Public Private Research Partnerships for Seed Sector Development

Carl E. Pray
Department of Agricultural, Food and Resource Economics Rutgers University New Brunswick, New Jersey, USA pray@aesop.rutgers.edu

Why the excitement about public private partnerships ?

In US and Europe
Basic concepts and tools from new biology are from public research Private seed and biotech firms turned concepts into actual technology and patented them More benefit for society if they worked together

In developing countries
Public sector weak in some sectors US & European firms enter seed markets Firms need public sector research to compete

Development community Aid donors, academics, international organization like FAO concerned about poverty
Productivity of major field crops stagnating Biotech having big impacts in wealthy countries, little impact in poor countries Large seed companies not interested in small markets and public sector in small markets can not get access to the technology

PPPs in Developing Countries in research and technology transfer in response to international competition

Example: India cotton seed industry transformed by Bt gene

Bt cotton developed by Monsanto and MAHYCO has transformed cotton seed market
MAHYCO had small market share adds Bt from Monsanto and starts to dominate market in Central India Nuziveedu and Rasi big losers in market share Monsanto MAHYCO JV licenses at high price but major seed companies license

In Western India Monsantos Bt is used illegally and dominates that market

Market shares of companies without Bt Vikram in Gujarat plunge

Indian companies scrambling to get other Bt genes

Consortium of seven India companies financing the National Botanical Research Institute in Lucknow, India to develop an Indian Bt Nath Seeds is licensing the Chinese governments Bt gene Others hire local biotech companies to develop Bt genes

Competitive threats growing in other crops also

Cotton Maize and soybean seed industries Vegetables
Syngenta Bayer/Nunhems Recent purchase of Seminis by Monsanto suggests more GM or breakthroughs from functional genomics

Local seed industry strengthen themselves by working with public research system
China government investing US $200 million in biotech but more important emergence of private sector
Deng Hai Chinese Academy of Agricultural Sciences and local for hybrid maize Origin CAS/CAAS collaboration on Bt cotton

South Africa Pannar U of Capetown for maize virus resistance and drought tolerance India MAHYCO collaboration for hybrid rice

Benefits of PPPs to Private Firms

More competitive locally Expand market for private sector
Allows exports in foreign markets

Seed industry responds to declining research funding research consortia

Partnerships support research and tech transfer in Brazil

In response to declining support for EMBRAPA Local seed companies organized into groups by EMBRAPA staff Payoff both for seed companies and farmers

Partnerships at Embrapa

Public Partners
Requirements for partnerships: Cooperation Contract Germoplasma exchange; Bilateral research from both parties;
Benefits Offered Co-ownership; Sharing of royalties; Indication of partnership in the cultivar's patent/register/copyright.
Source: Evandro Mantovani, Embrapa

Private Partners
Requirements for partnerships: Restriction with partners that had breeding programs; Cooperation Contract; Evaluation tests of Embrapas genetic material.
Benefits Offered Exclusive license to multiply and commercialize cultivars resulting from the partnership, subject to the royalties agreed upon (on a range from 3% to 10%). The exclusivity can be for 5 or 10 years according to the initial stage of development.

Royalties
18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2001
* Estimate

16896

11993 8991 5617 3117 225 651

55%

270

1200

1500 463 62% 2003 351 2004

1264

401

1374

2002

2005*

Cultivars licensed

Royalties received (R$ 1.000)

Number of Contrats

Germplasm and improved lines from ICRISAT, India

ICRISAT had provide most important lines of Pearl Millet for private sector Funding crisis threatened to eliminate fielddays, demonstrations, distribution of seed to private sector and reducing breeding Organized Hybrid Parents Research Consortia-Sorghum, Pearl millet and Pigeonpea Private firms use lines extensively in their research programs

Hybrid parents research consortia

Enhances germplasm of these crops especially the development of elite hybrid parents Contributions are $10,000 per crop for full members or $5,000 for the first two years for start up firms Now collect more than $400,000 per year

Status on Private Sector Consortia Members as of 24 Nov 2005

S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Name of company Ajeet Seeds Ltd Ankur Seeds Pvt Ltd Armoor Hybrid Seeds Basant Agro Tech (India) Ltd Bioseed Research India Biostadt M.S. Seeds Ltd Emergent Genetics India Energy Seed International Pvt Ltd Ganga Kaveri Seeds Pvt Ltd Green Gold Seeds Ltd J K Agri Genetics Ltd Kanchan Ganga Seed Co Kaveri Seed Co Pvt Ltd Krishidhan Seeds Ltd Mahodaya Hybrid Seeds MAHYCO Metahelix Life Sciences Misr Hytech Seed Int., SAE, Egypt Nandi Seeds Nature Great Seed Intl Navbharat Seeds Pvt Ltd Nuziveedu Seeds Ltd Pioneer Overseas Corporation Pradham Biotech Pvt LTd Proagro Seed Co Pvt Ltd P.T. Benihinti Suburintani Rasi Seeds Pvt Ltd Safal Seeds S M Sehgal Foundation Syngenta India Ltd Tulasi Seeds Pvt Ltd Vibha Agritech Vikki's Agrotech Ltd Zuari Seeds Ltd Sorghum Prim. Prom. x x x x x x x x x x x x x x x x x x x x x x x x Pearl Millet Prim. Prom. x x x Pigeonpea Prim. Prom. x

x x x

x x x x x x x x

x x x x x x x x x x x x x (LoA sent) x

Benefits form public private consortia

Public sector stronger
More money Research more relevant for industry and farmers
Private knowledge of market Private germplasm and technology

Private sector benefits from

Technology Access to knowledge

Opportunities for seed companies to work with foreign aid donors to help the poor.

Underlying model of reducing poverty

If poor farmers can obtain new varieties of basic food grain that increase yield or reduce the variability in yield, they will
Increase family consumption to reduce malnutrition Improve the families income because they do not have to buy as much or because they can sell crop If the new varieties use more labor then poor laborers can also increase their income

Improved varieties of cash crops like cotton and vegetables can increase the income of the poor

Foreign aid community is asking can PPPs help move technology to the poor?
Opportunities and problems of biotechnology
Dramatic potential about the technology Little impact on poor Problems of access to technology

Private sector does not serve small markets and poor people Weakness of public sector seed industries to transfer new technology to farmers
Were inefficient but did spread seeds Reduced government spending on ag
Structural adjustment Donors move away from ag to health and governance

Problems of public sector research

Reduced government funding Shift to competitive grant funding

Examples of pro-poor public private partnerships

Private companies and foundations have developed partnerships
Insect resistant maize project (IRM)
Syngenta foundation-Kenya agricultural research institute-CIMMYT Local firms ready to use new varieties

International donors have financed partnerships

US Agency for International Development ABSP I developed Bt potato and maize technology for Egypt
MAHYCO in India supported by USAID to develop Bt eggplant varieties for Bangladesh and the Philippines

Rockefeller Foundation is financing African Agricultural Technology Fund (AATF)

CGIAR Institutes are developing collaborations

Harvest plus of CGIAR - $25 million from Gates Foundation to improve nutritional quality of crops local firms in Africa and Asia CIMMYT collaborations on apomixis and drought tolerance in maize with private firms ICRISATs Sorghum, Pearl Millet and Pigeon pea consortia

Oportunities for multinational firms?

Collaboration with world class scientists Access to germplasm Multiple locations for testing germplasm

Working with small farmers to learn how to develop them into a viable market
Humanitarian goals and public relations goals for improving position of poor - IRMA

Lessons for CWANA firms Example of Pannar

Medium sized markets the big corporations have ignored
Compete with multinationals in South African maize market Expanding into rest of Africa - compete with national companies and multinationals

Access technology wherever available

Subsidiary in US Buy Bt genes from Monsanto for South Africa Partnership with U. of Capetown for Maize streak virus and drought tolerance Collaboration with Harvest plus for improved grain quality financed by Gates foundation and others

Lessons for CWANA seed industry?

Public private research partnerships on germplasm, genomics or transgenic technology could strengthen the competitiveness of your industry
National programs like the Turkish National System and AGERI in Egypt International research institutes like ICARDA, CIMMYT, ICRISAT and AVRDC International consortia such as the International Sugarcane Network

Partnerships can help support important public programs that are having financial problems Partnerships for pro-poor development might also lead to financial support from donors to build new markets and it might also build employee satisfaction