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What role does “profit” play in determining which genetic traits will be commercialized?

Submitted by: beckster17


Expert response from Gregory Conko

Former Senior Fellow at the Competitive Enterprise Institute

Tuesday, 10/09/2013 17:24

To be successful, plant breeders must serve the needs of farmers, and their goal is to develop products that will perform well in the marketplace. Commercial breeders set out to produce varieties that will not only recover the costs associated with development, testing, and seeking regulatory approval, but also generate the profits that let them stay in business. Conducting the extensive testing needed to develop and secure approval for genetically engineered varieties is costly and time-consuming, though. And this substantial expense forces commercial seed companies to focus on traits and crop species most likely to appeal to the largest number of farmers.


Not all breeders work at for-profit companies, however. Many thousands of biotech seed developers work for public and private universities, charitable institutions, and public-sector research facilities. Though these breeders are not motivated by their own commercial interests, they too must be driven by a desire to help farmers produce a successful crop if the varieties they develop are to be successful. Sometimes this means helping farmers achieve profitability by increasing productivity. Other times, breeders working for charitable foundations and aid organizations try to help small-scale farmers in less developed countries meet or exceed their basic food subsistence needs – not necessarily to achieve profitability per se.


In countries like the United States and Canada, when farmers grow more food and earn more income, they are better able to feed their families, pay their bills, send their children to college, provide for their family’s health, invest in their farms, and support local businesses in their communities. So, farmers will not purchase new seed varieties that fail to help them achieve profitability. In countries such as South Africa, India, China, and the Philippines, on the other hand, millions of poor farmers chose genetically engineered seeds because they deliver higher yields, which in turn means greater food security, improved health and nutritional status for themselves and their families, and higher incomes.


For-profit and non-profit institutions also work together at times. Biotech companies frequently partner with universities, charitable organizations, and both national and international governmental bodies such as the United Nations Food and Agriculture Organization, in mutually beneficial ventures that improve agriculture and sustainability in both less developed and industrialized countries around the world. The vast network of commercial and non-commercial research institutions has brought to market plant varieties that reduce the need for insecticide applications, improve weed management and soil quality, and resist a number of devastating plant diseases, raising productivity and incomes for millions of farmers in rich and poor countries alike. Countless additional varieties have also been engineered with improved nutritional value, to tolerate periods of drought and extremes in heat or cold, and to grow better in poor soils. But, whether breeders work in the for-profit or non-profit sectors, their willingness to bring these varieties to market will depend on the level of demand from farmers who must meet the needs of the consumers they serve.


"Genetically Modified Crops and Food Security," Matin Qaim and Shahzad Kouser, PLoS ONE 2013.


“Global Status of Commercialized Biotech/GM Crops: 2012,” International Service for the Acquisition of Agri-Biotech Applications.


“The regulatory bottleneck for biotech specialty crops,” Jamie K Miller & Kent J Bradford, Nature Biotechnology 2010.


“Cost of Compliance with Biotechnology Regulation in the Philippines: Implications for Developing Countries,” Jessica C. Bayer, George W. Norton, and Jose B. Falck-Zepeda, AgBioForum 2010.


“Impact of Genetically Engineered Crops on Farm Sustainability in the United States,” National Research Council 2010.


“The Economics of Genetically Modified Crops,” Matin Qaim, Annual Review of Resource Economics 2009.


Gates Foundation


Global Harvest Initiative