Agriculture Reference
In-Depth Information
F
ACTORS
I
NFLUENCING
F
UTURE
T
RENDS IN
P
RIVATE
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S
ECTOR
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EED
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IOTECHNOLOGY
R&D
Structural change in the seed-biotechnology industry may have been
greater than in any of the other industries covered in this study. Several factors
will continue to influence this structure and the level and composition of
private-sector investments in seed-biotechnology R&D:
1)
Potential for future market expansion.
Future market expansion will
be determined by, among other things, the potential for greater use of
improved seed in general and GM crops in particular in developing
countries; by changes in consumer attitudes toward genetic engi-
neering, particularly in high-income countries; by the potential for
expansion in biotechnology applications to additional crops; and by
the development of newer biotechnology applications, for example,
tolerance to drought stress.
2)
Industry structure, seed pricing, and seed-biotechnology R&D.
Considerable attention has been focused on the effects of industry
structure on seed pricing and potential distributional effects. For
example, Stiegert et al. (2010) summarize a number of studies and
find that in the United States, own-market concentration can increase
seed prices. At the same time, the study finds that if a more integrated
system of production of GM seeds by a few large firms reduces
development costs, the resulting price effects may reduce or reverse
price increases due to market power. Focusing specifically on the
impacts of industry structure on R&D, Schimmelpfennig et al. (2004),
using field-trial data from the United States, argue that increases in
industry concentration had a negative effect on research intensity in
agricultural biotechnology. The evidence reported here on actual
R&D expenditures for the global seed industry as a whole shows that
the net trend in research intensity was strongly positive during the
1990s, and real private-sector research expenditures have continued to
grow since then (see table 2.3). Alternatively, Kalaitzandonakes et al.
(2010) show that the value of price premiums and markups for GM
seed in the U.S. corn and soybean seed industries did not exceed R&D
expenditures until 2007, and the authors cite this as evidence of
dynamic efficiency in these industries.
