Chapter 10

U.S. Investment inBiotechnology Applied to

Plant Agriculture

“Let us never forget that the cultivation of the earth is the most important labor of man.”—Daniel WebsterJanuary 13, 1840

,, . . . whoever could make two ears of corn, or two blades of grass, to grow upon a spotof ground where only one grew before, would deserve better of mankind, and do moreessential service to his country, than the whole race of politicians put together. ”

–SwiftGulliver’s Travels: Voyage to Brobdingnag

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CONTENTS

Page

Factors Influencing U.S. Investment in Agricultural Research . ...............193The Biotechniques in Agricultural Research . . . . . . . . . . . . . . . . . . . . . ..........194

Applications of the Techniques . . . . . . . . . . . . . . . . . . . . . ...................194Impact of Biotechniques on Agricultural Research Investment . . . . . . . . . .. ...197

Property Rights and Plants . . . . . . . . . . . . . . . . . . . . . . .......................199Plant Patent Act of 1930 and Plant Variety Protection Act of 1970..........199Diamond v. Chakrabarty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...199Impact of Intellectual Property on Agricultural Research Investment . ......,199

Agricultural Biotechnology Research Funding . . . . . . . . . . . . . . . . . . . . . . .......200Public Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........201Private Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........204Collaborative Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . ................205Impact of Funding Source on Agricultural Research Investment . ..........,205

Commercialization of Agricultural Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .209Institutional Barriers to Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...210Personnel Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..211

The Future of Agricultural Research. . . . . . . . . . . . . . . . . . . . . . ...............212Issues and Options for Congressional Action . . . . . . . . . . . . . . . . . . . . . .........213Summary and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...215Chapter IO References.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......216

BoxesBox Page10-A. Techniques Used in Plant Biotechnology . ............................19510-B. Biotechnology in Iowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....20310-C. The Midwest Plant Biotechnology Consortium . . . . . . . . . . . . . . . . . . . . ....207

FiguresFigure Page10-1. Plant Propagation: From Single Cells to Whole Plants . .................19610-2. Onion Cell Bombarded With DNA-Microprojectiles . . . . . . . . . . . . . . . . . . . . .19710-3. Genetically Engineered Insect-Tolerant Tomato Plant. . .................197

TablesTable Page10-1. Some Recent Applications of Biotechnology to Plant Agriculture . . . . . . . . .19810-2. Examples of USDA Competitive Grants Awarded for

Plant Biotechnology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...............20210-3. State-University Research Center Initiatives in

Plant Biotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............20410-4. Types of Private Plant Agriculture Grants to Universities . ..............20610-5. Probable Year of Commercialization for Some Genetically Manipulated

Crop Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......................20910-6. Some Knowledge Gaps in Plant Agriculture Needing Basic Research .. ....210

Chapter 10

U.S. Investment in BiotechnologyApplied to Plant Agriculture

Agricultura] research in the United States is notmonolithic. It uses both traditional methods, suchas plant and animal breeding, and newer biotech-niques, such as genetic engineering. It spans abroad range of applications, extending from live-stock to fisheries to crops to forests to micro-organisms. U.S. agricultural research is a long-standing institution with public and private sec-tor components. And, while it is often difficultto compartmentalize the diverse componentsof agricultural research, this chapter focuseson U.S. investment—both human and financialcapital—in biotechnological research of plantsin agriculture. Who invests in plant agricul-tural biotechnology research, and what factorsinfluence the amount invested and how thefunding is used? What actions are necessaryto enhance the development of agricultural re-search?

An analysis of plant biotechnology researchmust include a discussion of the firmly established(and necessary) traditional technology component,i.e., plant breeding. Thus, while this chapter fo-cuses on biotechnological applications, it examines,to a lesser extent, the delicate balance betweenresearch with the new techniques v. traditional

agricultural research. Because it is difficult to sep-arate research activity from commercial develop-ment in plant biotechnology, this chapter first ex-amines factors influencing investment in U.S. plantagricultural research, and then briefly examinesissues important to commercialization of such re-search.

This chapter principally examines investmentin plant agricultural biotechnology and issues thataffect the dollar flow (rather than, for example,the impact of biotechnology on farms or on theextension service). A comprehensive analysis ofbiotechnology and its impact on the infrastruc-ture of American agriculture was assessed in the1986 OTA report Technology, Public Policy, andthe Changing Structure of American Agriculture(101). While micro-organisms play a pivotal rolein plant biotechnology research and development(R&D), examining micro-organismal applicationsis beyond the scope of this chapter. Finally, al-though plant agricultural applications of biotech-nology play a central role in discussions about envi-ronmental risks of biotechnology, these issues areaddressed in a separate OTA report in this series(96).

FACTORS INFLUENCING U.S. INVESTMENT IN AGRICULTURAL RESEARCH

US. agriculture—plant and animal—is one of the U.S. agricultural products in international mar-most efficient and productive sectors in this coun- kets, increasing commodity surpluses, low prof-try’s economy. Despite declines in recent years, itability for significant numbers of farmers, andthe U.S. agricultural trade balance has added a environmental effects of agrichemicals (83,102).surplus to the U.S. trade account every year since Research alone cannot solve these problems, but1960 (91, 101). Agriculture contributes to, directly can contribute to their solution if resources, hu-or indirectly, approximately 20 percent of the man and financial, are available (83)102). Thus,gross national product, 23 percent of the nation’s although the problems facing agriculture areemployment, and 19 percent of export earnings serious, the impact of Federal R&Din this sec-(77). tor in particular can be powerful (100).

Increasingly, however, myriad problems beset The benefits of agricultural research are sub-U.S. agriculture. Complex in nature and scope, stantial. The U.S. Department of Agriculture (USDA)they include the declining competitive position of claims the annual rate of return for investment

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in agricultural research is between 30 and 50 per-cent per year (83)104). Other estimates of rate ofreturn vary from 21 percent to 110 percent, withthe vast majority in the 33 to 66 percent range(100). In particular, biotechnology products areexpected to improve international competi-tiveness of U.S. agricultural products (101).

Over the past decade and a half, however, theU.S. agricultural research system has undergoneincreased scrutiny and criticism (66,48)81). Agri-cultural research endeavors, including biotech-nological applications, are presently in a state offlux. Several factors affect, or have affected, theinvestment forecast for agri-biotechnological re-search, including:

● the discovery of the new technologies them-selves,

intellectual property rights for plants,the funding source of plant agricultural bio-technology research,the regulatory environment,domestic political and economic conditions,andinternational markets.

With such a range of pressures, the emphasisin U.S. plant biotechnology constantly shifts to de-rive the optimum formula to achieve the maxi-mum return possible. The following sections fo-cus on how investment in plant agriculturalresearch responded or is responding to the firstthree factors: the advent of the biotechniques;plant ownership; and private v. public plant re-search funding.

THE BIOTECHNIQUES IN AGRICULTURAL RESEARCH

New biotechnologies have the potential to mod-ify plants so that they can resist insects and dis-ease, grow in harsh environments, provide theirown nitrogen fertilizer, or be more nutritious.Technical barriers, however, still exist. In particu-lar, widespread success in applications for multi-genic traits (such as salt tolerance or stress resis-tance) will for the present remain elusive (17,44),perhaps decades away (6,101). Nevertheless, thenewer technologies can potentially lower costs andaccelerate the rate, precision, reliability, and scopeof improvements beyond that possible by tradi-tional plant breeding (68,101).

Two broad classes of biotechniques--cell cul-ture and recombinant DNA—are likely to have animpact on the production of new plant varieties.Plant tissue and cell culture date from the turnof the century, but were only minimally exploiteduntil the late 1950s (6). Successful in vitro cultiva-tion of plant cells and related culturing techniquesunderlie today’s gene transfer techniques and sub-sequent regeneration of altered, whole plants.Plant tissue and cell culture are also critical toolsfor increasing fundamental knowledge throughbasic research. The history of genetic engineer-ing and a detailed description of the principlesof recombinant DNA technology are discussed in

an earlier OTA report in this series (97). In gen-eral, the fundamentals of genetic engineering aresimilar for microbial, animal, and plant applica-tions, but developing some new approaches forplant systems has been necessary.

The endpoints of crop improvement using bio-technology are those of traditional breeding: in-creased yield, improved qualitative traits, and re-duced labor and production costs. New productsnot previously associated with classical methodsalso appear possible. Box 10-A briefly describessome of the new biotechniques exploited toachieve these aims. Comprehensive descriptionsof strategies designed to transfer foreign genesto plants and plant cells have been published else-where (19,21,57,67,68,70,88).

Applications of the Techniques

The new biotechniques are useful for investi-gating diverse problems and plant types. For ex-ample, plant tissue and cell culture is an impor-tant technique for breeders. It can be used forscreening, at the cellular level, potentially usefultraits. As many as ten million cell aggregates canbe cultured in a single 250 ml flask (less than 1cup). This can be compared to a space require-

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Box l0-A.-Techniques Used in Plant Biotechnology

Plant Tissue and cell culture. Plant cultures can be started from single cells, or pieces of plant tissue.Cultures are grown on solid or in liquid media. Several species of plants, including alfalfa, blueberry, carrot,corn, rice, soybean, sunflower, tobacco, tomato, and wheat, can be cultured in vitro (3).

Plant Regeneration. Regenerating intact, viable organisms from single ceils, protoplasts, or tissue isunique to plants and pivotal to successful genetic engineering of crop species. (To produce a protoplast,scientists use enzymes to digest away the plant cell wall.) Although genes can be transferred and examinedin laboratory cultures, ultimate success is achieved only if the culture can be regenerated and the charac-teristic expressed in the whole plant. Figure 10-1 illustrates steps involved in regenerating plants in vitro.

Protoplast Fusion. Protoplasts from different parent cells are artificially fused to form a single hybridcell with the genetic material from each parent. Protoplasm fusions are useful for transferring multigenictraits or for fusing cells from plants that cannot be crossed sexually (68), thus permitting the exchangeof genetic information beyond natural breeding barriers. Successful gene transfer via protoplasm fusiondepends on the ability to regenerate a mature plant from the fusion product.

Agrobacterium tumefaciens plasmid One of the most widely used and probably the best character-ized system for transferring foreign genes into plant cells is Ti plasmid-mediated transfer (88). The tech-nique involves a plasmid vector (Ti plasmid) isolated from Agrobacterium tumefaciens, a naturally occur-ring soil-borne bacteria that can introduce genetic information stably into certain plant cells in nature.Using recombinant DNA technology, the plasmid has been modified to increase its efficacy in the laboratory.

Transformation (Direct DNA Uptake). Certain chemical or electrical treatments allow direct uptakeand incorporation of foreign DNA into plant protoplasts--a process called transformation. Since hundredsof thousands of cells can be simultaneously treated, transformation is a relatively easy technique. Cellsexpressing the desired trait can be regenerated and tested further.

Microinjection. Using a special apparatus, fine glass micropipettes, and a microscope, DNA is directlyintroduced into individual cells or cell nuclei (in plants, protoplasts are usually used). The process is morelabor-intensive than transformation, requiring a trained worker. Although fewer cells can be injected withDNA than in mass transformation, a higher frequency of successful uptake and incorporation of the foreigngenetic material can be achieved (68)–up to 14 percent of injected cells (22).

Virus-Mediated Transfer. Virus-mediated transfer of DNA has played a critical role in nonplant appli-cations of biotechnology. But in large part due to an underdeveloped knowledge base, viral vectors forplant systems generally have not been exploited (68). Cauliflower mosaic virus has been used with somesuccess in turnips (14,68),. and Brome mosaic virus in barley (35,68). Developing generic virus-mediatedtransfer systems could accelerate progress in plant biotechnology.

DNA Shotgun. One novel approach uses gunpowder to deliver DNA into plant cells (54). The DNA tobe transferred is put onto the surface of four micrometer tungsten particles and propelled into a plantcell by a specially designed gun. Figure 10-2 is a photograph of an onion cell with such microprojectilesvisible within its confines. While an innovative approach, it is unclear whether it will prove to be a routinemethod for gene transfer in monocots (15).

SOURCE: Office of Technology Assessment, 1988.

ment of 10 to 100 acres if individual test plants (e.g., producing strawberry, apple, plum, andwere put into the field (6). peach plants). Several crop species, such as aspara-

Several species of plants can be clonally regener-gus, cabbage, citrus, sunflower, carrot, alfalfa,tomatoes, and tobacco are also routinely regener-ated to produce genetically identical copies. The

process is widely used for a range of commercial ated (94). Although monocotyledonous plants,such as the cereals, have been more difficult toapplications, including forestry and horticulture

The process of plant regeneration from single cells or plant tissue in culture.

SOURCE: Office of Technology Assessment, 1988.

regenerate, rapid progress is being made withthese as well (1,37).

Plant regeneration is a powerful tool not onlyfor increasing the numbers of propagated mate-rials, but also for reducing the time required toselect for genetically interesting traits. Further-more, under certain conditions, genetic variantsarise during the culturing process (somoclonal var-iation). Somoclonal variation can uncover new,useful variants and again reduce the time spentselecting genetically interesting traits.

Many important agricultural applications of bio-technology depend on regenerating whole plantsfrom protoplasts. Protoplasm fusion has been ap-plied successfully in several plants, including thepotato. In this instance, cells from wild and culti-vated potato plants were fused to transfer the vi-ral resistance of the wild species. The hybrid cellswere regenerated into fertile plants that expressedthe desired virus-resistant characteristic (12,68).

Virus-free potato cells can now be cultured invitro, and virus-free plants regenerated; the yieldof these plants has increased substantially (107).Culturing virus-free plant cells is particularly im-portant in certain horticulturally important spe-cies, including ornamental and certain vegeta-ble crops. As is the case with single cell or tissueregeneration, protoplasts of the monocotyledon -ous subclass of plants, such as cereals, have beenmuch more difficult to regenerate than protoplastsof the other major plant subclass, dicotyledonousplants, such as tobacco and tomato.

Ti vectors are especially useful for geneticallyengineering dicotyledonous plants, such as tobac-co, tomato, potato, and sunflower. For example,Ti-mediated transfer has been used to engineervirus-resistant tobacco plants (38)46) and insect-tolerant tomato plants (33) (figure IO-3). The tech-nique is less useful for gene transfer in monocots(which include important cereal crops). Increas-

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ingly, however, technical hurdles identified as bar-riers only a few years ago (94,101) are beingcleared (1,24,43). Recent success using the Ti vec-tor for corn (a monocot) has been reported (43),with continued progress for monocots anticipated(108). Furthermore, direct DNA transformationapparently allows gene transfer in several cereals(monocots), including rice, wheat, and maize, withan efficiency approaching comparability to the fre-quency of Ti-mediated gene transfer in dicots (19).

Figure 10-3.—Genetically Engineered Insect-TolerantTomato Plant

Larvae were allowed to feed on a transgenic tomato plant(right) and a normal plant (left). After seven days, the plantthat was genetically engineered for tolerance to the insectis still relatively intact, whereas the normal plant has beendestroyed.

Photo credit: Monsanto Corp

New applications and new techniques, such asthe “DNA plant shotgun, ” (54) are continuouslyarising. Table 10-1 describes a few recent appli-cations of biotechnology to plant agriculture.

Impact of Biotechniques onAgricultural Research Investment

In part, the advent of genetic engineering andrelated biotechniques has, itself, altered the shapeand scope of U.S. agricultural research investmentdecisions (17)56). In particular, the emerging tech-nologies presented fundamental challenges andopportunities for the public component of U.S.agricultural research (17). Basic science advocatescharged that the USDA-led system had not beenon the cutting edge of science nor had been pay-ing enough attention to basic research (66,81),stimulating an evaluation of the system that con-tinues today.

Some have argued that the biotechnologies haveled to private sector, proprietary-dominated re-search efforts. Others, however, point out thatincreased private sector research investment re-sulting from the biotechnology boom has uniquelycontributed to the fundamental knowledge base

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Table 10-1.—Some Recent Applications ofBiotechnology to Plant Agriculture

Rice: Whole rice plants can be regenerated from single-cellprotoplasts; recent advances that improve the efficiencyof the process are important to progress in applying ge-netic engineering to cereals in general (1,37).

Maize: The Ti vector was recently used to transfer the maizestreak virus into corn plants, a monocotyledonous mem-ber of the grass family. The study is a landmark becausethe Ti plasmid is probably the best characterized plantvector and an efficient gene transfer mechanism, butmonocots had been refractory to its use (43). Successfulplant regeneration of maize protoplasts also was reportedrecently (80).

Rye: Using a syringe, DNA was injected into rye floral tillers.The new genetic material was introduced into the germcells of this monocot, and some recovered seeds grew intonormal plants that expressed the foreign gene. This sim-ple strategy, which does not require plant regenerationfrom protoplasts, could be useful in other cereals (24).

Orange: Orange juice-sac cells have been removed from ma-ture fruit and maintained in tissue culture. The cells pro-duce juice chemically similar to that squeezed from tree-grown fruit. Such laboratory cultivation could advance traitselection and speed up varietal development, although lab-oratory produced juice is not on the immediate horizon (34).

Tomato: A gene that confers a type of insect tolerance wasrecently transferred via the Ti system to tomato plants. Thetolerance is also expressed in progeny plants. Since over$400 million per year is spent to control this type of pest,constructing insect transgenic plants of this sort is of greatinterest to the agricultural community (33). See also fig.10-3..

SOURCE: Office of Technology Assessment, 1988.

and resulted in a positive economic impact (47).And, through increasing alliances between com-panies and universities, industry involvement hasalso resulted in resources for new ideas, with po-tential to further enhance economic return throughaccelerated technology transfer (47).

Biotechnology has also stimulated greater inter-est in agricultural research by the nontraditionalagricultural research community. Today, agricul-tural applications command greater interest withinthe general research hierarchy (23,42,89). Whilesome believe this shift is valuable (42), others fearthat research directed to address regional and lo-cal problems could suffer and that ‘(have” and “havenot” institutions will result (27,52,53,58,101).

In addition to the effect of biotechnology on re-search investment decisions, concern has been

raised about biotechnology’s influence on invest-ment in human capital: namely, a decline in thenumber of full-time equivalents (FTEs) in tradi-tional plant breeding at the expensive of increas-ing numbers of FTEs in molecular biology (44,58).Improvements in varieties with the new biotech-niques will be hollow achievements if there is ashortage of traditional plant breeders who con-duct the complementary field research that is es-sential to develop varieties for use by farmers.Some reports indicate a 15 to 30 percent decreasein university-based plant breeders and an increaseof about one-third in molecular biologists between1982 and 1985 (59). This trend might, in part, re-flect the glamour image of plant molecular biol-ogy coupled with industrial demands for plantbreeders (36).

A continuing industry demand for trained plantbreeders might be an attractive argument forthose making career decisions and ensure an ade-quate supply of plant breeders (42). However, alarge majority of graduate students in the plantsciences still want to work in molecular biology,and siphoning university plant breeders to indus-try could leave a teaching void for those who wantto learn conventional breeding (44). At present,some argue that a balance in supply seems to havebeen (or is being) struck (36,74). Others withinindustry and academia assert a lack of plantbreeders exists (29,44). Regardless, evidence forboth sides is largely anecdotal, and accurateaccounting would be useful for forecasting andplanning the direction of plant agricultural re-search.

The impact of the biotechnologies on the direc-tion of agricultural research has not, however,occurred in a vacuum. Intellectual property is-sues and who funds projects also are importantfactors. For example, the concern about the ex-change of plant-breeding materials just mentionedhas been generated both by the research thrustusing the biotechnologies and interpretation ofpatent law (44). The biotechniques have also con-tributed to an evolution in the investment empha-sis (i.e., the types of projects funded) of privateand public sources. The impact of these two issues,property rights and funding source, on researchinvestment is examined in following sections.

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PROPERTY RIGHTS AND PLANTS

Proprietary protection of plants precedes re-combinant DNA technology by about four dec-ades. Today, two Federal statutes specifically con-fer ownership rights to new plant varieties: thePlant Patent Act of 1930 (35 U.S.C. §§161-164) andthe Plant Variety Protection Act of 1970 (7 U.S.C.§2321 et seq.). The Chakrabarty decision coupled.with Ex parte Hibberd (32) affords plant breedersthe additional option of seeking a utility patent(35 U.S.C. §101) to protect a novel variety. ’

The following sections first outline the laws rele-vant to plant property and hybrid plants, and thenanalyze the effect plant protection has had on U.S.investment in agri-biotechnology. A detailed anal-ysis of plant protection and its economic conse-quences will be explored in a forthcoming OTAreport, New Developments in Biotechnology:Patenting Life. The issue of intellectual propertyas a barrier to commercializing plant products isbriefly discussed later in this chapter.

Plant Patent Act of 1930 and PlantVariety Protection Act of 1970

In 1930, Congress passed the Plant Patent Act(PPA), allowing patent protection for new and dis-tinct asexually propagated varieties other thantuber-propagated plants. PPA, administered by theU.S. Patent and Trademark Office, gives the pat-ent holder the right to exclude others from asex-ually reproducing the plant or from using or sell-ing any plants so reproduced, for a period of 17

‘Trade secrets are also an important form of plant protection.In particular, the hybrid seed industry (such as corn) makes exten -si\’c use of trade secrets (36). Hybrid seeds hakre “internal geneticprotection, ” making them more amenable to the trade secret ap-proach (27). Inbred parental lines (trade secrets themselves) are cross-bred to produce high-yielding hybrid seed (also trade secrets) with‘hybrid \’igor. ” But, unlike seed for nonh~rbrid crops, seed from ahar\wt using hybrid seed cannot be sa~’ed and used for additionalhigh-yield planting cycles Since hybrid vigor from subsequentprogenj’ declines, the producer must return to the source for newseed to maintain the highest yields. Thus, the genetics of hybridseed cle facto force the producer back to the supplier, and the h.v -brid seed industry has preferred trade secret plant protection, ratherthan seeking monetary return through the certificate or patent proc-ess (each ~~rith disclosure requirements) (26). Academic researchersprobab]: Jicu trade secrets less fa~orabl}’, since they hinder pub-lication efforts (94).

years. At the time PPA was enacted, it was notthought possible to produce stable, uniform linesvia sexual reproduction (4). These ideas were re-vised, however, and Congress passed the Plant Va-riety Protection Act (PVPA) in 1970.

PVPA provides for patent-like protection to new,distinct, uniform, and stable varieties of plantsthat are reproduced sexually, except fungi, bac-teria, tuber-propagated plants, uncultivated plants,and first-generation hybrids. The breeder may ex-clude others from selling, offering for sale, repro-ducing (sexually or asexually), importing, or ex-porting the protected variety. In addition, otherscannot use it to produce a hybrid or a differentvariety for sale. However, saving seed for cropproduction and for the use and reproduction ofprotected varieties for research is expressly per-mitted. The period of exclusion is 18 years forwoody plants and 17 years for other varieties.PVPA is administered by the Plant Variety Pro-tection Office, USDA.

Diamond v. Chakrabarty

In the landmark case Diamond v. Chakrabarty,the U.S. Supreme Court addressed one of the ma-jor patent law questions arising from applicationsof the new biotechniques—whether living, human-made micro-organisms are patentable (25). In a5 to 4 decision, the Court made it clear that thequestion of whether or not an invention embracesliving matter is irrelevant to the issue of patenta-bility, as long as the invention results from hu-man intervention. Since 1985, when the PatentOffice ruled that utility patents could be grantedfor novel plants (32), genetically engineered plantshave been granted utility patents. There are noexemptions for a plant utility patent —in contrastto PVPA, the holder of a plant utility patent canexclude others from using the patented varietyto develop new varieties.

Impact of Intellectual Property onAgricultural Research Investment

Intellectual property and plant protection haveinfluenced and continue to influence the direc-

2 0 0

tion of U.S. plant agricultural research investment.Since the enactment of PVPA and the Chakrabartydecision, private sector interest has blossomed(101). Funding to initially capitalize dedicated bio-technology companies (DBCs) was based, in somemeasure, on the expectation that legal means ex-isted to protect discoveries resulting from the in-vestment. In particular, some view the option ofapplying for plant utility patents (afforded byChakrabarty and Hibberd) as sparking progressand increasing dollar flow in the industry by pro-viding both the scope of protection needed to en-courage new research investment and the rapiddissemination of information describing the newtechnology resulting from the research (109).

In contrast with the Chakrabarty decision, therole of PVPA in directly stimulating private in-vestment is less clear (18). Some argue that therate of private research investment in plant breed-ing following passage of PVPA equals that duringthe preceding decade (55), However, others dis-pute the notion that private investment has notrisen since passage of PVPA in 1970 (61)63). Theperception, however, that PVPA would increasethe profitability of seed companies galvanized far--reaching acquisition and merger activity involv-ing many American and international companies(18,55). These corporate entities were then poisedto take advantage as events in the biotechnologyrevolution unfolded.

Plant protection is not only important to com-mercial parties, but to public sector institutionsas well. Until 1980, only about 4 percent of some30)000 government-owned patents were licensed(73). Furthermore, the government policy of grant-ing nonexclusive licenses discouraged investment,since a company lacking an exclusive license wasreluctant to pay the cost of developing a productand building a production facility. Potentially val-uable research thus remained unexploited. Con-gressional concern about this innovation lag

prompted passage in 1980 of the Patent and Trade-mark Amendment Act (public Law 96-517), withamendments in 1984 (Public Law 98-620) to en-courage cooperative relationships between uni-versities and industry, with the goal of puttinggovernment-sponsored inventions in the market-place. Burgeoning university-industry relation-ships have been attributed, in part, to patent pol-icy (101).

On one hand, intellectual property rights stim-ulated and are critical to maintaining investment—public and private–in plant biotechnology re-search. Innovation must be protected and re-warded to realize a continuing flow of dollars toagri-biotechnology R&D (30,109). On the otherhand, many individuals are concerned that in-creased patent activity is having serious and ad-verse consequences resulting in the “privatization”of agriculture (17,26)56). Greater awareness of po-tential profits to be accrued from patenting genesand products has led to a rush to register underthe existing patent laws (30). Moreover, patent-ing in biotechnology is increasingly viewed as adefensive mechanism (42) to protect future invest-ment and projects, rather than a means that ex-pects immediate return.

To many in both the public and corporate sec-tors, increased patent activity is tying up, or hasthe potential to tie up, germplasm (28,30,44). Someargue that a noticeable slowing in the free ex-change of germplasm that existed prior to patent-ing has occurred (28,44). In effect, they argue thatthe biological domain was once public domain,but has shifted to a private property right (27).Others argue that utility patents do not stifle freeexchange (109). Rather than patents per se, rec-ognition that germplasm is commercially valuablecould be resulting in closer attention being givento free transfer (75). In any case, advances in bothplant breeding and plant biotechnology require free-moving, international exchange of germplasm.

AGRICULTURAL BIOTECHNOLOGY RESEARCH FUNDING

The U.S. agricultural research enterprise is a tional and biotechnological research in agricul-system. Lodged partly in the private sector and ture. In response to scientific, legal, economic, andpartly in the public sector, it is comprised of a political pressures, the system evolves, seeking tobroad variety of institutions funding both tradi- balance the diverse requirements and interests

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of each stakeholder. At issue is how research willbe prioritized, what lines of research should bepursued, and what research roles are appropri-ate for the respective public and private sectors.This section examines who invests in plant biotech-nological research in the United States and to whatextent the funding source (e.g., Federal Govern-ment, public institutions, private corporation) in-fluences the direction of agricultural research.(For a detailed accounting of biotechnology fund-ing, see chs. 3,4, and 5, and for agricultural fund-ing in general [681.)

Public Investment

U.S. public investment in agricultural researchinvolves two principal partners: the Federal Gov-ernment and the States. Within the Federal sec-tor, USDA funds the majority of plant research.In addition to the USDA, other Federal agencies,including the National Science Foundation (NSF),National Institutes of Health (NIH), Departmentof Energy (DOE), Agency for International Devel-opment, Department of Defense, and National Aer-onautics and Space Administration, support basicscience research on or applicable to plant biotech-nology. NSF in particular, funds many basic re-search initiatives and training programs in theplant sciences. In the more recent past, NH-I andDOE played critical roles funding basic plant re-searchers at non-land-grant institutions.

Funding for all agricultural research by the pub-lic sector is estimated at approximately $2.0 bil-lion–$1.9 billion combined Federal and State sup-port of the traditional USDA system and $100million through grants from other agencies (68).Not all of this research, however, involves plantsor biotechnology. The following sections describeplant research initiatives within the public sectorand, where available, plant biotechnology appli-cations. Targeted investment in education andtraining is also presented.

U.S. Department of Agriculture

A long tradition and a complex institutional fund-ing structure characterize agricultural researchinvestment by USDA. Most federally sponsoredresearch in plant biology is conducted at land-grant institutions, which are part of a tripartite

USDA complex that includes 72 land-grant insti-tutions, 146 State agricultural experiment stations,and thousands of extension agents (one in virtu-ally every county in the United States).

Determining the precise amount of USDAfunding in plant biotechnology is problematic.Funding amounts for plant science or biotech-nology projects are generally distinguished,but not both as a unit. Nevertheless, it appearsthat the majority of research funding obligatedby USDA involves plant applications (103,105,106).

USDA allocates research funds through the Agri-cultural Research Service (ARS) for intramural re-search, the Cooperative State Research Service(CSRS), and the Office of Grants and Program Sys-tems for competitive grants funding. ARS spon-sors in-house research allocated among 140 in-tramural research facilities located nationwide.CSRS distributes funds based on a formula incor-porating each State’s farm and rural population.CSRS-sponsored research is carried out largelyat State agricultural experiment stations and col-leges of veterinary medicine that are part of land-grant universities. CSRS funding includes a State-matching formula. Competitive grant funding byUSDA was established nearly a century after ini-tiation of the land-grant complex, and expendi-tures are not limited to land-grant institutions.

Within ARS, approximately 38 percent of re-search dollars (fiscal year 1986 appropriation ofapproximately $185 million) are specifically des-ignated for plant science (106). The CompetitiveResearch Grants Program of CSRS does break outplant biotechnology. Plant applications were 58percent of funds for competitive grants awarded;biotechnology applications 45 percent; and plantbiotechnology applications 28.5 percent (total bud-get $40.1 million) (105). Table IO-2 describes someof the kinds of projects funded by the CSRS com-petitive grants program.

In education and training, land-grant universi-ties also support 80 percent of the Nation’s plantbiology faculty and graduate students (68). USDAfunds 200 to 300 graduate students at both land-grant and non-land-grant institutions through train-ing grants in four targeted areas, one of whichis biotechnology (68). USDA also has a modest com-

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Table 10-2.—Examples of USDA Competitive GrantsAwarded for Plant Biotechnology

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Molecular Cloning of a Rubber Gene From GuayuleCloning of Maize Regulatory GenesMolecular Biology of Rice GenesRegulation of Soybean Seed Protein Gene ExpressionOrganization and Manipulation of Wheat Storage ProteinGenesDelivery of DNA Into Cells of Onion and Tobacco UsingHigh Velocity MicroprojectilesIn Vitro Culture of Cool Season Forage GrassesMolecular and Genetic Studies in BarleyIdentification of DNA Markers for Disease and PestResistance in PotatoMolecular Biochemistry of Herbicide ResistanceRegulation of Cytochrome Synthesis in PhotosynthesisDirected Mutation Studies of the PhotosyntheticCytochrome b6Regulation of Corn Nitrate Reductase: Application ofMonoclinal AntibodiesRegulation of Nitrite Reductase

SOURCE: U.S. Demrtfnent of Agriculture, Office of Grants end Program Systems,Cooper’atlve State R&earch Service, Food and Agriculture Competi-tively Awarded Research and Education Grants, Fiscai Year 1986,Washington, DC, 1987.

petitive postdoctoral fellowship program throughARS. Of the approximately 100 fellowships awardedin fiscal year 1986, about one-half were in biotech-nology (68). CSRS funds Food and Agriculture Sci-ences National Needs Graduate Fellowship grantsthat supported 87 doctoral degree candidates(many in plant fields) in fiscal year 1986 (105).

National Science Foundation

NSF plays a pivotal role in funding basic plantbiological research, training, and education. In fis-cal year 1985, NSF awarded 50 percent of com-petitive Federal funding for plant research (71).In addition to research investment, agency ex-penditures are also devoted to developing the plantsciences human resource base. For example, NSFconducts a peer-reviewed, competitive postdoc-toral plant biology fellowship program that em-phasizes an interdisciplinary approach to expandan individual’s training into plant biology -e.g.,bacterial molecular biology to plant molecular bi-ology. The program provides funds for approxi-mately 20 fellows per year. NSF also sponsors asummer course in plant molecular biology for 16scientists each year (68).

Science and Technology Centers forPlant Science

Plant biotechnology is one of several relevantresearch areas that could be covered at proposedmultidisciplinary plant science research centersto be funded jointly by USDA, NSF, and the De-partment of Energy. The proposal initially will in-volve $10 million per year and use a competitivegrant/peer review process to establish severalcenters with average annual funding of $1 to $2million per center for 5 years. The Administra-tion’s Working Group on Plant Science believesthat $250 million during the first five years of theprogram represents a realistic recognition thatthe scant amount of competitive funding for plantsciences needs to be increased or the search toelucidate many fundamental principles of plantswill continue to lag (79). Collaborative arrange-ments (including funds, equipment, or people) be-tween State and local governments, private foun-dations, and industries would be encouraged,although the grantee must be a doctorate grant-ing institution with graduate programs related toplant sciences. Proposed centers are encouragedto form, wherever possible, research and train-ing relationships with existing facilities, such asthose of the Agricultural Research Service andNational Laboratories (72).

States

States play a significant role in funding agricul-tural research, plant biotechnology included. Oneanalysis reports that in 1985, the ratio of Stateto Federal appropriations through CSRS at Stateagricultural experiment stations was 3.5 to 1 (68);another estimates that the ratio is much less, ap-proximately 2 to 1 (62). Total expenditures by Statelegislatures for State agricultural experiment sta-tions approach $700 million annually (68). In addi-tion to State contributions through CSRS, someStates, such as Iowa, have targeted agri-biotech-nology as a strategic industry for State investment(see box 10-B).

In addition to research and facilities funding,States have also recognized the importance of in-vesting in human capital. For example, Iowa andNorth Carolina have special graduate and post-graduate fellowships in plant molecular biology.

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Box 10-B.-Biotechnology in Iowa

“All encompassing” probably best characterizes the biotechnology effort underway in Iowa. Involving the State’sexecutive and legislative branches, industries, and colleges and universities, the necessary components of a multi-facetedapproach for success are each seemingly covered. These include:

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2-year laboratory technician training,undergraduate biotechnology training,graduate biotechnology training,faculty development and recruitment,equipment acquisition,facilities improvement and new construction,tax incentives for industry R&D, andprograms for employee training.

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State universities outside the land-grant complexalso are pivotal to research and training in plantbiotechnology.

Combining matching funds and novel initiatives,the bulk of State investment in biotechnologyis probably related to plant agricultural appli-cations—at least 33 States have biotechnology ini-tiatives (ch. 4), many with plant agriculture com-ponents (table 10-3).

Private Investment

Private funding for agricultural research derivesprimarily from industry, although private foun-dations, trade associations, and commodity orga-nizations also channel money into the system.Companies also provide money to universities fordoctoral and postdoctoral education and training,

Dollar expenditures for agricultural researchby the private sector are difficult to determine,One recent survey places industry funding at ap-

proximately $2.1 billion (2), and it may approach$3 billion (101). Again, not all of this research in-volves plants or biotechnology, but, in the pastfew years, investment in plant research usinggenetic technologies has accelerated in both theprivate and public sectors (7). The following sec-tions describe plant research and education in-vestment by private sector interests, with particu-lar focus, where available, on plant biotechnology.

Industry

Commercial funding of plant biotechnology re-search derives from two sources: large (often mul-tinational) corporations and dedicated biotechnol-ogy companies (DBCs) (ch. 5). In a 1987 OTA surveyof nearly 300 DBCs, 12.5 percent indicated plantagriculture as a primary or secondary focus. Cor-porate biotechnology companies (CBCs) involvedin applications of biotechniques to plants arelargely fully integrated seed companies. Researchinvestment includes both intra- and extramuralfunding.

Table 10.3.–State-University Research Center Initiatives in Plant Biotechnology

State Description

Georgia

Indiana

Iowa

Maryland

Michigan

MissouriNew Jersey

New York

North Carolina

Ohio

Oklahoma

Pennsylvania

Washington

Wisconsin

State Legislature appropriated $7.5 million for the construction of a $32 million Center for Biotechnologyat the University of Georgia. Research emphasis will focus on cattle, hogs, and peaches.Indiana Corporation for Science and Technology specifically targets biotechnology and agricultural geneticsas 2 of 13 strategic areas. The Corporation has granted over $2.5 million for biotechnology projects at theAgrigenetics Center at Purdue University or the Molecular and Cellular Biology Center at Indiana University.State Legislature appropriated $18 million over four years to Iowa State University for agri-biotechnology re-search. See also box 10-B.Center for Advanced Research in Biotechnology established at the University of Maryland with agricultureas one of five research areas.Michigan Biotechnology Institute established at Michigan State University includes focus on plant geneticengineering and tissue culture projects related to forestry and new uses of agricultural surpluses.Food for the 21st Century Center established at the University of Missouri, Columbia.Center for Advanced Food Technology established at Cook College, and the Center for Agricultural Molecu-lar Biology established at Rutgers University.Biotechnology Institute created at Cornell University. New York State Science & Technology Foundation alsohas designated Cornell University a “Center for Advanced Technology.” The agriculture and food industriesare target areas of both programs.North Carolina Biotechnology Center established, targeting agriculture and forestry as part of its R&D pro-gram. Center also offers graduate and post-graduate fellowships in plant molecular biology.Edison Animal Biotechnology Center established at Ohio University and the Biotechnology Institute at OhioState University.21st Century Center under construction ($30 million) at Oklahoma State University, Stillwater. Focus of cen-ter will be agricultural biotechnology, water resources, and renewable energy.Cooperative Program in Recombinant DNA Technology established at Pennsylvania State University. PennState Biotechnology Institute established with agricultural biotechnology one targeted research area.Washington Technology Center established. Projects funded include livestock, crop, and forestry applica-tions of biotechnology.Biotechnology Center established at the University of Wisconsin, Madison includes a Plant Cell and TissueCulture Service Facility. A high containment growth chamber for recombinant plants also is being developed.

SOURCE: Office of Technology Assessment, 1988.

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Industry also recognizes the importance of sup-porting the manpower base for the plant sciences.For example, several companies, such as Ciba-Geigy, have established in-house postdoctoraltraining programs, Graduate and postgraduatestudents have benefited from Agrigenetics’ invest-ment at several university laboratories.

Philanthropic

Noncorporate private sources, including foun-dations, trade associations, and commodity orga-nizations, invest in some agri-biotechnology re-search. The nature of the funded projects varieswith the interest and purpose of the organization.Although the money usually supports research,funds are sometimes earmarked for training andeducation. For example, in 1982, the McKnightFoundation of Minneapolis announced plans tospend $2 million a year for the next 10 years onbasic research and graduate education in plantbiology. Most of that money is targeted for abouta half dozen universities, with interdisciplinaryresearch teams focusing on plant genetics. Grantswill consist of up to $300,000 a year for the sup-port of doctoral and postdoctoral research. Anadditional ten grants of $35,000 per year for 3-year periods will be awarded to university scien-tists conducting basic research in plant biologyrelated to agriculture. Despite such efforts, philan-thropic investment is modest compared to thefunds available from public sources.

Collaborative Arrangements

The typology and purposes of collaborativearrangements (see ch. 7) in plant agriculturalbiotechnology apparently do not differ fromother sectors. Industry interaction with land-grant institutions has a long tradition within theagricultural sector (23,78), although the numberof formal collaborations between agricultural bio-technology companies averages one to two percompany in contrast to seven or more for the hu-man therapeutics sector (8).

Today, collaborative arrangements in plant agri-cultural biotechnology include university-government, university-industry, and university-industry-government associations. For example,State-university cooperation in agri-biotechnology

has been manifest in the establishment of severalresearch centers with plant biotechnology com-ponents (table 10-3). In addition to government-university interactions, several dedicated and cor-porate agri-biotechnology companies make grantsor other arrangements with university research-ers or research groups, Table 10-4 lists some typesof projects that companies have funded, or pres-ently fund, at universities. An ambitious consor-tium involving collaboration between universities,industry, and Federal and State Governments re-cently has been inaugurated (see box 10 C). Finally,a cooperative project, the Biotechnology Researchand Development Corp., involving the USDA, sev-eral companies, the State of Illinois, and the Peo-ria Economic Development Council was recentlyformed (10).

Impact of Funding Source onAgricultural Research Investment

Historically, public investment in agricultural re-search has been through the land-grant system.Land-grant institutions were established on a pub-lic service basis different from that of other univer-sities, with a tradition of an implied social con-tract to make its discoveries freely available tothe public (101), Since 1965, however, federallyfunded agricultural research through formulafunds and USDA has remained stagnant or de-clined (in constant dollars), while State and pri-vate sector support for agricultural research hasincreased significantly in real terms. Private sec-tor investment now exceeds public funding. And,within the public sector, the funding structureis evolving. Has the changing funding mix influ-enced agricultural research investment?

Formula-based Funding v.Competitive Grant Funding

As mentioned earlier, charges have been leveledthat the USDA research enterprise has not beenat the cutting edge of science. Such criticism oftenfocuses on the tradition of formula funding. Inresponse, a competitive grants program has beenestablished by USDA (93). The peer-reviewed, com-petitive grants program allows non-land-grantuniversities to participate in research thrustsfunded by USDA. Peer review at ARS was recently

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Table 10-4.—Types of Private Plant Agriculture Grants to Universities

Funding Source University Project Description

Agrigenetics Corp.

Asgrow Seed Co.(Upjohn)

Busch AgriculturalResources, Inc.

ChocolateManufacturers Assn.

Cotton, Inc.

Crow’s Hybrid Corn Co.

Dow Chemical

Eli Lilly & Co.

Hershey Foods

Monsanto

Nestle

North AmericanPlant Breeders

Northrup King(Sandoz)

Pioneer Hi-Bred

Popcorn Inst i tu te

Quaker Oats

Rohm & Haas

Showalter Trust

Standard Oil

Upjohn

C o r n e l l

Purdue

U. Arkansas

Purdue

U. Arkansas

Cornell

Purdue

Purdue

Penn. State

Rockefeller U.

Cornell

P u r d u e

Cornell

Penn. State

Purdue

Purdue

U. Penn.

P u r d u e

U. I l l ino is

P u r d u e

Tomato hybridization through cell culture

Soybean research

Rice breeding, genetics, and evaluation

In vitro production of cocoa

Development of types of early

Tissue culture regeneration

Soybean plant regulation

Wheat genetics research

maturing cotton for Eastern Arkansas

Molecular biology of the cocoa plant

Regulation of plant genes involved in photosynthesis

Bitterness in squash

Evaluation of alfalfa and red clover varieties

Tissue culture regeneration

Regulation of grain yield in maize

Improvement of popcorn hybrids

Improvement of competitive ability of oats in Indiana and other MidwesternStates

Support for Plant Science Institute

Development of tissue culture systems to produce plant secondary products

Long-range improvement of food production, primarily in corn and soybeans

Muskmelon breeding programSOURCE: Office of Technology Assessment, 1988.

reviewed, and recommendations were made tostrengthen the process in several ways (69).

The move to a competitive agricultural researchprogram has led to concern that elite, well-staffedinstitutions will be favored. Critics charge that thepeer review system that is generally used has re-sulted in the top 20 research universities receiv-ing the bulk of Federal research dollars year af-ter year (92). Under the grant process at theNational Institutes of Health, critics point out 1to 2 percent of institutions receive as much as 20percent of the funding. With geographical con-siderations such an important part of the agricul-tural research sector, concern has been and con-tinues to be expressed that the valuable researchfunctions performed by the smaller land-grant in-stitutions would increasingly receive less attention.

While sensitive to such concerns, others main-tain that allocation of new and even redirectedresources from USDA should be based primarilyon competitive peer and merit review. They ar-gue that such a system ensures that public dol-lars are invested most wisely and efficiently with-out limiting the character and diversity of U.S.agricultural research (68)93). These individualscontend that while there appears to be a threatto the system, the long-term impact will be bene-ficial, leading to a more competitive science anda more competitive industry (74).

Because competitive grants represent, at present,less than 5 percent of the USDA agricultural re-search budget, it is difficult to assess their impact,both on concerns raised and expectations held.

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Box 10-C.--The Midwest Plant Biotechnology Consortium

Increased Commercial Involvementporate research programs are driven by the eco-nomic incentive to produce a profit-yielding prod-

Agribusiness in the United States today is chang- uct. In the case of plant biotechnology, however,ing—becoming bigger, and also more horizontally private investment in basic research was neces-and vertically integrated (101). Historically, cor- sary to enhance the paucity of knowledge avail-

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able about plant systems. This increased spend-ing by the commercial sector was coupled withreal dollar declines in Federal support (28).

Some believe that an overall weakening of thepublic sector role in agricultural research, espe-cially within the land-grant complex, and a corol-lary strengthening of the position and interestsof the private sector is occurring, and that thiscould portend problems. For example, strength-ening support by the private sector could presentproblems in intellectual property or developingtechnology of real benefit for farmers (62). Argu-ments also have been raised that an erosion ofthe public interest in agricultural research mightnot be in the best interests of the Nation if high-cost/high-yield projects are pursued, rather thanlow-input/low-cost options (28).

In addition to the increased money being spentby industry, a recent flurry of merger activity in-volving agribusiness has also raised questionsabout the direction of agricultural research in-vestment. Since the late 1960s, seed companiesincreasingly have become subsidiaries of largercorporations, especially chemical firms. Some ex-press concern that consolidation of seed andagrichemical companies will make projects suchas herbicide-resistant plants attractive, and thatsuch applications will lead to increased depen-dence on chemicals also produced by the samefirm.

Others point out that private investment in agri-biotechnology is vital to the country’s economicwell-being and will enhance the global positionof American agriculture in the world marketplacethrough low-input options. It is also argued thatthe opportunities afforded by private involvementin agri-biotechnology could produce health andenvironmental benefits through industrial effortsto develop products that decrease the present de-pendence on chemical pesticides and herbicidesand lead to more efficient nonchemical controlmethods.

Private spending on agri-biotechnology cannot,however, replace public involvement. Private sup-port for basic research, intramural and extra-mural, is expected to decline (95) as companiesincreasingly identify potential products and shiftfunding toward applied R&D. Industry can, how-

ever, act as an advocate for public funding of agri-biotechnology research (68) as it looks to publicinvestment for advances in fundamental research.Because universities are well-springs of innova-tion, commercial agriculture will benefit from col-laborative arrangements that support basic re-search. (Questions surrounding such collaborativearrangements are discussed in ch. 7.)

Resource Allocation Within USDA

Public investment in agricultural research is nec-essary because incentives for private research areoften inadequate. The social return could be con-siderable, but private profit is meager, with gainscaptured by other firms, by producers, and byconsumers (84).

Implied in public funding of agricultural re-search is responsibility to the public, which is en-titled to broad benefits. For example, historicallyBlack colleges of agriculture in the land-grant sys-tem have important programs targeted to smallerfarms. Yet today, the USDA-led enterprise is in-creasingly challenged by consumers, environmen-talists, farmworkers, and rural developmentadvocates who have a range of concerns and re-search priorities. Concern about land-grant ac-countability led to a lawsuit in California examin-ing the role and impact of federally fundedresearch. In November 1987, a verdict, which isbeing appealed, was issued ordering the Univer-sity of California to develop a process to ensurethat Federal Hatch Act appropriations are usedto enhance rural life and promote small familyfarms (13).

Over its long history, public research has dem-onstrated that it contributes to the maintenanceor enhancement of a competitive structure in theagricultural production, farm supply, and mar-keting sectors (84). Concerns recently have beenraised, however, that the U.S. public agriculturalresearch system lacks focus toward equity forfarmers and consumers, and that an examinationof priorities could be necessary (26).

USDA’s Users Advisory Board has recommendedthat public sector research should encourage strat-egies that increase profitability, reduce the needfor subsidies, protect the environment, and en-hance rural development and world competitive-

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ness (106). With or without biotechnology, public interest sectors—that U.S. agricultural researchsector agricultural research institutions could em- programs need to be revitalized and recreditedphasize biological processes and cultural manage- in the public’s mind. This issue is paramountment in the field, new crop diversification, and if the USDA system is to reap maximumhost-based disease and insect resistance for crops, benefit.Most agree—in both the commercial and public

COMMERCIALIZATION OF AGRICULTURAL RESEARCH

The United States’ ability to transfer technol-ogy-including agricultural technology-from lab-oratory to marketplace is under increasing scru-tiny. Generic issues described earlier also applyto commercialization of plant agricultural biotech-nology as well (see chs. 5 and 6). For example, col-laborative arrangements have been designed toenhance commercialization of plant biotechnol-ogy research. What is the general profile of com-mercial plant agricultural biotechnology, and whatissues are important to product development inthis sector?

As mentioned earlier, about one-eighth of DBCs(37 companies) surveyed by OTA in 1987 are in-volved in R&D of plant agricultural applications.The OTA survey also found that the profile of pat-ent activity for these companies was similar tothat for DBCs in general (see chs. 5 and 6). In-cluding corporate participants, the commer-cial sector for plant agricultural biotechnologydoes not appear to have changed appreciablysince a 1984 OTA report of industry activity(94).

Nevertheless, expectations for profitable returnson investment in agri-biotechnology are high. Esti-mated revenues from world seed sales range from$30 to $60 billion (6,7), with the U.S. share repre-senting approximately one-fourth the world mar-ket (7). Some analysts predict that, with geneti-cally modified seeds, the world market could reach$150 to $180 billion by 1990 (6), and that disease-,pesticide-, and herbicide-resistant plants couldconstitute a sizable portion of the $10 billion agri-cultural chemical market (6). Others are less op-timistic, but still see real growth, anticipating aslow to moderate growth rate (5 percent annu-ally) over the next decade (7). This represents adoubling between 1982 and 1995 (7). Yet, com-pared to human therapeutics, raising adequate

capital for research has been relatively difficultfor most agricultural biotechnology companies,including plant biotechnology firms (76). However,the world-wide nature of agriculture could resultin biotechnological agriculture processes andproducts, both plant and animal, becoming thelargest sector in the industry (64,65). Table 10-5lists one analysis of probable years of commer-cialization for several genetically manipulated cropplants.

To achieve success under either growth pat-tern, widespread commercialization of plantbiotechnology will require breakthroughs inseveral technical areas. It will also depend onother factors, including environmental regu-lation, university-industry relations, economicincentives, and consumer acceptance. A com-prehensive analysis of the commercial plant bio-technology sector is beyond the scope of this chap-ter. As a case study, however, two issues specificto commercialization in the plant biotechnologysector merit discussion: institutional barriers todevelopment and personnel needs.

Table 10.5.—Probable Year of Commercialization forSome Genetically Manipulated Crop Plants

Tomatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..1988Other vegetables . . . . . . . . . . . . . . . . . . . . . . . . ........1989Potatoes . . . . . . . . . . . . . . . . . . . . . ..................1989Sugar cane . . . . . . . . . . . . . . . . . . . . . ................1989Fruit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...1990Rapeseed . . . . . . . . . . . . . . . . . . . . . .................1991Rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...1991Sunflower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........1991Alfalfa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1992Barley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1992Corn. . . . ... , . . . . . . . . . . . . . . . . . . . . . . . . . . .........1992Sorghum . . . . . . . . . . . . . . . . . . . . . ..................1992Soybeans . . . . . . . . . . . . . . . . . . . . . .................1992Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1992SOURCE: M. Ratafia and T, Purinton, “World Agricultural Markets,” EVo/Tectrrro/-

ogy 6:280-281, 1988.

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Institutional Barriers toDevelopment

Practical use (through public or commercialavailability) of plant agricultural research is in-grained in the fabric of the U.S. system. Althoughthis chapter focuses primarily on aspects that af-fect investment in U.S. agri-biotechnology re-search, it is also important to delineate parame-ters that influence the flow of plant biotechnologyproducts to the open market. The following threesections analyze three parameters identified andexamined at a 1987 OTA workshop (95), that areimpeding or could impede rapid plant biotechnol-ogy development: the existing knowledge base,regulation, and property rights.

Knowledge Base

While an enormous information base hasprovided a substructure for sweeping ad-vances in biomedical science (68), similar basicknowledge about plants and plant systems isin short supply. Experts from academia and in-dustry nearly all agree that the sparse fun-damental knowledge base underlying plantagricultural biotechnology, especially in cropspecies, is the rate-limiting barrier to commer-cial development, and that developing the baseis critical to future U.S. efforts (95).

The level of basic scientific knowledge aboutplants is rudimentary and limited to certain spe-cies (89). Basic biochemistry of plants and plantsystems is poorly understood. For example, themetabolic basis of drought resistance is not un-derstood, let alone the genetics of this trait. Thesame holds true for many plant traits. Knowledgeabout gene expression and developmental regu-lation of plants is not well defined, and while plantsare a major source of pharmaceuticals and otherspecialty chemicals (45,94,99), biotechnological ap-plications are poorly exploited; only one productis currently under production (45)87). At the plantmolecular level, only a few important plant geneshave been cloned and sequenced (67), and com-plete molecular maps to correspond to geneticmaps are available for only two or three species(36,42).

A comprehensive treatise on the knowledge gapsin plant sciences is beyond the scope of this chap-ter, however, table 10-6 lists some basic research

Table 10-6.-Some Knowledge Gaps in PlantAgriculture Needing Basic Research

● Gene, seed, embryo Iibraries and banksc Model systems to correlate with important crop species● Metabolic regulation and expression of polygenic traits● Germination: storage, differentiation, and properties of

embryonic tissue● Plant differentiation: morphology and physiology for all

stagesQ Gene structure and function● Biochemistry and mechanisms of plant regulators and

hormonesSOURCE: Office of Technology Assessment, 1988.

needs in plant biotechnology. A following sectionanalyzes the division of labor between the publicand private research sectors to meet these needs.

Regulatory Uncertainty

Government regulates commerce for a widerange of reasons, including protection of humanhealth and the environment. State initiatives andthe Federal regulatory structure for biotechno-logical products were analyzed in a previous OTAreport (96). Does the present regulatory environ-ment act as an institutional barrier to commer-cial development of plant biotechnology?

Regulatory uncertainty stands as the secondmajor barrier to commercialization of agricul-tural research (95), and could become the mostserious (28,36)42,47,78), For the agricultural sec-tor of the biotechnology industries in particular,regulatory delays have hampered the movementof products from laboratories and greenhouses,to small-scale, experimental field tests (20). Whilethe furor appears greater when the applicationinvolves micro-organisms, genetically engineeredplants with bacterial or fungal genes also havebeen tied up in the regulatory system (20,96).

Routine progress toward field and environ-mental testing of genetically engineered organ-isms has been slow, with controversy and confu-sion among Federal regulatory agencies leadingto uncertainty within the biotechnology researchcommunity and industry (68). This uncertaintyhas resulted in significant delays in field researchon potential agricultural biotechnology products(68). Dissatisfaction with Federal regulation of bio-technology (both too much and too little) has fo-cused on the two agencies that regulate agricul-tural products: USDA and EPA (20).

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From a commercial standpoint, Federal regula-tion needs to be affordable and should support,not stifle, technology development (36). Unantici-pated regulatory delay can dramatically affect theprofitability of products and the commercial agri-cultural biotechnology research agenda (47). Reg-ulatory uncertainty, for example, affects decisionsby companies on whether to spend $1 to $2 mil-lion on greenhouses only because of concern overfuture field tests v. greenhouse work, instead ofinvesting the money in research (42).

In contrast to regulatory delay for pharma-ceutical biotechnology, crop agriculture is par-ticularly sensitive to a time lapse. A one-monthdelay at a critical time can result in a lost yearof development. A one-year delay can reduceprofit by 50 percent during the product lifetimeand stem cash flow (47). Missing a seasonalplanting window for an experimental fieldtrial of a plant biotechnology product repre-sents a major risk to be factored by companiesinto the R&D process, with such factoringaffecting, and probably reducing, total invest-ment decisions Diverting funds away from R&Dcould be especially critical to the survival ofsmaller DBCs which, unlike corporate seed sup-pliers, do not have seed revenues to offset short-term losses.

In some respects, regulation could be less aninstitutional barrier itself than a consequenceof the barrier just discussed—poor knowledgebase. Only further research can alleviate thislack and reverse the regulatory uncertainty itcreates.

Property Rights

As discussed earlier, proprietary protection iscritical to maintaining investment in research,especially commercially sponsored research. Highcosts for R&D and regulatory approval of prod-ucts favor patenting because a company wantsto protect its investment. Are there intellectualproperty issues that are barriers to developingplant agricultural research?

The structure of the plant protection systemdoes not seem to be a barrier to commercial de-velopment (36)78), but rather an idiosyncrasy add-

ing complexity to management of plant intellec-tual property. Some sentiment exists that patentand related issues are overblown (36,78), espe-cially compared to regulatory issues (36). Choos-ing the type of protection to seek is character-ized as a basic business decision (36). For example,there are advantages and disadvantages of secur-ing protection of sexually and asexually repro-duced plant varieties by obtaining a utility patentthrough 35 U.S.C. §101 rather than PPA or PVPA.Utility patents for plants provide somewhat greaterprotection (49,60) and lower nominal cost (60), andthe holder of a utility patent can exclude othersfrom using the patented variety to develop newvarieties. A Certificate of Plant Variety Protection,however, affords 18 years of protection, whereasthe life of a utility patent is 17 years. In the caseof many agriculture companies, especially largefirms, formal protection is not generally a partof their corporate milieu; rather they rely on tradesecrets (ch. 6).

Although the domestic structure of plant intel-lectual property probably does not hinder com-mercialization, a lack of international harmonyfor plant protection is a potential barrier, espe-cially considering the global economy in whichthe agricultural sector operates (31,36,47,78). Ad-ditionally, calls for patent extension for agri-bio-technology products (similar to the situation forpharmaceuticals) have been made. In light of thepresent regulatory uncertainty just described,some parties believe patent extension, based onthe period a product is under regulatory review,would compensate companies and stimulate themto undertake higher risk research ventures. Anal-yses of international patent issues, how a type ofprotection is chosen by a company, and patentterm extension will be analyzed in a forthcomingreport on New Developments in Biotechnology:Patenting Life,

Personnel Needs

Adequate numbers of trained personnel in a va-riety of disciplines are necessary for successfulcommercialization of U.S. plant agricultural bio-technology, and the demand remains substantiallyunmet (5,68). A 1985 survey found that compa-nies seeking plant scientists cited shortages in plant

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molecular biologists who had solid education andtraining in plant science (as opposed to individ-uals who cross over from animal or microbial sys-tems), plant tissue culture experts, and plantgeneticists or breeders with expertise within vitrotechnologies (50). In other words, industry citedshortages in just about every area. These person-nel shortages are not limited to the private sec-tor, since industry draws its talent from universi-ties. What measures could solve this problem?

The Federal role in funding education and train-ing is crucial. Industry support—at universitiesor private institutions and in-house programs—isalso important. Equally important is adequate re-search funding. Personnel needs are self-driven;if enough money is available to support research,then individuals will be drawn to the field. Re-search funding drives the process, ensuringan adequate supply of trained personnel foruniversities, government, and industry.

THE FUTURE OF AGRICULTURAL RESEARCH

The U.S. agricultural research enterprise is anevolving system. In addition to the three impactsjust described, the changing global market for agri-cultural products affected and continues to affectagri-biotechnology research. In the late 1970s andearly 1980s, the goal of increasing agricultural pro-duction drove public policy and the agriculturalresearch agendas of both the public and privatesectors. Today, however, the goal of U.S. agricul-tural research is increasingly focused on farm-ing profitability.

In a recent survey, most Americans said thatresearch into genetic engineering should be con-tinued (98). Americans support and encourage arange of agri-biotechnology applications, such asdisease-resistant crops, frost-resistant crops, andmore effective pesticides (98). Given this popularsupport and these high expectations, what is thelong-term outlook for U.S. investment in plant bio-technology research?

Increased Federal attention to agricultural re-search seems to be the most urgent need. In 1939,approximately 80 percent of federally sponsoredresearch was for agriculture, while in 1985, agri-cultural research comprised less than 2 percentof Federal research expenditures. USDA, thelargest Federal sponsor, is allocated only 5.2 per-cent of total Federal research funds, and only 1.4percent of USDA’s budget is used for research.Given the potential return on investment in agri-cultural research, the present spending patternmight be too low for priority research areas thathave the ability to enhance and ensure the futurecompetitiveness and profitability of U.S. agricul-ture (83). In particular, more fundamental re-

search on plant applications is needed than onanimal applications, because basic knowledgeabout plants is less (68). While recognizing thepresent climate of fiscal restraint, both public andprivate interests express the conviction that fund-ing should be reallocated from other activities toagriculture, not reallocated within agriculture (95).Furthermore, increased integration between thebasic biological sciences and applied agriculturalresearch is paramount.

Agri-biotechnology research performed inthe private sector has different long-term ob-jectives from public sector research. What isthe proper division of labor between the di-verse interests? Balance needs to be foundbetween molecular biology and traditionalbreeding private and public interests, and ap-plied and basic research. While recent researchagendas and interests of each sector have over-lapped rather extensively, the public sector canno longer rely on the private sector to performsubstantial basic research. The private sector, trou-bled by public sector usurpation, must also rec-ognize the traditional responsibilities and con-straints (including the broad and specific “publicgood” mandate) of the public sector. Applied re-search is an important component of the publicagricultural research tradition—necessary to fillgaps left by industry, explore novel applications,and keep the government abreast of developmentsin the field. Accordingly, to strike and maintaina balance, agri-biotechnology research per-formed by both sectors will need careful man-agement so that its research benefits the pub-lic and enhances the competitiveness of theU.S. agricultural industry.

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At present, scientific, legal, economic, and po-litical forces have seemingly converged to accel-erate the rate of evolution and the direction ofU.S. agricultural R&D. Yet change in the systemis not novel, and adopting a siege mentality wouldbe counterproductive (90). Serious new issues

ISSUES AND OPTIONS FOR

Three policy issues related specifically to appli-cations of biotechnology to plant agriculture wereidentified during the course of this study. The firstconcerns possible congressional actions regard-ing research funding. The second involves regu-lating products of plant biotechnology, and thethird concerns the impact of intellectual propertyprotection of plants on germplasm exchange.

Associated with each policy issue are severaloptions for congressional action. The options arenot, for the most part, mutually exclusive, nor isthe order in which the options are presented in-dicative of their priority.

ISSUE 1: Is Federal funding of research in plantbiotechnology adequate?

Option 1.1: Take no action.

Congress could conclude that current Federalspending for plant agricultural research is ade-quate. Continuing the present level of funding,however, could result in a static agricultural sec-tor that is unable to respond to future economic,technological, and scientific needs—both domes-tic and international. Knowledge in the plant sci-ences would continue to remain in short supply,limiting commercialization even further.

If Federal spending remains the same, the re-duced role for public research could result in aslower rate of technological progress.

Option 1.2: Increase spending.

Congress could determine that present spend-ing for agricultural research is insufficient. If Con-gress increases agricultural research funding, U.S.preeminence in this sector would probably con-tinue, Increased expenditures for training wouldensure an adequate supply of personnel for bothuniversities and industry.

have been raised, but the embryonic nature ofthe agricultural biotechnology industry compli-cates the assessment of long-term effects. Con-tinued examination and private and public sup-port for long-range planning seem prudent.

CONGRESSIONAL ACTION

Option 1.3: Decrease spending.

The U.S. agricultural sector has added a sur-plus to the U.S. trade account every year since1960, Underlying this success has been researchsupport—with an annual rate of return for invest-ment in agricultural research in the range of 33to 66 percent.

If Congress determines that Federal investmentin plant biotechnology is excessive, it could de-crease allocations for this sector. Decreased fund-ing for agricultural research would result indiminished returns that would undermine theagricultural economy.

Option 1.4: Reallocate existing resources.

Should Congress conclude that present fund-ing levels are adequate or, because of fiscal con-straints, must remain the same, then it could di-rect that Federal resources be reallocated.

Congress could increase the Competitive GrantsProgram at USDA at the expense of formula fund-ing for land-grant institutions. Increasing dollarsfor peer-reviewed, competitive-based grants couldbean effective mechanism to ensure that Federalinvestment in basic research is being well spent.However, historically, the nature of federally spon-sored agricultural research has been applied. Thisfact, combined with a decentralized structure thatincludes local agricultural experiment stations andextension services, provides a unique national ca-pacity to identify and solve local or regional prob-lems. Reallocating resources away from formula-based funding would diminish the important rolethat even the smallest, poorest funded land-grantuniversities play.

Likewise, Congress could decrease spending forcompetitive grants within USDA or other agen-cies, such as NSF. In general, competitive researchfunding is directed toward basic research. Be-

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cause the database for plant sciences is sparse,decreasing awards that foster excellence in thisarea could hinder rapid progress in plant biotech-nology.

Option 1.5: Direct increases in State funding atState Agricultural Experiment Stations throughthe Cooperative State Research Service.

To increase total spending or offset Federal re-ductions, Congress could require States to increasetheir contributions to agricultural research throughthe Cooperative State Research Service at StateAgricultural Experiment Stations. If increasedState spending were to result in an overall increasefor agricultural research, then continued devel-opment should occur.

ISSUE 2: Agricultural applications of biotech-nology will increase significantly over thenext several yearn Is the statutory and reg-ulatory structure governing environmentalapplications of plant biotechnology adequate?

Option 2.1: Take no action.

Congress could take no action if it determinesthat the present regulatory structure provides ade-quate review to ensure environmental safety andpublic health, or that experience with the exist-ing structure has been insufficient to ascertainits adequacy.

If Congress takes no action, the CoordinatedFramework for the Regulation of Biotechnology(51 F.R. 23301) will continue to direct regulationof plant biotechnological products.

Option 2.2:Direct the Office of Science and Tech-nology Policy (OSTP) to report on the imple-mentation of the Coordinated Framework.

Congress could direct OSTP to evaluate, or spe-cifically commission an independent analysis of,the process by which plant agricultural applica-tions have been handled by regulatory author-ities. A comprehensive review of the timelinessand efficiency of regulatory review, resolution ofcompeting agency jurisdictions, scientific knowl-edge gained through field testing, actions of Stateand local regulation, community involvement, andconsequences of field testing on environmentalsafety and public health could demonstrate whether

the present regulatory framework best serves allinterested parties.

Option 2.3: Relax regulatory constraints.

If regulatory requirements are judged excessive,Congress could direct executive authorities to re-lax regulations. The existing USDA regulatory au-thority for plant biotechnology includes the Fed-eral Plant Pest Act (7 U.S.C. 150aa-150jj), the PlantQuarantine Act (7 U.S.C. 151-164, 166, 167), theFederal Noxious Weed Act (7 U.S.C. 2801 et seq.),the Federal Seed Act (7 U.S.C. 551 et seq.), andthe Plant Variety Protection Act (7 U.S.C. 2321et seq.) (51 F.R. 23339). Modifications that removerestrictions would make regulations for some ap-plications more consistent with the regulation ofnonengineered cultivars.

Less stringent regulation of environmental ap-plications of genetically engineered plants mightdecrease costs associated with experimental fieldtesting and increase investment in research. How-ever, if planned introductions in the future (in con-trast with those now contemplated or likely) definenew risks, then reevaluating relaxed regulatoryrequirements could be necessary.

Option 2.4: Preempt State and local regulation ofagricultural applications of biotechnology.

Increased State and local interest in regulatingbiotechnology exists. If Federal regulation of bio-technology is deemed adequate, Congress couldenact a statute that preempts State and local reg-ulation on this issue.

Uniform authority could remove some presentregulatory uncertainty, streamline the process,and decrease delays in field testing. If Congresspreempts such regulation, however, local concernsmight receive less attention. Federal preemptioncould also hinder cooperative regulatory effortsbetween Federal and State agencies that are pres-ently in place, e.g. the Animal Plant Health Inspec-tion Service’s regulation of genetically engineeredorganisms or products under the Plant Pest Act.

Option 2.5: Direct the Secretary of Agricultureto report how USDA is complying with NationalEnvironmental Policy Act requirements (NEPA)in its regulation of genetically engineered plants.

2 1 5

The statutory mission of USDA is to assist thedevelopment of agriculture and husbandry in theUnited States. NEPA requires all Federal agenciesto consider the environmental impact of activi-ties funded with Federal dollars.

If Congress determines that a conflict betweenNEPA requirements and the statutory responsi-bilities of USDA exists, then Congress could amendthe mission of USDA to explicitly include environ-mental protection.

ISSUE 3: Does intellectual property protectionof plants in the United States ensure ade-quate germplasm exchange?

Option 3.1: Take no action.

Congress could conclude that the present intel-lectual property structure for plant protectiondoes not interfere with germplasm exchange. If

Congress takes no action, inventors would con-tinue to seek protection through the avenue theydeem most appropriate or advantageous. Germplasmexchange would continue on an ad hoc basis.

Option 3.2: Direct the Secretary of Agricultureto report on the impact that plant protectionhas on germplasm exchange.

Congress could direct the Secretary of Agricul-ture to report on the impact that proprietary in-terests in plants has on germplasm exchange. Todate, any information on the issue is anecdotal.Because all interested parties agree that free ex-change of germplasm is necessary to continueprogress in plant biotechnology, a comprehensiveanalysis examining trends in plant protection andgermplasm exchange could reveal that a problemexists, that no problem exists, or could direct at-tention to potential problems.

SUMMARY AND CONCLUSIONS

The largest industry in the United States, agri-culture is one of the most efficient and produc-tive sectors in the country’s economy. Agriculturecontributes to approximately 20 percent of thegross national product, and employs more than1 in 5 Americans. Increasingly, however, problemsbeset the U.S. agricultural economy. Researchalone cannot solve all of the problems, but cansignificantly alleviate them if resources are avail-able. Historically, the returns on Federal R&D inthis sector have been high, so efforts to providerelief through agricultural research could yieldpowerful results.

Both public and private sector agricultural re-search endeavors are in a state of flux. Severalfactors have converged to affect U.S. investmentdecisions in such research, including the discov-ery of the new biotechniques, intellectual prop-erty rights and plants, and the funding source forplant agricultural biotechnology research.

Biotechnological innovation in plants spans aspectrum of applications, New techniques and newuses continue to arise. The new technologies canpotentially accelerate the rate, precision, reliabil-ity, and scope of improvements beyond that pos-sible through traditional plant breeding, while also

reducing costs. Some have expressed concern,however, that biotechnology has led to privatesector-, proprietary-dominated research efforts.others point out that biotechnology has affordedunique contributions to agricultural research andcreated positive economic effects. Biotechnology’seffect on the balance of manpower between tradi-tional plant breeders and molecular geneticistsis seemingly reaching equilibrium.

Plant property developments have influencedagri-biotechnology research profoundly. Intellec-tual property protection of plants has stimulatedinterest and investment in plant research. How-ever, increased plant protection activities have ledto concerns about free-flowing exchange of germ-plasm. Such exchange is necessary to continuedadvances in plant breeding and biotechnology.

The U.S. agricultural research enterprise islodged partly in the public sector and partly inthe private sector. Each has different agendas andpurposes. Understandably, the perceptions ofproper roles, research priorities, and investmentdecisions clash. The issue of balance—formulafunding v. competitive grants, private v. public,basic v. applied, traditional plant breeding v.molecular biology-seems foremost. Spending pat-

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terns by the public sector should be responsibleand sensitive to broad public benefit. Industry canserve as an advocate for public agri-biotechnologyresearch and as a funding source for research toenhance US. competitiveness. Adequate researchfunding also pulls in interested and qualified man-power to the agricultural research system.

The commercial profile of the plant agriculturalsector does not appear to have changed apprecia-bly since an earlier OTA report. Achieving wide-spread success, however, will require expansionof the plant science knowledge base, Lack of fun-damental knowledge about plants and plant sys-tems is probably the rate-limiting barrier to com-plete commercialization of plant biotechnologyresearch. Regulatory uncertainty stands as the sec-ond major barrier and looms as potentially themost serious. Crop agriculture is particularly sen-sitive to regulatory delay—a one month lapse canresult in a company missing the planting seasonand, thus, an entire year of development. In somemeasure, regulation itself could be less an institu-tional barrier than one arising from a poor fun-damental knowledge base. Intellectual property

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issues do not appear to hinder commercialization,although patent term extension to compensate forregulatory delays might stimulate companies toundertake higher risk ventures.

Increased Federal and popular attention to agri-cultural research seems to be the most urgentneed. Given the potential return for agriculturalresearch, the present level of expenditures mightbe too low to ensure the preeminent role thatguarantees U.S. agriculture vitality and profitabil-ity. While recognizing the present climate of fis-cal restraint, proposals to reallocate already scarceagricultural resources to meet unmet needs dis-turb both commercial and public interests. In par-ticular, USDA funding for fundamental researchon plants is required to a greater extent than ani-mal basic research. Furthermore, increased in-tegration between the basic biological sciences andapplied agricultural research is paramount.

As scientific, legal, economic, and political forcescontinue to direct U.S. investment in agriculturalresearch, including plant biotechnology, ongoingexamination and long-range planning seem prudent.

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