Intellectual property rights (IPRs) in agriculture are increasingly being questioned in society because some argue that it allows developers to extract too much profit at the cost of farmers and consumers. In this perspective, there is clear need for a common ground to discuss the role of IPR.
EuropaBio and Crop Life International asked Steward Redqueen to develop an economic framework to analyze the socio-economic logic and effects of IPR in agriculture. In the study, we focused on the Ogura technology, invented and patented by the French research institute INRA and licensed non-exclusively to seed companies. During the project, we involved members, INRA and agricultural institutions for consultation to produce an optimal insight of the situation.
We launched the report at the European Innovation Summit organized at the European Parliament. Furthermore, the findings will be presented and discussed across Europe.
The study provided fact-based arguments about who benefits from IPR in agriculture. The results show that many actors in the chain benefit up to a total of EUR 1.2 billion during patent life. Nearly 80% accrues to farmers and consumers (see intellectual_property_helps_farmers_grow.pdf). Ogura developers (INRA and seed producers) invested €56 million and almost 10 years bringing the Ogura oilseed rape hybrids to market and required 15 years to break even on their investments.
IPR was essential to enable the Ogura innovation as it provided the ability to recoup R&D investments. This substantially increased the incentive to invest in R&D and therefore the probability of innovations happening vs no IPR use. The actual situation (non-exclusive IPR use) seems optimal in the Ogura case. However, pricing power of the innovator would also have been limited under exclusive use as this is mainly driven by local market dynamics such as crop prices and farmers’ willingness to adopt new seed. That is why the local market conditions and the strength of an innovation in each case define which IPR regime is optimal (see report_europabio.pdf).
“It is important to evaluate the impact this tool can have on the agricultural sector and European consumers, at a time when Europe faces major challenges worldwide such as climate change or demographic growth."
Mr. Michel Dantin, Member European Parliament
“Companies and public research organisations are focused on finding new solutions to the many challenges of agriculture; it is however up to EU policy-makers to ensure that a sufficient level of protection is guaranteed in order to foster innovation, which then enables farmers around the world and society as a whole to benefit from that innovation.”
Beat Späth, Director, Agricultural Biotechnology Europe