IP Rights In Agriculture: High Stakes, Entrenched Positions At WTO Public Forum

The economic, climate and food crises were on the lips of speakers at the 2009 World Trade Organization Public Forum last week. Suggestions for better global governance were sought from stakeholders who took the podium in different sessions, and trade in agriculture was a focal point of the event.

Although WTO Director General Pascal Lamy warned against “the impulse to go local in answer to the financial crisis” and advised, on the contrary “to go global,” some speakers encouraged local solutions to achieve food security and a sustainable agriculture.

Estrella Penunia of the Asian Farmers Association, a non-governmental organisation representing 10 million small farmers in eight Asian countries, said that one key to the food, climate change and financial crises was to promote organic and ecologically friendly agro-based industries, owned and managed by organisations of small-scale farmers.

She recommended that WTO negotiators from developing countries ensure that trade agreements that their countries are entering preserved their capacity to exempt sectors relating to food security and rural development objectives from trade liberalisation. “Trade agreements should not deprive countries of the right to adopt and implement trade policy safeguarding the livelihood of small producers,” she said.

The agriculture trade situation in the world can be broadly described with two paradigms, said Ujal Singh Bathia, Indian ambassador to the WTO. On the one hand, in developed countries, agricultural trade is marked by the concentration of economic power and trade distortions due to huge subsidies, market access barriers and increasing control of agricultural production by a few companies through proprietary technologies and production methods. And on the other hand, some developing countries have neglected their agriculture sectors and have used cheap imports to manage their shortages. This is a “perverse complementarity which is striking,” he said.

Biotech Industry Partnership Effort

Private-public partnerships (PPPs) might be the way forward to promote innovation, as described by John Kilama, president of the Global Bioscience Development Institute, a US consultancy agency encouraging developing countries to adopt strategies favourable to bioscience, bioprospecting and biotechnology industry.

The goal of PPPs is to promote innovation, he said. There are many excellent national laboratories in developing countries and there is an opportunity for companies to take findings from those laboratories to be able to market them, he said. So there are a lot of opportunities in using those public and private entities to provide products that can be very useful to meet the demand for agricultural products.

There is a critical need for a legal framework to enable PPPs to address the food demand, Kilama said. Challenges to PPPs, he added, are mainly the small local private sector, the lack of regulatory capacity and the liability for private sector that donates technologies. Kilama encouraged corporate solutions to these challenges, including creating IP rules, increasing venture capital, and increasing large farming in poor countries.

For Juan Gonzalez Valero, head of corporate responsibility for Syngenta, food production should double by 2050 and has to be increased to accommodate 2.5 billion people, create jobs for those people and integrate them in the trade system.

It is not so much the notion of public-private partnerships that is important, he said, but partnerships in general. The private sector is heavily investing in research and development to find solutions but new technologies have to be brought to the farmers and “we cannot reach each” farmer, he said, and this is where partnerships are important.

Syngenta has developed hundreds of partnerships, Gonzalez Valero said, in knowledge sharing and technology transfer, for example. The company also is subcontracting research at universities. “What is public and what is private is starting to disappear in that context,” he said.

In order to get farmers to adopt new technologies, innovative approaches and new business models are needed, he said. He gave the example of the market introduction of Syngenta’s tropical sugar beet. The new variety of sugar beet can be used in tropical climes and grows in half the time. In one public-private partnership, to prompt farmers to adopt this new variety, the mill that transforms the sugar beet into sugar or ethanol was financed by Syngenta and some stakeholders. A refinancing system was then used so that, in time, the ownership of the mill can be handed over to the farmer, said Gonzalez Valero.

Partnerships take time, he said, and IP rights systems have to protect the investment in order to have responsible and safe management of these new technologies. An international regulatory framework more supportive of partnerships than the existing one is needed, he said. Gonzalez Valero warned against overly politicised regulatory requirements that are leading, in the case of genetically modified organisms, to the technology not being shared because nobody is ready to take the risks and liabilities.

UN Rapporteur: IP Rights Threatening Biodiversity, Food Security

The commercial seed system may jeopardise the farmer seed system, according to Olivier de Schutter, United Nations Special Rapporteur on the right to food.

There are two ways for farmers to access seeds, he said. The first is the informal or farmer seed system in which local varieties and exchanged, traded between farmers who select the seed from the harvests. He described this system as prevalent in many developing countries. The second is the commercial seed system in which better or improved varieties, uniform and stable are certified by governments. Those seeds are either provided to the farmers by subsidised schemes or sold to those farmers. This system is increasingly being used in developing countries, he said.

Although both systems coexist in many countries, several factors tend to gradually replace the informal farmers’ seeds systems with commercial ones. One of them is the impact of seed certification schemes which are government-provided lists of seeds, considered to be reliable. Those lists often do not include traditional local varieties because those do not present the uniformity and stability to allow them to be catalogued.

Another factor is that in an effort to support farmers, governments provide farmers with packages including seeds, fertilisers, pesticides and sometime access to credit. The farmers are thus provided with improved commercial varieties of seeds and put aside local traditional varieties.

This presents two risks, according to de Schutter. One is despite higher yields under the right conditions of irrigation and inputs, superior nutritious value, disease resistance, offered by improved varieties, there are some drawbacks. In many cases it leads to less stable income for farmers across the years as uniform seeds present less resilience to natural phenomenon.

The second risk is that inputs are also protected by IP rights, which creates a system in which farmers are dependent on the acquisition of seeds, he said. There is an increased concentration in the seed market with the three top companies owning some 47 percent of the market. “Very concentrated sectors make it possible for the companies to reap very high benefits” and “that might call for a more energetic use of antitrust legislation,” he added.

The reliance on improved varieties also could lead to a loss of agro-biodiversity as the pressure toward more uniform crops increase. Most research efforts are invested in five species, de Schutter said: maize, soybean [corrected], wheat, rice and potato. Even within those five species, the genetic diversity is decreasing, for example in Sri Lanka, where in 1969 some 2,000 rice varieties were being cultivated compared to today’s fewer than a hundred.

It is important to ensure that countries are better equipped to make appropriate choices in establishing IP rights regimes, de Shutter advised.

Trade Deals Seen Promoting Rising IP Rights on Plants

The enforcement of IP rights in agriculture is getting stronger, according to François Meienberg, campaign director for agriculture, biodiversity and intellectual property at the Berne Declaration, and while the number of applications on seed patents is dropping at the European Patent Office, there is a trend towards patents on conventional plant breeding.

Prof. Carlos Correa of the University of Buenos Aires said Article 27.3(b) of the 1994 WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement provides the possibility for exception from patentability for plants and animals but also requires countries to provide protection for plant varieties either by an effective sui generis system or patent, or a combination of both.

The International Union for the Protection of New Varieties of Plants (UPOV) is the main model for protection of plant varieties, Correa said, adding that a large number of developing countries had joined the UPOV convention. Very few countries, such as Thailand, Malaysia and India, have developed sui generis systems that are not based on the UPOV regime.

According to Correa, one of the reasons many developing countries joined the UPOV convention is because free trade agreements, mainly with the European Union or the United States, include obligations to provide protections for plants and animals. Correa said the International Treaty on Plant Genetic Resources for Food and Agriculture is providing a philosophy of sharing resources through a multilateral system and putting IP rights in the right perspective.