Agriculture Reference
In-Depth Information
R
APID
C
HANGE AND
P
ACE OF
R&D
A
CTIVITY
C
HARACTERIZE THE
S
EED
I
NDUSTRY AND
T
ECHNOLOGY
P
ROVIDERS
The U.S. commercial seed market is the world's largest—with an
estimated annual value of $5.7 billion per year in the late 1990s—followed by
China at $3 billion and Japan at $2.5 billion (Fernandez-Cornejo, 2004).
Moreover, the U.S. seed market is growing (in quantity and value), mainly
because farmers have been increasing purchases of seed and reducing the
planting of saved seed.
Growth in the seed market has been particularly rapid for major field
crops—corn, soybeans, cotton, and wheat—that together constituted two-
thirds of the seed market value in 1997.
The U.S. seed industry began a transformation in the 1930s, with the
introduction of commercially viable hybrid seeds. These hybrids were higher
yielding than nonhybrid varieties but degenerative, so farmers had to purchase
new seed every year to maintain the high yields. Further changes were
motivated by the strengthening of intellectual property rights (IPR) protection,
mainly during the 1970s and 1980s, which increased returns to research and
offered a greater incentive for private companies to invest in seed
development. The two principal forms of legal protection are plant variety
protection (PVP) certificates issued by the Plant Variety Protection Office of
USDA and patents issued by the U.S. Patent and Trademark Office. Both grant
private crop breeders exclusive rights to multiply and market their newly
developed varieties.
However, patents provide more control since PVP certificates have a
research exemption allowing others to use the new variety for research
purposes. Agricultural biotechnology patents, mostly dealing with some aspect
of plant breeding, have outpaced the general upward trend in patenting
throughout the U.S. economy. During 1996-2000, 75 percent of over 4,200
new agricultural biotech patents went to private industry (King and Heisey).
Enhanced protection of intellectual property rights brought rapid increases
in private research and development (R&D) investments and changes in
market concentration in the U.S. seed industry. R&D expenditures on plant
breeding for many major crops shifted from mainly public to mainly private.
Private spending on crop variety R&D increased fourteenfold between 1960
and 1996 (adjusted for inflation), while public expenditures changed little
(Fernandez-Cornejo, 2004).
