Access Issues for Plant Breeders in an Increasingly Privatized World

There is a growing trend to widespread privatisation of crop breeding, and there are groundsfor expecting this trend to continue and even to accelerate. Possible consequences forAustralian grain growers and the national interest of much greater private sector involvementin plant breeding are explored.Growing privatisation and commercialisation of plant breeding will lead to increasedcompetition between plant breeders. While this increased competition has been at least partlydriven by the potential for value creation, it also is likely to enhance value creation from plantbreeding so long as there is adequate continuing investment in the capacity for plant breeding,and more particularly in productivity enhancing enabling technology.In the event of monopoly provision of such enabling technology, an important policy issuewill be access to what might be termed essential plant breeding infrastructure. For any accessregime to essential infrastructure, the core issue is to select terms and conditions for accessthat promote full and efficient competition in upstream and downstream markets (e.g. plantbreeding) while preserving the incentive for adequate levels of investment in the ongoingdevelopment, maintenance, and provision of such essential infrastructure.A key, perhaps pivotal issue will be pricing policy and practice. Because EPBI has the publicgood characteristic of being non-rival in use, price discovery by market processes can not beexpected to produce the desired outcome. Moreover, even if an access regime mandated thatEPBI be made available to all plant breeders at a uniform price, the imbalance in marketpower between the monopoly provider of EPBI and plant breeders seeking access wouldalmost inevitably result in both under-production of EPBI, and in under-utilisation of anyproduced EPBI due to price rationing. Such outcomes would severely undermine thecompetitive position of Australian grain growers in international markets.Results from the literature on what are called excludable public goods are used to analyse theimpact on the incentive for adequate investment in EPBI under an access regime mandatinguniform pricing.