The Economic and Marketing Challenges of Horticultural Biotechnology - Transgenic Horticultural Crops: Challenges and Opportunities - page 177

sections. of. this. chapter,. the. potential.to. recoup. costly. investments. in. horticultural.
R&D.is.limited.by.consumer.acceptance.and.regulation..Against.these.expectations.
of.low.beneits,.irms. must.weigh. the. costs.of.innovation,.which. are.mostly.ixed..
While. the. costs. of. commercializing. GM. crops. are. independent. of. the. size. of. the.
crop,.the.beneits.are.directly.proportional.to.the.size.of.crops,.which.means.that.the.
development.of.GM.horticulture.is.less.likely.to.be.proitable.than.the.development.
of.GM.ield.crops.
Apart.from.the.costs.of.research,.the.regulatory.approval.process.for.new.bio-
tech. crop. varieties. is. slow. and. expensive,. imposing. barriers. to. the. development.
and. commercialization. of. new. technologies. and. creating. orphan. crops. 17,18 . The.
cost. of. commercializing. a. single. transgenic. variety. can. exceed. $100. million. 18 .
Once.a.new.trait.has.been.developed,.it.must.undergo.extensive.testing.for.envi-
ronmental.and.human.safety.in.order.to.be.approved.for.production..In.the.United.
States,.no.fewer.than.three.federal.agencies.are.responsible.for.approving.various.
aspects.of.GM.technologies—the.U.S..Environmental.Protection.Agency,.the.U.S..
Department.of.Agriculture.(USDA),.and.the.U.S..Food.and.Drug.Administration.
(FDA).. The. registration. process. relies. on. ex. ante. testing. of. new. technologies,.
followed.by.continual.monitoring.and.inspection.in.the.ield,.with.the.technology.
being. subject. to. cancellation. if. adverse. events. occur.. The. outcomes. of. research.
efforts,. the. regulatory. costs,. and. time. of. approval. are. uncertain,. and. investors.
require.extra.gains.to.take.these.risks.
Each. transgenic. event. must. undergo. the. same. rigors. of. testing,. regardless. of.
whether.the.same.trait.was.previously.approved.for.a.different.plant.species.or.variety. 19 .
Registration. of. each. GM. variety. is. estimated. to. cost. as. much. as. $15. million..
Testing.at.the.varietal.level.can.be.costly.and.causes.irms.to.introduce.new.traits.
into.a.smaller.number.of.varieties.than.would.be.optimal.absent.the.costly.testing. 20 .
Evidence. suggests. that. crop. biotechnology.innovation. has. slowed. because. of. high.
costs.of.regulatory.compliance. 17,21,22
The.diversity.of.horticultural.crops.causes.biotechnology.regulatory.costs.to.be.
disproportionately.burdensome.relative.to.ield.crops..Horticulture.comprises.hun-
dreds.of.species.and.thousands.of.cultivars.each.produced.in.relatively.small.quanti-
ties..It.can.be.costly.to.introduce.a.GM.trait.into.any.speciic.crop.and.cultivar,.even.
if.the.trait.has.previously.been.used.in.other.species. 2 .In.many.horticultural.crops,.
several.different.varieties.are.commercially.important..If.introgression.of.the.new.
trait.via.backcrossing.is.not.an.option,.such.as.may.be.the.case.for.clonally.propa-
gated.varieties.that.do.not.breed.true,.each.variety.must.be.separately.transformed.
in.the.lab,.and.each.must.be.separately.tested.and.approved..Regulatory.costs.would.
add. up,. but. they. could. not. be. spread. out. over. nearly. as. large. a. market. as. could.
row.crops. 19 .A.regulatory.regime.based.on.testing.at.the.trait.level.rather.than.the.
event.or.varietal.level.would.reduce.compliance.costs.and.encourage.development.
of. traits. that. could. be. introduced. into. closely. related. specialty. crops,. like. water-
melon.and.cantaloupe. 19
Another. cost. associated. with. the. development. of. horticultural. biotechnology. is.
the.cost.of.gaining.access.to.complimentary.intellectual.property.rights.(IPRs)..The.
transaction.costs.for.gaining.the.freedom.to.operate.(FTO).in.relevant.IP.space.are.
considerable—as. high. as. $100,000. per. contract.. And. these. costs. are. independent.