94
of pre- basic and basic seed (see Fig. 8.1). The university also requested that the seed
company carry out the production of the breeder seed on the university’s behalf and
then purchase it, with the cost of production subtracted from the price. This request
indicated that an adequate amount of breeder seed was not available at the university. According to the university breeder, there was lack of a framework for producing certified breeder, pre-basic and basic seed for new varieties. It was assumed that
breeders and/or their institutions would have the resources for this production and
to support commercialization of new varieties, but in fact this is rarely the case
(pers. comm.).
The agreement foundered because the seed company was unwilling to commit to
buying such a large amount of seed every season and did not have the capacity to
undertake the production of the breeder seed as the university was requesting. The
upfront investment was considered too high for a variety that had not yet been commercialized. The total fixed cost of the stipulated 2 mt of breeder seed per season,
along with the annual licensing fees and royalties as laid out in the proposed contract, would have amounted to a cost of 33% of the seed price at current market
rates for a similar bean variety, squeezing already tight profit margins for the company when production, marketing and distribution costs were factored in. This
made the agreement unattractive for the company. The university was unwilling to
yield to the seed company’s requests for a smaller amount of breeder seed, and the
seed company was unable to meet the university’s purchasing requirements. A lack
of an urgent focusing event, apparent unavailability of EGS for the variety in question, and low motivation for commercialization all contributed to the failure to
reach an agreement.
This case study illustrates how the lack of access to EGS has prevented a
needed variety from reaching farmers. The university that holds the rights to the
variety was seemingly not able to provide the breeder seed requested, and the seed
company could not shoulder the burden to produce and purchase an amount that
was uneconomical for its needs. There was no other bean variety released in
Kenya with the nutritional properties specified. As a result, the bean variety that
was developed to help reduce micronutrient malnutrition remains uncommercialized and unavailable to Kenyan farmers. The university breeder reported that he
has released 24 bean varieties in Kenya but that only 10 have been commercialized (pers. comm.). The university has worked with the largest seed company in
Kenya and provided it with exclusive rights to other bean varieties, but there
appears to be a lack of trust and understanding between the university and the
smaller seed company, leading to a failure to reach an agreement.
8.4 Possible Solutions and Implications for Development
Development partners such as the Bill and Melinda Gates Foundation (BMGF)
and United States Agency for International Development (USAID) have started
paying attention to the EGS hurdle and are studying the multiple causes of the
L. K. Cramer
of pre- basic and basic seed (see Fig. 8.1). The university also requested that the seed
company carry out the production of the breeder seed on the university’s behalf and
then purchase it, with the cost of production subtracted from the price. This request
indicated that an adequate amount of breeder seed was not available at the university. According to the university breeder, there was lack of a framework for producing certified breeder, pre-basic and basic seed for new varieties. It was assumed that
breeders and/or their institutions would have the resources for this production and
to support commercialization of new varieties, but in fact this is rarely the case
(pers. comm.).
The agreement foundered because the seed company was unwilling to commit to
buying such a large amount of seed every season and did not have the capacity to
undertake the production of the breeder seed as the university was requesting. The
upfront investment was considered too high for a variety that had not yet been commercialized. The total fixed cost of the stipulated 2 mt of breeder seed per season,
along with the annual licensing fees and royalties as laid out in the proposed contract, would have amounted to a cost of 33% of the seed price at current market
rates for a similar bean variety, squeezing already tight profit margins for the company when production, marketing and distribution costs were factored in. This
made the agreement unattractive for the company. The university was unwilling to
yield to the seed company’s requests for a smaller amount of breeder seed, and the
seed company was unable to meet the university’s purchasing requirements. A lack
of an urgent focusing event, apparent unavailability of EGS for the variety in question, and low motivation for commercialization all contributed to the failure to
reach an agreement.
This case study illustrates how the lack of access to EGS has prevented a
needed variety from reaching farmers. The university that holds the rights to the
variety was seemingly not able to provide the breeder seed requested, and the seed
company could not shoulder the burden to produce and purchase an amount that
was uneconomical for its needs. There was no other bean variety released in
Kenya with the nutritional properties specified. As a result, the bean variety that
was developed to help reduce micronutrient malnutrition remains uncommercialized and unavailable to Kenyan farmers. The university breeder reported that he
has released 24 bean varieties in Kenya but that only 10 have been commercialized (pers. comm.). The university has worked with the largest seed company in
Kenya and provided it with exclusive rights to other bean varieties, but there
appears to be a lack of trust and understanding between the university and the
smaller seed company, leading to a failure to reach an agreement.
8.4 Possible Solutions and Implications for Development
Development partners such as the Bill and Melinda Gates Foundation (BMGF)
and United States Agency for International Development (USAID) have started
paying attention to the EGS hurdle and are studying the multiple causes of the
L. K. Cramer