4.4 Different Systems for the Transaction of Genetic Resources
93
Although some major points of conservation and utilization of PGRFA have been
achieved with the existing system, there are still some major elements missing,
those being the acceptance and implementation of specific financing mechanisms
for benefit and burden sharing and the adoption of a revised International
Undertaking including the recognition of the Farmers' Rights.
A multilateral system for controlling the exchange of PGRFA should have the
task of providing suitable incentives for in situ conservation and ensuring a fair
share of the benefits of the utilization of these resources to the donor countries. It
should also facilitate access to plant genetic resources necessary for agricultural
products and provide mechanisms for the regulation of this access where
necessary, e.g., when requirements of nature conservation take precedence over
other concerns. Such a system must also answer to basic institutional principles
such as the equal access for the national agricultural research systems of all
countries, the transparency of decision-making processes, the control of executive
organs, and the securing of finances (Cooper et aI., 1994).
The main advantage of a multilateral system of PGRFA exchange, in which all
countries participate, is that it can only produce winners because each single
participant gains access to more genetic material than he himself can contribute.
Furthermore, a formal multilateral system of exchange may have an advantage
over the present informal system, in that more transparency and certainty may
exist with respect to the rights and obligations of the members on ownership,
access and benefit-sharing (IPGRI, 1996). The present informal multilateral
system is based on free access on the one hand and some - still not defined -
compensation in the form of financial or a technology transfer or some kind of
internalization on the other hand. The proposed multilateral system for exchange
(MUSE) is conceptualized as a " ... framework for a system guided by a set of
mutually agreed rules ... " including bilateral and multilateral agreements (IPGRI,
1996, p. 61).
Not all participants, however, will profit equally from such a system. To base
compensation merely on the number of species, varieties, or genes contributed to
the multilateral system's common, internationally accessible pool would be too
simple a solution. It would bear the threat of an adverse selection. Not all varieties
will have the same valuable level of information. Some varieties will have more
unique information than others. Hence, varieties with important, i.e., higher valued
genetically coded information will be underpriced and will subsidize the less
valued varieties, if all traditional varieties are treated as having the same value in a
multilateral exchange system. If the countries or other suppliers of PGRFA are
able to obtain the differences, they will try to take the more valuable varieties out
of the multilateral exchange market and try to sell them independently on the basis
of bilateral agreements. Consequently, the average quality of the regular PGRFA
market will be reduced, which would lead to a reduction in the price. This
tendency is increased by the proposed MUSE, as a framework in which different
kinds of agreements can be signed, including bilateral contracts. Hence, the
incentive will cause the countries to negotiate the most valuable germplasm in
bilateral agreements because of the high demand, and the less demanded
germplasm in the multilateral compensation pool.
93
Although some major points of conservation and utilization of PGRFA have been
achieved with the existing system, there are still some major elements missing,
those being the acceptance and implementation of specific financing mechanisms
for benefit and burden sharing and the adoption of a revised International
Undertaking including the recognition of the Farmers' Rights.
A multilateral system for controlling the exchange of PGRFA should have the
task of providing suitable incentives for in situ conservation and ensuring a fair
share of the benefits of the utilization of these resources to the donor countries. It
should also facilitate access to plant genetic resources necessary for agricultural
products and provide mechanisms for the regulation of this access where
necessary, e.g., when requirements of nature conservation take precedence over
other concerns. Such a system must also answer to basic institutional principles
such as the equal access for the national agricultural research systems of all
countries, the transparency of decision-making processes, the control of executive
organs, and the securing of finances (Cooper et aI., 1994).
The main advantage of a multilateral system of PGRFA exchange, in which all
countries participate, is that it can only produce winners because each single
participant gains access to more genetic material than he himself can contribute.
Furthermore, a formal multilateral system of exchange may have an advantage
over the present informal system, in that more transparency and certainty may
exist with respect to the rights and obligations of the members on ownership,
access and benefit-sharing (IPGRI, 1996). The present informal multilateral
system is based on free access on the one hand and some - still not defined -
compensation in the form of financial or a technology transfer or some kind of
internalization on the other hand. The proposed multilateral system for exchange
(MUSE) is conceptualized as a " ... framework for a system guided by a set of
mutually agreed rules ... " including bilateral and multilateral agreements (IPGRI,
1996, p. 61).
Not all participants, however, will profit equally from such a system. To base
compensation merely on the number of species, varieties, or genes contributed to
the multilateral system's common, internationally accessible pool would be too
simple a solution. It would bear the threat of an adverse selection. Not all varieties
will have the same valuable level of information. Some varieties will have more
unique information than others. Hence, varieties with important, i.e., higher valued
genetically coded information will be underpriced and will subsidize the less
valued varieties, if all traditional varieties are treated as having the same value in a
multilateral exchange system. If the countries or other suppliers of PGRFA are
able to obtain the differences, they will try to take the more valuable varieties out
of the multilateral exchange market and try to sell them independently on the basis
of bilateral agreements. Consequently, the average quality of the regular PGRFA
market will be reduced, which would lead to a reduction in the price. This
tendency is increased by the proposed MUSE, as a framework in which different
kinds of agreements can be signed, including bilateral contracts. Hence, the
incentive will cause the countries to negotiate the most valuable germplasm in
bilateral agreements because of the high demand, and the less demanded
germplasm in the multilateral compensation pool.