The Economic and Marketing Challenges of Horticultural Biotechnology - Transgenic Horticultural Crops: Challenges and Opportunities - page 178

of. market. size.. The. costs. also. increase. as. irms.seek. to. export. to. foreign. markets.
because.additional.FTO.agreements.must.be.negotiated..A.large.share.of.horticul-
tural.crop.output.is.exports,.making.these.costs.an.important.consideration.in.invest-
ment.decisions..The.costs.of.FTOs.are.higher.for.horticultural.crops.than.ield.crops.
because.the.relevant.IP.is.more.secured.and.distributed.across.a.greater.number.of.
IP.holders. 23
Due. to. IP. congestion. and. the. dificulty. in. managing. IPRs. and. navigating. IP.
spaces,.several.leading.U.S..public-sector.agricultural.research.organizations.estab-
lished. the. Public. Intellectual. Property. Resource. for. Agriculture. (PIPRA),. which.
provides.IP.management.solutions.for.public.sector.and.small.private.sector.players.
in. horticulture.. PIPRA. seeks. to. coordinate. the. disparate. portfolios. of. its. member.
organizations.to.support.specialty.crop.applications..For.instance,.PIPRA.attempts.
to. better. specify. licensing. agreements. to. distinguish. the. “ields. of. use”. so. that. a.
technology.could.at.once.be.licensed.for.use.on.major.row.crops.as.well.as.for.uses.in.
smaller.markets,.including.those.in.developing.countries..PIPRA.also.is.developing.
an.IP.clearinghouse.and.working.to.pool.patents.to.be.licensed.as.a.bundle.for.uses.
in.speciic.crops.or.speciic.regions..Such.efforts.can.help.to.mitigate.some.of.the.
barriers.to.entry.in.horticultural.biotechnology.
In.spite.of.efforts.like.PIPRA,.the.high.ixed.costs.of.biotechnology.R&D,.par-
ticularly,.the.regulatory.burden,.require.a.substantial.market.in.order.for.innovating.
irms.to.recoup.their.investments..Many.of.California's.specialty.crops.have.become.
technological.orphans.because.agricultural.chemical.companies.have.concluded.that.
the.potential.market.is.too.small.to.warrant.high.ixed.costs.to.develop.pesticides.for.
specialty.crops..By.a.number.of.measures,.it.appears.that.seed.companies.share.the.
sentiment.of.the.chemical.companies,.preferring.to.invest.in.conventional.breeding.
of.horticultural.crops,.rather.than.genetic.engineering..Bradford.et.al..argue.that.the.
marked.decline.in.R&D.intensity.for.lower.market.crops.is.a.consequence.of.high.
registration.costs. 2
CONSUMER ACCEPTANCE
In. the. 11,000. years. since. the. domestication. of. plants,. crop. improvement. has. been.
widely.hailed.as.a.necessity.for.overcoming.human.suffering.and.promoting.economic.
growth..Plant.breeding.has.advanced.considerably.since.the.days.of.weak.selection..
It.was.not.until.genetic.plant.engineering.was.introduced.that.sophisticated.breeding.
techniques.elicited.consumer.opposition. 24 .The.application.of.the.same.genetic.pro-
cesses.to.pharmaceutical.production.has.been.widely.accepted.by.consumers,.whereas.
there. remain. considerable. health. and. environmental. concerns. associated. with. bio-
technology.in.food.crops..In.the.13.years.since.the.commercial.introduction.of.GM.
ield.crops,.the.technology.has.largely.proven.to.be.safe.to.human.health.and.the.envi-
ronment.and.to.provide.considerable.beneits.in.terms.of.increased.food.output.and.
reduced.use.of.chemical.pesticides.and.tilling.operations. 25 .Shelton.et.al..reviewed.the.
risks.of.insect-resistant.GM.crops.and.determined.the.risks.to.humans.and.the.envi-
ronment.to.be.lower.than.the.risks.posed.by.alternative.pest-control.technologies. 26 .
Nevertheless,.surveys.of.public.attitudes.routinely.ind.large.portions.of.the.popula-
tion.are.skeptical.of.biotechnology.in.general.and.food.applications.in.particular. 27,28