CAS-IP submission to DoJ’s exploration of seed industry concentration

In August 2009, the US Department of Justice (DoJ), together with the US Department of Agriculture (USDA) announced a series of workshops intended to “explore competition and regulatory issues in the agriculture industry”. –  Agriculture and Antitrust Enforcement Issues in Our 21st Century Economy – will enquire into agriculture and into the dairy, poultry and livestock industries.  One of several workshops that has been scheduled will take place in Iowa and address “…seed technology, vertical integration, market transparency and buyer power”.

These hearings will ask if mergers and acquisitions have reduced competition in the US seed industry.  While this enquiry is US centric, CAS-IP, in its role to assist the CGIAR and its constituency of resource-poor farmers, argues that the availability of seed to poor farmers is critical to current and future food security.  This is no longer a national issue, and the food security of developing nations is of great concern to the US and to other developed nations.  By way of example, at the July, 2009 L’Aquila Summit President Obama made a powerful statement of support for agricultural development in developing countries:

“We have committed to investing $20 billion in food security — agricultural development programs to help fight world hunger.  This is in addition to the emergency humanitarian aid that we provide.  And I should just note…we had agreed to $15 billion; we exceeded that mark and obtained an additional $5 billion of hard commitments.  We do not view this assistance as an end in itself.  We believe that the purpose of aid must be to create the conditions where it’s no longer needed — to help people become self-sufficient, provide for their families, and lift their standards of living.”

Based on 2006 revenues the ETC Group estimates that the top ten global seed companies control 47% of the global proprietary seed market.  Of the top 10, three are US based and control 40% of the global proprietary seed market.  Any reduction of competition within the US will impact agriculture and, potentially, food security in the developing world.  Our submission to the DoJ argues, therefore, that the investigation be expanded and reference the impacts of reduced competition and the concentration of IP ownership within the US seed industry on developing countries.

Over the last year, our System Dynamics Modeling team has been studying the seed sector in several African countries and prepared a case study of the seed sector in Malawi.  This analysis, which supports our contention that reduced competition may have negative impact on agriculture in developing countries, is an integral part of the CAS submission to DoJ.

With support from PIIPA, Pillsbury Law provided pro bono legal consultations on the preparation of the submission, which was delivered on December 31st.  The document can be downloaded at http://www.cas-ip.org/resources/publications/publications-impact-of-seed-company-competition-on-access/

The paper is authored by Guat Hong Teh, Sebastian Derwisch, Victoria Henson-Apollonio and Peter Bloch of the CGIAR Central Advisory Service on Intellectual Property (CAS-IP).  The authors would like to acknowledge the contributions of Donna O. Perdue of Pillsbury Winthrop Shaw Pittman LLP.

Post written by Peter Bloch, consultant to CAS-IP

Intellectual property rights (in Mexico) & maize breeding; a case study

http://unisfera.org/IMG/pdf/Leger_-_IPR_in_Mexico_-_June_2004.pdf
This case study was a link on the WIPO SMEs Newsletter July 2009.  It’s a paper dated 2004 from a study that took place in 2000.  Not sure why WIPO included this item now, but given the relevance of the topic it seemed worth blogging here. 

It deals with, and outlines some important issues.  (N.B for the study Intellectual Property Rights were defined and limited as; patents, plant breeder’s rights & trade secrets only.)  Interestingly the conclusions highlighted a:

“need for further, more precise empirical research on the impacts of IPR strengthening on developing countries’ agriculture.”

Cue Sebastian Derwisch who is leading the CAS-IP SDM modelling project and doing just that!  Sebastian said:

“Assessment of IPRs is difficult as they are often related to inputs of upstream research – so using impact indicators one mixes the impact of IPRs with several other influences that determine an innovation friendly environment and that might even interact with the use of an IPR system.

Current studies are econometric so they treat IPRs as a monolithic block and try to assess the incentives or disincentives that arise from them, ignoring:

• the dynamics that result from weak or strong enforcement of IPR,
• the dynamics that result from the specific form or IPR that is applied
• that in specific points of the value chains different forms of IPR perform different tasks
   

It’s hard to come by data to assess the impact of IPR on local industries since in most developing countries IPR frameworks have been implemented only recently – comparisons to developed countries need to be handled with care since local companies in variety development are interacting with multinational actors from developed countries, which can change the structure and the development path of local industries fundamentally”

Causal Relations of Patent Lifetime – A System Dynamics Approach

http://www.youtube.com/watch?v=GKcW4FO75b4&feature=channel_page The latest upload on the CAS YouTube channel is a presentation about applying System Dynamics to analyse patents.  This is part of the CAS-IP research project using scientific methods to assess the impact of IP in agriculture. 

This particular presentation takes the viewer through some of the factors that determine the lifetime of a patent.  Why are patents renewed?  What are the causes and effects?  From such representations of cause and effect it is easier to analyse what this can teach us about the dynamics of the patent system and how the information can be used.

The presentation was put together by Sebastian Derwisch who is a consultant to CAS- IP.  Sebastian is also a PhD candidate at the University of Bergen working on value chain dynamics in seed systems and the impact of intellectual property.