Crop genetic resource policy: the role of ex situ genebanks

The world-wide capacity of genebanks for ex situ conservation of crop genetic resources has increased greatly since the 1970s, improving the access of crop breeders to landraces and wild and weedy relatives. But utilization of genebank resources has not kept pace. The set of popular cultivars in major crops is typically rather small, and their ancestry encompasses only a fraction of the genetic diversity currently available in other cultivars. Discussions of farmers' rights that focus on compensation for current incorporation of farmers' varieties in new cultivars have diverted attention from the question of why so little of the newly accessible genetic diversity is currently being utilized by public and private breeders. To optimize the future provision of genebank services, research is needed on the costs of genebanks, the market for their services, the use of genetic resources by breeders, and the implications of recognition of farmers' rights, evolving intellectual property rights, continued funding problems and developments in biotechnology.Crop Production/Industries, Resource /Energy Economics and Policy,

Why weak patents? Rational ignorance or pro-"customer" Tilt?

The issuance of weak patents is widely viewed as a fundamental problem in the current US patent system. Reasons that have been offered for the granting of weak patents by the US Patent and Trademark Office (USPTO) include examiners’ “rational ignorance” of the patentability of applications and pro-“customer” rules and institutions that create incentives for examiners to grant patents of dubious validity to their “customers”- applicants. In this paper, we study whether US examiners’ behavior in prior art search betrays their assessment of applications’ patentability. For a sample of US patents for which applications were also filed at the European Patent Office (EPO), we construct a measure of the fraction of prior art that is missed by US examiners. We find that this measure significantly explains the probability of receiving a patent at the EPO. The results are robust to different empirical specifications. US examiners’ prior art searches indicate that they are, on average, not “rationally ignorant”. On the contrary, they identify and dedicate more search effort to those applications that seem more problematic, because they bear the burden of proof of non-patentability. Our study offers empirical evidence that a systematic problem of weak patents likely exists, and suggests that the problem may be more strongly attributable to the pro-applicant rules and policies than to examiners’ ignorance. The current prevalence of weak patents does not appear to be caused at the margin by lack of resources at the USPTO.Weak patents, Rational ignorance, cited prior art, missed prior art, Industrial Organization, Institutional and Behavioral Economics, Research and Development/Tech Change/Emerging Technologies,

Dynamic implications of patenting for crop genetic resources:

In a climate of rapid technological change, it is important to evaluate policies on the innovation incentives that result from the introduction of intellectual property rights as they relate to agricultural genetic resources. In this paper, we use a stylized model of cumulative innovation to explore the dynamics of introducing patent protection with licensing agreements, and then we contrast those results with the comparative-statics viewpoint. We also investigate the dynamic effects of claims on behalf of farmers on the profits of private crop breeders whose output is newly protected by patents. We show that the choices about patent life and licensing share that optimize worldwide dynamic social welfare can be quite different from the values that maximize steady-state social welfare. Further, recognition of farmers' rights entails a dynamic welfare loss to producers and consumers that is not revealed in a comparative-statics analysis.Plant breeding Technological innovations., Plant genetic engineering Economic aspects., Intellectual property.,

The timing of evaluation of genebank accessions and the effects of biotechnology:

The lack of ex-ante evaluation of germplasm in genebanks has been the single most prevalent and long-standing complaint of plant breeders about the management of genebanks. Advances in biotechnology offer the possibility of faster, cheaper, and more efficient evaluation methodologies. Will these new technologies favor ex-post evaluation, as some expect, or will it lead to more ex-ante evaluation? Will it also lead to earlier development of varieties with disease resistance traits in anticipation of actual infestations? Will the prospect of further advances in biotechnology favor delay of evaluation and development? This paper addresses these questions in the case of evaluation of germplasm for resistance to a disease.Gene banks, Plant., Biotechnology.,

DESIGNING OPTIMAL CROP REVENUE INSURANCE

The optimal crop revenue insurance contract is designed from recent developments in the theory of insurance economics under incomplete markets. The message is two-fold. Firstly, when the indemnity schedule is contingent on individual price and individual yield, the optimal contract depends only on the individual gross revenue. Secondly, this policy is shown to fail if the indemnity function is based on aggregate price and/or aggregate yield. A closed-form solution, in which basis risks are ignored, is proposed. It differs from actual revenue insurance programs proposed to the U.S. farmers. When insurance and capital markets are unbiased, it can be replicated with existing crop yield and revenue insurance policies and hedging contracts if the decision variables are not constrained. The impact of yield and price basis risks on the form of the optimal crop revenue insurance contract is examined and a closed-form solution is derived.Agricultural Finance, Risk and Uncertainty,

Economics of patenting a research tool: participation and productivity

When a new technology consists of sequences of innovations that culminate in a final consumer product, the balance between successive innovators is one of the main concerns in the design of the patent system. While intertemporal aspects of incentive are critical in this environment of sequential innovations, time plays a minor role in existing literature on dynamic models. By focusing on the incentives of follow-on innovators who commercialize an initial invention, this study examines the dynamic implications of the patent instrument (e.g., patent life) via a positive analysis. It shows that a long patent life may encourage innovation incentives and increase social welfare, contrary to existing arguments that argue that long patent life always discourages the incentive for subsequent innovations. This study also examines the implications of finite patent system in different market structures.Patents Economic aspects., Research Technological innovations., Licensing Agreements.,

Sovereign Debt as Intertemporal Barter

Borrowing and lending between sovereign parties is modeled as intertemporal barter that smoothes the consumption of a risk-averse party subject to endowment shocks. The surplus anticipated in the relationship offers sufficient incentive for cooperation by all parties, including any other competitive agents who are potential lenders to the sovereign. The sole punishments consist of renegotiation-proof changes in the path of future payments. We show that intertemporal trade can be sustained in the absence of any exogenous enforcement of lending relationships whatsoever. That is, borrowing and lending are possible under anarchy, and are supported by punishments that consist of cheating any cheater. Long-term implicit relationships may be fulfilled as the continual renegotiation of simple incomplete short-term loans. The analysis suggests that the crucial role of the explicit loan contract is the identification of the relationship and the parties involved.

Patents versus patenting: implications of intellectual property protection for biological research

A new survey shows scientists consider the proliferation of intellectual property protectionto have a strongly negative effect on research.patents, biology, intellectual property, material transfer agreements