Property Rights Legislation in Agricultural Biotechnology: United States and Argentina

The market for biotechnology products has expanded rapidly in the 1990s and is expected to give impulse to radical changes in agriculture around the world. Investment in research and development (R&D) of new seed varieties has become a key factor for agriculture development. In the last decades, the investment in R&D has switched from state sponsored research to private funding. At the same time, the market has moved towards a strong concentration in a few multinational firms, which now control most of the agricultural biotechnology R&D around the world. One of the most important issues regarding ag-biotechnology is the legal environment in which seeds are going to be produced and traded. A homogeneous legal framework characterizes domestic markets, while in international markets different legislation can distort or change marketing and production incentives. This paper analyzes the legal differences between the United States and Argentina, two of the most important exporters of grains in the world. As we show, the evolution of legislation and regulation in both countries help us understand the challenges of generating homogeneous protection in international markets, as well as the incentives for private sector companies operating under different legal systems. We will highlight the differences in property rights protection, as well as the incentives for producers and traders. The comparative analysis of this paper provides a useful framework to understand the complexities of international regulatory systems, and the challenges that multinational and local seed producers face in developing countries with weak legal/regulatory systems for the protection of intellectual property rights. The implications of not creating and providing significant legal regimes for protecting agricultural biotechnology innovation has significant impact in terms of the allocation of resources devoted to both indigenous research on plant innovation and also on the choices being made by growers acting in response to current weak property regimes. PROPERTY RIGHTS LEGISLATION IN AGRICULTURAL BIOTECHNOLOGY: UNITED STATES AND ARGENTINA Andres A. Gallo & Jay P. Kesan The market for biotechnology products has expanded rapidly in the 1990s and is expected to give impulse to radical changes in agriculture around the world. Investment in research and development (R&D) of new seed varieties has become a key factor for agriculture development. In the last decades, the investment in R&D has switched from state sponsored research to private funding. At the same time, the market has moved towards a strong concentration in a few multinational firms, which now control most of the agricultural biotechnology R&D around the world. One of the most important issues regarding ag-biotechnology is the legal environment in which seeds are going to be produced and traded. A homogeneous legal framework characterizes domestic markets, while in international markets different legislation can distort or change marketing and production incentives. This paper analyzes the legal differences between the United States and Argentina, two of the most important exporters of grains in the world. As we show, the evolution of legislation and regulation in both countries help us understand the challenges of generating homogeneous protection in international markets, as well as the incentives for private sector companies operating under different legal systems. We will highlight the differences in property rights protection, as well as the incentives for producers and traders. The comparative analysis of this paper provides a useful framework to understand the complexities of international regulatory systems, and the challenges that multinational and local seed producers face in developing countries with weak legal/regulatory systems for the protection of intellectual property rights. The implications of not creating and providing significant legal regimes for protecting agricultural biotechnology innovation has significant impact in terms of the allocation of resources devoted to both indigenous research on plant innovation and also on the choices being made by growers acting in response to current weak property regimes. PROPRIGHTS-ARGENTINA-US-COMPARATIVE-MINNIPJOURNAL-FINALVERSION-AUG'06.DOC 565 Property Rights Legislation in Agricultural Biotechnology: United States and Argentina Andres A. Gallo & Jay P. Kesan