Agricultural Innovation: Investments and Incentives

Investments in R&D and agricultural innovations have been fundamental to long-term economic growth worldwide. But global resource allocation has been uneven, with some developing countries closing in on developed-world scientific capacities, others regaining ground lost over the past decade or so, but, unfortunately, many others either stalled or slipping behind. Recently, substantial shifts in the scientific basis for much of biological research have created a new and promising set of opportunities for innovation in agricultural biotechnologies. Moreover, the institutional, regulatory and, especially, intellectual property regimes that affect agricultural R&D are also undergoing rapid change, providing enhanced private incentives for applications of biotechnology in agriculture. But the nature of these developments is raising real concerns about the extent to which developing-country agriculture will be able to partake in the benefits offered by the advances in biotechnology. In this chapter we present an overview of the globally evolving structure of funding and performance of agricultural research. This establishes the special nature of agricultural research as a truly joint endeavor of North and South, and of the public and private sectors. We then sketch the economics of intellectual property protection - highlighting static and dynamic models and the effects of competition - and alternative incentives to innovate. A brief list of means that have been used or proposed for protecting intellectual property in agriculture is presented, followed by a discussion of the ongoing global evolution of the intellectual property environment and relevant institutions. Then we discuss instruments that are available for transacting intellectual property rights (IPRs), provide a quantitative view of trends in agricultural intellectual property protection worldwide, and end with a short conclusion.