AGBIOTECH AS A STRATEGIC INVESTMENT
By DR. AMAN ULLAH CHAUDHRY
Dec 05 - 11, 2005
Partnership between public funded organizations and industry is crucial in the science to product chain. Pakistan by providing necessary science infrastructures like biotech parks may have strong appeal for firms, with low wages and large amounts of well-educated, skilled workers. Multinationals in Pakistan may improve their competitiveness by reducing their costs.
Biotechnology, globally recognized as a rapidly emerging and far-reaching technology, is aptly described, as the "technology of hope" for its promising food, health and environmental sustainability. The recent and continuing advancements in life sciences clearly unfold a scenario energized and driven by the new tools of biotechnology. The Pakistan biotechnology sector should gain global visibility and tracking for emerging investment opportunities. Human capital is perceived to be the key driver for global competitiveness. Added to this is a decreasing appetite for risk capital in developed countries, which has led to a decline in the biotechnology sector in these regions, whereas survival lifelines may be provided by the lower cost research environment of the developing world such as Pakistan.
For a country like Pakistan, biotechnology is a powerful enabling technology that can revolutionize agriculture, healthcare, industrial processing and environmental sustainability.
The Pakistan biotechnology sector is spread over a number of scattered and sporadic academic and research initiatives. The time is now ripe to integrate these efforts through a pragmatic National Biotechnology Development Strategy. Plant biotechnology has largely been acknowledged as a key strategy for achieving food security and sustainable agriculture; many countries give high priority to agricultural biotechnology research and development. Many of these countries focus their biotechnology research on food crops and crops of high commercial value in the hope of meeting increasing food requirements and reducing poverty, particularly among resource poor farming households.
ROLE OF SCIENCE AND TECHNOLOGY
Science and technology have been the foundation of the social and economic gains made in agriculture over the 30 years and will continue to underpin any necessary increase in agricultural productivity. Plant biotechnology is one such technology that has been regarded as part of the "sustainable productivity equation" in agriculture. The present applications in agriculture include conventional breeding, tissue culture and micro propagation, molecular breeding or marker-assisted selection, plant disease diagnostics, genetic engineering and the production of GM crops, and the "omics" sciences (e.g. genomics, metablomics etc.).
Unfortunately, harnessing biotechnology and its applications for the benefit of the poor will require considerable attention in many areas including: allocation of additional public resources to agricultural research; appropriateness of, and access to, biotechnology by resource-poor farmers; improvement in the seed distribution and extension systems; capacity building of the public sector in biotech R&D; public education; policies and regulatory frameworks on biosafety, food safety and intellectual property rights; and stronger public-private links for live research and provide mentorship and problem solving support in addition to the grant/soft loan. This scheme may operate in two phases of innovation and product development.
PHASE - 1:
The funding in this stage should be provided for highly innovative, early stage, pre-proof concept research. Preference should be given to proposals that address important national needs. The maximum amount of funding to an enterprise may be limited to Rs. 50 lakh with not more than 50 percent of it going as grant and the remaining as an interest free loan. For projects to be considered at this stage, though a partner from public R&D institution would be considered important, it should not be a mandatory requirement for those companies that have good quality scientists. This should encourage high quality scientists to agree to work in small and medium biotech companies, a change from our traditions.
It is expected that some of the proposals funded in Phase-1 will establish the proof-of-concept. At this stage, the ability of the project to get venture capital funding improves. It is proposed to provide soft loan at this stage for product development and commercialization at an interest rate of 2 percent. The role of public R&D institution at this stage too is critical. The partner in the public institution at this stage should get the R&D support as grant.
Small and medium knowledge based industries in biotech should be encouraged to avail equity support from various financial institutions.
Pakistan should enter into agreement with advanced countries to develop fund.
India has entered into agreements with several countries like Israel, Brazil and US for cooperation in frontier sciences like biotechnology and Nan-technology. India and Israel have decided to create a corpus fund of $ 2 million per year each country depositing $ one million each. This corpus fund has successfully generated business worth of $ 7 billion.
BIOTECHNOLOGY PARKS & INCUBATORS
Establishing biotechnology parks for the growth of the biotechnology industry is essential either through public-private alliance or public/private sponsorship. With its human resources in molecular biotechnology, biochemical engineering, synthetic organic chemistry, chemical engineering and allied branches of engineering. Pakistan is well placed to support a number of biotech parks. Biotechnology parks can provide a viable mechanism for licensing new technology to upcoming biotech companies to start new ventures and to achieve early stage value enhancement of the technology with minimum financial inputs. These biotech parks will facilitate the lab to land transfer of the technology by serving as an impetus for entrepreneurship through partnership among innovators from R&D institutions and industry.
Basic minimum components for parks should include research laboratories for product development, multi-purpose pilot facility for manufacturing and process development, quality control and validation of technologies, common effluent treatment plant, human resource training center, administrative support center, etc.
The biotech parks should be located so as to be easily accessible to all the stakeholders with connecting toads, water and power supply and should also attract less administrative clearances from the government.
The international crops research institute for semi-arid tropics (ICRISAT) in India has planned partnership with NGOs, public and private sectors to achieve its objectives. Thirteen private sector companies have agreed to become partners in ICRISAT private sector bio-pesticides research consortium. The Andhra pradesh government has approved a grant of Rs. 3 crore to support development of the Agri-biotech Park in five years. In the existing Agri-science park ICRISAT has launched commercial operations in the agri-business incubator with three companies in India. ICRISAT's hybrid parents research consortium now has 29 seed companies from India, Indonesia and Egypt and is expected to generate $ 2.3 million in five years. India will promote and support at least 10 biotech parks by 2010.
It is important that biotechnology is used for the social benefit of Pakistan and for economic development. To fulfill this vision, it has to be ensured that research and application in biotechnology is guided by a process of decision-making that safeguards both human health and environment with adherence to the highest ethical standards. The legislation, backed by science based assessment procedures should clearly articulate rules & regulations that can efficiently fulfill this vision.
Choices are required to be made that reflect an adequate balance between benefit, safety, access and interest of consumers and farmers. It is also important that biotechnology products that are required for social and economic good are produced speedily at the lowest cost. A scientific, rigorous, transparent, efficient, and consistent regulatory mechanism for biosafety evaluation and release system/protocol is an essential for achieving these multiple goals. A competent single National Biotechnology Regulatory Authority is established with separate divisions for agriculture product/transgenic crops, pharmaceuticals/drugs and industrial products, and transgenic food/feed and transgenic animal/aqua culture. The authority should be governed by an independent administrative structure with a common chairman.
Biotechnology is necessary to maintain our competitive and remunerative agriculture and to achieve nutrition security in the face of major challenges such as declining per capita availability of arable land, lower productivity of crops, livestock and fisheries, heavy production losses due to biotic (insects pests, weeds) and a biotic (salinity, drought, alkalinity) stresses; heavy post-harvest crop damage and declining availability of water as an agricultural input. Investment in agricultural related biotechnology has resulted in significantly enhanced R&D capability and institutional building over the years. However, progress has been rather slow in converting the research leads into useable products.
Uncertainties regarding IPR management and regulatory requirements, poor understanding of risk assessment and lack of effective management and commercialization strategies have been significant impediments. Pakistan owns very few genes of applied value. The majority of genes under use - about 40 are currently held by MNCs and may be received under material transfer agreements for R&D purpose without clarity on the potential for commercialization.
The spectrum of biotechnology application in agriculture is very wide and includes generation of improved crops, animals, plants of agro forestry importance, microbes; use of molecular markers to tag genes of interest; accelerating the breeding through marker assisted selection; fingerprinting of cultivars, land races, germplasm stocks; DNA based diagnostics for pests/pathogens of crops, in vitro mass multiplication of elite planting material. Plants and animals are being used for the production of therapeutically or industrially useful products, the emphasis being on improving efficiency and lowering the cost of production. Biotechnology has a critical role in developing and processing value added products of enhanced nutritive quality and providing tools for ensuring and monitoring food quality and safety.
Bio fertilizers have a potential to substitute chemical fertilizers. In India projected production target by 2011 is about 50, 000 tones. In India bio pesticides have market share of 2.5 percent and an annual growth rate of 10-15 percent. In spite of the obvious advantages, several constraints have limited their wider usage such as product of inconsistent quality, short shelf life, and sensitivity to drought, temperature, and agronomic conditions. Unless there is a policy initiative at the center and the province to actively promote bio fertilizers and bio pesticides at a faster pace, there is unlikely to be a quantum jump in their consumption. There is a need for strategic action in public-private partnership.
1. There is an urgent need to promote and improve the levels of horizontal integration between public-public and public-private laboratories.
2. Institutions that generate knowledge and those that specialize in late stage field trials are compartmentalized. While support to public-funded innovation must continue to be strengthened, it is proposed that at least 30 percent of government funded programmes must have commercial partners, who will be responsible for directing R&D towards commercialization. Public investment should also be encouraged in small and medium companies, especially for late stage trials of transgenic crops. Partnership between public-funded organizations and industry is crucial in science to product chain.
Priorities for crops and traits should be set after conducting a need assessment exercise in various farming zones. However, an indicative list may be suggested.
Priority target traits in crop plants may be yield increase, pest and disease resistance, a biotic stress tolerance, enhanced quality, and shelf life, engineering male sterility and development of apomixes. Crops of priority should be rice, wheat, maize, sorghum chickpea, moong bean, groundnut, mustard, cotton, sugarcane, potato tomato, banana, mango, apple and citrus. In priority crops equal emphasis should be given to GM hybrids and new varieties. The varieties in contrast to hybrids, are preferred by small farmers as they can use their own farm saved seeds for at least three or four years. In case of hybrids, research on the introduction of genetic factors for apomixes would be supported so that resource poor farmers can derive benefits from hybrid vigour without having to buy expensive seeds every cropping season.
(B) BIO FERTILIZERS AND BIO PESTICIDES
Priorities would include screening of elite stains of micros-organisms and /or production of super-strains, better understanding of dynamics of symbiotic nitrogen fixation, process optimization for fermentor -based technologies, improved shelf life, better quality standards, and setting up accredited quality control laboratories.
Research and development (R&D) funds flowing into developing nations rose from two percent to 18 percent between 1996 and 2002. China, India, Thailand and Singapore have attracted lions share of R&D money. The high level of foreign direct investment flows to developing countries is likely to sustained. Developing countries have a strong appeal for major firm, with low wages and large amounts of well-educated, skilled workers. Multinationals have been "seeking to improve their competitiveness by expanding in the fast growing markets of emerging economies and by seeking new ways to reduce costs.
The author is from Department of Agronomy, University of Agriculture, Faisalabad.