasingly contentious debate has, since 1988, moved significantly in the direction of compromise and consensus. The questions raised over the accountability of current germplasm conservation activities at both the international and national

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies levels and the need for adequate safeguards to ensure free access to genetic diversity are generally accepted as important and relevant. The present challenge is to achieve both aims in worldwide system of genetic conservation that is practical and effective, and that does justice to the aspirations of the world community. There is a growing awareness among scientists, policymakers, and international organizations that germplasm is an important natural resource. In a polarizing international environment with conflicting economic systems and a skewed distribution of wealth and control over agricultural production and markets, the problems of germplasm conservation and management extend beyond purely technical issues to include the broader social and economic ramifications of research. The conservation of genetic resources must receive a greater level of national and international effort and financial support. There is a need for legal, institutional, and other arrangements that guarantee use and accessibility of genetic diversity for the benefit of society as a whole. Global responsibility must find its expressions in truly international funding of genetic resources activities. The source of such finances, however, should not, as is often the case now, derive from unstable funding such as international aid programs. A more structured form of financing may be necessary to facilitate both in situ and ex situ conservation in the most appropriate locations (notably, in present geographic centers of diversity). International control over this fund is logical and desirable. The fund could be derived from national contributions that would be linked to the value of commercial seed sales. Its governance would be at the international level through an existing agency or specially designated commission. The proposal of the Keystone International Dialogue for a fund of US$300 million per year to support global and national efforts is an important first step (Keystone Center, 1991). Disagreements over ownership, control, and use of genetic resources must be resolved. If left unresolved these issues will seriously hamper international cooperation and the unrestricted, free flow of genetic resources between countries. As necessary as political will and cooperative relations among scientists are to germplasm exchange, the funding levels and technical standards of genetic resources collection and preservation activities are major influences on distribution. Major barriers to the free exchange of genetic resources remain because of the lack of funding and staff to maintain and distribute materials upon request. There is blame to share and responsibility to be accepted on the part of developing and developed countries alike. The governments of

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Managing Global Genetic Resources: Agricultural Crop Issues and Policies developed countries that are hosts to major collections should maintain them and make materials available for free distribution, since many of the collected samples will not be reliably maintained at the national centers. Government officials, agricultural scientists, and germplasm conservation personnel in developed and developing countries must recognize the necessity of cooperation in genetic resources conservation, exchange, and use. Cooperation is needed between the developing countries, which serve as centers of diversity, locations for rejuvenation of seed, and sites for in situ conservation, and the developed countries, which serve as sources of funding, preservation and distribution sites, and training programs (Chang, 1992). International cooperation and exchanges of germplasm can be substantially strengthened by international agencies such as FAO, IBPGR, and the IARCs. Cooperation cannot be secured by statutory means alone. It must begin with working scientists who share a common interest in the management and use of the world's genetic resources. The capacities for plant breeding and biotechnology in developing countries should be strengthened. The governments of developing nations could help their plant breeding and biotechnology sectors by establishing appropriate economic incentives and institutions. Public sector extension activities should be structured to ensure that subsistence farmers participate in the benefits provided by these technologies. Accomplishing these goals will require assistance from developed countries in the form of training, facilities, and operating support. Until recently, it has been relatively easy politically to conduct a large-scale, international, public sector, agricultural technology development program. That type of program, which was responsible for the green revolution, was quite successful. Today, multilateral programs may be the objects of political criticism. Agricultural technology is also increasingly being developed in the private sector rather than in the public sector. These transitions underlie the germplasm controversy; they pose the challenge of ensuring the capacity for private sector agricultural biotechnology and expanded opportunities in developing countries.