FUNDS FOR RESEARCH ON TRANSGENIC CROPS - THE BALANCE BETWEEN PUBLIC AND PRIVATE SECTOR
The public sector and charitable foundations funded the national and international crop research in the post-war period that led to doubling or tripling crop yields in large parts of Asia and Latin America, along with gains in employment and nutrition in the developing world. The dwarf wheat and rice plants and other high-yielding varieties which were at the center of this “Green Revolution” met the needs of millions of poor farmers and consumers.
The balance of funding for this kind of research has shifted significantly during the past decade from the public to the private sector, and there has been a corresponding reduction in national, non-commercial agricultural research capacity that needs to be reversed. Substantial public-sector agricultural research still exists, however, notably in North America, Australia, Europe, China, India, Brazil, and in the Consultative Group for International Agricultural Research (CGIAR) system. The CGIAR system comprises 16 international research centers with interests that include wheat and maize (Mexico), rice (Philippines), potatoes (Peru), and millet and sorghum (India), but the financial support for the CGIAR has been declining in real terms. Whereas fundamental research is still being carried out in the public sector, the strategic application, in sharp contrast to the “Green Revolution,” takes place largely in the private sector where much of the intellectual property is controlled.
In these circumstances, research priorities are driven by market forces (e.g., price signals). Companies produce products
whose costs are recoverable in the marketplace. There are also goods that benefit society as a whole rather than individuals and whose costs cannot be recovered in the marketplace (so-called public goods). Public sector funding is needed for such public-good work (Stiglitz 1993). A classic example of a public good would be an improved plant that can be propagated by farmers with little deterioration, as with self-pollinated (e.g., wheat and rice), or vegetatively propagated (e.g., potatoes) crops. If such crop improvement research were left to normal markets for private provision, then it would be systematically under-supplied. This is a typical feature.
The main reason why aid donors and foundations support international agricultural research is to ensure that public-good research of relevance to small-scale farmers and to complex tropical and subtropical environments is undertaken. If such research were wholly private, even in a perfectly functioning market, the demands of rich consumers for innovation in their own interests would overwhelm the price signals from poor consumers and small-scale farmers.
Given the limited resources so far available to them for research, the non-commercial (public and charitable foundation) sectors have achieved more than could have been expected (e.g., beta-carotene-enhanced rice and rice resistant to the yellow mottle virus).
We recommend that: (i) governments should fully recognize that there will always be public interest/goods research requiring public investment even in the market-driven economy; it is imperative that public funding of research in this area is maintained at least at its present level in both CGIAR and national research institutions; (ii) governments, international organizations and aid agencies should acknowledge that plant genomics research is a legitimate and important object for public funding, and that the results of such research should be placed in the public domain;
(iii) innovative and vigorous forms of public-private collaboration are urgently required if the benefits of GM technologies are to be brought to all the world's people; (iv) incentives are needed to encourage commercial research companies to share with the public sector more of their capacity for innovation; and (v) care should be taken so that research is not inhibited by over-protective intellectual property regimes.