75 



For Pioneer and other companies to continue taking the risks of investment in 

 research — and at the same time remain profitable and competitive — we must have 

 more effective protection for the intellectual property created by the research. 



Why is it important to ensure that research-based commercial seed companies 

 continue to prosper? Public sector plant breeding programs, both Government and 

 university, face declining financial support. We expect that they will continue to 

 make a significant contribution to agricultural progress. But much of that contribu- 

 tion will likely come from their role in training future plant breeders and conduct- 

 ing basic research, rather than from the release of new varieties in crops such as 

 soybeans and wheat. 



Even more troublesome is the limited capacity of public sector breeding programs. 

 We are referring to the ability to release an assortment of new varieties having dif- 

 ferent traits and adaptations, rather than a single new variety from time to time. 



Why is this significant? Because plants are constantly under attack from a varie- 

 ty of natural forces, including drought, insects and diseases. A variety which thrives 

 one year may not perform as well the next. History reflects this in the Irish potato 

 famine of the 1840s, the powdery mildew devastation of the French wine industry in 

 1848, red rust in wheat in 1916 and 1917, rust in Brazilian coffee in 1969, and the 

 continuing problems of chestnut blight and Dutch elm disease. 



The pervasive effects of diseases caused by viruses, which are notorious not only 

 for their adaptability but their propensity k mutate to create new strains or races 

 of diseases, mean that a new widespread disease or pest outbreak may only be one 

 season away. 



In the past, commercial breeding programs have been successful in developing a 

 broad spectrum of resistant varieties. For example, today U.S. farmers have the 

 choice of selecting from approximately 340 different varieties of soybeans, covering 

 all 10 maturity groups, which offer resistance to phytophthora root rot. 



An important function of plant breeding research is to offer farmers choices so 

 that they can select the varieties that work well for them. Pioneer has always car- 

 ried a selection of varieties of varying maturities, disease resistance, and other char- 

 acteristics so that farmers can choose the variety that best meets their needs. 



However, farmers can choose from a selection of varieties only when there are 

 enough economically successful breeding programs to provide a choice. If the cur- 

 rent situation continues and the exodus of commercial research becomes complete, 

 agriculture will be woefully underequipped to deal with the next potentially devas- 

 tating outbreak of disease or pests. 



It might seem reasonable to ask: If what we need is more research investment, 

 why wouldn't it be simpler to increase funding for public agricultural research? 

 There are two reasons why that may not be appropriate: effectiveness and efficien- 

 cy. Effectiveness is doing things right. Efficiency is doing the right things the right 

 way. Private sector research is product-oriented research; public sector research 

 often is not, and justifiably so. It isn't necessary that every research project produce 

 results, but when the future of agriculture is on the line, it is important that every 

 project be judged by whether or not it does produce results. 



Other studies cited by the World Bank discussion paper suggest that privately de- 

 veloped varieties are more productive than their publicly bred competitors. Yields of 

 varieties have consistently increased since adoption of the PVP Act. 



For a textbook example of the difference, we have the real-world experience of 

 South Korea. In 1975, over 80 percent of the R&D in Korea was government spon- 

 sored. Over the next 10 years, that percentage was reversed so that by 1986 over 80 

 percent of R & D was funded by the private sector. In addition, R&D spending as a 

 percentage of Gross Domestic Product more than tripled. In agriculture, R&D 

 spending, as a percentage of value added, increased by over 45 percent. It was, of 

 course, during that period that Korea became one of the growth economies in the 

 Pacific Rim and made the transition from a developing country to a developed, in- 

 dustrialized country. 



The disparity between overall research spending and agricultural research spend- 

 ing, by the way, is attributed in the papers cited by the World Bank study to the 

 availability of patents in other industries and the absence of PVP in Korea for agri- 

 cultural research. 



Induced by the benefits of plant variety protection, other countries are also 

 making significant strides in breeding of self-pollinated crops such as soybeans. In 

 Chile and Argentina, both of which are competitors of the United States in the 

 international commodities market, plant variety protection has stimulated invest- 

 ment in plant breeding research and opened those markets to introduction of varie- 

 ties developed elsewhere. The result is that they will challenge us more in the 



