Jock R. Anderson, Rutgers Consortium (& UNE, Australia)Regina Birner, University of Hohenheim, Germany

Latha Nagarajan, Rutgers Consortium (IFDC)Anwar Naseem, Rutgers University

Carl Pray, Rutgers University

Can the private sector also do good by doing well in fostering innovative

technology for agricultural development?

Derek E. Tribe (1991) Doing Well by Doing Good : Agricultural Research: Feeding and Greening the World

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Rising private agricultural research

• The rate of investment in public agricultural R&D has stagnated,

• and the growth of private agricultural R&D has accelerated, • especially in relatively high-income countries, but also

increasingly in others. • Main question for this presentation:

– How well is private agricultural R&D playing its potential role in helping farmers increase productivity and thus improve human nutrition and food security?

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Outline

• We consider the major factors of production that can be influenced by research-based improvements in productivity:– breeding materials, – pesticides, – fertilizers,– feedstuffs,– machinery, and – information technology,

• We enquire how well private initiatives are stepping up to the challenge.

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Changes in private sector agricultural input research in the US

* Increase in overall investment* Major increase in crop seed and biotechnology* Rather low research investment in fertilizers

5Source: Fuglie et al. (2012, p. 2032)

Breeding Materials - Crops• Some concerns regarding private providers (Fuglie, 2016)

– Technology determinism, where farmers’ choices may be limited to technologies favored by private developers• such as hybrid seed and GM crops

– A preference to serve the needs of large commercial farms at the expense of smallholders (?)

• But many remarkable successes– Such as cotton in India, maize in China, wheat in South Africa and fruit,

vegetables and flowers almost everywhere! – Although still many cases of limited adoption of “modern” inputs (such as

improved cultivars), especially in SSA (see IFAD 2016, Chapter 8)– Much need for focused studies, but some initiatives are helpful, e.g., Access

to Seed Index (ASI), • although the global seed companies yet reach only some 10% of

smallholder farmers globally 6

Corporate Social Responsibility (CSR): Everything is wonderful!

https://www.syngenta.com/what-we-do/the-good-growth-plan 7

Corporate Social Responsibility- relevant to check out

• Lots of great “correct” words of good intentions, e.g.,– Example: “Our core values – safety and health, highest ethical behaviors,

environmental stewardship and respect for people ….” (DuPont Pioneer)– Some initiatives develop and promote the introduction of small packages to help

smallholder farmers get access to high quality seeds and crop protection products (Syngenta website)

– Some initiatives are executed through Public Private Partnerships, e.g., WEMA (Water-Efficient Maize for Africa), involving Monsanto and others

• But generally little evidence provided of effectiveness of CSR programs!– Do these CSR efforts add up to the needful for poverty-oriented agricultural

development? Seems worthy of careful analysis!• In such analyses, let us not forget forages and dual-purpose crops

(https://www.pioneer.com/home/site/about/business/commitment/sustainability/)8

Livestock Breeding

• Private sector remarkably dominant in poultry and swine– Big US and EU players well serve corporate/industrial poultry and swine

• Less concentrated and less corporatized for other species, such as bovines • Main strategy for dairy herd improvement in developing countries: cross-

breeding using A.I. with imported and local semen; • some public sector efforts to establish breeding programs based on progeny

testing, e.g., Kenya; (Ojango et al., 2016)• but note Nestlé’s efforts in improving dairy herds in Pakistan• increasing role of private sector possible with genomic selection

– Globally, for smallholders reliance on informal efforts and trading among producers predominates so far, • with limited access to superior stock from transnational sources • but some Civil Society Organizations (CSOs) are helping (e.g., Heifer

International with goats in Nepal) (https://www.heifer.org/ending-hunger/our-impact/index.html 9

Trends in the value of global exports of liveanimals and bovine semen

Source: FAO (2015, p. 45)

Reflects investments in breeding by companies as well as farmer-based breeding organizations

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Pesticides• Evolution of resistance to pesticides contributes to a great business model

for the concerned private sector (subject to time lines and patent life)– Notwithstanding the pesticide market reductions of Bt & HT crops

• Crops– Range of GM crops is small and thus there is continuing reliance on

pesticides, but too often difficult to access by smallholders– and also too often dangerous to use if access is accomplished.

• Livestock– Some vaccine successes, e.g., against Rinderpest, Newcastle Disease,

brucellosis, tuberculosis and to some extent East Coast fever (public and private sector efforts!)

– But many challenges remain, e.g., trypanosomiasis – and the inevitable development of anthelmintic resistance …

• fortunately with “spill-ins” from human medical research 11

Fertilizers and Feedstuffs

• Such inputs are the heartlands of private firms• Crops

– Surprisingly low private investment in fertilizer research – Globally < 0.2% of sales, in less-developed < .1% of already low sales

• maybe appropriate given likely low returns!– But surely scope, e.g., continuing work on slow- and controlled-release

fertilizers, and on deep placement (IFDC), and innovative financing• Livestock

– Beyond grown fodder discussed above– Complete feed and concentrates; nutritional feed additives consisting of

micro-ingredient premixes, such as vitamins and minerals• including urea-molasses-mineral blocks for ruminants

– Medicated feeds, manufactured primarily by pharmaceutical companies, are problematic in several ways!

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Machinery• Machinery for crop production

– Tillage: typically mechanized first• Rise of contractor model to serve smallholders in Sub-Saharan Africa • Example: John Deere/AFGRI efforts in Zambia, supported by NGOs

» Smallholders could expand cultivated area (Baffour et al., forthcoming)• Challenges: Access to finance• Need for applied research, e.g., on the choice of equipment (disk plow

problematic for soil erosion)– Positive experience with Zero Tillage in South Asia (and Rice Wheat

Consortium)– Machinery for animal draft power (e.g., no-till equipment in Brazil; but weakly

addressed in Africa in spite of opportunities, e.g. scoops in Ethiopia) • Machinery for livestock value chains

– Example: Solar-based milk cooling (e.g., Kenya)

Foto: T. Daum Foto: H. Buchwald

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Information Technology – Digital AgricultureOpportunities along the value chain

Source: Daum (2019, p. 256)

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Information Technology - Digital Agriculture

• Much scope! Exciting! Significant!• Opportunity for local start-ups – as well as big companies

and new players entering agriculture (e.g., Bosch, IBM)• Crops

– Access to price information, e.g., M-Farm in Kenya – Excitement about “Uber for tractors” (e.g., Hello Tractor in Nigeria, EM3

Services in India) – but it is not Uber yet– Numerous Apps for on-line advice, as well as access to financial services

• Livestock– Management information for livestock farmers: Example: iCow in Kenya –

advice to farmers per SMS (standardized messages, developed by local enterprise; impact not yet studied)

– Big data collection by dairy enterprises: Example: Herdman software in India – monitoring of dairy cows by RFID devices, developed by VetWare, used by the Hutsun dairy enterprise 15

Conclusion

• Wide rage of private sector R&D activities that are relevant for smallholders• Big companies increasingly recognize African agriculture as future market –

efforts to develop business models to reach smallholders– Implications for R&D investments to be seen

• Need for more study of the distributional implications of private R&D related to agriculture, – especially of the adequacy of smallholder access to the products of private

agricultural R&D, – and of the implications of digitalization, and– perhaps more formal investigation of various CSR initiatives.

• Opportunity for innovative approaches (such as Public-Private-People- Partnerships) to ensure that private sector R&D efforts serve smallholders and the environment in the digital age.

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Thank you!

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References

• Adu-Baffour, F., Daum, T., & Birner, R. (forthcoming). Can small farms benefit from big companies ’ initiatives to promote mechanization in Africa? A case study from Zambia. Food Policy. https://doi.org/10.1016/j.foodpol.2019.03.007

• Daum, T. (2019). ICT Applications in Agriculture. In P. Ferranti, E. M. Berry, & J. R. Anderson (Eds.), Encyclopedia of Food Security and Sustainability (Vol. 1, pp. 255–260), Elsevier, Amsterdam.

• FAO (2015). The Second Report on the State of the World’s Animal Genetic Resources for Food and Agriculture. FAO Commission on Genetic Resources for Food and Agriculture, Food and Agriculture Organization (FAO), Rome .

• Fuglie, K. (2016). The growing role of the private sector in agricultural research and development world-wide. Global Food Security 10(1): 29–38.

• Fuglie, K., Heisey, P., King, J., Pray, C. E., & Schimmelpfenning, D. (2012). The contribution of private industry to agricultural innovation. Science, 338, 1031–1032. https://doi.org/10.1126/science.1226294.

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References (continued)

• IFAD (2016). Agricultural technology innovation, chapter 8 of Rural Development Report 2016: Fostering Inclusive Rural Transformation, IFAD, Rome, 277-304.

• Ojango, J. M. K., Wasike, C. B., Enahoro, D. K., & Okeyo, A. M. (2016). Dairy production systems and the adoption ofgenetic and breeding technologies in Tanzania,Kenya, India and Nicaragua. Animal Genetic Resources, 59, 81–95.

• Tribe, Derek E. (1991). Doing well by doing good: agricultural research: feeding and greening the world. Pluto Press for the Crawford Foundation for International Agricultural Research, Leichhardt, N.S.W.

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