An estimated 18,000 people attended the 15th meeting of the Conference of the Parties (COP) to the United Nations Convention on Biological Diversity (CBD) that was held in Montreal, Canada from December 7 – 22. Attendance was considerably lower than the 40,000 that were estimated to have attended the November COP-27 meeting on climate change that was held in Egypt. The last time these meetings were held in person, in 2018, both meetings were combined, with fewer than 10,000 attending. It’s evident that over the past 4 years, the politics of the environment, climate change and biodiversity have significantly increased as the number of individuals attending increased more than 5-fold. Additionally, the number of politicians attending substantially increased in Montreal.
Because of its consensus-style decision making process, the countries attending COP-15 reached an agreement that by 2030, they would domestically enact policies that would protect 30% of the land and 30% of oceans, known as the 30 by 30 strategy (30×30). They additionally agreed to implement legislation that would reverse nature losses.
Concern for agriculture
With well over a dozen agenda items, it’s not possible to review all COP-15 outcomes, so this discussion will focus on one aspect that has significant implications for agriculture, digital sequence information (DSI). DSI refers to the digital information that is available about a plant species genetics, once it has been sequenced. DSI exists in online genomic sequence databases and involves more than just plant genomes, as the genomes of a wide variety of species have been sequenced. This information spans all aspects of an organism’s genetic traits. DSI is particularly important to discussions about access to genetic resources and benefits that may occur, such as a new pharmaceutical drug or vaccine, or a new cosmetic product. In an agricultural context, it relates to the development of new plant varieties, designed to have improved agronomic traits, such as higher yield, improved diseases resistance or tolerance to alkaline soils.
Discussions involving both DSI and access and benefits sharing (ABS) have predominantly been dominated by biodiverse-rich countries, who rightly advocate that if a new drug, vaccine or cosmetic product is developed based on the genetics found in a plant local to their country, an economic share of the benefits should accrue to the country where the genetic resource originates. One option that has been advanced and has gained considerable recognition with some stakeholders, is to implement a 1% tax on the sales of products that have benefitted from DSI. Large, multinational pharmaceutical and cosmetic firms are considerably better positioned to be able to incorporate a 1% tax into the price of their products, resulting in higher consumer prices, thereby affording this tax with fewer challenges than with public sector agricultural research.
The future of public sector variety development
Product commercialization in agriculture is different than both the cosmetic and pharmaceutical sectors as in Canada, the public sector is the leading developer of all crop varieties other than canola, corn and soybeans. Public developers, be they the federal government department of Agriculture and Agri-Food Canada or universities that have crop variety development and commercialization programs, will be challenged to pay a 1% sales tax. If this tax was applied to the sale of all bread products in Canada, similar to how it would be applied to all cosmetic products sold, it would potentially result in a fiscal cost in the tens of millions of dollars. Crop variety research is funded through competitive grants, which pays for students and research staff to undertake the research and the equipment and supplies needed. Most large, multi-year grants provide plant breeders with up to a few hundred thousand dollars annually to carry out their research activities, while other would get less than $100,000 per year. Since no one grant funds an entire crop breeding program, plant breeders rely of a series of research grants to conduct their research.
The challenge then becomes, where would cash-strapped Canadian universities access the funds to pay a 1% sales tax on a new crop variety that could be worth tens of millions of dollars per year? The short answer is, there is no way any university could afford this cost. The solution that would develop is that public breeders would develop varieties up to the point that they would enter field trials, when they would be sold to the private sector that would complete the research, submit the variety for approval and then be the variety developer. This also assumes that the private sector would want to develop a crop that is presently outside of their research focus. Private firms may have no interest in this area of research, ending up with a complete halt on research into, and commercialization of, new varieties.
A workable future
The proposed 1% tax has the potential to end public sector variety development, not to mention the global role played in agricultural research through the sharing of plant and animal genetics by the Consultative Group on International Agricultural Research (CGIAR). It is conceivable that two alternatives might exist for agriculture.
The first, is that an exemption is given for the use of DSI in the commercialization of new agricultural products. Given the impossibility of universities being capable of paying the millions resulting from a 1% sales tax, that agricultural DSI be treated completely separate from pharmaceutical or cosmetic DSI. This would allow public sector variety development to continue as is, as there is no guarantee that the private sector would want to take on the commercialization of cereal and pulse crops, as they aren’t presently engaged in these activities.
The second supporting argument would be that the benefit is the new variety, which would provide greater benefits for farmers than a 1% tax. The advantage of agricultural DSI and the benefit that would be shared is the new crop variety that would be higher yielding for farmers in the area where the DSI originated.
Ultimately, including agriculture in the implementation of a 1% DSI sales tax would have negative effects on public sector research around the world.