By Viviana Muñoz Tellez, Programme Officer of the Innovation and Access to Knowledge Programme (IAKP) at South Centre.

In response to the global food crisis, world leaders around the globe are making pledges for rapid action. New commitments are embodied in the recent Declaration of the High-level conference on World Food Security convened by the Food and Agriculture Organization (FAO) of the United Nations in Rome from June 3 to 5, 2008. Governments are rightly focusing on implrmenting short-term measures to muffle the immediate effects of the dramatic upward surge in commodity prices, particularly on the mostvulnerable populations. However, addressing the root causes of the crisis requires a thorough appraisal of the global industrial agri-food system and concerted, long-term commitment to reforms aimed at ensuring global food security. This should include a critical examination of the growing use of
intellectual property rights in the agri-food sector and its impact on local markets and farmers in developing countries.

The Current Food Crisis

The world is experiencing an unprecedented food crisis. Dramatic hikes in global prices for food are inflating domestic prices of basic staples, such as bread, maize and rice. According to the World Bank, overall global food prices have increased by 83% in the 36 months leading up to February 2008. This in
turn is aggravating poverty and malnutrition in developing countries. Food comprises a larger part of the consumption basket of low-income households in developing countries, and thus the poor are more vulnerable to rising food prices. The effect is greater on the poor in countries that depend on food imports from foreign markets, where there is no domestic supply to meet the local demand. Safety nets and social protection is weak or non-existent in countries where they are needed the most. Food
exporting countries that would generally benefit from higher international prices are also hit by the sudden upsurge and are responding with a mix of measures, such as introducing import restrictions, setting domestic price ceilings and keeping food stocks in the fear of local food shortages.

An underlying question is how did we get to this point? Why were we not prepared? Analysts point to numerous factors as causes of the aggravating food crisis, including growing global demand, biofuel production, speculation on food markets and rising oil prices. However, if governments are serious about
finding solutions for the long term they need to seriously reflect on the structural underpinnings of the crisis rather than turn a blind eye. This is ever more important in light of the strong link-
ages between food security, climate change and bioenergy. The blame game amongst governments can only go so far.

The State of the Global Food System

So what is the current state of our global food system? Agri-food markets have turned global. All the different activities in the agro-business value chain- from the supply of inputs, to production, processing and delivery- can be undertaken separately around the globe. One of the problems arising from the
current system is the growing concentration of few dominating companies at all stages of agri-food value chains. Concentration means less market power for smaller suppliers, buyers and retailers. The increasing scope and complexity of food standards, particularly those to related food safety, further
complicate entry to global food markets. At the same time, many developing countries have made export growth the priority of their agricultural sector and opened up their domestic food markets to global competition. The benefits of commodity export-led growth have been mixed; some countries have been able to diversify export production and increase participation in higher value-added activities in the agri-food value-chain but others are worse off. Some countries are meeting domestic demand for food despite import surges and growing participation of transnational companies in the local agri-food market. Others that previously were food sufficient are now net importing countries.

Expanding Monopoly Rights

The intellectual property system today has become central to the functioning of the agri-food sector. This was not the case only a century ago. Intellectual property rights are legal rights granted by the State that allow a right owner to exclude for a certain period of time (in most cases) anyone from making a use of his/her invention or creation. The scope of intellectual property rights has expanded in time and today
they take many forms, including patents, copyright, plant breeders rights (PBRs), trademarks, trade secrets, geographical indications, etc. It is assumed that in the absence of these rewards, overall innovative and creative activity would be diminished.

Innovation in agriculture has changed dramatically. While in the past agricultural biodiversity and crop improvement lay in the hands of farmers and indigenous peoples on their own land, today the industrial farming model has taken over (Dutfield 2008). Historically, farmers produced, selected and improved plant varieties through traditional methods. As commercial interests in agriculture and food grew, the private sector displaced public sector as lead investor in agricultural research. Private enterprises seeking to reap market benefits of applying new technology, such as genetic engineering to agriculture, pressed for the extension of intellectual property rights, particularly patents and PBRs, to agriculture.

Though many countries have withstood pressure to grant patents related to plants and animals, patents on genes on plants are nonetheless proliferating. Risks associated with such patent activity include loss of agricultural biodiversity, environmental, and health safety risks. Yet the most direct, devastating ef-
fects are on small-scale farmers. Patents, and to a lesser extent PBRs, increase the cost of seeds and fertilizers and restrict the ability of farmers to save, reuse and sell seeds.

International Rules

The historical role and contribution of farmers in relation to innovation and conservation of plant genetic resources, and their right to save, exchange and sell seeds is not rightfully recognized in the current international regulatory framework. Treaties, such as the Trade Related Aspects of Intellectual
Property Rights (TRIPS) of the World Trade Organization (WTO), and the International Convention for the Protection of New Varieties of Plants (UPOV 1991) do not effectively promote or guarantee farmers’ rights. The TRIPS Agreement allows countries to exclude plants and animals from patentability, but
requires countries to protect new plant varieties by either patents, or an effective sui
generis system or by a combination of the two. TRIPS makes no mention of farmers’
rights. The UPOV, built around PBRs, is the prevailing sui generis model of plant variety protection. UPOV seeks to ensure that patent holders do not block access to plant genetic resources so that breeders can freely access these resources for the purpose of propagating new plant varieties through a ‘breeders exemption’. In UPOV 1991 it is up to governments to decide whether they wish to uphold farmers’ rights at the national level, which is limited only to the use of saved seed on the same farm, not the exchange or sale of the seed. Most developing countries have not adopted national legislation providing for farmers’ rights, yet they have implemented UPOV 1978 or the more restrictive version 1991. One notable exception is India, which enacted the Protection of Plant Variety and Farmers’ Rights Act in 2001.

A different approach to the TRIPS and UPOV model for agrifood innovation was adopted in the FAO International Treaty on Plant Genetic Resources for Food and Agriculture (ITGRFA) that came into force in 2001. The treaty seeks to establish a plant genetic resource commons in light of the interdependence of countries on certain genetic resources essential for food and agriculture. Access to the poll is free, if anyone develops a product using material from the poll, they cannot claim intellectual property rights over it and must share in the benefits of its sales. Farmers’ rights are explicitly recognized and
measures to realize these are promoted, yet their implementation is again left to national governments.
Unfortunately, members of the ITGRFA have yet to make the necessary financial contributions to ensure the proper functioning of the system.

Concentration in Agri-food Supply Chains

The alarming level of concentration of private commercial enterprises in the input supply side of the agri-food system is related to intellectual property rights. The seed and agro-chemical fertilizer sector is now dominated by a handful of multinational companies whose profits in the present food crisis have risen exponentially. For example, revenues for Cargill, one of the largest players in the agri-food business, increased over 36% in the 2006-2007 period (GRAIN 2008). By merging and acquiring smaller players in the seed sector, dominant companies are able to further increase their dominant position
and acquire greater control over intellectual property protected seeds and fertilizers. An added problem is lax requirements for obtaining a patent for plant materials in countries that allow them, such as the United States (US). An example of the complexities is the case of the Enola bean. A patent was errone-
ously granted for 20 years to a US national over a yellow bean common in Latin America who claimed to have developed a new field bean variety. It took a regional research centre eight years to defeat the case, and the patent owner can still appeal the case through the US federal court system.

If not managed appropriately, the linkage between climate change and intellectual property rights threatens to devastate the food system further. Troubling signs of what is to come ahead is the current moves by seed and agrochemical companies to file a number of patents on what are called “climate-ready” genes (ETC 2008).

Thinking Long-Term

There is a real need for new technology and investment in innovation to increase agricultural production in developing countries and to ensure that farmers have access to basic agricultural inputs, particularly seeds. However, caution must be observed in the policies that are implemented towards achieving these goals. Sustainable agriculture for domestic food security, meeting the needs of local markets and supporting local farmers must be prioritized. The limits of the industry-led agri-food market must
be recognized and more than short-term buffers for the poor must be put in place. Seed aid and provision of fertilizer is rightly being advocated as an immediate answer to the current food crisis but in the medium-long term it is not a solution for seed security and may create more problems than it solves,
such as distorting farmers local seed systems (Sperling et al 2008).

GRAIN, Making a Killing From Hunger, April 2008
Tansey & Rajottee Eds., The Future Control of Food, Earthscan
UNIDO, Global Value Chains in the Agrifood Sector, Working Papers, 2006
ETC, Patenting the “Climate Genes” and Capturing the Climate Agenda, May/June 2008
Dutfield, “The UPOV Convention”, in Tansey & Rajotte Eds. (2008) The Future Control of
Food, Earthscan, 27-47
Sperling, Cooper & Remington (2008), Moving Towards More Effective Seed Aid, Jour-
nal of Development Studies, 44(4):573–600, April.