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

New ideas for the CAS-IP System Dynamics Modelling team

https://casipblog.wordpress.com/2009/07/29/system-dynamics-conference-2009-and-cas-ip-using-sdm-technique-for-research/

Further to the recent posting about the CAS-IP System Dynamics team participating at the 2009 System Dynamics conference the following is an update from the trip report written by Sebastian Derwisch and Sebastian Poehlmann:

 “For this project we are creating a generic model of the seed value chain in West Africa, depicting every step from variety creation in the research and development sector down to the adoption by smallholder farmers.

In the plenary session Sebastian Derwisch presented a paper he co-authored with Birgit Kopainsky on farmers’ adoption in which they are trying to identify a) how farmers’ adoption differs by country and region, b) which policies are suited to enhance the adoption of improved seed as well as c) the role IP strategies play in this process.

CAS-IP at the System Dynamics conference 2009

The discussion after the presentation dealt mainly with following:
– Matching reference mode – did we validate the structure with empirical data

– Including bottom up approaches; IP policies are perceived to be top down approaches and we need to include justifications to what extend working top down is in fact necessary if we speak of framing conditions like intellectual property right or to what extent executing IPR is also bottom up

– Including the price as a variable – including financing issues of enhanced agricultural inputs more explicitly would increase confidence in the structure as this is the main inhibiting factor for adoption

– How can we simulate the impact of catastrophic events like droughts?

– What about combining policies?

– What are factors that would make farmers that once used commercial seed start using traditional farm saved seed again

–  is availability an issue here? What else?

The other paper Sebastian Derwisch presented was his work on the issue of enhancing investment into the development of new seed varieties. In this parallel session he received comments on the problem of validating the structure with empirical data.  It was also suggested the project could benefit from looking at other agricultural inputs for traditional and commercial seed systems as influencing factors.

From discussions at the presentations it became clear that embedding seed value chain in the larger context of energy prices, other food chains and the productivity and capacity of soils would be another interesting aspect.

We observed the current trends towards web-based simulation and modelling collaboration with great interest and plan to invest some time in developing web simulations in order to better illustrate and communicate the System Dynamics approach e.g. via the CAS-IP blog.”

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”

System Dynamics conference 2009, and CAS-IP using SDM technique for research

http://www.systemdynamics.org/conferences/2009/index.htm

This week sees the 27th International System Dynamics Conference, in Albuquerque, New Mexico, USA.  The CAS-IP System Dynamics Modelling team were there and on Monday Sebastian Derwisch presented a plenary presentation entitled: “Model-based exploration of strategies for fostering adoption of improved seed in West Africa” (download the paper here)

Sebastian Derwisch had the following to say:

“Two plenary presentations in the morning [Monday] highlighted the potential a contribition from the field of SD could make to global challenges like energy, climate change and food production. The research of CAS-IP (and the CGIAR) relates directly to the long term goals of the SD society. This shows that system dynamicists also see the methodology as a suitable approach to adress these global challenges.”

I am looking forward to hearing more from both Sebastian Derwisch and Sebastian Poehlmann about how their interactions at this conference may influence the future of the SDM work they are doing for CAS-IP.

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.