176 93
Dec. 1996
Agricultural Research
and Development:
The Need for
Public-Private
Sector Partnerships
Issues in Agriculture 9
CLIVE JAMES
1JNSUL1TAI1\'1v  GROUP ON IN IERNATIONAI AGRIC L I'LIRAI RESIARCH



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Agricultural Research
and Development:
The Need for
Public -Pnrvate
Sector Partnerships
Issues in Agriculture 9
CLIVE JAMES



About the CGIAR
The Consultative Group on International Agricultural Research
(CGIAR) is an informal association of 52 public and private sector
members that supports a network of 16 international agricultural
research centers. The Group was established in 1971.
The World Bank, the Food and Agriculture Organization of the
United Nations (FAO), the United Nations Development
Programme (UNDP), and the United Nations Environment
Programme (UNEP) are cosponsors of the CGIAR. The Chairman
of the Group is a senior official of the World Bank, which provides
the CGIAR system with a Secretariat in Washington, DC. The
CGIAR is assisted by a Technical Advisory Committee, with a
Secretariat at FAO in Rome.
The mission of the CGLAR is to contribute, through its research,
to promoting sustainable agriculture for food security in the develop-
ing countries. International centers supported by the CGIAR are part
of a global agricultural research system. The CGIAR conducts strate-
gic and applied research, with its products being international public
goods, and focuses its research agenda on problem solving through
interdisciplinary programs implemented by one or more of its inter-
national centers in collaboration with a full range of partners. Such
programs concentrate on increasing productivity, protecting the envi-
ronment, saving biodiversity, improving policies, and contributing to
strengthening agricultural research in developing countries.
Food productivity in developing countries has increased through
the combined efforts of CGIAR centers and their partners in devel-
oping countries. The same efforts have helped to bring about a range
of other benefits, such as reduced prices of food, better nutrition,
more rational policies, and stronger institutions. CGIAR centers
have trained more than 50,000 agricultural scientists from develop-
ing countries over the past 25 years. Many of them form the nucleus
of and provide leadership to national agricultural research systems in
their own countries.



Contents
Introduction ..............................................1
Declining Support for Developing Country Agriculture .........................3
Public Sector Investments in Agricultural R&D  .....................................                            4
Private Sector Investments in Agricultural R&D and Estimates of
Global Markets for Selected  Products ..............................................                            6
Activities of the Private Sector in International Agricultural R&D ......9
Estimates of R&D Expenditures for Selected Corporations ........... 11
Fertilizer Industry ............................................. 13
Plant Protection  Industry .............................................                               14
Seed Industry .............................................                                            18
Animal Health .............................................                                            22
Biotechnology .............................................                                           24
Summary of Private Sector Activities in Agricultural R&D ............ 28
The Need for Collaboration Between the Public and Private Sectors ...... 29
Founding of the International Service for the Acquisition of
Agri-Biotech Applications .............................................                                       31
The Mission .............................................                                              31
The Need .............................................                                                 32
The Institutional Response .............................................                               32
The Program .............................................                                              34
The Strategy .............................................                                             34
Program  Achievement ...............                             .............................. 35
Project Support Activities ...................                         .......................... 37
Investment in Human Capital, ISAAA's Fellowship Program ........ 37
Summary .............................................                                                  38
Establishment of the Private Sector Committee of the CGJAR ............. 39
Proposal to  Establish  the Committee ............................................. 39
Terms of Reference of the Committee ............................................ 39
Composition and Membership of the Committee .......................... 41
i



Initial Areas of Interest Identified by the Committee ...................... 42
Summary ........................................               42
References ........................................ 43
Appendix ........................................                   44
Acknowledgments ........................................            48
About the Author ........................................           48
List of Tables
Table 1.  Investments in Agricultural R&D.                           5
Table 2.  Trends in Private Sector Spending on Agricultural R&D, Input
Oriented, Postharvest and Food Processing, 1960 to 1992 ..   8
Table 3.  Annual Revenues and R&D Expenditures in 1994 of Selected
Corporations with a Broad Range of Agricultural Activities . 12
Table 4.  Global Fertilizer Market, 1992 to 1993 .13
Table 5.  Estimated Fertilizer Consumption in Industrial and Developing
Countries, 1992 to 1993 .13
Table 6.  Global Pesticide Market in 1994, by Pesticide Product, by Region,
and by Principal Country .15
Table 7.  Global Pesticide Market in 1994, by Crop and by Pesticide
Product/Crop .16
Table 8.  Total World Consumption of Agricultural Seed, by Continent. 19
Table 9.  Total World Consumption of Agricultural Seed, by Crop .   19
Table 10. Global Animal Health Sales in 1994, by Product Group and
Region .23
Table 11. Global Animal Health Sales in 1994, by Product Group and
Animal Species .23
Table 12. Global Estimates of R&D Expenditures in 1985 on
Biotechnology, by Country or Region .25
Table 13. Global Estimates of R&D Expenditures in 1985
on Biotechnology, Private and Public Sectors .25
Table 14. R&D Global Expenditures in 1985 on Agricultural
Biotechnology, by Applcation .25
Table A- 1. Principal Fertilizer Companies ............. ................... 44
Table A-2. Major Plant Protection Companies    .     ............................ 45
Table A-3. Major International Seed Companies ................................ 46
Table A-4. Major Animal Health Companies    .       .............................. 47
..



Agricultural Research and Development:
The Need for Public-Private Sector Pamerships
CLIVE JAMES
Introduction
The world's population is approximately 5.5 billion and is expected
to double to 11 billion by the year 2050. Ninety-seven percent of this
population increase will occur in developing countries in Africa, Asia,
and Latin America (Swaminathan 1995). Even with today's population,
700 million people do not have adequate food supplies, and more than
1.1 billion people-30 percent of the population of the developing
world-live in abject poverty, barely surviving on one dollar per day or
less for food, shelter, and other essential needs. The challenge for the
future is global food security, which will require at least a doubling, and
preferably a tripling, of food production by the year 2050 to meet the
needs of the rapidly growing global population of 11 billion, approxi-
mately 90 percent of whom will reside in developing countries.
Compounding the problem, this additional food will have to be pro-
duced on the existing area, or less, of agricultural land. The enormity of
the challenge of food security is best illustrated by the fact that in the
next fifty years the global population will consume twice as much food
as has ever been consumed since agriculture began 10,000 years ago.
Agricultural research and technological improvements are and
will continue to be prerequisites for increasing agricultural productiv-
ity and generating income for farmers and the rural work force. This
in turn will help to alleviate poverty, which is primarily a rural phe-
nomenon, but which also afflicts the urban poor; 75 percent of the
poor in Africa and Asia live in rural areas. Given that economic
growth is the best antidote to poverty, and that few countries have
-1 



achieved economic growth without agricultural growth, it follows
that agriculture, a principal sector in most developing countries, can
contribute significantly to growth and development and should be
accorded a high priority. During the last decade, however, invest-
ments in agriculture, at both the national and international levels,
have declined. There is an urgent need to reverse this trend, which, if
left unchecked, can threaten global food security.
Industrial countries have benefitted from agricultural research and
development (R&D) investments in both the public and private sec-
tors, but developing countries have by and large relied on public sector
support from national programs and from international organizations
such as the international centers of the Consultative Group on
International Agricultural Research. In the future it is imperative that
developing countries invest significantly more public sector funding in
agricultural R&D and also encourage the indigenous and international
private sectors to participate in activities where they have comparative
advantages. To meet the challenge of global food security requires new
partnerships in agricultural R&D between the public and private sec-
tors that optimize the comparative advantages of each in pursuit of
mutual objectives. Forging these new public-private sector partnerships
would promote the most effective use of limited global resources for
the development of sustainable agricultural systems. In the last decade
governments in industrial countries have encouraged increased partici-
pation by the private sector in agricultural R&D, a trend that is being
mirrored in many developing countries. During the 1990s there has
been a growing awareness, in both the public and private sectors, of the
significant benefits that can be derived from such collaboration.
This publication is not an exhaustive analysis of public and pri-
vate sector investments in agricultural R&D; rather, it presents gen-
eral information that demonstrates the need for public-private sector
partnerships, with particular emphasis on developing countries. In
order to provide a global contextual framework in which to view the
activities of the public and private sectors, the declining official devel-
opment assistance to agriculture as well as public and private sector
investments in agricultural R&D are briefly reviewed; for the latter,
2



selected activities of the private sector active in international agricul-
tural R&D are characterized. The need for collaboration between the
private and public sectors is discussed and two different initiatives are
described that involve collaboration between the public and the pri-
vate sectors, aimed at building new partnerships for the future.
Declining Support for
Developing Country Agriculture
A recent International Food Policy Research Institute (IFPRI)
study (Brown and Haddad 1994) reported that the proportion of
official development assistance (ODA) devoted to agriculture
decreased from 20 percent in 1980 to 14 percent in 1990. The studv
also showed that real external assistance to agriculture for developing
countries declined from $12 billion' in 1980 to $10 billion in 1990.
Although there are many reasons for this decline, the following are
believed to be the major factors. First, there are those within the
development assistance community who (i) reject the view that
investment in agriculture is a prerequisite for economic growth in
developing countries, and (ii) contest the reported high private and
social rates of return of 20 percent or more attributed to agricultural
research projects. Second, during the 1980s and 1990s, bilateral and
multilateral agencies that provided development assistance assigned a
higher priority to environmental protection, which reduced the
amount of funds available for support to agriculture. This change in
priority occurred at the same time donor agencies were being forced
to deal with their own domestic economic constraints.
Consequently, donors were unable to satisfy all of the new and com-
peting demands, such as significant financial aid to Eastern Europe
and the countries of the former Soviet Union.
In the past, ODA and official investment assistance have been
important for obtaining additional financial support from national
All data in this publication are given in US dollars ($).
3



programs for agricultural research. There is now evidence that this
external support is declining at the same time developing countries
are providing less support to agricultural R&D. External assistance to
national agricultural research systems (NARS) is estimated to be 35
percent for Sub-Saharan Africa, 26 percent for Asia and the Pacific,
and 7 percent for Latin America and the Caribbean. The breadth of
support for agriculture from the donor community tends to be nar-
row and, therefore, is vulnerable. For example, the World Bank pro-
vides 25 percent of the total agricultural R&D support to developing
countries, and two-thirds of the World Bank's $817 million to devel-
oping countries during the period 1981 to 1987 was limited to six
projects (Anderson et al. 1994).
In summary, declining support of public sector funds from ODA
to aid agricultural research in developing countries does not bode well
for the future, which highlights the importance of increased participa-
tion by the private sector in partnership with the public sector. It is
noteworthy that public sector ODA funding for all sectors is currently
estimated at approximately $60 billion annually, whereas private sec-
tor investments from the North for all sectors in the developing coun-
tries of the South are estimated at more than $170 billion per year
(Serageldin and Sfeir-Younis 1996), equivalent to almost three times
that of public sector ODA.
Public Sector Investments in Agricultural R&D
In the 1960s industrial countries accounted for approximately
two-thirds of the total public sector investments in global agricul-
tural research. It was not until 1990 that developing countries
invested marginally more than industrial countries in agricultural
R&D. In 1990 global investments in agricultural R&D by the
public sector were estimated at $17.3 billion, with $8.8 billion
invested by developing countries and $8.5 billion by industrial
countries (Alston and Pardey 1996). One of the most useful and
meaningful methods for comparing national agricultural research
expenditures is to express them as a percentage of the correspond-
ing national agricultural gross domestic product (GDP); Anderson
4



and others (1994) reported these as "agricultural research intensity
ratios." Data for the period 1961 to 1993 is shown in Table 1.
Table 1. Investments in Agricultural R&D
(espressed as a percentage of national agricultural GDP)
REGION OR COUNTRY   NUMBER   1961-65   1971-75   1981-85   MOST
OF                                   RECENT
COUNTRIES                                 YEAR
Developing Regions:
Sub-Saharan Africa     17       0.42      0.67      0.76     0.58a
(exduding South Africa)
South Africa            1       1.39      1.53      2.02     2.59a
Asia and the Pacific    15      0.14      0.22      0.32
(excluding China)
China                    1      0.57      0.44      0.42     0.42b
Latin America and      26       0.30      0.46      0.58
the Caribbean
West Asia and          13       0.28      0.50      0.52
North Africa
Developed Countries:    18      0.96      1.41      2.03
United States            1      1.32      1.36      1.93     2.22c
Australia                1      1.54      3.56      4.52     4.42d
1991 estimate, 1993, c1992,d 1998.
Source: PardeyandAlston(1995).
The data in Table 1 indicate that industrial country investments
show continued growth, with at least 2 percent of agricultural GDP
invested in R&D by the early 1980s; the average investment by eigh-
teen industrial countries in the early 1980s was 2.03 percent, wit-h
the United States reporting 2.22 percent in 1992 and Australia 4.42
percent in 1988. Corresponding developing country expenditures
averaged approximately 0.5 percent in the early 1980s, equivalent to
one-fourth of the amount invested by industrial countries. Whereas
public sector investments in agricultural R&D in developing coun-
5



tries doubled on average between the 1960s and the early 1980s, the
initial rapid growth during the early 1960s slowed during the 1970s,
and by the 1980s investments had either leveled off (China at 0.42
percent) or declined, with seventeen Sub-Saharan Africa countries
showing a significant decrease, from 0.76 percent in 1981 to 1985 to
0.58 percent in 1991. It is noteworthy that the Republic of South
Africa's investment in agricultural research continued to increase,
from 1.39 percent in the 1960s to 2.02 percent in the early 1980s to
2.59 percent in 1991, and compared favorably with investment in
industrial countries such as the United States, which reported 2.22
percent for 1992.
In summary, recent global investments in public agricultural
research show that developing countries invest approximately 0.5
percent of agricultural GDP in agricultural R&D, one-fourth of
the amount invested by industrial countries, which average 2 pe:r-
cent. The significant growth in public spending on agricultural
research in the 1960s in developing countries has leveled off or
declined in some countries, and there is growing concern that cur-
rent investments will not be adequate for delivering the technology
contribution necessary to increase food productivity sufficiently to
ensure food security in the future. Given that global resources
devoted to agricultural R&D are inadequate, one of the options
that must be explored is better use of current allocated global
resources, including the integration of public and private sector
research resources, so that limited global resources can be used to
achieve mutual objectives more effectively and efficiently at the
national and international levels.
Private Sector Investments in Agricultural
R&D and Estimates of
Global Markets for Selected Products
There are no comprehensive and uniformly generated global esti-
mates of private sector investments in agricultural R&D for industrial
and developing countries. However, some data from selected industri-
6



al countries, where most of the private sector investments are made,
provide an indication of the scale and scope of investment vis-iz-vis the
public sector. In the early 1960s private sector agricultural R&D
expenditures in the United States were about $250 million annually,
approximately 5 percent less than corresponding public sector expen-
ditures. Recent estimates (United States Department of Agriculture
1995) for the United States indicate that in-house private sector agri-
cultural research expenditures for 1992 were $3.3 billion, 27 percent
more than the corresponding amount spent by the U.S. public sector.
The data in Table 2 show the trends in private sector spending for
various activities during the period 1960 to 1992. It is noteworthy
that private sector agricultural R&D spending in the United States
increased almost twentyfold during this period, with real expenditures
(expressed in 1980 dollars) increasing by a factor of three, from $511
million in 1960 to $1,648 million in 1992 (Alston and Pardey 1996).
During the 1960s and 1970s, spending on agricultural research by the
private sector showed real growth rates of more than 4.5 percent per
year and exceeded corresponding public sector spending. Despite the
fact that U.S. private sector expenditures in agricultural R&D grew at
lower real growth rates in the 1980s, compared with those of the
1960s and 1970s, the total investment by the U.S. private sector in
1992 was $700 million greater than the public sector. The highest
rate of growth in the 1970s was in chemicals, which was also the only
activity to decline in the 1980s, when postharvest and food processing
investments increased rapidly from $456 million in 1982 to $1,088
million in 1992.
Although available data do not allow precise comparisons arid
breakdown of public and private sector spending in agricultural
R&D, the trend in the United States-higher spending in the
1970s and 1980s by the private sector compared with that of the
public sector-is probably representative of the spending in most
other industrial countries. Comparable data for agricultural and
food R&D in the United States, United Kingdom, and France for
the mid-1980s indicate that annual private sector expenditures
were $2,400 million, $530 million, and $270 million, respectively,
equivalent to 49, 47, and 39 percent of total spending by both the
7



Table 2. Trends in Private Sector Spending on Agricultural R&D
Input-Oriented, Postharvest and Food Processing, 1960 to 1992
(millions of current dollars)
: YEAR:    9  E   : INu-rORWNED   :        POSTNARVESr    TOTAL
AND FoOD
PROCEsING
CHEMCAtS AGRCUCLURAL VEMr.MN,Y/ l   PLINT     CuRRENr    REAL
MAa-NERY  PNAEMA-  BREEDING
1960      9.7   :75.9       6.0      5.6      80.0    177.2    511.9
1970     126.0    89.1      45.0     26.3    206.1    492.5    839.0
1980   1,390.0  287.0   0111.0      96.7    456.1   1,340.8  1,340.8
1992   1,123.0   394.0    306.0    399.7  1,088.0  3,310.7  1,648.0
Source: Adaped from United States Department of Agriculture (1995).
public and private sectors (Anderson 1996), and these percentages
are likely to have increased significantly in the interim period.
Expenditures on agricultural R&D by the indigenous and inter-
national private sectors in developing countries are much lower than
in industrial countries and are concentrated in a few of the larger and
more advanced developing countries, such as Argentina, Brazil, India,
and Mexico (Pray and Echeverria 1991). More recent data (Falconi
1992, 1993) show that in the 1970s and 1980s private sector invest-
ments in agricultural R&D in some developing countries increased
faster than public sector investments, similar to the trend in the
United States. For example, private sector investments (expressed as a
percent of total R&D expenditures) in Colombia increased from 22
percent in 1970 to 37 percent in 1991, and in Ecuador from 19 per-
cent in 1986 to 27 percent in 1991. This trend is not surprising
because it occurred at a time when many developing countries intro-
duced policies to encourage increased participation by the private sec-
tor in agricultural R&D.
Given the nature of the marketplace and the competition among
private sector corporations, comprehensive data on agricultural R&D
8,S



is not readily available in the public domain. However, much can be
gleaned about the scale and scope of private sector activities in an inter-
national context. In this paper, information from industry sources has
been used to characterize the international markets for selected prod-
ucts, and to estimate R&D expenditures, expressed as a percentage of
revenues. These activities are discussed in the following section.
Activities of the Private Sector in International Agricultural R&D
Corporations active in international agricultural research include a
large number of companies from the North and fewer, but an increas-
ing number of, indigenous companies from the South. Companies
from the North range in size from small corporations, often with spe-
cialized applications and operations in one or few industrial countries,
to large transnationals with global operations in many industrial and
developing countries. Companies from the South are generally smaller
and focus on their home country or region. Recent acquisitions-the
successive acquisitions by the Empressa La Moderna [Pulsar] Group
from Mexico of Asgrow Seed, Peto Seed, Royal Sluis, and DNAP--
however, indicate that some of the larger companies from the South
are expanding their base of activities and becoming transnational.
The private sector has broad-ranging activities in agricultural
research focused on the development, production, and distribution
of products and services that lend themselves to commercialization.
The private sector's major activities are in the industrial countries
where currently there are more opportunities for commercialization
than in developing countries, but this is changing. Most private sec-
tor activities in the developing world take place in the most advanced
developing countries and favor working with large and wealthy com-
mercial farmers and plantations rather than with small, subsistence,
and resource-poor farmers. The corporations from the North and
South that are active in agricultural R&D and are potential partners
for public sector institutes are engaged in very diverse activities, some
of which are listed below:
* Acquisition, exchange, distribution, and improve-
ment of genetic stocks of crops, forest species, live-
9 -



stock, and fish using conventional and biotechnolo-
gy applications.
*  Production and distribution of improved seed and
livestock to meet international needs.
*  Production of fertilizers and development of man-
agement practices to optimize crop production.
*  Development of diagnostics to detect diseases in
crops, animals, and fish.
*  Production of pesticides and pesticide application
within the context of chemical control or integrated
pest management.
*  Development of strategies to ensure responsible
deployment of resistance genes in crops that will
optimize durability of the genes.
*  Development and production of vaccines and other
disease control agents for animal diseases.
•  Processing, storage, and use of food and feed prod-
ucts, including control of postharvest losses.
i  Global strategic planning and policy analysis aimed
at developing commercial agriculture-based prod-
ucts to meet global needs.
Private sector activities in agricultural research, such as those list-
ed above, are conducted by industry groups that can be conveniently
classified according to the following product types:
*  fertilizers;
*  seeds;
*  plant protection;
10



*  plant and microbial biotechnology products;
*  animal genetic stocks, including biotechnology-
based technologies;
*  animal health products;
*  food and food processing;
*  forestry;
*  fisheries; and
*  machinery and equipment.
The above classification can be used to match the activities of
the private sector with those of the public sector. To provide an indi-
cation of the scale of the private sector's international activities,
recent data on global markets for selected major industry groups have
been collated, with major companies identified and listed according
to their estimated global markets or their estimated R&D expendi-
tures. Data have been collated for fertilizers, seeds, plant protection,
animal health, and biotechnology. Many of the large transnational
companies are listed in several of the groups, indicating that they are
involved in several areas; for example, some companies have opera-
tions in seeds, agricultural chemicals (pesticides), as well as in plant
and animal biotechnology.
Estimates of R&D Expenditures for Selected Corporations
The data in Table 3 list annual revenues- and R&D expendi-
tures for selected agricultural companies that represent very diverse
industry groups with interests in activities ranging from plant
breeding to chemicals to biotechnology to large food and trading
companies. Given this diversity of activities it is to be expected that
the percentage of R&D expenditures will vary widely and reflect
the nature of the R&D program necessary for products that are
quite different. For this reason, the data cannot be compared
directly with spending by the public sector in agricultural R&D;
the intent is to provide a better understanding of the scale and
scope of current expenditures by the private sector. R&D expendi-
tures range from 13.9 percent of total revenue, for a very special-
ized corporation concentrating on plant genetic improvement, to
1.8 percent, for a company that is by and large a trading company
11



that also has major global interests in food and food processing. In
general, industry considers 6 to 7 percent of revenue as the mini-
mum investment necessary to ensure an acceptable level of compet-
itiveness in the marketplace. Estimates of R&D expenditures by
indigenous companies in developing countries suggest that on aver-
age R&D expenditures as a percentage of revenue is significantly
lower, ranging from 1 to 5 percent, as compared with 5 to 10 per-
cent or more in industrial countries.
Table 3. Annual Revenues and R&D Expenditures in 1994 of
Selected Corporations with a Broad Range of Agricultural Activities
COMPANY           ANNUAL REVENUEI   R&D EXPENDITURE   EXPENDITURES AS
($ MILLIONS)      ($ MILLIONS)    PERCENr OF REVENUE
American
Cyanamid Co.           4,276               595              13.9
DeKalb Genetics
Corp.                   320                 44              13.7
Sandoz AG              15,870             1,635              10.4
Zeneca (AG)2            2,420               242              10.0
Ciba-Geigy             19,341             1,931               9.8
Pioneer                 1,478               114               7.7
Monsanto3               8,272               609               7.4
Hoechst
Celanese Corp.         7,794               313               7.3
Sumitomo
Chemical4              9,798               554               5.7
DuPont                 39,333             1,404               3.6
Unilever               45,419               831               1.8
IAnnual revenues and R&D expenditures are for 1994 and are available only for
2publicly traded companies that disclose these data in annual reports.
Sales of Zeneca PLC are $7,123 million, with R&D of $823 million (11.5
3percent of sales).
4Sales of Monsanto Agricultural Group are $2,200 million.
Sales for Sumitomo Agriculture are $840 million.
Source- Compiled by the author from various industry sources.
12



Fertilizer Industry
The annual global fertilizer market was estimated at $32 billion in
1992 to 1993, as shown in Table 4, with nitrogen at $20 million rep-
resenting the major component in terms of value and tonnage, fol-
lowed by phosphate at $8.2 million and potash at $3.9 million. Data
in Table 5 show that developing countries use 60 percent of the nit-o-
gen consumed on a global basis, 54 percent of phosphate, but only 33
percent of the potash. On average about 55 percent of global fertilizer
is consumed in developing countries, and the private sector is responsi-
ble for at least half of the total global production. Due to significantly
higher prices in 1995, the global fertilizer market was estimated at
approximately $50 billion. The major fertilizer producers active in the
international market are listed in Table A-I of the Appendix.
Table 4. Global Fertilizer Market, 1992 to 1993
NUTRIENT                   MILLIONS OP TONS        ANNUAL VALUE1
($ BILLIONS)
Nitrogen (N)                    73.6                   20.0
Phosphate (P205)                31.5                    8.2
Potash (K20)                    20.8                    3.9
Total                          125.9                   32.1
1 Ex-factory value.
Source: Communication with the International Fertilizer Development Center (IFDC) and
the International Fertilizer Industry Association (IFIA) using base data from World
Bank Technical Report 252 (1994).
Table 5. Estimated Fertilizer Consumption in Industrial and
Developing Countries, 1992 to 1993 (million nutrient tons)
NuTRIENT             DEVELOPED        DEVELOPING          WORLD
COUNTRIES        COUNTRIES
Nitrogen (N)           29.3              44.3              73.6
Phosphate (P205)       14.6              16.9              31.5
Potash (K20)           13.8               7.0              20.8
Total                  57.7              68.2             125.9
Source: FAO.
13



Doubling food production will require significantly more use of
fertilizers despite the significant effort underway to develop crop vari-
eties that are more responsive to fertilizers. Such increased use of fer-
tilizer will exacerbate a situation that is already of environmental con-
cern; that is, even with the current usage rate of fertilizer, intensified
agriculture is resulting in nitrate levels in groundwater well above
accepted tolerance levels. Various technologies are being investigated
to determine their applicability for increasing the efficiency of nitro-
gen utilization and for using nitrogen-fixing organisms to develop
cereals that can fix some of their own nitrogen supply, thereby
decreasing dependence on inorganic nitrogen. Use of mycorhiza is
also being explored as a means to increase the extraction efficiency of
phosphate and other elements that are not available in sufficient
quantities for crops growing in marginal areas, such as in acid soils.
Plant Protection Industry
Global food, feed, and fiber losses due to the combined effect of
weeds, insect pests, and pathogens are estimated to reduce yield by
approximately 35 percent. The annual value of the global plant pro-
tection market in 1994 was approximately $28 billion (Wood
Mackenzie 1996). Herbicides represent almost 50 percent of the
world pesticide market, insecticides 30 percent, and fungicides 20
percent, as shown in Table 6. Whereas herbicides are far more impor-
tant than insecticides and fungicides in North America, Europe, and
other industrial countries, insecticides predominate in developing
countries. Approximately 75 percent ($20.6 billion) of the annual
$27.8 billion global pesticide market is in industrial countries of the
North; 25 percent ($7.1 billion) is in developing countries of the
South. Nine countries consume 72 percent of pesticides, and the two
major markets in the industrial North are the United States (27 per-
cent) and Japan (17 percent), followed by several European Union
countries and Canada, which consume 2 to 8 percent. Brazil, at 5.3
percent, is the only significant consumer from the South.
In terms of crops, horticultural crops (fruits and vegetables) are by
far the most important, consuming approximately 25 percent of pesti.-
cides, as shown in Table 7. The other major crops, which consume
14



from 9 to 12 percent of the global supply are, in order of priority, cere-
als (small grains), rice, maize, cotton, soybean, sugar beet, and oilseed
rape. The segmented market for different pesticide products indicates
that more insecticide is used on fruit and vegetables than on any other
category of crop, followed in order of importance by cotton, rice, and
maize. The major use of herbicides is for maize (18 percent), cereals (17
percent), soybean (15 percent), fruit and vegetables (13 percent), and
rice (10 percent). For fungicides, the major consuming crops are fruit
and vegetables (46 percent), cereals (23 percent), and rice (17 percent).
Table 6. Global Pesticide Market in 1994, by Pesticide Product,
by Region, and by Principal Country
PESTICIDE                    $ MILLIONS               PERCENT
PRODUCT
Herbicides                     12,995                  46.7
Insecticides                    8,110                  29.1
Fungicides                      5,420                  19.5
Others                          1,300                   4.7
Total                         27,825                  100.0
REGION                $ MILLIONS    PRINCIPAL COUNTRY       PERCENT
Western Europe           6,720       United States           27.0
North America            8,300      Japan                    16.9
(United States/Canada)              France                    7.8
Japan                    4,700       Brazil                   5.3
Eastern Europe            955       Germany                   3.5
Industrial Countries   20,675       Italy                     3.3
South Korea              2.9
Canada                   2.8
Far East                2,715       United Kingdom            2.5
Latin America           2,930       Others                   28.0
Others                   1,505
Developing Countries    7,150
Total                  27,825       Total                   100.0
Source: Wood Mackenzie (1996).
15



Table 7. Global Pesticide Market in 1994, by Crop and
by Pesticide Product/Crop
TOTAL PESrCIDE MARET   $ MILLIONS   HERBICIDE MARKEr BY    $ MILLIONS
BY CROP                             PRINCIPAL CROP
Fruit and Vegetables    7,000       Maize                     2,365
Cereals                 3,960       Cereals                   2,150
Rice                    3,625       Soybean                   1,920
Maize                   3,110       Fruit and Vegetables      1,720
Cotton                  2,845       Rice                      1,335
Soybean                 2,260       Sugar Beet                  545
Sugar Beet                790       Cotton                      530
Oilseed Rape              470       Oilseed Rape                325
Others                  3,765       Others                    2,105
Total                  27,825       Total                    12,995
FUNGICIDE MARKET      $ MILLIONS    INSECTICIDE MARKET BY   $ MILLIONS
BY PRINCIPAL CROP                   PRINCIPAL CROP
Fruit and Vegetables    2,495       Fruit and Vegetables      2,465
Cereals                  1,240      Cotton                    1,870
Rice                      940       Rice                      1,190
Others                    745       Maize                       620
Others                    1,965
Total                    5,420      Total                     8,110
Source: Wood Mackenzie (1996).
With the advent of biotechnology, some conventional insecticides
will be substituted for by novel genes-for example, Bacillus thuingien.-
sis (Bt)-that confer resistance to insects through development of trans-
genic crops in which the active gene has been incorporated. Currently,
industrial countries consume considerably more herbicides than devel-
oping countries, but this is likely to change. Labor shortages and higher
labor prices will lead to reduced use of hand-weeding for crops such as
rice, and more herbicides will be applied, perhaps in conjunction with
use of herbicide-resistant varieties. In developing countries more than
$1.25 billion worth of pesticides (insecticides 44 percent, herbicides 29
percent, and fungicides 27 percent) are used annually on rice. Use of
16



herbicides on rice in developing countries is likely to increase as the pre-
sent trend to favor direct seeding in irrigated areas over traditional
transplanting becomes more pronounced, and if more attention is
focused on rainfed rice, where weeds are more of a problem. Water
constraints associated with irrigated rice production will lead to less
optimal control of weeds, which, in conjunction with the other factors
noted above, could lead to significant increases in herbicide use on rice,
more than 90 percent of which is grown and consumed in Asia.
Concern for the environment, large-scale commercialization of
transgenic crops with resistance to insects, herbicides, and plant
pathogens, and widespread implementation of integrated pest manage-
ment (IPM) are all factors that will likely have a significant effect on the
structure of the pesticide market in the future. The private sector, how-
ever, will continue to dominate the pesticide market and will probably
become more dominant as technologies become more sophisticated and
as penetration of markets in the developing countries of Asia and Latin
America, and to a lesser extent Africa, advances.
The principal companies involved in the international plant pro-
tection industry are transnationals with headquarters based in Europe
(7), the United States (7), and Japan (9). Companies involved in plant
protection are by and large also those involved in the chemical, pharma-
ceutical, seed, and agribiotechnology industries. The principal compa-
nies involved and their respective share of the global market are listed in
Table A-2 of the appendix. The turnover of the companies ranges from
$0.21 billion to $4.1 billion per year, and the leading ten companies
account for approximately 75 percent of the $28 billion global market.
The plant protection industry went through a consolidation phase
that featured mergers and takeovers, the most recent of which occurred
in March 1996 with the merger of Ciba and Sandoz to form Novarntis.
Novartis, which will benefit from the combined pesticide markets of
both Ciba and Sandoz, is now the largest pesticide company in the
world, with the equivalent of $4.12 billion in combined Ciba/Sandoz
1994 sales [see Table A-2]. In 1995, Hoechst and Scherring merged to
form AgroEvo, which is now, along with DuPont, ranked the second
17



largest corporation involved in plant protection, with 1994 revenues of
$2.1 billion. Whereas the incentive for the merger between Ciba and
Sandoz was driven mainly by the needs of the pharmaceutical industry,
it nevertheless has important implications for the pesticide industry,
which is anticipating more mergers in the coming decade.
A survey of pesticide use in the United States (Anonymous 1995)
for the period 1991 to 1993 showed that use, as measured by volume of
active ingredients, continued in 1993 a ten-year pattern of nearly flat
growth, which was due to lower application rates of more potent com-
pounds and more efficient use of pesticides. Twenty new active ingredi-
ents were registered in the United States in 1993, the highest number
since 1975, with regulation costs estimated at $303 million, or 3.6 per-
cent of pesticide revenues.
Seed Industry
The value of the global seed trade is estimated at $45 billion annu-
ally, equally divided among the three different segments (Rabobank
1994): commercial seed, which is dominated by the private sector;
farm-saved seed; and seed from government institutions. The latter is
particularly prevalent in developing countries and in centrally planned
economies. For example, in Africa, governments completely control the
seed industry in 60 percent of the countries, and both the government
and private sectors are active in 28 percent of the countries.
Consumption of agricultural seed, which includes farm-saved seed, is
approximately 120 million tons per year, and global consumption has
been stable since about 1980. Asia and the Commonwealth of
Independent States are the largest consumers of seeds, approximately
38.4 and 37.3 million tons, respectively, in 1990, and together repre-
sent approximately two-thirds of the world market, as shown in Table
8. Consumption has been stagnant during the last decade, except in
Asia, where consumption has increased by 18 percent since 1980; one-
third of the seed used in Asia is rice.
Cereals dominate the world seed market, accounting for approxi-
mately two-thirds of the 120 million ton market, as shown in Table
9. Wheat is the major cereal crop for the seed market (35 million
18



Table 8. Total World Consumption of Agricultural Seed,
by Continent (millions of tons, including farm-saved seed)
REGION                            1980          1985         1990
Commonwealth of                   41.7          37.7         37.3
Independent States
South America                      4.3           4.4          4.2
Europe                            23.2          23.6         21.3
North and Central America         10.9          10.4          11.0
Asia                              32.6          35.0         38.4
Africa                             3.9           4.3           4.6
Oceania                            1.2           1.4           1.1
Total (World)                    118.8         117.7         118.7
Source: FAO (Rabobank 1994).
Table 9. Total World Consumption of Agricultural Seed,
by Crop (millions of tons)
CROP                              1980          1985         1990
Wheat                             34.0          33.2         35.0
Barley                            11.8          11.6         11.1
Rice                              11.5          12.2         13.0
Maize                               6.4           6.5         6.8
Other Grains                       9.5           9.3          8.9
Root and Tuber Crops              36.8          35.4         33.3
Pulses                             3.4           3.9          4.0
Oilseeds                            5.4          5.6          6.6
Total                             118.8        117.7        118.7
Source- FAO.
tons), followed by rice (13 million tons), barley (11.1 million tons),
and maize (6.8 million tons); root and tuber crops are exceptionally
high, at 33.3 million tons, because of the high water content of "seed
tubers." Of the $15 billion annual market in commercial seed, horti-
19



cultural seed accounts for only $1.75 billion, and this includes both
vegetable and flower seed. In 1990 approximately $13 billion of the
$15 billion commercial seed market was in the OECD countries. The
European Union ($5.8 billion), the United States ($4.5 billion), and
Japan ($2.7 billion) were the largest markets; Turkey, Argentina, and
Brazil also were important.
The private sector dominates the $15 billion annual global com-
mercial seed market. There are approximately 1,500 seed companies
worldwide, 600 based in the United States and 400 in Europe. The fif-
teen principal seed companies that are active internationally are listed in
Table A-3 (Anonymous 1996) of the Appendix and, with the exception
of Empresas La Moderna, S.A.-ELM (Pulsar), which is based in
Mexico, are transnationals based in North America (3), Europe (10),
and Japan (1). The annual turnover of the companies ranges from
approximately $0.12 billion to $1.5 billion per year. Their combined
turnover is approximately $5.5 billion, about one-third of the global
commercial seed market. The market shares of these companies are
expected to increase in the fuiture. Of these fifteen seed companies,
approximately half are specialized seed companies, the other half are
owned by larger corporations with diversified interests.
Until the 1960s the seed industry comprised traditional seed com-
panies that specialized in the improvement, production, and distribu-
tion of seed. During the late 1960s several transnational corporations
with activities in farm chemicals and pharmaceuticals acquired seed
companies to capture the range of products and services for the agricul-
tural industry within one corporate structure, thus providing them with
the necessary R&D critical mass and benefiting from economies of
scale. After a decade or so, however, some of the transnationals sold
their acquired seed operations, for several reasons: incompatibility with
an evolving business strategy, lower margins than expected in seed oper-
ations where they lacked business linkages and experience, and a realiza-
tion that the opportunities for using the seed industry to capture and
market proprietary transgenic crops was a longer-term venture than
they had anticipated. In the 1980s and 1990s acquisitions and mergers
have resulted in fewer but larger seed companies, a trend that is expect-
20



ed to continue into the next decade, ultimately resulting in a few very
large companies dominating the international market. This trend is
fueled by the long-term investments in research that are necessary to
ensure competitiveness and an international marketing structure to
effectively compete in the global market.
Mergers and acquisitions are not the only way critical mass for
R&D is being created in the industry. Collaborative arrangements,
which range from cooperative R&D agreements to cross-licensing, are
becoming prevalent, with Pioneer Hi-Bred International recently
reporting that it has 800 agreements with various private and public
organizations. In 1995, ELM (Pulsar) of Mexico acquired Asgrow
Seed owned by Upjohn, added Peto Seed and Royal Sluis to its portfo-
lio later in the year, and in early 1996 acquired DNAP, a small agricul-
tural biotechnology company. In February 1996 there was a merger
between the seed operations of Zeneca (formerly ICI, United
Kingdom) and Suiker Unie, which owns the Vander Have Group
from the Netherlands. The two corporations view the merger as an
opportunity to mobilize the necessary critical mass for research, to ben-
efit from the complementarity in their respective operations, and to
increase the probability that the newly formed company will be one of
a few large companies to dominate the market in the coming decades.
In March 1996, Sandoz and Ciba merged to form Novartis, which
now is the second largest seed company in the world, with a turnover of
$907 million in 1994. The former operations of Sandoz were estimated
at $727 million and included four companies, Hilleshog NK (France),
Northrup King (United States), S&G Seeds (the Netherlands), and
Rogers (United States), with subsidiaries in twenty-five countries, and
those of Ciba were in ten or more countries, with operations estimated
at $180 million. Seed industry representatives expect such mergers to
continue as companies attempt to build the minimum critical mass nec-
essary for efficient R&D operations to be implemented and for prod-
ucts to be more competitive in the international marketplace. In devel-
oping countries, where it is estimated that 80 percent of seed is current-
ly supplied by government organizations or by farmer-saved seed, pri-
vate sector activity in the seed industry is expected to become increas-
-21-



ingly strong. Private sector growth is likely to be important in Asia, as
well as in Latin America and selected countries in Africa. As the formeir
centrally planned economies of Eastern Europe and the
Commonwealth of Independent States become politically and econom-
ically stable, these regions should also experience significant growth of
the private sector seed industry.
Animal Health
The world market for animal health products was estimated to be
approximately $13 billion in 1994 (Wood Mackenzie 1996), as
shown in Table 10. Animal health products are divided into four cat--
egories: nutritional feed additives; medicinal feed additives; biologi-
cals; and pharmaceuticals. [These categories are defined in detail in
the footnote of Table 10.] Pharmaceuticals represent just under half
of the global market of animal health products, and nutritional feed
additives approximately one-third. More than half of the total global
pharmaceutical market of $5.6 billion is in the OECD countries, with
sales of $1.9 billion in Europe, $1.6 billion in North America, $870
million in East Asia, and $750 million in Latin America.
The data in Table 11 indicate that catde are the major consumers
of animal health products, consuming approximately 31 percent of
the global market supply, of which approximately half is pharmaceuti-
cals, followed by pigs (24 percent), poultry (18 percent), and sheep (6
percent). In developed countries, care of domestic pets is a significant
and growing market, making up approximately 20 percent of the
global market in animal health products.
The animal health industry has many similarities to the plant
protection industry in that the principal companies active internation-
ally are either part of, or have association with, large transnationals
that have operations in chemicals, pharmaceuticals, and biotechnolo-
gy. Global sales of animal health products are dominated by the pri-
vate sector. Ten companies account for the majority of such opera-
tions [see Table A-4], totaling almost $11 billion, just over 80 percent
of the world market. With the exception of Tortuga (Brazil), all the
principal companies are transnationals based in the United States (9),
22



Table 10. GlobalAnimal Health Sales in 1994, by Product Group
and Region ($ millions)
REGION                NUTRmONAL MEDICINAL      BIo-      PHARMA-    TOTAL
FEM        FEED     LOGICALS   CEUTICALS
ADDITIVEs   ADDITiVES
North America             945        690        500      1,660       3,795
Western Europe            800        425        570      1,860       3,655
East Asia                 820        450        350        870       2,490
(China, Southeast Asia,
Australia)
Eastern Europe            395        180        135        320       1,030
Latin America             210        170        300        750       1,430
Rest of World             130         80        110        180         500
(Africa, Middle East, India,
World Total              3,300     1,995      1,965      5,640      12,900
Note. Product categories include the following: nutritional feed additives include vitamins,
minerals, amino acids, nonptotein nitrogen and other nutritionals; medicinal feed additives
indude antibiotics, antibacterials, anticoccidials, growth promotants, and other medicinals;
biologicals include livestock biologicals, poultry biologicals, and companion animals; pharma-
ceuticals include antimicrobials, parasiticides, and performance enhancers.
SourcCe Wood Mackenzie (1996).
Table 11. Global Animal Health Sales in 1994, by Product Group
and Animal Species ($ millions)
ANIMAL SPEciEs        NuTrnoNAL MEDIC11iAL      Bio-     PHARMA-    TOTAL
FEED       FrED     LOGICALS   CEUrICALS
ADDITIVES   ADDorsvEs
Cattle                    890        374        620      2,230       4,114
Pigs                      990       693         310      1,055       3,048
Sheep                     110         85        150        475         820
Poultry                   880        785        455        215       2,335
Pets/Others               430         58        430      1,665       2,583
Total                   3,300      1,995      1,965      5,640      12,900
Source. Wood Mackenzie (1996).
23



Europe (13), or Japan (2), but they have significant and growing busi-
ness in the developing countries estimated to be approximately 25 per-
cent of the global market of $13 billion annually.
Biotechnology
Private sector investments in biotechnology are multidiscipli-
nary in the sectors of medicine, pharmaceuticals, agriculture, and
industrial applications such as fermentation. Because most private
sector R&D investments are subject to a degree of confidentiality
and many of the companies investing in biotechnology have multi-
sector investments in biotechnology research, it is difficult to deseg-
regate the proportion of R&D investments devoted to agriculture.
Thus, because there are no precise data available on biotechnology
R&D expenditures, and because estimates are not always compara-
ble, because of lack of uniform methodology for consolidating and
comparing data, the intent here is to describe the scope and scale of
the investments and to highlight order-of-magnitude differences.
Global R&D investments in 1990 by both the public and pri-
vate sectors in biotechnology for all sectors were estimated to be $ 11
billion, of which $6 billion was in the United States, $3 billion in
Europe, and $2 billion in Japan; the private sector in Japan invested
$1.4 billion (70 percent) of the total $2 billion (Persley 1990). The
most recent detailed estimates of the relative contributions of the
public and private sectors in the different biotechnology markets are
from 1985 (Persley 1990); these data are detailed in Tables 12, 13,
and 14, and indicate that 50 percent of total global investments
were in the United States, 25 percent in Europe, 15 percent in
Japan, and the balance of 10 percent in other countries. The esti-
mates also show that global R&D expenditures in biotechnology by
the private sector was $2.7 billion, slightly more than twice the $1.3
billion by the public sector. Corresponding comparisons for agricul-
tural biotechnology indicate that slightly more than 60 percent of
the investments were by the private sector and the balance by the
public sector. Of the total $900 million spent in agricultural
biotechnology R&D by the public and private sectors, $550 mil-
lion, equivalent to almost two-thirds of total expenditures, was spent
i24-



by the private sector. Of the $900 million invested by both the pub-
lic and private sector on agricultural biotechnology, two-thirds was
spent on seed, and the balance on microbiology applications.
Table 12. Global Estimates of R&D Expenditures in 1985
on Biotechnology, by Country or Region ($ millions)
COUNTRY OR           PRIVATE           PUBLIC           TOTAL
REGION               SECTOR           SECTOR
United States        1,500              600             2,100
European Union         700              300             1,000
Japan                  400              200               600
Others                 100              200               300
Total                2,700            1,300             4,000
Source: Persley (1990).
Table 13. Global Estimates of R&D Expenditures in 1985
on Biotechnology, Private and Public Sectors ($ millions)
SECTOR             AGRICULTURAL        OTHER            TOTAL
BIOTECHNOLOGY
Private                550            2,150             2,700
Public                350               950             1,300
Total                  900            3,100             4,000
Source Persley (1990).
Table 14. R&D Global Expenditures in 1985
on Agricultural Biotechnology, by Application ($ millions)
APPLICATION          PRIVATE           PUBLIC           TOTAL
SECTOR           SECTOR
Seeds                 350              250                600
Microbiology           200              100               300
Total                  550              350               900
Source: Persley (1990).
25



It is probable that private sector R&D investments in agricul-
tural biotechnology will increase dramatically in the late 1990s given
that significant progress with regulation has resulted in the delivery
of biotechnology-based products in the international marketplace.
For example, approximately twenty transgenic crops were approved
in 1995 for commercialization in industrial countries, fourteen in
the United States alone. Without exception, all these approved
transgenic crops in the industrial countries have been developed by
the private sector. However, China has grown transgenic crops for
several years and in 1994 was reported to have transgenic tobacco
equivalent to 5 percent of the total tobacco area in the country. In
addition, in 1996 it is estimated that more than four million acres of
transgenic crops have been grown in other industrial and developing
countries, including cotton (>2 million acres), soybean (1.5 million
acres), maize (0.5 million acres), canola (>0.2 million acres), and the
balance in tomato, potato, and squash James and Krattiger 1996).
In summary, the reported total global acreage of transgenic crops
grown by industrial and developing countries in 1996 was known to
be at least 6.5 million acres, with probably close to 10 million acres
actually planted.
There are numerous potential opportunities for applying
biotechnology in developing countries, but for commercial reasons
many of these will not be pursued by the private sector. These
opportunities often exist for what are termed orphan commodities
(Persley 1989); for example, low-value, vegetatively propagated crops
such as cassava and sweet potatoes, which are important primarily as
staples for poor people in the developing world. Similarly, crops
grown over a relatively small area would not be attractive to the pri-
vate sector, even though these crops may make a vital contribution to
the diet of poor people in a specific country or region. Given that
basic biotechnology knowledge is broadly applicable to diverse prob-
lems, however, industry often has a comparative advantage in devel-
oping the most cost-effective solutions to many of the problems in
the developing world. This situation represents a challenge to both
developing countries and to international development agencies
James and Persley 1990).
26



Assuming equal research competence in the private industrial
and public sectors, and acknowledging that industry's principal
objective is product delivery, it is reasonable to suggest that the pri-
vate sector will emerge as the principal, although not the only, gen-
erator of biotechnology products for agriculture. The comparative
advantage of industry lies in several areas:
*  Large R&D resources for funding long-term and
sometimes high-return, but speculative, agricultural
projects.
*  Diversity, from small, dedicated biotechnology com-
panies to large transnational corporations that have
extensive and increasingly collaborative research links
with the public sector, particularly universities.
*  Critical mass of scientific research resources, which
is of paramount importance in biotechnology.
These resources often are consolidated within a core
research group in the private sector (e.g., in a life sci-
ences department), which is a cost-effective way to
provide common research support for two signifi-
cant product development markets-medicine and
agriculture.
*  Knowledge of and expertise in marketing and distri-
bution systems.
*  Access to global markets and the associated advan-
tages of economies of scale, which allow develop-
ment costs to be amortized over long periods in
large markets.
The advent of biotechnology has resulted in a significant
change in the relative investments of the public and private sec-
tors in agriculture, with the private sector now investing signifi-
cantly more than the public sector in biotechnology R&D. As the
27



adoption of biotechnology-based products in agriculture becomes
more widespread, this gap between public and private sector
investments is expected to increase. This trend will be accentuat-
ed by current government policies, in both industrial and devel-
oping countries, that encourage participation by the private sector
in areas where it has comparative advantages over the public sec-
tor. Estimates of future markets for agricultural biotechnology
products vary widely; industry sources suggest that a realistic esti-
mate is $3 billion to $5 billion for total sales at the farm level by
the year 2000. Of this, seeds are predicted to comprise approxi-
mately $2 billion to $3 billion, with the balance in veterinary
products and microbiology-based products. The increased market
for agricultural biotechnology products is expected to be at the
expense of existing markets, with some restructuring of those
markets, rather than by major expansion of current markets
(Persley 1990).
Summary of Private Sector Activities in Agricultural R&D
In summary, the private sector plays a major global role in
agricultural R&D. The importance of its role is evident from the
data presented in this section and in the appendix, even though
these data do not include all the activities of the private sector; for
example, the subsectors of postharvest/food processing and agri-
cultural machinery, which are not featured, represent significant
investments that are dominated by the private sector. In the
future, private sector investments in agriculture and food are
expected to increase faster than investments by the public sector,
in both industrial and developing countries. Anderson and others
(1994) noted that, as farmers use more purchased inputs and as
the value-added in agriculture increasingly moves off the farm to
the marketing and processing subsectors, it is likely that the incen-
tives for private sector investments in agricultural research will
grow. With current private sector global revenues in fertilizers,
seeds, pesticides, and animal health alone estimated conservatively
at approximately $70 billion per year, the private sector is an
essential partner for the global public sector engaged in agricultur-
al research.
28



The Need for Collaboration Between
the Public and Private Sectors
There is no greater incentive for collaboration between the
public and private sectors in agricultural research than the enor-
mous challenge posed by global food security, which will require
that limited global resources be used in the most effective way to
develop sustainable systems that also conserve natural resources.
The urgency of this challenge cannot be overstated. Knowledgeable
observers judge that the current joint investments of the public and
private sectors in agricultural research are inadequate to double (or
preferably triple) agricultural production in the next fifty years.
Furthermore, this is occurring at the same time external aid to agri-
cultural research, which is viewed by many to be the catalyst that
will stimulate economic growth in developing countries and as the
best antidote for poverty, is declining.
There is, and will continue to be, a critical and essential role
for governments in developing countries to address policy issues in
agriculture and to implement technical programs that optimize
social welfare for the public good. Governments should not view
for-profit private sector activities as detrimental to the public good
because these private sector activities often are the most effective
way-in seed production and distribution-to achieve national
goals set by the governments. The collective goal must be to build
partnerships that use the comparative advantages of the public and
private sectors to achieve mutual goals. Governments can use poli-
cy instruments to encourage and stimulate private sector invest-
ments in joint venture programs, and donors can facilitate imple-
mentation of such collaborative programs (Anderson et al. 1994).
In the last decade there has been a strong trend for govern-
ments of donor countries to encourage, and in some cases require,
increased participation by the private sector in agricultural research.
Many of the more advanced developing countries have emulated
this trend and established policies that encourage increased partici-
29



pation by the private sector in areas where it has comparative
advantage. Whereas in the past policymakers in developing cour-
tries did not recognize the private sector as an important resource
for carrying out national programs, there has been a marked and
progressive change in which the private sector is now generally
acknowledged to be a key player in development. This view is
endorsed by the international development and finance communi-
ty, which recognizes the private sectors in the North and the South
as increasingly important national and international resources
James and Persley 1990).
The significant investment of the private sector in biotechnolo-
gy, perhaps more than any other single factor, has clearly demon-
strated the need for and significant advantages associated with col-
laboration between the public and private sectors in agricultural
research and development. Indeed, the requirement for a minimum
critical mass in R&D, particularly in biotechnology, has been the
major stimulus for most of the mergers and acquisitions in the pri-
vate sector. The development of biotechnology applications is capi-
tal intensive, requiring substantial long-term investments, which
often can be mobilized only by the private sector. Thus, most
investments in biotechnology are made by the private sector. A
major challenge for both the private sector and the public sector is
to find ways to collaborate in sharing and transferring appropriate
new and superior technologies, which often are proprietary, from
the private sector to the public sector.
Collaboration between the public and private sectors is esseri-
tial in planning future research strategies that are global in cover-
age, and requires cooperation by all the major entities in agricultur-
al research in industrial and developing countries. This cooperation
should ensure that limited global resources in agricultural research
are used in the most effective way to strategically address the issue
of food security in the developing world by optimizing the compar-
ative advantages of the public and private sectors. Assuming that
the data from selected industrial and developing countries are rep-
resentative, current private sector investments in agricultural and
30



food R&D are conservatively estimated to be about $11 billion In
the industrial countries and $2 billion in the developing countries;
this compares with $8.5 billion and $8.8 billion, respectively, by
the public sector. The issue here is not the precision of the esti-
mates; rather, it is that both the public and private sectors are
spending, independently, about $30 billion on agricultural R&D.
This $30 billion investment is inadequate to meet current global
agricultural R&D needs. In addition, it does not benefit from the
considerable efficiencies that could accrue if the same amount were
invested in a more coordinated manner by the public and private
sectors. It is, therefore, vital that the two major players, the public
and private sectors, involved in agricultural R&D on the global
scene collaborate to address the important and impending chal-
lenge of global food security. Governments of developing couIn-
tries, the donor community, and the private sector must take the
necessary and urgent steps to initiate the building of partnerships.
It is encouraging to note that there are several initiatives alreacdy
underway to build new partnerships between the public and private
sectors. Two of these initiatives are the founding of the
International Service for the Acquisition of Agri-Biotech
Applications (ISAAA) in 1991 and the establishment of the Privatce
Sector Committee of the CGIAR in 1995. These two initiatives,
quite different in character, are described below.
Founding of the International Service for the
Acquisition ofAgri-Biotech Applications
The Mission
The mission of the International Service for the Acquisition of
Agri-Biotech Applications is to help alleviate poverty by increasing
crop productivity and income generation, particularly for
resource-poor farmers, and to create a safer environment and pro-
mote more sustainable agricultural development. ISAAA's objec-
tive is the transfer and delivery of appropriate biotechnology prod-
ucts, particularly proprietary technology from the private sector in
the North, to developing countries in the South by building part-
31



nerships between institutions in the South and the private sector
in the North.
The Need
In the past, developing countries, and the organizations that
assisted them with agricultural research, have had free access to non-
proprietary traditional technology from the public sector in industrial
countries. With the advent of new biotechnology applications, how-
ever, this situation is changing. The new applications are increasingly
proprietary, and are owned primarily by private sector corporations in
industrial countries, which account for the majority of the investment
in biotechnology R&D on a global basis. The greatest need for
agribiotechnology, however, is in the developing countries. The bene-
fits of biotechnology generally are not accessible to developing counI-
tries due to institutional, political, and infrastructural constraints and
to a lack of financial resources. The applications of agribiotechnology
offer promising means to a more sustainable agriculture and a safer
environment; for example, by providing alternatives to the use of
toxic conventional pesticides. Conventional technology alone can rno
longer increase food, feed, and fiber productivity at a growth rate fast
enough to keep up with population growth and still respond to envi-
ronmental and sustainability pressures. There is consensus in the sci-
entific community that biotechnology is an essential element for
increasing food, feed, and fiber productivity in the future.
The Institutional Response
A new institutional mechanism, ISAAA, sponsored by public
and private sector institutions, was created to transfer agribiotechnol-
ogy applications from industrial countries in the North, particularly
proprietary technology from the private sector, to developing cowu-
tries James 1991; Krattiger and James 1993). ISAAA's role and
comparative advantage as an honest broker is to bring together insti-
tutions from national programs in the South and from the private
sector in the North into partnerships to transfer biotechnology appli-
cations. Thus, ISAAA is not an executor, but a facilitator. ISAAA's
organizational structure permits both the public and private sectors
to work together as true partners in an international biotechnology
32



program for the benefit of the developing world. Acknowledging that
technology adoption by resource-poor farmers is, and probably
always will be, challenging and difficult emphasizes the importance
of ISAAA's mission in its quest for equity in technology transfer. In
the absence of organizations such as ISAAA, developing countries
may be denied the opportunity to access the full potential that cur-
rent and future superior biotechnology applications offer.
To assist developing countries in the acquisition and application
of proprietary biotechnology applications, ISAAA was founded as a
not-for-profit international organization. It is cosponsored by philan-
thropic foundations, bilateral organizations, and corporations from the
private sector that provide financial support and share biotechnology
applications. ISAAA is a small, responsive, nonbureaucratic, interna-
tional network. There are three centers established in the North-the
AmeriCenter, at Cornell University in the United States; the
EuroCenter at the John Innes Centre in the United Kingdom; and the
precursor liaison office for the AsiaCenter in Japan-to monitor and
evaluate the availability of biotechnology for transfer to the developing
world. There will be three centers in the South-the AfriCenter,
SEAsiaCenter, and LatiCenter-to help national programs identify
priority needs for biotechnology applications. The AfriCenter was
established in 1994, the other two are planned for the near-term.
Programmatic, organizational, and policy guidance is provided by an
international board of prominent individuals representing developing
and industrial countries, public and private sectors, and professional
interest groups, particularly those in environmental protection.
ISAAA is funded by fixed-term commitments through a donor
support group that includes a balanced representation of public and
private sector institutions. No core funding is being mobilized, allow-
ing full flexibility for changes in future directions without encumber-
ing donors with long-term and less flexible core commitments. The
fixed-term funding strategy exposes the program to regular peer
review when accessing competitive international funding. Early tangi-
ble expressions of support from the public and private sectors were the
significant grants awarded to ISAAA by eighteen donors.
33



The Program
ISAAA has initiated a pilot program that uses a five-step strate-
gy to provide the following services:
*  assist developing countries in identifying biotech-
nology needs and priorities and in assessing poten-
tial socioeconomic impacts in a demand-driven
program;
*  monitor and evaluate the availability of appropriate
biotechnology applications, particularly proprietary
technologies, from the private sector in industrial-
ized countries;
*  provide "honest broker" services by matching needs
with appropriate proprietary technologies;
•  mobilize funding from donor agencies for client
countries to implement projects; and
*  counsel developing countries on the safe and
responsible testing of biotechnology products, and
provide targeted assistance for implementation of
biosafety and food safety regulatory procedures,
socioeconomic analysis, management of resistance
genes, and intellectual property rights.
The Strategy
The strategy is to focus on the safe and effective introduction of
near-term biotechnology applications that already have been tested in
industrial countries, particularly to:
X emphasize applications to increase the productivity
of food crops, particularly orphan commodities
grown by resource-poor farmers; contribute to sus-
tainable agriculture and a safer environment
through the development of alternative technologies
34



to conventional toxic pesticides; and assign high pri-
ority to horticulture and forestry;
*  concentrate on three classes of plant biotechnology
applications: tissue culture, diagnostics, and trans-
genic crops; and
*  assign priority to the assessment of benefits and con-
straints of biotechnology in developing countries,
including biosafety and food safety considerations,
and the responsible deployment of resistance genes
to optimize durability.
An example of such an application of biotechnology would be
in forestry. Some of the tropical species that contribute to biodiver-
sity in natural and commercial forests in developing countries do
not lend themselves to easy seed propagation. Biodiversity will be
threatened and genetic erosion will occur if biotechnology cannot
be applied to offset these disadvantages.
ISAAA implements a demand-driven program that responds to
the priority needs of twelve target national programs in Africa
(Egypt, Kenya, and Zimbabwe), Asia (Indonesia, Malaysia, the
Philippines, Thailand, and Vietnam), and Latin America
(Argentina, Brazil, Costa Rica, and Mexico). These target countries
were selected because they are developing nations that have some
capability in agribiotechnology and the political will to play a lead-
ership role in biotechnology transfer. Establishment of ISAAA cen-
ters in the South will encourage the diffusion of technology, at mar-
ginal cost, to neighboring countries with similar needs.
Program Achievement
Twelve ISAAA projects have been developed, brokered, and
implemented or are under development. The most advanced model
project involves Monsanto's donation of coat protein genes to Mexico
for the control of potato viruses (PVX/PVY), which is funded by the
Rockefeller Foundation and features technology transfer and training
35



of Mexican scientists. The first generation of transgenic potatoes,
developed by Mexican scientists, has been field-tested in Mexico and is
promising. Monsanto also has agreed to a South-South transfer of the
PVX/PVY technology that will allow Mexico to share this technology
with Kenya. A companion project assisted Mexico in developing the
infrastructure and regulatory biosafety and food safety procedures for
testing and introducing recombinant products. Discussions between
Mexico and Monsanto are currently being held about technology
transfer that involves use of a gene that confers resistance to potato leaf
virus (PLRV), aimed specifically at varieties, such as Rosita, that are
grown exclusively by resource-poor farmers. Monsanto also has agreed
to a further donation of PLRV resistance to enhance the benefits for
resource-poor farmers growing potatoes in other developing countries.
Other ISAAA projects include:
*  Diagnostic for black rot of crucifers, one of the most
important diseases of cabbage in Asia (Washington
State University/Asian Research and Development
Center-AVRDC).
*  Development and transfer of several diagnostics for
maize diseases in Brazil (Pioneer Hi-Bred
International/EMBRAPA).
*  Network for the development and testing of papaya
that is resistant to Papaya Ring Spot Virus (PRSV)
(Cornell University/Brazil/Thailand).
*  Insect-resistant cotton (Monsanto/Brazil/Argentina).
*  Transfer of a selectable marker gene in cassava
(Sandoz/CIAT).
*  Tissue culture-based pilot production facility for
more productive, virus-free banana seedlings (South
Africa/Costa Rica/Kenya/Uganda).
3 V6-



*  Improved and healthier fruit trees with the applica-
tion of diagnostics (South Africa/Zimbabwe).
* Breeding for maize streak virus resistance in maize
(ohn Innes Centre, United Kingdom/Kenya/Pan
Africa).
* Micropropagation and distribution of multipurpose
trees (Mondi Corporation, South Africa/Kenya).
Projects under development indude:
*  Transgenic sweet potatoes resistant to one of the
most devastating virus diseases of sweet potatoes
(Monsanto/Kenya/Rwanda/Tanzania/Uganda).
*  Cryopreservation technology for the conservation of
plant genetic resources.
Project Support Activities
ISAAA initiated a series of activities to support project implementa-
tion. These include an initiative on biosafety and food safety regulatory
development, socioeconomic analysis, intellectual property rights, issues
related to biodiversity, and deployment and management of crops resis-
tant to insects (Bt). A series of five biosafety workshops were completed in
Argentina, Costa Rica, and Indonesia, and two were completed in Kenya.
Investment in Human Capital, ISAAA's Fellowship Program
Recognizing that human capital and training are the most impor-
tant factors for sustainable and successful projects, ISAAA has a strong
fellowship program. Training, an element in all ISAAA projects, is
essential to build capacity and sustainability vis-t3-vis biotechnology in
national programs and to predude dependence of developing courn-
tries on industrial countries for the new technologies. To date, ISAAA
has arranged mid-career training for twenty scientists from eight
countries in transformation, regeneration, diagnostics, and molecular
biology. Unlike traditional training programs, which usually have
37 -



involved the public sector in industrial countries, a noteworthy feature
of the ISAAA Fellowship Program is that most of the project-specific,
hands-on training has been undertaken with private sector corpora-
tions rather than with the public sector.
Four regional biosafety workshops organized in Latin America
(2), Asia, and Africa have provided training for approximately 250
regulatory officials and scientists from developing countries in tlhe
promulgation and implementation of biosafety guidelines. In the
workshops, representatives from industrial country public sector regu-
latory agencies and from private sector corporations, which are the
major users of biosafery regulations, have shared their experience with
colleagues from the developing countries. The thrust of the biosafety
activities is to build capacity in regulatory oversight in national pro-
grams. For projects that involve genetically engineered plants, ISAAA
ensures that products are tested and introduced in a safe and effective
way, and preferably in harmony with existing biosafety regulations of
industrial countries. A similar series of training activities is being
developed for food safety, and future plans include activities in intel-
lectual property rights and socioeconomic studies, which are incorpo-
rated in all projects that deal with recombinant technology.
Summary
In summary, the ISAAA experience has already demonstrated
that partnerships can be built between the public and private sectors
to their mutual advantage, and that win-win options can be negotiat-
ed. These options include a partnership between the public sector in a
developing country and a private sector corporation in an industrial
country that involves outright donation of a biotechnology applica-
tion by the private sector corporation; a joint venture that involves a
contribution of technology from the two partners (for example,
adapted germplasm from the developing country and a gene that con-
fers added value from the private sector corporation), with an arrange-
ment for development costs and return on investments to be shared
by both parties; and a partnership between two private sector corpora-
tions, one from the North and one from the South, to commercialize
a product by optimizing the comparative advantages of the partners.
38



Establishment of the Private Sector Committee
of the CGIAR
Proposal to Establish the Committee
At the CGIAR Ministerial-Level Meeting in Lucerne,
Switzerland, February 9-10, 1995, ministers, heads of organiza-
tions, and delegates representing the membership of the
Consultative Group on International Agricultural Research recom-
mended that the CGIAR broaden its partnership within the global
agricultural research system. More specifically, as part of their
Declaration and Action Program, the Ministerial-Level Meeting
encouraged the CGIAR to convene a committee of the private sec-
tor as a means to improve the dialogue among the CGIAR, the pri-
vate sector, and members of the civil society interested in the same
issues as the CGIAR. Interaction between the committee and the
CGIAR was envisioned to be collaborative and of a consultative
nature. The CGIAR was urged to work in closer partnership and
collaboration with the private sectors in the North and in the
South to design and conduct joint research programs and to ensure
that the CGIAR's research agenda reflects the views and goals of
global and regional partners in agricultural research. Under the
leadership of the Chairman of the CGIAR, Mr. Ismail Serageldin, a
proposal was developed, discussed, and agreed to by the CGIAR, to
establish the committee, which first met in December 1995.
Terms of Reference of the Committee
The committee interacts with the CGIAR to provide a private
sector perspective on the current status of global agricultural research
and future needs. It serves as a link between the CGIAR and the
agricultural private sector organizations at large, in the North and the
South, and facilitates the liaison between the agricultural private sec-
tor and the CGIAR. Through rotation of membership, over time the
committee will incorporate representative views of a broad cross sec-
tion of the private sector in relation to policies, strategies, research
priorities, and program activities in agricultural research and develop-
ment in the North and in the South.
39



The CGIAR initiative to form the committee aims at encour-
aging the private sector to foster and develop new programmatic
partnerships that exploit fully the respective strengths, network of
relationships, and comparative advantages of the CGIAR and the
private sector.
The committee brings to the CGIAR its perspectives on issues
such as the following:
*  current and future needs and priorities for agricultural
research and development in developing countries;
*  current and future strategies of the private sector,
especially in the South, to respond to those needs;
*  private sector views on CGIAR policies, strategies,
and activities, including views on recent private sec-
tor research breakthroughs or cutting-edge tech-
nologies that the private sector would be willing to
share with the CGIAR;
*  identification of program thrusts that represent an
opportunity for the private sector and the CGIAR
to collaborate and to optimize the comparative
advantages of the partners to achieve mutual goals
and objectives; and
*  evolution of a new partnership between the pri-
vate sector and the CGIAR that will represent a
holistic and all-encompassing global approach to
food security.
The committee expects to carry out its work by:
* meeting two times per year, for approximately two
days, at locations in the North and in the South
(these meetings may or may not coincide with the
40



Mid-Term Meeting and International Centers
Week of the CGIAR);
* interacting with the various elements of the CGIAR
system and the dients that it serves in the develop-
ing countries;
* consulting with the CGIAR and its Chairman, as
necessary;
* organizing meetings, workshops, and consultations
to broaden interactions between the CGIAR and
private sector institutions; and
* presenting to the CGIAR views and proposals
emerging from the committee's deliberations.
The committee is represented at CGIAR meetings through
attendance by the Co-Chairs.
Composition and Membership of the Committee
The committee has ten private sector members, induding two
Co-Chairs, one from the North and one from the South. Half of the
members are from the private sector in the North, the other half
from the private sector in the South. Members were selected from
small, medium, and large companies and represent the major activi-
ties of the private sectors in the North and South, focusing on the
particular areas where the CGIAR is active (for example, genetic
improvement and management of crops, livestock, forest, and fish-
eries; soil fertility; conservation and use of genetic resources; formula-
tion of government food policies; and conservation and management
of natural resources). The committee has reasonable geographic cov-
erage, and is a manageable size. Members are senior executives who
are leaders in their respective fields, have experience in strategic plan-
ning and policy decisions, and have a broad range of professional
backgrounds in the principal areas where the private sector and the
CGIAR are active.
41-



Initial Areas of Interest Identified by the Committee
The committee has identified the following four topics for
exploration and dialogue with the CGIAR:
*  biotechnology;
*  intellectual property rights, genetic resources, and
biodiversity policy;
*  mechanisms of interaction between the CGIAR,
NARS, and the private sector; and
*  international centers and private sector practices in
research and research management.
Summary
In summary, the establishment of the Private Sector Committee
of the CGIAR represents an important development that should pro-
vide mutual benefits. The CGIAR, with a current annual budget of
approximately $300 million (equivalent to 4 percent of public sector
spending on agricultural research in developing countries), is the single
largest public sector investor in international agricultural R&D. The
significant impact of the international centers of the CGIAR on pro-
ductivity and production of staples, such as wheat and rice, is well doc-
umented and internationally recognized, as shown by Dr. Norman
Borlaug being awarded the Nobel Peace Prize in 1970 for his pioneer-
ing work on semidwarf wheats. More recent objectives of the CGIAR
focus on food self-reliance rather than food self-sufficiency, acknowvl-
edging both that agricultural and economic growth can alleviate pover-
ty and the need for an eco-regional perspective to develop sustainable
systems that conserve natural resources and protect the environment.
The private sector faces the same challenges. These challenges demand
more resources than the public and private sectors can marshal inde-
pendently, and, thus, it is both logical and desirable for the public and
private sectors to collaborate in the pursuit of a goal that is vital for the
survival of the global community-food security.
42



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43



Appendix
Table A-1. Principal Fertilizer Companies (listed alphabetically)
COMPANY                                                COUNTRY
Nitrogen/Ammonia (N)
Arcadian                                              United States
CF Industries                                         United States
DSM Agro BV                                           Netherlands
Farmland Industries Inc.                              United States
ICI Fertilizer                                        United Kingdom
Kemira Oy                                             Finland
National Ferdlizer Ltd.                               India
Norak Hydro As.                                       Norway
Pemex                                                 Mexico
Pupuk Kaltim                                          Indonesia
Rashtriya Chemicals & Fertilizers Ltd.                India
Phosphate (P20)
CF Industries                                         United States
Freeport McMoran Resource Partners                    United States
ICW/SIAPE/SAEPA                                       Tunisia
IMC Fertilizer Group Inc.                             United States
Occidental Chemical Corp. Ag. Products                United States
OCP                                                   Morocco
Texas Gulf Inc.                                       United States
Potash (K20)
Arab Potash Company                                   Jordan
Entreprise Miniere et Chimique                        France
Dead Sea Works                                        Israel
IMC Fertilizer Group Inc.                             United States
Kali and Salz                                         Germany
Kallum Chemicals                                      Canada
Potash Corporation of Saskatchewan                    Canada
*List excludes producers in China, the former Soviet Union, and Central Europe.
Source: Communication from International Fertilizer Industry Association (IFIA), Paris, France.
. 44



Table A-2. Major Plant Protection Companies (based on esti-
mated 1994 global sales of crop protection products)
RANK             NAME               COUNTRY       APPROXIMATE SALES
($ MILLIONS)
1         Novartis            Switzerland              4,126
2         AgroEvo             Germany                  2,140
2         DuPont              United States            2,140
4         Monsanto            United States            2,123
5         Zeneca              United Kingdom           2,120
6         Bayer               Germany                  2,041
7         Rhone-Poulenc       France                   1,866
8         DowElanco           United States            1,737
9         Cyanamid            United States            1,618
10        BASF                Germany                  1,316
11        Sumitomo            Japan                     603
12        FMC                 United States             504
13        Kumiai              Japan                     500
14        Sankyo              Japan                     459
15        Ishihara            Japan                     455
15        Nihon Nohyaku       Japan                     455
17        Rohm & Haas         United States             439
18        Hokko               Japan                     380
19        Takeda              Japan                     363
20        Nissan              Japan                     356
21        Sipcam Oxon         Italy                     351
22        Makhteshim          Israel                    320
23        Uniroyal            United States             268
24        Atochem             France                    240
25        Nippon Soda         Japan                     210
Total                                                  27,130
Source: Wood Mackenzie (1996), with adjustment for mergers that have taken place subsequent
to 1994.



Table A-3. Major International Seed Companies
(ranked by worldwide sales in 1994)
RANK           NAME                 COUNTRY         APPROXIMATE SALES
($ MILLIONS)
1     Pioneer                  United States             1,500
2      Novartis                Switzerland                907
3      Limagrain               France                     820
4      ELM (Pulsar)            Mexico                     500
5     Vander Have/Zeneca       Netherlands/               460
United Kingdom
6      Takii                   Japan                      450
7      Dekalb Plant Genetics   United States              320
8      KWS                     Germany                    315
9      Cargill                 United States              250
10    Pau Euralis              France                     170
11    Sigma Semences           France                     160
de France
12    RAGT                     France                     150
13    Rhone-Poulenc            France                     140
14    Cebeco                   Netherlands                125
15    Barenbrug                Netherlands                120
Total                                                     6,387
Source: Cultivar,Anonymous(1996).
46



Table A-4. Major Animal Health Companies
(based on estimated 1994 global sales of animal health and
nutrition products)
RANK           NAME                  COUNTRY                SALES
($ MILLIONS)
1      Hoffiman-La Roche        Switzerland               1,293
2      Pfizer                   United States              1,251
3      Rhone-Poulenc            France                     1,158
4      Merck                    United States               815
5      Bayer                    Germany                     663
6      BASF                     Germany                     629
7      Novartis                 Switzerland                 485
8      Hoechst                  Germany                     464
8      Eli Lilly                United States               464
10     Mallinckrodt             United States               448
11    American Home             United States               374
Products
12     Upjohn                   United States               346
13     Degussa                  Germany                     288
14     Solvay                   Belgium                     232
15     Novus                    United States               220
16    Akzo                      Netherlands                 216
17     Boehringer Ingelheim     Germany                     204
18     Virbac                   France                      199
19     Schering-Plough          United States               167
20     Sanofi                   France                      162
21     Takeda                   Japan                       153
22     Alpharma                 United States               141
23     Nippon Zenyaku           Japan                       136
24     Janssen                  Belgium                     132
25     Tortuga                  Brazil                      110
Total                                                      10,750
Sorace: Wood Mackenzie (1996), with adjustment for mergers that have taken place since 1994.
47



Acknowledgments
I wish to express my sincere thanks to Dr. Donald Duvick and Mr.
R. N. Dryden for comments on the manuscript; to Dr. J. R.
Anderson, Dr. Jasper van Zanten, Dr. Robert Fraley, Wood
Mackenzie Consultants Ltd., the International Fertilizer Industry
Association, the International Fertilizer Development Center, and
the Food and Agriculture Organization of the United Nations
(FAO) for providing data; and to my wife Glenys James and Ms. Pat
Brand for formatting my original manuscript.
C.J.
About the Author
Clive James is Chair of the Board of Directors of the
International Service for the Acquisition of Agri-biotech Applications,
a not-for-profit organization he assisted in founding in 1990. ISAAA
was established to facilitate the acquisition and transfer of agricultural
biotechnology applications from industrial countries, particularly pro-
prietary technologies from the private sector, for the benefit of the
developing world.
Prior to his association with ISAAA, Mr. James was Deputy
Director General for Research at the International Maize and Wheat
Improvement Center (Centro Internacional de Mejoramiento de
Maiz y Trigo-CIMMYT), a CGIAR center headquartered in
Mexico.
Mr. James has served as Senior Agricultural Adviser to the
Canadian International Development Agency (CIDA), the Food and
Agriculture Organization of the United Nations (FAO), and has con-
sulted for many international development agencies, including the
United Nations Development Programme (UNDP) and the World
Bank, and for the Hitachi, McKnight, and Rockefeller Foundations.
An agricultural scientist by training, Mr. James holds a Ph.D.
from Cambridge University in the United Kingdom.
48



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