Science and TechnologyWritten evidence submitted by the British Society of Plant Breeders

1. Declaration of Interests

1.1 BSPB is the representative body for the UK plant breeding industry.

1.2 Acting on members’ behalf, BSPB licenses, collects and distributes certified seed royalties and farm-saved seed payments on certain agricultural crops. The Society aims to safeguard investment in future crop improvement by optimising the return to plant breeders on their intellectual property. It is a not for profit organisation, funded by a retention on royalties, membership and licence fees.

1.3 BSPB represents virtually 100% of public and private sector crop breeding in the UK. It promotes members’ interests in technical, regulatory and intellectual property matters at national and international level. It is a member of the European Seed Association and the International Seed Federation.1 A list of BSPB members is appended.

2. Plant Breeding

Plant breeding is the science and business of developing and commercialising new varieties of crop plants with improved yields, disease resistances, agronomic characters and quality attributes. Plant breeding delivers considerable financial benefits to farmers, primary processors such as millers and maltsters, users further along the food chain and ultimately the public. Today, plant breeders are extremely mindful of the need to improve productivity without detriment to the environment.

3. The Relevance of Plant Breeding to the UK Economy and Global Challenges

3.1 Improved crop varieties provide the essential foundation for the UK’s £86 billion food production chain, the seed corn that produces the seed that the farmer sows. The economic benefits of plant breeding range from increased productivity at farm level through to import substitution, export earnings and enhanced processing quality within the food and drink manufacturing sector. Plant breeding for sustainability traits (improved resource efficiency, resistance to disease, resilience to climate change etc.) will reduce the impact of agriculture on the environment and benefit the economy by lowering the costs of alternative mitigation/adaptation strategies.

3.2 Independent work by NIAB (Reanalyses of the historical series of UK variety trials to quantify the contributions of genetic and environmental factors to trends and variability in yield over time, shows that between 1947 and 1982, around half of the yield gain of major UK cereal crops could be attributed to plant breeding, equal to the contribution of other factors such as improved agronomy, machinery or inputs. Since 1982, however, the contribution of plant breeding to yield gain has increased to more than 90%.2

3.3 A 2010 study by DTZ found that the annual contribution of plant breeding in three key crops (wheat, barley and forage maize) exceeds £1 billion in additional value within the UK farming and food supply chain—a 40-fold return on the £25m annual royalty income on those three crops. Copies of the NIAB and DTZ reports are appended.

3.4 The 2011 Foresight report on Global Food and Farming Futures, the Royal Society’s report Reaping the Benefits and many other recent reports by high level bodies looking at the issues behind John Beddington’s “perfect storm” have highlighted the role of plant breeding.3 , 4 It is clear from all of this that plant breeding is the single most important tool to deliver solutions to the challenges of food security, climate change and the more efficient use of resources as well as making a major contribution to economic growth.

4. Funding Plant Breeding

4.1 Plant breeding is long term and expensive. In general the period from first cross to commercial seed is around 10–12 years. Breeding has been a private sector activity in the UK since the Government’s decision in the 1980s to stop funding near market research and sell the Plant Breeding Institute. Plant breeders in the agricultural sector derive their income from royalties, provided for by Plant Breeders’ Rights (PBR) legislation. Royalties are paid on certified seed supplied by seed multipliers (agricultural merchants) and on farm-saved seed (seed that is saved by a farmer from his own harvest to be re-sown on his own holding), the latter at around 50% of the royalty paid for the use of certified seed. The total income available to breeders is relatively inelastic and equates to around £40 million per year in the UK across all crops. Plant breeding is a high risk industry, breeding companies need steady state investment but have variable income flow; winners have to pay for losers. There are no new entrants and the vast majority of the UK breeding programmes in our major crops are now in continental or global ownership with investment decisions being taken on a European or broader level.

4.2 Plant breeding is a highly research intensive business; around 40% of the breeders’ royalty income is invested in R & D. Plant breeding is also expensive, a competitive wheat breeding programme costs £1.5 million to £2 million per annum. This level of spend is sufficient for breeders to continue to make incremental advances in variety improvement but not enough for investment in the R & D that has the potential to lead to step changes in genetic gain (eg development of hybrid systems in wheat, nitrogen use efficient or drought resistant crops, use of synthetic wheat and exotic species to capture novel genetic variation). Public/private partnership is the way to achieve this, pulling through the research of the UK’s internationally acclaimed plant scientists but the Valley of Death is a very real barrier to innovation.

5. What are the difficulties of funding the commercialisation of research, and how can they be overcome?

5.1 Commercial plant breeding is the only route to market for the output from public research into plant genetics and breeding but:

commercial breeders have only about 5–10% of their R & D budget available to contribute to strategic R & D; maybe only £1 million pa across the whole industry, which is not enough to fully fund the work that is needed to draw academic research into commerce;

policy makers do not recognise sufficiently that advances in plant science can only be delivered to the market and contribute to economic, environmental and other policy objectives through a vibrant and financially robust, commercial plant breeding industry;

nor do they recognise that plant breeding in the UK is a tiny industry with exceptionally high R & D: turnover ratios which literally supplies the seed corn for everyone;

publicly funded R & D is rarely supported to the point at which it can be taken up and used in a commercial plant breeding programme;

even when translational work is to be supported, there is often no clear understanding of the commercial timescale from transfer to market, which is significantly longer in plant breeding than in many other sectors;

sometimes research organisations over-value the worth of their IP; companies can be deterred from entering into collaboration with academia where the upfront demands for use of IP are unreasonable and unrealistic; BSPB is not aware of any LINK projects involving its members that have led to patents in the last decade; and

there is a mismatch between the understanding of the public sector research funders, some academics and the industry of what constitutes research that can be taken up and used in the commercial sector. Research funders and practitioners often claim to have “solved” a particular research challenge when in reality they have completed a piece of fundamental work which though excellent in itself, is not capable of delivery into a commercial programme. A perfect illustration of this is work presented recently on the BBC’s Farming Today (24/01/2012) in which it was claimed that a new technology would allow scientists to develop new salt tolerant rice cultivars, with commercial seed available within one to two years. The research described is a significant advance but the claims for speed to commercialisation were hugely exaggerated. The downstream work in taking this from discovery, through marker assisted back crossing, cleanup, seed bulking and field testing, is still required. The delivery timescales into agriculture are more like 10–12 years for simple traits and much more for complex ones. The one to two year timeframe is just the first step in the process to the point at which the lab scientist publishes. The work is then at high risk of plunging headlong into the valley of death unless there is funding for the routine hard work of development, validation and transfer to breeders who can then commercialise. This is summed up perfectly in a slide used by BSPB’s vice Chairman, Richard Summers, in May 2010, see below.

5.2 Public sector funders of research have responded to a stream of messages about the need to support translational research in the last two to three years and a number of crop science related initiatives have been established by BBSRC, Defra and the TSB. BBSRC has stated its commitment to “excellence with impact” and the TSB was set up specifically to sponsor industry-led R & D. This is all positive but industry’s concern is that this will be seen to be “job done”. For the investment to have been worthwhile, there must be a mechanism and further funding to carry out what will often be routine, tedious and not very glamorous research, to move the output from these projects into something that the commercial breeder can use. It is not clear how this will happen. Action and knowledge transfer are needed, not warm words.

6. Are there specific science and engineering sectors where it is particularly difficult to commercialise research? Are there common difficulties and common solutions across sectors?

6.1 Plant breeding.

6.2 In addition to the “valley of death” problem, the regulatory and market environment are not conducive to the commercialisation of plant science research through breeding. It is clear that in the case of agricultural biotechnology the regulatory authorities are not keeping pace with the speed and dimension of innovation. The pragmatic decision of BASF to relocate its European GM activity to the US was made against a hostile regulatory background. The speed of innovation in plant breeding in the UK and more widely in Europe is also at risk from European regulators’ ongoing assessment of a range of novel breeding techniques and their potential reclassification as “GM”. If any, or all of the techniques that are under review should be classed for regulatory purposes as GM and plant varieties derived from them become subject to the regulatory burden that currently blights the potential use of recombinant DNA technology in Europe, European industry and society will not benefit from faster innovation and acceleration of genetic gain that these technologies offer.

7. What, if any, examples are there of UK-based research having to be transferred outside the UK for commercialisation? Why did this occur?

Plant breeding companies operate Europe-wide or globally and take R & D investment decisions on this basis. Investment follows the market. The UK wheat acreage/value is similar to that of Germany but only half that of France. The value of the USA market is increasing as the university sector contracts and the private sector starts to invest. All GM R & D is focused on markets outside Europe as the EU regulatory climate is so unattractive.

8. What evidence is there that Government and Technology Strategy Board initiatives to date have improved the commercialisation of research?

Plant breeders have welcomed the relevant TSB initiatives which are expected to deliver research with direct and meaningful commercial impact. TSB has encouraged greater dialogue between industry and research organisations and resulted in many well-structured consortium projects. TSB should consider conducting post-project audits to appraise and evaluate the commercial uptake and progress, also the application and management process which is overly bureaucratic and expensive.

9. What impact will the Government’s innovation, research and growth strategies have on bridging the valley of death?

9.1 The decision to include Plant Variety Rights in the Patent Box regime for favourable taxation of profits from IP is welcome and regarded very positively by the industry; the HMRC/Treasury consultations on this subject have been open and genuine, taking account of the views of this sector and the tax benefits will help companies’ ability to invest in innovation.

9.2 The Government has highlighted a need for the UK to strengthen its ability to accelerate the commercialisation of emerging technologies. This is a welcome statement. The plant breeding industry looks to the Government to speak out in relation to discussions in Europe around the regulatory status of novel breeding techniques, which threaten innovation. The Government’s support in trying to unblock the regulatory approvals system for GM crops in Europe would signal a genuine desire to support the commercialisation of innovation, though the political challenge in this area is in no way underestimated. This is particularly crucial in the light of the recognition in the strategy that the UK is at risk of being outcompeted by other developed countries and the BRIICS, many of which have embraced the potential of this technology.

9.3 The strategy refers to new “Catapult Centres”. New investment in innovation is always welcome but this must not be at the expense of existing networks and centres of excellence which form crucial hubs for public/private sector partnership in R & D. This relates particularly to the agricultural research institutes, which have been subject to cuts, closures and amalgamations over a long period but which remain vital centres of R & D expertise at the interface between academia and commerce.

9.4 There are many references to initiatives aimed at SMEs throughout the strategy. In the commercial plant breeding sector there are very few SMEs in the UK or the EU. The majority of companies are UK arms of larger European or multinational companies. They will not benefit from the measures designed specifically for SMEs but they are subject to the funding constraints of the sector as a whole that are outlined above. Companies that fall outside the SME definition also need support and it is from them that most breeding innovation will come.

9.5 The Government’s commitment to support research and innovation in business and remove barriers to innovation is welcome. No doubt Government will be engaging with industry as it implements this strategy. The commercial plant breeding sector is generally conspicuous by its absence from high level discussions with policy makers in Government in contrast with academia, yet its products are potentially major contributors to addressing the grand challenges of food security and climate change and are of major economic significance. BSPB urges that there be dialogue with the commercial plant breeders.

10. Should the UK seek to encourage more private equity investment (including venture capital and angel investment) into science and engineering sectors and if so, how can this be achieved?

Yes. With food security and sustainability high on the agenda, agriculture must attract substantial inward investment to sustain innovation.The provision of a clear long term political strategy will encourage new investors, including some in the fields of renewables and emerging bioindustries but this needs to be by direct funding into commercial breeding companies; the timescales for venture capital are too long.

11. What other types of investment or support should the Government develop?

11.1 For plant breeders to innovate by commercialising the output from the UK’s high class plant science research base, the industry needs to be allowed to flourish in an enabling regulatory framework in which there is appropriate reward for innovation supported with effective powers of IP enforcement. The sector needs a clear understanding from public sector research funders of commercial breeding as the unique delivery route for plant science research and of the financial and temporal limitations on it, together with a recognition of what there is to gain economically, environmentally and socially from building a solid and durable passage across the valley of death.

11.2 Some specific steps that could be taken by now Government that could have a tangible benefit for innovation in plant breeding include:

Strong support within the current European simplification reviews of the Seeds Marketing Directives and Community Plant Variety Rights Regulation for reforms aligned with those that have been proposed by the breeding and seeds industry, particularly those relating to farm saved seed and enforcement of IP rights, which would make for a more enabling regulatory environment in which innovation could thrive.

Help to reduce the financial burden on the breeding sector through an imaginative and flexible approach to the delivery of the statutory services for plant variety registration, seed certification and plant health, transferring competence to the industry to deliver these services at lower cost, with no loss of quality at the earliest possible opportunity. This refers to the ongoing review by Fera of the fees it charges for these services, which are unavoidable for the breeding industry and which are set to increase by up to 400% over the next three years, directly taking £1 million out of the industry’s ability to fund R & D unless Government is prepared to consider this alternative.

Targeted funding initiatives for public sector funders; involving the identification of an industry need (eg wheat productivity increase of x% by 2030) and a long term, directed allocation of R & D funding to private/public collaborations designed to achieve these targets—a totally different model of funding to the more usual response mode funding through a range of disparate, broadly defined initiatives.

11.3 Not so immediate and politically difficult, but the Government should consider meeting head on the regulatory obstacles posed by GM technology and emerging breeding technologies to start to reverse the current position of the UK and Europe as an innovation backwater as far as these new technologies and the R & D investment that they can bring is concerned. The sector would like to see the Government fight to ensure that novel breeding technologies are not allowed to become regulated as GMOs, which if it happens could accelerate the exodus of R & D programmes and associated loss of investment by breeding companies from the UK and Europe.

February 2012

1 www.euroseeds.org and www.worldseed.org

2 TAG manuscript TAG-2010-0215.R2, Mackay, Ian; Horwell, Andy; Garner, Jane; White, Jon; McKee, Juno; Philpott, Haidee.

3 www.bis.gov.uk/foresight/our-work/projects/current-projects/global-food-and-farming-futures

4 http://royalsociety.org/Reapingthebenefits/

Prepared 11th March 2013