International Seed Treaty Brainstorming For Sustainability

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A working group established by the international seed treaty of the UN Food and Agriculture Organization (FAO) this week is examining ways to raise its income level, in particular innovative approaches to attract more industry participation.

The International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) of the FAO, adopted on 3 November 2001 and entered into force on 29 June 2004, is experiencing funding shortfalls. The treaty provides a global system of access to plant genetic materials to farmers and breeders while ensuring that recipients share benefits that they derive from the use of those materials with the countries where they originated.

An “Ad Hoc Open-ended Working Group” was established at the fifth session of the ITPGRFA Governing Body, on 24-28 September, with the aim of exploring solutions. It is holding its first meeting from 14-16 May in Geneva. A final report is expected to be adopted at the end of the session.

Members of the working group include countries from seven regional groups (Africa, Asia, Europe, Latin America and the Caribbean, North America, South West Pacific, and Near East). According to the ITPGRFA secretariat, 50 participants were expected to attend the meeting, including observers, and “silent observers” from contracting parties and non-contracting parties, as well as stakeholder groups.

In its Resolution 2/2013, the Governing Body noted “with concern that a large shortfall of funding has accumulated in relation to the targets established in the Strategic Plan [pdf] for the Implementation of the Benefit-sharing Fund.” The Working Group is tasked with exploring ways to enhance the functioning of the Multilateral System of Access and Benefit-Sharing.

The ITPGRFA’s strategic plan indicates that in the early days of the treaty, contributions from contracting parties provided a “basic level of financial support to the Benefit-sharing Fund.” The Benefit-Sharing Fund was also supposed to receive financial contributions from other sources, notably from the private sector as commercial benefit-sharing if genetic material was accessed through a standard material transfer agreement (SMTA) and products developed with this genetic material were commercialised.

Financing the Multilateral System of Access and Benefit-Sharing has been an ongoing challenge for the ITPGRFA (IPW, Biodiversity/Genetic Resources/Biotech, 30 March 2011).

According to one of the working group meeting documents (Background on the Work Undertaken by the Ad Hoc Advisory Committee on the Funding Strategy, and its Further Development) [pdf], during the 2012-2013 biennium, the Ad Hoc Advisory Committee noted that contracting parties were not meeting their self-defined targets, and a “large shortfall” of funding had accumulated.

“There are no indications that the situation is likely to change substantially by the end of the current Strategic Plan period, that is, by December 2014,” according to the document, which states that the Strategic Plan relied on contributions from contracting parties for 75-85 percent of the total.

Only nine members contributed, the document says: Australia, European Commission, Germany, Indonesia, Ireland, Italy, Norway, Spain and Switzerland. Largest contributors were the European Commission, Norway, Italy and Spain. No payments resulted from the use of material received under a SMTA, the document says.

Two unplanned initiatives provided additional funds, one of which is the Norwegian initiative to contribute the equivalent of 0.1 percent of the value of seed sales on the national territory. According to the background document, between 2009 and 2014, Norway contributed US$ 648,178 through this initiative and when launching it, the country estimated that if all developed countries would follow suit, some US$ 200 million would be collected over 10 years.

Factors Hindering Process

A number of factors limiting the regular in-flow of financial resources to the ITPGRFA have been identified.

One of them is that plant breeding is a slow process. Another factor is the availability of the material and its type. Currently, the genetic material covered by the treaty is listed in an annex, referred to as “Annex 1 crops.” According to the ITPGRFA, “substantial parts of Contracting Parties’ holdings of Annex 1 crops have not yet been made available.”

The types of crops available under Annex 1 have been described as too limited by the seed industry, which would favour the inclusion of more vegetables. Yet another issue is the fact that much of the material in the multilateral system is available outside of it, mainly “because of duplication in international and national exsitu collections.”

“The Treatyhas no power over materials held by natural and legal persons who do not wish to bring their holdings under the Treaty or by countries that are not Contracting Parties, and so may have to address the problem through a combination of incentives for using the Treaty, and disincentives for avoiding the Treaty,” the background document states.

Others hindrances include the avoidance of SMTA material and voluntary payments. This relates to the three payment obligations under the SMTA [pdf].

According to an ITPGRFA Official “there are basic differences between the payment obligations under Articles 6.7 /6.8 and Article 6.11. Articles 6.7/6.8 require payments, under certain conditions, when seeds developed from single samples received under an SMTA are marketed,” he told Intellectual Property Watch.

“Article 6.7 requires mandatory payment, when that product cannot be freely used for further breeding, usually because the product is patented. Article 6.8 provides for voluntary payments, when they may be used for further breeding.”

However, “Article 6.11 provides for payments not linked to single samples. Under this option, a mandatory payment is made on a company’s annual sales, whether or not they derive from a sample accessed under an SMTA,” he said.

“Revisiting Article 6.7 involves the possibility of turning the payments that are currently voluntary into mandatory,” he said. The Governing Body could set different levels for products marketed under different kinds of conditions, whether they are protected by a patent or not, he further explained.

“Article 6.8 is currently interpreted as concerning patents only because it is not permitted to use material under patents for further research and breeding,” he said. “That left material under plant variety protection subject to voluntary payments, because under plant variety protection, the breeders’ exemption allows the use of material for further research and breeding.”
Innovative Solutions

 

The Ad Hoc Advisory Committee on the funding strategy has identified six potential innovative approaches, among which is the revisiting of Articles 6.11 and 6.7 of the SMTA. Also envisaged is the expansion of the coverage of the multilateral system to other crops, new ways to attract use-based voluntary funding, and upfront payments on access to be discounted against payments due on the commercialisation of a product.

The latter would aim at shortening the time between accessing a material under an SMTA and receipt of income for the Benefit-Sharing Fund, according to the ITPGRFA. “It would provide recipients with an option to make a payment on receipt of a material, and in exchange pay at a reduced rate when a product is commercialized,” it says.

The working group is expected to consider the six innovative solutions, but the issue of the expansion of the crop list covered by the treaty is supposed to be discussed during a further meeting, according to an ITPGRFA official.

Relationship to IP

The implication for intellectual property are discussions to include other IP rights in the consideration of the way the Benefit-sharing Fund works, according to the ITPGRFA. “It would work like a Creative Commons approach to the treaty, establishing an agreed pool of material, which can be used in accordance to agreed procedures,” the official said.

“There is a greater sense of urgency because the agricultural sector has to get its act together now,” he said.

“Treaty negotiators have a very strong moral imperative, because plant genetic resources for food and agriculture are crucial for world food security, the reduction of poverty, and economic development,” he said.

Consultations with Stakeholders

In February, the ITPGRFA secretariat sent a notification to a number of various stakeholders and member states to solicit information as contribution to the work of the working group.

The annex to a meeting document entitled “Information from and Consultations with Relevant Stakeholders,” [pdf] shows three submissions: from the International Center for Tropical Agriculture (CIAT), the International Seed Federation (ISF), and the European Seed Association (ESA).

In their submission, the ISF suggested a list of principles upon which the funding mechanism should be based, and potential changes to be made to the SMTA, including “contracting parties fulfilling their obligations to include material under their control into the MLS [multilateral system],” extending Annex 1 to include “all plant genetic resources for food and agriculture,” and “transparency and possible involvement of the seed sector in decision-making concerning funding of projects.” Similar suggestions were made by the ESA.

Catherine Saez may be reached at info@ip-watch.ch.

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