Farmer versus Breeder Rights: Sharing the Benefits from Crop Varietal Improvement

Assigning the farmer versus breeder shares of the economic value derived from improved crop varieties remains a contentious issue, with real world food security, poverty alleviation and environmental health consequences. Drawing on ideas regarding the economics of (sequential) innovation that align especially well with varietal improvement, we introduce a new way of attributing the added value derived from crop varietal improvement between current breeding programs and the recent and distant past efforts of prior (formal and farmer) breeders. We then apply our new attribution method to entirely new data we compiled over the past few years for the development and uptake of Canadian wheat varieties to investigate the implications of different attribution rules for breeder versus farmer benefits. We use our illustrative empirical results to guide and recommend policy reforms regarding the multilateral system (MLS) of access and benefit sharing encapsulated in the International Treaty on Plant Genetic Resources for Food and Agriculture. Our proposed reforms are designed to both eliminate the inventive downsides of the MLS Treaty levy (effectively a tax on seed sales) and to better align MLS goals with other policies and practices associated with the plant breeders rights (PBRs) embodied in the International Convention for the Protection of New Plant Varieties (UPOV), including end-point royalties that represent a return on innovative effort levied on grain sales. The Treaty levy is clearly failing to generate sufficient revenues to fully achieve its stated genetic conservation and benefit sharing goals. The evidenced-based policy options we identify can constitute a win-win fix that realigns benefit sharing equity outcomes with innovation incentives for crop breeding throughout the world.