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Plant breeders' rights, patents and incentives to innovate

Author

Listed:
  • Adrien Hervouet

    (GAEL - Laboratoire d'Economie Appliquée = Grenoble Applied Economics Laboratory - UPMF - Université Pierre Mendès France - Grenoble 2 - INRA - Institut National de la Recherche Agronomique, INRA - Institut National de la Recherche Agronomique)

  • Corinne Langinier

    (University of Alberta)

Abstract

Innovations on plant varieties can be protected by patents or Plant Breeders’ Rights (PBRs). Although these methods of protection have similarities, they also have major differences. With the PBR regime, farmers are allowed to save part of their harvest to replant during the next period (“farmers’ exemption”). To comply with international regulation, they must pay a tax to seed producers for the loss incurred due to this exemption. We analyze the impact of this exemption and its associated tax on seed prices and on the incentives to innovate in a monopoly setting. We find that with only a PBR regime, a relatively high tax level is necessary to eliminate self-production. If both patent and PBR regimes coexist, farmers might still self-produce if the seed innovation is protected with a PBR. Our findings suggest that the coexistence of the two regimes does not fully prevent self-production. Nevertheless, it boosts the research investment which is a non-monotonic function of the tax. The seed producer might over or under invest compared to what is socially optimal. Moreover, incentives to innovate are the strongest, either with a patent regime or with a PBR regime for which a high tax prevents seed saving. In terms of welfare, having both systems has ambiguous effects.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Adrien Hervouet & Corinne Langinier, 2014. "Plant breeders' rights, patents and incentives to innovate," Post-Print hal-02012162, HAL.
    • Handle: RePEc:hal:journl:hal-02012162
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    Cited by:

    1. is not listed on IDEAS
    2. Adrien Hervouet & Stéphane Lemarié, 2025. "Farm‐saved seed, royalty rates, and innovation in plant breeding," American Journal of Agricultural Economics, John Wiley & Sons, vol. 107(2), pages 465-503, March.
    3. Ting Meng & Richard Carew & Wojciech J. Florkowski, 2020. "Determinants of the grant lag and the surrender lag of horticultural crop plant breeders’ rights applications: Survival analysis with competing risks," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(4), pages 489-512, December.
    4. Adrien Hervouet & Stéphane Lemarié, 2021. "The Economics of Royalty Rate in Plant Breeding," Post-Print hal-03837325, HAL.
    5. Mehdi Arzandeh & Derek G. Brewin, 2021. "R&D Investments in Plant Breeding under Changing Intellectual Property Rights," International Journal of Economics and Financial Issues, Econjournals, vol. 11(6), pages 32-47.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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