Big Business, Intellectual Property Rights and Farmers’ Rights

Rights

13.1. Introduction: The role of private multinationals

The agricultural market and research sector – whether it is concerning the seed market, agricultural chemicals or biotech crop varieties – is dominated by a few, large and private multinational

companies – such as Monsanto (USA), DuPont (USA), Syngenta (Switzerland), Bayer (Germany), BASF (Germany), Groupe Limagrain (France) and Dow AgroSciences (USA) (Fig. 13.1) (Castro, 2015) – which are becoming increasingly bigger (Box 13.1). To put things in perspective: In 2006, Monsanto

invested 10% of its total revenue to R&D within agricultural biotechnology, which accounted for US$

550 million. In comparison, CGIAR invested approximately US$450 million in agricultural R&D, whereby only a small portion went towards agri-biotechnology (Virgin et al., 2007).

Figure 13.1. Market share of the global agrochemical market (pie chart, left) and global proprietary seed market (pie chart, right) by the top 10 private multinational companies in 2007. Similar figures from recent years were not obtainable, thus the current market share will be somewhat different, but the overall trend is likely to be similar. Figure from: ECT Group, 2008.

Many multinationals have increased their investment within the agricultural sector in the developing world, including biotech crop projects (FAO, 2012b; Chapter 4, Table 4.1). This has caused some to question the ulterior motives of such companies – why would multinational corporations want to invest in seemingly unprofitable pro-poor technologies and in a market where most farms are small-scale and subsistence? Indeed, the promotion of biotech crops as pro-poor and environmentally sustainable – an image believed to have been partly created by the biotechnology industry (Glover, 2009; 2010) – seems contradictory considering that most commercially available transgenic crops have been developed with large-scale, industrialised farming in mind (Elliott & Madan, 2016).

Box 13.1. Mergers of private multinationals pose problems for farmers? Currently, several mergers are being tabled, including between DuPont and Dow Chemical Company, a planned takeover of Monsanto by Bayer, and the previously mentioned takeover of Syngenta by

ChemChina. Some worry that such mergers will increase the price of seeds and planting materials further, while decreasing the price of commodities and crops (Picker & de la Merced, 2015; Picker et al., 2016).

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Thus, some describe investments by transnational companies in developing countries as a “Trojan horse” for expanding market access, gaining control of the seed market, promoting a transition from subsistence to commercially-driven farming, and to create long-term dependence on the technology (e.g. Box 13.2) (Zerbe, 2004; Cooke & Downie, 2010; Glover, 2010). As a consequence, distrust by various stakeholders towards the private sector has been identified as one of the obstacles to biotech crop adoption in Sub-Saharan Africa (Ezezika et al., 2012).

Much of the debate on who really owns the agricultural supply chain – or even nature herself – has been centred on Intellectual Property Rights (IPRs), which is believed to concentrate ownership of agricultural resources and determine which products become available. Thus, IPRs will be the focus of the remainder of this section. However, it should be recognised that several other issues

contribute to the debate, including continuing globalisation and liberalisation of markets and the seed industry, shifts in the political economy of agriculture, ownership of genetic resources, and access to genetic resources and the equal sharing of benefits that arise from such resources (e.g. the international agreement of the Nagoya Protocol on Access to Genetic Resources and Equitable Sharing under the CBD) (Chambers et al., 2014).

Box 13.2. Monsanto – “The Big Bad Wolf”? Monsanto has by some, especially anti-GMO NGOs and farmers’ movements coalitions, been appointed the ”big, bad wolf” (e.g. AFP, 2015). Some speculate that, following the European moratorium on GM crops in 1998

(Chapter 8, section 8.1), Monsanto went looking for a new market for its products, as well as a way to improve the reputation of biotech crops (Glover, 2010). Thus, Monsanto turned to the developing world – or so it is argued by certain authors (e.g. Schurman, 2004; Glover, 2007a, 2007b, 2007c, 2010; Schurman & Munro, 2006; Newell, 2008; Scoones, 2008).

Between 1999 and 2002, Monsanto established the Technology Cooperation Programme whereby certain pieces of the company’s intellectual properties were licensed for

non-commercial applications relevant to the developing world (Glover, 2010). For instance, in year 2000, Monsanto shared its working draft of the rice genome with the International Rice Genome Sequencing Project, as well as sharing proprietary technology with scientists working on Golden Rice (Monsanto Company, 2000a, b). Concurrently, Monsanto initiated the

Smallholder Programme in order to provide poor farmers with a “package” consisting of agricultural technologies and extension support (Glover, 2010). Additionally, Monsanto started to fund third-party research which proposedly produced a range of economic studies which claimed significant benefits of GM adoption in the developing world, as well as promoting biotech crops as safe and environmentally friendly (Glover 2007b; Glover, 2010).

Glover (2010) argues that all of the above were initiated as part of a deliberate strategy to expand the company’s market in the developing world, to improve the reputation of biotech crops, and to encourage the transition from subsistence to commercial farming. Monsanto itself has stated that the company “has a track record of sharing knowledge and technologies with the public sector” – at reasonable costs and quantities – and that such initiatives stem from a “natural human value to share” while not conflicting directly with the company’s commercial pursuit (Horsch & Montgomery, 2004).

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13.2. Socio-economic impacts associated with Intellectual Property Rights

New technologies are often delivered with IPRs which enable companies exclusive rights to the product (e.g. claiming control of seeds), as well as the opportunity to impose royalty and technology fees to recoup some of their investments (Lambrecht, 2001; ASSAF, 2010). It has been argued that proprietary control contribute to several socio-economic impacts, including (i) ethical concerns, such as the patentability of life (Mayer, 2003); (ii) monopoly control that the transnational companies exercise on the price of biotech seeds (Virgin et al., 2007); (iii) negative impacts on Farmers’ Rights (Box 13.3), food sovereignty, and traditional agricultural practices, knowledge and crop varieties (Virgin et al., 2007); (iv) exacerbation of socio-economic injustice (Mayer, 2003; Virgin et al., 2007);

and (v) impediment of the free flow of information, knowledge, genetic materials and technological innovations needed by public institutions to deliver pro-poor technologies (Fransen et al., 2005;

Daño, 2007; Fischer et al., 2015).

For instance, saving and exchanging seeds and planting material has been practiced by East African farmers for centuries and has contributed to greater genetic diversity, flexibility and resilience of farming systems (Virgin et al., 2007). Consequently, any limitation to such practices could be considered a violation of Farmers’ Rights and long-standing cultural practices (e.g. cultural uses of biodiversity, traditional conservation and cropping practice, and the indigenous knowledge systems), and has been proposed to pose a threat to entire farming communities and long-term food security due to loss of genetic diversity (Fransen et al., 2005; Daño, 2007; Azadi et al., 2011).

Most commonly, farmers have to sign a contract whereby they pledge not to save, replant or sell seeds or planting material obtained from a proprietary GM crop variety (and in some cases refrain from purchasing agrochemicals from other companies) (Campbell, 1998; Lambrecht, 2011; Monsanto Company, s.a.-c). However, many smallholder farmers simply cannot afford buying new seeds every season or find themselves in greater debt if being charged due to violation of the contract (Virgin et al., 2007). Consequently, the access to proprietary protected transgenic varieties may become limited to elite farmers with the effect of exacerbating socio-economic inequality (further discussed in Chapter 16) (ASSAF, 2010).

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13.3. Are East African farmers already tied into Intellectual Property Rights frameworks?

The proprietary seed market accounts for over 80% of commercially-sold seeds, be it conventional or GM, and many concerns associated with biotech crops and IPRs are considered similar to those associated with hybrids seeds and elite cultivars (though the IPRs of GM crop varieties are considered to provide stronger protection) (Donnenwirth et al., 2004; Virgin et al., 2007; ETC Group, 2008).

Consequently, some argue that many East African farmers already have to abide to the rules of seed stewardship due to their dependence on improved varieties, and that the discussion on IPRs should revolve around the companies and institutions that hold the proprietary rights rather than the technology itself (an argument supported by Dr. Oduor).

Studies have previously indicated a relatively low adoption level and rate of improved varieties, especially in remote and marginal areas (Doss et al., 2003; Virgin et al., 2007). In 1999, hybrid maize varieties were planted on only 4%, 6% and 5% of the total areas dedicated to maize in Ethiopia, Tanzania and Uganda, respectively (CIMMYT Maize Research Impacts Survey 1998/1999; as cited by Virgin et al., 2007). In Kenya, 65% of maize areas were found to be dedicated to hybrid varieties in 1999 (CIMMYT Maize Research Impacts Survey 1998/1999; as cited by Virgin et al., 2007). Virgin et al. (2007) further cite a Daily News report from 2002 which found that less than 10% of Tanzanian farmers used hybrid maize seeds. In Uganda, 11% of land areas have been found to be dedicated to cultivation of improved varieties (Virgin et al., 2007). However, the adoption level of hybrid maize has been shown to be relatively high in certain areas, including the Lake Victoria Basin whereby 60%

of farmers were found to plant up to 60% improved varieties (Sserunkuuma, 2004).

Since then, data obtained from FAO show that the percentage of improved seeds in Kenya was ~27-31% in 2005, and that such seeds were used by ~32-34% of households (percentage depends on farm size). No data on the percentage of improved seeds was available in Ethiopia, but ~23-31% of

Box 13.3. What are Farmers’ Rights and how are they protected? The debate on Farmers’ Rights usually revolve around the right to save and exchange seeds and planting material, but the concept also includes, amongst others, (i) protection of traditional knowledge; (ii) equal sharing of the benefits that arise from the use of genetic resources; and (iii) a farmer’s right to take part in the decision-making concerning conservation and sustainable use of such resources (Naluwairo, 2006). Some of these rights are enclosed in the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) which is signed and ratified by all study countries (FAO, 2009;

FAO, 2017). Additionally, the AU Model Law for the Protection of the Rights of Local

Communities, Farmers and Breeders and for Regulation of Access to Biological Resources also recognises farmers’ and communities’ rights over plant genetic resources, in addition to

traditional knowledge, innovation and practices (Organisation of African Unity, 2000; IIED, s.a.).

The idea of Farmers’ Rights is relatively new to many East African stakeholders, including

policymakers that are responsible for implementing such rights (Naluwairo, 2006). Consequently, the concept may appear rather unclear and diffuse, which has resulted in a lack of efficient mechanisms for putting Farmers’ Rights into practice (Naluwairo, 2006). Furthermore, many countries find it difficult to co-align the regulations established by international trade agreements (e.g. the TRIPS Agreement) with that of the ITPGRFA and protection of Farmers’ Rights (Daño, 2007).

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households used such seeds in 2012. In Uganda, improved seeds constituted 7-25% and were employed by 15-31% of households in 2012. No data was available for Tanzania in terms of

percentage of households which employ improved seeds, but improved seeds amounted to 23-26%

in 2009 (FAO, s.a.-c). Additionally, a recent study found that the average adoption rate of hybrid maize seeds was 45% in Kenya and Tanzania, and 43% in Uganda (Marechera et al., 2016).

Thus, it appears that the level and rate of adoption of improved seeds and varieties have increased in recent years, at least for hybrid maize. Still, the notion that all East African farmers are tied into the proprietary seed market may be unfound. It further suggests that increased delivery of improved and elite non-GM material could have beneficial impacts on productivity, yield and food security.

13.4. The importance of Intellectual Property Rights for foreign investment in agri-biotech projects in developing countries

It is important to recognise that IPRs help promote research within the private sector and provides an incentive for companies to invest in a foreign market where the returnable profit may be small (Barton, 2003; Basu & Qaim, 2007; Kerle, 2007). Thus, inadequate protection of IPRs and poor legal systems may discourage foreign investors, which may prevent East African countries from reaping the potential benefits of a technology (Paarlberg, 2001; Adenle, 2011; Chambers et al., 2014).

Furthermore, weak IP systems can be particularly challenging for public-private partnerships (PPPs) in the case whereby the partners involved have different IPR arrangements (see Chapter 20 for more information about PPPs) (Kerle, 2007; Chambers et al., 2014). For example, unresolved issues concerning IPRs were believed to slow down the progress of the Insect Resistant Maize for Africa (IRMA) project in Kenya (Paarlberg, 2001). Additionally, weak IP systems may pose a challenge for local public and private sector investors and developers who have to work around a complex system of IPR laws at the domestic, regional (e.g. provisions set by the African Regional Industrial Property Organization [ARIPO] and the AU Model Law) and international level (e.g. the TRIPS Agreement), with the effect of increasing transaction costs (Chamber et al., 2014).

“It must be recognized that biotechnology . . . will not evolve without IPRs, unless there is much more public sector research than seems plausible . . . IP protection is thus a necessary component of a global trade regime in a high technology era” - Barton, 2003 (as cited by Kerle, 2007).

Finally, it should be noted that studies have found that a substantial amount of the economic benefits arising from GM adoption goes towards farmers as opposed to the private companies. For instance, Gouse et al. (2004) found that 45-70% of the economic benefits arising from Bt cotton in South Africa went towards the farmers, while 20-52% and 1-3% went to Monsanto and the seed suppliers, respectively.

13.5. Addressing issues associated with Intellectual Property Rights: Capacity building, royalty-free access, increased funding to local public and private crop breeding programs, and protection of Farmers’ Rights

East African governments face the challenge of protecting traditional agricultural practices and Farmers’ Rights, while still complying with regional and international agreements (Chambers et al., 2014). Thus far, little progress has been made in dissecting such issues or developing appropriate IPR policies (Chambers et al., 2014). The adoption of a weak IPR system can allow countries to avoid the major issues related to proprietary control, but may as previously mentioned discourage both international and local private and public research, innovation and investments (Fransen et al.,

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2005). Rather, one should encourage the development of national skill sets capable of handling issues concerning proprietary rights (Chambers et al., 2014). Capacity building projects should be initiated to educate and train policymakers, lawyers, scientists and practitioners involved in technology transfer on how to negotiate technology access, manage IP issues and effectively implement IP frameworks (Chambers et al., 2014). In 2003, Sida established the Genetic Resources and Intellectual Property Rights (GRP) program in an attempt to meet such needs (Sida, 2003).

However, the fact that the initiative was not African-based is believed to have limited its potential impact (Chambers et al., 2014).

Consequently, institutions such as AATF have acted as brokers on the behalf of African technology-sharing partners in negotiating royalty-free access to a range of biotechnology advances and applications (ASSAF, 2010). AATF have been relatively successful in negotiating such agreements, including projects such as WEMA, BWX-resistant bananas, VIRCA and NEWEST Rice.

Additionally, East African governments have other tools at their disposal for protecting indigenous and cultural norms, while still facilitating technological advancement – including patent pools, humanitarian licenses, vouchers for support of research competitions, governmental-bought licenses, and so forth (Chambers et al., 2013). Additionally, it is important to reduce the reliance on multinationals by increasing funding to public and local private sector crop breeding programs (see Chapter 20 for more information). By doing so, East African governments could become more active in the global debate on the development and ownership of emerging technologies.

Finally, the protection of Farmers’ Rights as a way of safeguarding farmer autonomy and in recognition of their contributions to the East African society is pivotal – irrespective of whether or not biotech crops are involved (Borowiak, 2004). Hitherto, it has been challenging to enact Farmers’

Rights, which may reflect a lack of practicality (Borowiak, 2004). Thus, efforts should be made to correct short-comings of existing regimes, and analytical studies can be used to identify current barriers to Farmers’ Rights. African governments should strive to fulfil the obligations set by the ITGRFA and/or AU Model Law, as well as increasing the awareness on Farmers’ Rights among all stakeholders, including the general masses. Furthermore, East African countries should take active part in international policy and decision-making concerning Farmers’ Rights and IPRs frameworks, which up until now has displayed a tendency to mostly be in line with a Western notion of ownership tilted towards individual monopoly rights (Kameri-Mbote, 2003; Naluwairo, 2006).

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