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End-Point versus Point of Sale Levying of Plant Breeding Royalties: An Economic Analysis using Optimal Control Theory

Author

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  • Beard, Rodney

Abstract

Intellectual property rights for commercial crops have become in- creasingly controversial as plant breeders have sought to protect their investment through licensing and royalties, and farmers, in particular ecologically-oriented farmers, have promoted seed-saving as a conser- vation measure. Plant breeders have argued that seed saving reduces sales to breeders and that the imposition of royalties is necessary to maintain sales and to compensate them for the intellectual property invested in commercial varieties. These issues are explored here. In this paper, an optimal control model of seed purchase decisions in the presence of seed saving is developed. The model is used to analyze the impact of both point of sale royalties and end-point royalties on seed puchase decisions. The two approaches to levying royalties are then compared and policy conclusions drawn.

Suggested Citation

  • Beard, Rodney, 2008. "End-Point versus Point of Sale Levying of Plant Breeding Royalties: An Economic Analysis using Optimal Control Theory," MPRA Paper 7178, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7178
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    File URL: https://mpra.ub.uni-muenchen.de/7178/1/MPRA_paper_7178.pdf
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    References listed on IDEAS

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    1. repec:ags:auagre:126563 is not listed on IDEAS
    2. L. H. Woodhouse, 1933. "Changes in Farm Organization and Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(1), pages 103-110.
    3. W. Lesser, 1997. "Assessing the Implications of Intellectual Property Rights on Plant and Animal Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(5), pages 1584-1591.
    4. Lindner, Robert K., 2004. "Economic Issues for Plant Breeding - Public Funding and Private Ownership," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 0.
    5. Kingwell, Ross S., 2001. "Charging for the use of plant varieties," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 0(Issue 2), pages 1-15.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agricultural economics; plant breeding; intellectual property; royalties;

    JEL classification:

    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • 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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