Private Investment in AgriculturalResearch and Technology Transfer in               Africa  Carl Pray, David Gisselquist, ...
The purpose of the paper• Document the amount of private sector R&D and technology  transfer in SSA• To describe its impac...
Based on project “Measuring Private Research and Innovationin South Asia and Sub-Saharan Africa” Gates Foundation(2009-201...
The Industries that introduce new agriculturaltechnologies and conduct agricultural research• Agricultural Inputs   –   Se...
Sources of innovation from Private Sector:1/3 ownR&D, 10% public R&D, ½ imported Activities                # of Source of ...
Cultivars primarily from private sector in South Africa, Tanzania & Zambia;                      from public in Kenya and ...
Private R&D Expenditures SSA, South AsiaMeasures      Kenya      Senegal    South    Tanzania Zambia Bangla India         ...
What explains patterns of private research?                                                               South           ...
South Africa, Tanzania, and Zambia fit economic models,Kenya and Senegal do not  • South Africa has most private R&D the b...
Historically gradual growth in R&D until recentspurt   • Got rid of colonial monopolies and monopsonies but     sometimes ...
Examples of growth – Seed Industry• Liberalization starts in 1990s –   – 1990s government monopolies on improved seed sale...
Examples of Growth of Innovation and R&DProcessing   • Same stages of colonial to nationalization to     privatization as ...
Could African agribusiness research acceleratelike India since the mid 1990s?        Indian Agribusiness R&D Expenditure I...
It is possible that growth will accelerate• Currently Agribusiness in 5 African countries spend as much  as $62 million: >...
Policy options – Some more general policies –some Science and Technology Policy•   Further reductions of trade barriers to...
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Private Investment in Agricultural Research and Technology Transfer in Africa

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By Carl Pray, David Gisselquist, and Latha Nagarajan.
Presented at the ASTI-FARA conference Agricultural R&D: Investing in Africa's Future: Analyzing Trends, Challenges, and Opportunities - Accra, Ghana on December 5-7, 2011. http://www.asti.cgiar.org/2011conf

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  • About one third of the firms report innovations based on their own R&D. 11 reported that the source of their innovations was from other sources – mainly the public sector. Half the firms had imported new technologies and of those about half came from their parent firms while half came from other sources….
  • Private Investment in Agricultural Research and Technology Transfer in Africa

    1. 1. Private Investment in AgriculturalResearch and Technology Transfer in Africa Carl Pray, David Gisselquist, and Latha Nagarajan
    2. 2. The purpose of the paper• Document the amount of private sector R&D and technology transfer in SSA• To describe its impact (not in presentation)• To suggest government policies - options to encourage the private sector to play a larger and more constructive role in the future 2
    3. 3. Based on project “Measuring Private Research and Innovationin South Asia and Sub-Saharan Africa” Gates Foundation(2009-2011) Kenya – Hannington Odame, Elsie Kangai & David Spielman Senegal - Gert-Jan Stads and Louis Sène South Africa - Johann Kirsten, Ruan Stander & Choolwe Haankuku Tanzania – Hannington Odame, Elsie Kangai/Oscar Okumu Rose Matiko Ubwe, and David. J. Spielman Zambia – Mick Mwala and David Gisselquist 3
    4. 4. The Industries that introduce new agriculturaltechnologies and conduct agricultural research• Agricultural Inputs – Seeds – Pesticides – Fertilizers – Animal genetics – Feed – Veterinary pharmaceuticals• Large scale agriculture – tea and coffee plantations, floriculture• Processing industries – sugar mills, tobacco companies 4
    5. 5. Sources of innovation from Private Sector:1/3 ownR&D, 10% public R&D, ½ imported Activities # of Source of innovations (number of organizations with each source; organizations organizations may have >1 one source) reporting Developed in-country Imported from innovations Own R&D Other R&D* Parent firm Other source A. Inputs supply Seeds 31 12 4 12 10 Fertilizers 4 2 1 1 Pesticides 12 3 6 5 Ag Machinery 7 3 3 3 1 Livestock, 9 4 3 4 fisheries inputs B. Large scale production Crops 6 2 2 3 2 Livestock Fisheries C. Processing Crops 5 3 2 Livestock 3 2 1 Fisheries 3 3 1 Totals 80 34 11 28 25 5
    6. 6. Cultivars primarily from private sector in South Africa, Tanzania & Zambia; from public in Kenya and Senegal Number of cultivars registered 2000 to 2009 Crops Kenya Senegal South Africa* Tanzania Zambia Private Public Private Public Private Public Private Public Private Public A. Cereals Maize 67 70 2 8 482 16 37 10 105 8 Rice 7 16 0 0 5 2 Wheat 7 61 20 5 13 4 Sorghum 1 7 67 4 2 1 3 Barley 1 12 1 2 Finger 1 0 0 1 millet Pearl millet 3 0 0 3 B. Other food crops Sweet 5 ? ? 6 5 potato Cassava 9 0 0 5 4 Potato 66 15 3 Sunflower 3 3 61 5 2 3 6 0 Soybeans 5 84 8 11 2 Cowpea 1 3 0 2 1 1 Groundnut 7 2 11 4 1 Common 12 95 16 8 6 4 bean Sugar cane 10 1 37 ? C. Fibres, drinks, drugs Tea 1 4 ? ? Coffee ? ? 9 Tobacco 10 11 3 6 Cotton 2 33 3 1 Total# 71 146 8 31 1010 92 44 54 155 39 6
    7. 7. Private R&D Expenditures SSA, South AsiaMeasures Kenya Senegal South Tanzania Zambia Bangla India Africa DeshPrivate R&D 1.6 -3.2 3.6-4.7 41.0 – 0.9 -1.8 1.3-2.5 10-20 251.0(In 2008 50Mill.US$)Private R&D 0.25- 0.18- 0.49- 0.015- 0.05- 0.07- 0.12as % of Ag 0.05 0.24 0.60 0.03 0.09 0.13GDP# of 12 61 201 32 25 119 2190Scientists– Seed industry about 40% of R&D– Processing industry 30% of R&D 7
    8. 8. What explains patterns of private research? South Bangla Kenya Senegal Africa Tanzania Zambia desh IndiaPriv R&D (In 2008 Mill.US$) 1.6 -3.2 3.6-4.7 41.0 – 50 0.9 -1.8 1.3-2.5 10-20 251.0Market Size Ag GDP (2008 Bill.US$) 6.3 2 8.3 6.2 2.8 15.1 218.1Policies Nom. rates of assistance to Agric. (2000-04) 9.3 -7.5 -0.1 -12.4 -28.5 3.9 15.8 IPR Index(2005) 3.22 2.93 4.25 2.64 1.94 1.87 3.76 Ease of doing business (2009) 98 152 34 128 76 107 134Government research Govt. scientists (2002) 704 116 677 513 120 1610 5103 University Scientists (2002) 180 22 137 84 22 197 8045 Public R&D (2002 Mil.US$PPP) 263 50 585 78 197 218 2713 Public R&D intensity 1.22 1.21 2.16 0.28 0.44 0.36 0.37 8
    9. 9. South Africa, Tanzania, and Zambia fit economic models,Kenya and Senegal do not • South Africa has most private R&D the biggest markets, does not tax agriculture, has strong IPRs and business climate, and substantial public sector research • Tanzania and Zambia has least because markets smaller, heavy taxation of ag, weak business climate and IPR and relative small public sector R&D. • Kenya have much less R&D than expected. It has a substantial market, it supports agricultural sector, business climate and IPRs are middle of these countries and public sector is relatively large • Senegal has more R&D than expected since its ag sector is so small, it taxes agriculture, has poor business climate and a small public sector research program. 9
    10. 10. Historically gradual growth in R&D until recentspurt • Got rid of colonial monopolies and monopsonies but sometimes replaced them with government monopolies • Liberalization – Trade barriers – Allowing entry of new firms and foreign firms • Increased government support of agriculture…. 10
    11. 11. Examples of growth – Seed Industry• Liberalization starts in 1990s – – 1990s government monopolies on improved seed sales broken – 2000s Parastatals dissolve in Tanzania and Zambia, not Kenya – Gradual reduction in trade barriers to seed imports• Support for seed companies and research• Impact of changes – Industry grows • Spread of regional multinationals like Seedco and Pannar, • National companies Western Seed and East African seed company. • MNCs get serious about Africa – Many new varieties available – Increased seed trade 11
    12. 12. Examples of Growth of Innovation and R&DProcessing • Same stages of colonial to nationalization to privatization as seed – Breakup of regional markets reduces market size • Impacts differ by country – In Senegal privatization of cotton and groundnut industries has shifted research from the public to private sector – In Kenya liberalization has created more competition in some processing industries which is good for farmers but may initially lead to less research – Privatization in Zambia &Tanzania led to increased foreign investment in some industries like sugar where Illovo has bought government mills and is bringing in new technology • Regional multinationals --- Illovo, Kenya Breweries, SABMiller 12
    13. 13. Could African agribusiness research acceleratelike India since the mid 1990s? Indian Agribusiness R&D Expenditure Industry 1984-85 1994-95 2008-09 Millions of 2005 US$ Seed and Biotechnology 1.3 4.9 88.6 Pesticides 9 17 35.7 Fertilizers# 6.8 6.7 7.9 Agricultural Machinery 3.7 6.5 40.5 Biofertilizers & Biopesticides na na 1.3 Poultry and feeds na 3.5 7.8 Animal Health 0.9 2.7 18.6 Sugar 0.9 2.5 10.8 Biofuels 0 0 13.1 Food, Beverages & Plantations 1.3 10.3 27.0 Total 23.9 54.1 251.3 13
    14. 14. It is possible that growth will accelerate• Currently Agribusiness in 5 African countries spend as much as $62 million: > the $54 million India spent in mid 1990s• Market for new technology is growing: – Harmonization and regional integration has helped to open up bigger markets but they still are limited relative to India’s – A few African firms are globally competitive – SABMiller in beer, SAPPI and Mondi in paper & forestry, South African citrus – but are not exporters like Mahindra and Mahindra in tractors and UPL in pesticides – Regional and national companies are competitive – Tropicasem, Seedco, Pannar, Illovo. – Some investments by science based MNCs (which account for 40% of India private R&D) – Pioneer and Monsanto. – Investments by MNCs land-based or generic technologies from South– Indians investing in sugar mills & tea plantations; Brazilians in biofuel, Indians & Chinese in generic pesticides and machinery• Appropriability (IPRs) getting stronger but still weak outside 14 South Africa
    15. 15. Policy options – Some more general policies –some Science and Technology Policy• Further reductions of trade barriers to technology introduction and trade leads to larger markets and more incentive to invest in innovation and research• Development of universities, public research, and training of scientists is essential• Privatization along with anti-trust increases competition, technology transfer and eventually technology development• Public private partnerships can stimulate the development of appropriate research and technology development• Gradual strengthening of IPRs when agriculture and agribusiness have started to grow is important 15
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