FAO Plant Treaty To Operationalise Benefit-Sharing Fund

By Kaitlin Mara
Benefits from sharing and using biodiversity of food crops could soon be making their way to stakeholders, as the International Treaty on Plant Genetic Resources for Food and Agriculture prepares to make its benefit-sharing fund fully operational.

For the first time, say members of the treaty secretariat, this fund completes the circle from the guardians of living genetic resources – farmers, often in developing countries and transition economies – to the technological innovators who need access to and use those genetic resources – such as plant breeders, biotechnology firms or agribusinesses – and then back to the countries where the genetic resources originate in the form of shared benefits.

The first call for proposals [pdf] to the benefit fund went out in 2008, with the due date for applicants to submit concept notes and the application form [doc] falling on 15 January 2009. Grants of a maximum of US$50,000 will be given to “organisations that work towards maintaining and increasing the use of genetic resources for food and agriculture” and in particular that focus on the priorities of technology transfer and capacity building, conservation of genetic resources on farm, and sustainable use of those resources.

The international treaty, an initiative launched by the Rome-based UN Food and Agriculture Organization, was designed to facilitate the exchange of genetic resources for food and agriculture. Cooperation in such exchanges is necessary to ensure global food security, the treaty’s website claims, as no single country is completely self-sufficient in terms of genetic resources. A study [pdf] released by the FAO in 1997 supports this assertion, according to the treaty secretariat. This interdependence is likely to be especially true when looking toward a future where scientists, plant breeders and farmers will need strategies for coping with the effects of a changing climate on crop growth.

The treaty achieves its aims through a multilateral system of access and benefit-sharing, through which contracting parties agree to make available genetic resources on 64 major food crops – accounting for 80 percent of human consumption. For more details on the international treaty see (IPW, Biodiversity, 7 August 2008).

What makes the plant treaty’s international framework for access and benefit-sharing unique is that it is operationalised from the level of the seed sample all the way to the level of international law. Previously, treaty Secretary Shakeel Bhatti told Intellectual Property Watch, international access and benefit-sharing frameworks had been done via national access laws or, if international, had been non-binding.

By contrast, the benefit-sharing mechanism for users of the plant treaty is contained within the standard material transfer agreement (SMTA) [pdf] for biological materials. What this means in practice is that any entity obtaining genetic material via the multilateral system – which must be done through the SMTA – automatically will be bound to the benefit-sharing mechanism through the same SMTA.

Benefit-sharing is done in one of two ways: either 1.1 percent of profit from commercialisation of a product containing material obtained through the system must be given to the benefit-sharing fund, or the product must be made freely available without restriction to others for the purpose of research and breeding. Recipients may therefore choose to protect their product with intellectual property, and share benefits monetarily, or choose to make their research freely usable, without mandatory payment. There is also a discounted contribution rate for sale of products belonging to the same crop, which is given regardless of restrictions on the product use.

In the case of IP rights, the requirement to participate in benefit-sharing is viral: that is, the requirement affects not only the initial recipient of the genetic resource, but all subsequent licensees of that resource or materials derived from it, according to Article 6.1 of the SMTA.

The article reads: “A recipient who obtains intellectual property rights on any products developed from the material or its components, obtained from the multilateral system, and assigns such intellectual property rights to a third party, shall transfer the benefit-sharing obligations of this agreement to that third party.”

The revenue generated by commercialised products will eventually, it is hoped, provide the funding needed to support the benefit fund. However, due to the lengthy period of time needed to breed, test, and bring to market new plant varieties, and the uncertainty involved in any innovative process, it is unclear when funds from this revenue model will be available to support the benefit fund.

Norway decided to donate voluntarily 0.1 percent of all its annual seed sales to the fund, in order that benefit-sharing could begin immediately. Italy, Spain, and Switzerland followed suit with similar commitments, and Bhatti told Intellectual Property Watch that the treaty secretariat expects other nations might as well. The benefit fund was launched on 25 November when the first set of funds was received from Italy. This is a small-scale test run of the fund, comprising less than half a million US dollars.

The Norwegian Minister of Agriculture said in a plant treaty press release [pdf] in March, 2008 that if all OECD contracting parties donated the same percentage of seed sales, the fund would receive an annual budget of around US$20 million, though it is unclear how much Norway’s contribution will be on its own. However “the quantum leap is in the proof of concept” that the fund can not only attract support from contracting states, but can also attract grassroots interest from organisations working directly with farmers in developing countries, said Bhatti. At the time of publication, around 80 potential beneficiaries have expressed interest.

The selection process for granting funds involves an initial screening of the concept notes, done by the treaty bureau. Approved pre-proposals are invited to submit a full proposal for appraisal by a panel of experts nominated by the contracting parties of seven geographical regional groups. These appraisals are then sent to the bureau as recommendations for the final selection. The cycle is biennial, with a second round expected to begin in the summer of 2009.

The genetic resources accessible under the international treaty include the 560,000 types held in trust for the public good by the Consultative Group on International Agricultural Research (CGIAR) [pdf], the world’s largest agricultural research consortium, as well as by the national collections that contracting parties agree to make available as a condition of joining the multilateral system. To date there are 120 contracting parties to the international treaty. As such, the treaty is quickly becoming one of the world’s most significant gene pools.

Kaitlin Mara may be reached at kmara@ip-watch.ch.