A Chicken And Egg Story

Are intellectual property rights (IPR) good or bad for farmers? A good answer can be found by treating this as a chicken and egg question.

Much has been written about the green revolution in grain. But a much bigger revolution has taken place in the production of eggs and chickens. The per capita availability of foodgrains has risen only a smidegon since the early 1950s. But per capita availability of eggs has shot up from 5.32 in 1961 to 30 today, and is expected to hit 40 by 2000. Thanks to improved breeds, egg production has grown at 10 per cent annually for three decades, against barely 2.7 per cent annually for grain.

Fast-rising productivity has been a boon. Eggs are today five times as expensive as in the 1950s, but the overall price index has risen tenfold. This means that egg prices have halved in real terms — even more if you consider that the high-yielding egg is much bigger than the desi one.

Unlike the case of grain, virtually all R and D in poultry is done by private companies. The critical R and D in poultry lies in developing new pure lines of breeding fowl. These pure lines are then crossed to produce hybrids, which are then multiplied for three generations to produce table eggs. Desi hens may give no more than 120 eggs a year, but the new varieties give up to 350 eggs per year. What is more, the feed content per egg has halved since the 1950s.

LACK OF R&D: A major but little-known handicap faced by the green revolution has been the lack of private sector R and D. Companies will undertake R and D only if they can reap the fruits of their effort. In electronics or chemicals, an inventor can licence know-how and collect royalties. But for conventional grain varieties, farmers can simply save seeds from the last crop and sow them again, getting a perfectly good yield. Farmers do not need to go back to the original seed producer or pay any royalties. So it is not worthwhile for seed companies to do R and D in such seeds. This explains why research in conventional varieties has been done by only by the public sector the world over.

Budget constraints everywhere have constrained public sector research.

However, R and D in hybrids is4 profitable for companies. If two pure lines (of grain or fowl or whatever) are crossed, the resulting hybrid has a high yield, which then deteriorates rapidly in successive generations. To maintain high yields, the farmer has to go back to the seed company to, buy fresh seed (or fresh breeding chicks) each year. The company charges enough to make a good profit. The farmer is quite happy to pay a premium price, since he is more than compensated by the-higher yield. And higher production benefits the consumer too. It is a win-win-win situation — the fruits of higher productivity are shared by the inventor, the farmer and the consumer

The same is likely to be true If, intellectual property rights are granted for conventional, self- pollinating crops too, as proposed, in the Uruguay Round. Such IPR, will spark additional R and D, and the higher productivity should benefit everybody. In the case of drug patents, the consumer pays more. But IPR for seeds should mean lower prices for consumers, not higher. Just look at the egg situation. A desi egg, involving no IPR, is costlier than a high-yielding egg, although the egg farmer pays the pure-line company a premium for high yielding hens.

BREEDER’S RIGHTS: What does this imply for our proposed new law on plant breeders’ rights ? We need to have a wide rather than narrow definition of breeders’ rights. The Uruguay Round obliges us to protect no j more than five varieties to begin with, yet the draft bill proposes blanket protection for all varieties developed in India. Critics say this is wrong, but it seems to me that this approach is this likely to benefit consumers. Moreover, it will make fuller use of India’s considerable R and D talent, which has proved it can achieve great feats. If India avoids seed protection that is granted in other countries, Indian breeders will have to pay royalties for foreign genetic material while foreigners will be able to get Indian material free. This cannot possibly be in our interest.

Once we have widespread IPR for seeds, multinational seed companies will be encouraged to use India as a global production centre. Seed production is highly labour intensive, especially for hybrids, and India has a great comparative advantage here, A farmer can earn five times as much per acre producing hybrids as producing conventional varieties, and in the bargain will employ double the number of workers. So wide-ranging IPR laws encouraging seed production will mean more income for farmers, more income for labourers, and lower prices for consumers. So even those who oppose IPR for drugs should see IPR for seeds as a blessing.

A final caveat: the draft bill needs to incorporate provisions of the Biodiversity Convention adopted at the Rio de Janeiro green summit. This will give India a share in the profits made by foreign breeders using Indian genetic material. It will also mean, of course, that Indian breeders will pay more for material from other countries.

What do you think?