Argentina crop dispute: Will companies innovate if they are denied royalties?

The GLP aggregated and excerpted this blog/article to reflect the diversity of news, opinion and analysis.

On average, it takes roughly $135 million and between 7 and 10 years to discover, develop, and receive authorization for a new biotech crop. To ensure a return on investment, seed companies levy royalties usually on a per-tonne basis, on yield from the crop.

This method predates GMOs, as the first seller of high-performance hybrid corn in the late 1920s derived its income by sharing the price of additional yield produced. Some countries, however, are opposed to royalty collection. Argentina has posed a major challenge to biotech companies’, specifically Monsanto’s, efforts to collect royalties. It is also, surprisingly, one the biggest users of biotech seeds.

Argentina has made it clear that it will not allow royalties to be charged on the future output of any crop, but wants to encourage the development and use of biotechnology. These two stances can’t coexist forever.

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It is hard to imagine Monsanto, or any other company, would be eager to commit to developing and releasing a new product within Argentina if their returns on their investment are constrained by Argentine law.

Argentina’s fund for biotech research and development could be a welcome compromise between supporting small farmers and encouraging technological growth, but details on how that fund will be structured remain unclear.

Long-term, the costs of gene sequencing and DNA manipulation will continue to fall. And some industry analysts predict that the ongoing open-source revolution will eventually engulf the development process of GM seeds. Essentially, the biotechnology sector is on the verge of revolution. In the coming years and decades, therefore, much of the substance behind the current Argentina-Monsanto dispute may become insignificant.

Read full, original post: The Gift That Keeps on Giving, Unless You Made It: Biotech Soybeans in Argentina

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