Agriculture is significant to economies around the world. It accounted for about 27 per cent of the world’s total employment in 2019 and contributed 23.3 per cent to the Gross Domestic Product (GDP) in Low-Income Countries in the same year. Agricultural productivity is often the subject of international development efforts because it has a direct impact on key development goals like poverty reduction and food security. The World Bank estimates that agriculture can be used to raise incomes and improve food security for up to 80 per cent of the world’s poor.
The use of intellectual property rights (IPRs) affects how activities along the agricultural value chain are carried out and who the actors are. There are consequences for who gets access, what is produced, how it is grown and where it is bought or sold. This piece situates IPRs within the various stages of the agricultural value chain with the aim of highlighting its impact and potential. It is not an exhaustive discussion of every applicable IPR for agriculture. Instead, it focuses on interactions between agriculture and IPRs at different points within the agricultural value chain. It covers crucial issues such as why these rights are used, the effects of the rights on the activities, as well as the implications for other processes and actors along the value chain.
In this piece, the interlinked processes that make up the agricultural value chain are categorized into pre-production (innovation, research and development); production (farm operations, planting, rearing, harvesting); and post-production (processing, marketing, transportation, sales and consumption).
Pre-production
At the pre-production stage, researchers and farmers seek to develop better products through processes like selective breeding or genetic modification. In the case of plants, these could be varieties that are fortified with nutrients or resistant to drought, herbicides or other conditions. These innovations are made to support human health, provide economic benefits and prevent agricultural loss. For instance in the case of biofortification through traditional breeding, there have been efforts to combat malnutrition in the developing world through crops like Vitamin A Cassava, Iron Beans and Zinc Rice. This stage of the agricultural value chain also includes the development of agricultural inputs such as bio-control products.
Patents, Plant Variety Rights and Trade Secrets are the main forms of Intellectual Property Protection applied in the pre-production stage.
Patents are exclusive rights granted over an invention to prevent acts such as production, use, sale or import of the invention without the authorisation of the owner. In agriculture, patents are often used in the field of agricultural biotechnology. A patent could apply to the product developed such as patents for “Roundup Ready” glyphosate tolerant crops. Enabling technology used in the field could also be patented such as the CRISPR gene-editing technology.
Plant Variety Rights (PVRs) give plant breeders exclusive rights over new varieties of plants. Though plant patents are granted in some jurisdictions, the eligibility requirements, scope and available exceptions for plant variety rights and patents differ. Member states of the World Trade Organization (WTO) have an obligation under Article 27.3(b) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to protect plant varieties through patents, a sui generis system or a combination of both.
Trade Secrets are also a relevant form of protection in agricultural research and development. Article 39 of the TRIPS Agreement obliges member states of the WTO to protect undisclosed information which has been kept as a secret and has commercial value. Trade secrets do not require registration for protection, but the owner must have made reasonable efforts to keep the information secret. Hybrid crops provide a suitable biological complement to the use of trade secrets in agricultural innovation. With hybrid crops, the yield falls after the first generation of seed, thus the farmer would need to buy for the next planting season as opposed to saving. The owner can perpetuate this by keeping the parental lines a trade secret. Secrecy can also be enforced through the use of contracts.
Patents, PVRs and Trade secrets are used by their owners to control the innovation for commercial gain, to recoup research and development costs and in some cases to ensure the proper direction of a product targeted for humanitarian use. The use of these IPRs have an impact on activities at this stage and further down the value chain including in the aspects of innovation, accessibility, price and sustainability.
The grant of IPRs provides an incentive for innovation by corporations that may otherwise not undertake the research due to the high costs involved in a field like agricultural biotechnology. A survey in 2011 showed that the cost of bringing a biotechnology crop to the market, including, discovery, development and authorization was about US$136 million. Companies may rely on IPRs in order to generate a return on investment. However, the full picture also takes into account that some innovation would take place without the grant of IPRs particularly those that are user-generated such as the breeding undertaken by small scale farmers. In any case, small scale-farmers often lack the resources and organization required to take advantage of mainstream IPRs.
The takeaway is that different forms of innovation exist, IPRs like patents may encourage some forms but are irrelevant to others.
In relation to access, the owner of the IPR controls, to a large extent, who can access it and on what terms. At the research stage, the effect of IPRs on access can be seen where innovators are unable to use enabling technology because of patent thickets and this is detrimental to further innovation. In industries where broad patent claims overlap, there are barriers for further development because it is difficult to innovate without infringing an existing patent. Alliances between large agrochemical-seed firms such as BASF, Bayer, Monsanto, DuPont, Dow and Syngenta’s cross-licensing agreements (to share their technologies for transgenic crops) were a practical means to overcome this.
Further down the chain, other examples of accessibility issues include the inability of farmers to exchange seed or an increase in seed prices due to restrictions in favour of rights holders. There are exceptions built into IPR systems which commonly include private and non-commercial use exceptions for patents as well as exceptions for the purpose of breeding other varieties in the case of PVRs (‘breeder’s exemption’). Potentially negative effects on access may be mitigated by effective policies which consider humanitarian needs. Such policies could cover competition regulations, compulsory licensing or farmers’ rights provisions. A jurisdiction like India with its Protection of Plant Varieties and Farmers’ Rights Act 2001 recognizes farmers’ rights in its PVR legislation. It permits farmers to save, use, sow, re-sow, exchange, share or sell farm produce including seed of a protected variety in the same manner as before the law was passed.
The increased use of IPRs in agriculture may impact agricultural biodiversity and sustainability due to the type of innovation encouraged. It has been argued that research into minor food crops (as opposed to commercially important crops like wheat and soya beans) is neglected because the likelihood of return is small and that requirements for protection such as uniformity and industrial applicability continue to encourage homogenous varieties. These result in monocultures that are susceptible to being wiped out by disease.
Production
The discussion on patents, PVRs and trade secrets used at the pre-production stage has already revealed how these may shape farming practices further along the value chain at the production stage. Additionally, at the production stage, innovations that are subject to IPRs can be used in farm operations and processes such as rearing livestock, planting and harvesting. With the introduction of smart-farming solutions, farmers can use digital tools developed to increase yield, quality and efficiency. These include software for crop management; tools to monitor inputs such as animal feed; soil scanning drones; platforms to control farm machinery; programs that track seed production or provide data such as climate data.
Software and data are not usually patentable but digital patents may apply to computer related inventions, in which case the patent covers the operation of the software. These precision agriculture tools are also the subject of copyright and the names may be trademarked. The effect is that others cannot copy the work or pass-off another product under that name. Copyright in innovations such as software may be registered but registration is not a pre-requisite for protection against copying. The developers of the technology use these IPRs to prevent others profiting from their work and to control quality.
Post-Production
The post-production stage features activities of processing, marketing, transportation, sales and consumption and is a good point at which to focus on IPRs like trademarks and geographical indications of origin (GIs) which play an important part in these processes.
Trademarks can be used to protect words, signs, three-dimensional shapes or similar features used to distinguish a product. GIs restrict the use of a name to products that have a specific geographical origin and a reputation linked to that origin. A primary effect of these is to prevent passing-off by a product not associated with the brand or geographical region which may wish to ride on the good will of the protected products. They are useful to consumers as a means of identification or a marker of the quality of the products protected.
In the Nigerian poultry market, for instance, certain breeds for day-old chicks such as the Arbor Acres and ISA Brown are popular. Licensed companies in the sector import the parent stock for breeding from the US and Europe. The Arbor Acres (and Arbor Acres Plus), as well as ISA Brown, are protected by trademarks owned by Aviagen and Hendrix Genetics respectively. It is important for many along the supply chain, including the importers, breeders, hatcheries commercial broiler farmers and layer farmers, that the parent-stock, fertilized eggs or day-old chicks they purchase have the qualities attached to those brands. It is also important for the business continuity of the trademark owners that others cannot profit off their work or ruin their business reputation by introducing substandard breeds into the market under the name of the brand.
Trademarks can also be used to promote sustainability in agriculture by providing the consumer with information on how the product has been produced. In the oil palm industry, palm oil that has been certified in line with the requirements of the Roundtable on Sustainable Palm Oil (RSPO) can be packaged with the RSPO trademark.
GIs can assist to develop the market for a product in ways that could be beneficial to smallholder farmers or developing regions who cannot ordinarily compete with mainstream products. They signal the unique qualities of products from those localities to consumers. A 2018 study by FAO showed that GIs have a positive effect on the price of a product, allow for a greater percentage of the price to be distributed to the primary producers, increase production over time and enhance access to markets for the producers. They can also be used to promote environmental sustainability in cases where the specifications are linked to sustainable practices. The FAO study showed that after registration of the Cameroon “Penja pepper” in 2013, organization of the supply chain and increase in pepper prices led to a 328 per cent increase in production (from 70 tonnes in 2010 to 200-300 tonnes in 2015).
This overview of IPRs within the agricultural supply chain at selected points shows that it can encourage innovation or conversely stifle the exchange of ideas; serve as a means of quality assurance for products and tools; impact agrobiodiversity and sustainability; facilitate trade / potentially grow a market for produce; and encourage certain agricultural methods.
The effect of the IPRs depend on the type of system involved and its application. Policymakers need to prioritise effective IPRs systems as central parts of the basket of related issues such as trade, environment and land use policy that are examined in efforts to drive agricultural productivity.
