Who benefits from IP rights in agricultural innovation?

• Author: Catherine Jewell
• Position: Communications Division, WIPO

In the past, agricultural R&D was largely publicly funded but today, increasingly the private sector is picking up the tab for global crop R&D, especially in the area of agricultural biotechnology. The industry’s top ten companies invest some EUR1.69 billion a year – 7.5 percent of sales revenue – on new product development, according to a recent report commissioned by CropLife International and EuropaBio. In this context, intellectual property (IP) rights play a key role in enabling companies to attract investors and generate the returns necessary to recoup development costs and invest in further R&D.

In some quarters, however, there are concerns that IP rights in agricultural technology are pushing up prices and enabling agricultural innovators to generate huge profits at the expense of farmers and the public. How well founded are such concerns? Would the innovations have ever existed without the incentives provided by the IP system?

The study by Steward Redqueen on behalf of CropLife International and EuropaBio explores these questions and takes a closer look at the balancing act that underpins the IP system, in particular the trade-off between the need to offer incentives to invest in new innovation so that new and improved innovations are available down the line (future benefits) and the need to ensure public access to the benefits of existing innovations (present benefits).

The researchers established a framework to evaluate the use of IP rights and tested it using the case of Ogura hybrid oilseed rape technology. The study explores the different socio-economic outcomes flowing from three different IP (patent) licensing scenarios: non-exclusive use of IP rights, exclusive IP use and no IP rights. It examines the different ways in which each scenario would influence incentives for innovation as well as consumer benefits once a product enters the market.

The case of Ogura

Developed by the French National Institute for Agricultural Research (INRA) in the mid-1990s, Ogura is non-biotech method for producing high-yielding hybrids of oilseed rape . Long used as a valuable “break crop” to improve soil quality for cereals such as wheat and barley, it also a source of high-quality vegetable oil and animal feed – its tiny black seeds are 45 percent oil and 55 percent high protein animal fodder. Oilseed rape is also used for production of biodiesel and industrial lubricants. In sum, it is a versatile and high-value crop.

The study shows that...