Agriculture Reference
In-Depth Information
As the amount of private capital devoted to R&D in the seed industry
grew rapidly, the number of private firms engaged in plant breeding also grew,
until peaking in the early 1990s. Subsequently, the seed industry consolidated,
with fewer firms capable of sustaining the research investment needed to
develop new seed varieties. Mergers and acquisitions created a seed industry
structure dominated by large companies with primary investments in related
sectors, such as pharmaceutical, petrochemical, and food (Fernandez-Cornejo,
2004).
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In the early 1980s, developments in biological sciences created an
additional incentive for private firms to increase their investment in R&D and
seed production. As the first products of crop biotechnology were tested on a
large scale in the 1980s, the seed industry's structure underwent additional
transformation. Companies sought to achieve economies of scale to offset the
high costs of biotechnology R&D through an extensive process of mergers,
acquisitions, and joint ventures. Chemical and seed businesses combined to
take advantage of strong demand complementarities between products (Just
and Hueth, 1993). For example, the herbicide glyphosate and soybean seeds
tolerant to glyphosate are sold by the same firm. As a consequence of the
merger activity, the seed industry became more concentrated. By 1997, the
share of U.S. seed sales (including GE and conventional varieties) controlled
by the four largest firms providing seed of each crop reached 92 percent for
cotton, 69 percent for corn, and 47 percent for soybeans (table 1).
From the Laboratory to the Field
A critical part of new variety development is field-testing to ensure that
the desired traits will perform under production conditions. The release of new
GE varieties of organisms into the environment is regulated through field
release permits and monitored by USDA's Animal and Plant Health Inspection
Service (APHIS) (see box, “Regulatory Oversight”). The number of field
releases of plant varieties for testing purposes provides a useful indicator of
R&D efforts on crop biotechnology.
Regulatory Oversight
Before commercial introduction, genetically engineered crops must
conform to standards set by State and Federal statutes (USDA, 2005).
Under the Coordinated Framework for the Regulation of Biotechnology,
Federal oversight is shared by the U.S. Department of Agriculture (USDA),
