Insights into Agricultural Innovation: Global Evidence and Lessons for Pakistan is a document that discusses drivers of agricultural innovation and analyzes data on agricultural research and development (R&D) spending and innovation in Pakistan. Key points include: long-term public R&D investment, supportive policies, competitive markets, and engaged farmers drive innovation; Pakistan's agricultural R&D spending has stagnated in real terms since 2000; and Pakistan faces challenges in increasing R&D investment, monitoring policy impacts, and strengthening its intellectual property regime to incentivize more innovation.

1. Insights into Agricultural Innovation:
Global Evidence and Lessons for Pakistan
David J. Spielman
International Food Policy Research Institute

2. Drivers of agricultural innovation
• Long-term investment in public R&D
• Conducive policy environment, appropriate incentives
• Competitive markets that encourage innovation
• Farmers who can experiment, manage risk
• Social rates of returns on R&D: 40 to 78 percent
– High in relative terms – well above returns attainable from many
alternative uses of public funds
– Highest – in crop breeding and varietal improvement
– Varied – but with proven impacts on agricultural production,
poverty reduction, and food prices

3. Agricultural R&D spending in Pakistan
 New ASTI survey covers 250 agencies in ag. R&D
• Federal agencies: PARC, NARC, other
• Provincial agencies: Punjab, Balochistan, Sindh, Khyber Pakhtunkhwa
• Higher education agencies
• Nonprofit agencies
• Private companies
 Data analysis ongoing. All data presented here are preliminary
AgriculturalScienceandTechnologyIndicators(ASTI)Initiative
Source: M.A. Niazi, G.-J. Stads, and L. Gao, PARC/IFPRI

4. Total public agricultural R&D spending
8.0 billion rupees
(2011 constant prices)
2012
95 million US$
(current prices)
 Includes salaries, operating costs, and capital investments
 Includes research on crops, livestock, fisheries, forestry,
postharvest, socio-economics, etc.
 Includes PARC, NARC and all other federal and provincial
government, higher education, and nongovernmental
agencies
Preliminary data

5. Long-term stagnation in R&D spending
Preliminary data
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
MillionPakistanirupees
(inflationadjusted;baseyear=2011)
PARC NARC Other federal
Balochistan Khyber Pakhtunkhwa Punjab
Sindh Higher education

6. Long-term stagnation in R&D spending
• Total R&D spending increased by just 36% in real
terms from 2000 to 2012, but at an erratic pace
• Most growth in R&D spending was driven by higher
education agencies
• Share of federal R&D spending has decreased by only
3% during 2000-12, and still represents >30% of total
spending
• Share of federal spending has decreased only 1% since
devolution under the 18th Amendment
Preliminary data

7. Relative underinvestment in R&D
0.18 0.28 0.40 0.40 0.50 0.51
1.10
3.07
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
AgR&Dspending
asa%ofAgGDP
Preliminary data

8. Federal government Provincial government Higher education
Signs of growth in research capacity
Preliminary data
2000: 3,401 FTE researchers 2012: 3,699 FTE researchers

9. Release of varieties and hybrids, 1933–2013
Source: Rana, Spielman, and Zaidi (forthcoming), based on FSC&RD data
0
5
10
15
20
25
30
35
40
45
50
No.ofvarietiesreleased
Wheat
Cotton
Sugarcane
Rice
Maize
Signs of innovation in the market

10. Seed producers registered with FSC&RD, 1981-2012
Signs of competition in the market
Source: Rana, Spielman, and Zaidi (forthcoming), based on FSC&RD data
6
56
229
257
312
103
0
50
100
150
200
250
300
350
Before
1991
1991-95 1996-2000 2001-05 2006-10 (2011-12)
No.ofregisteredproducers

11. Signs of policy progress…
• 2015 Amendment to the Seed Act
– Recognizes the private sector in all aspects of the seed system:
breeding, multiplication, marketing, distribution
– Extends regulatory control over private sector
– Extends regulatory control over hybrids as well as varieties
– Allows for farmer saved seed
• Provision 2(f)(ia): “person means any natural or legal entity and includes an
association of persons, firm, partnership, society, group of persons, a public or
private limited company, corporation, cooperative society or any other body
corporate”
• Preliminary assessment:
– Slightly better than business as usual if there is federal,
provincial implementation capacity

12. …and tough decisions ahead
• Draft Plant Breeders’ Right Act
– TRIPS and WTO membership requires plant variety protection
via patents or a sui generis system
– Variety registration only has to pass a novelty test (DUS), does
not have to be superior to existing varieties (VCU)
– Provides scope for rewarding public breeders
– Protects farmers’ right to save, use, sow, exchange and non-
commercially sell seed
– But otherwise, provides limited farmer protections when
compared to the 2001 Indian PPV Act
• Preliminary assessment:
– Judicial capacity to process infringements remains an unknown

13. Concluding thoughts
• There is significant scope for increasing public R&D
spending in line with global comparators
• There is a need to monitor and evaluate the impact
of public policies and investments that influence
technological change, especially in the seed system
• Evaluation requires a minimum dataset of
– High-res, long-term household data on production
– Industry performance: releases, sales, revenues
– Industry structure: competitiveness
– Innovation: Tools, methods, products
– Regulation: Costs of doing business

14. The end

15. Rate of innovation ≈ varietal release rate
19
8
82
16
98
0 0 2
118
0
20
40
60
80
100
120
140
Bangladesh,
Maize (all),
1994-2011
Indonesia,
Maize
(composite),
2006-2012
Indonesia,
Maize (hybrid),
2006-2012
Pakistan, Maize
(all), 1990-2013
Vietnam, Maize
(all), 1977-2012
No.ofreleases
Country, maize type, years
Maize releases for
selected crops, years and countries
Public Private Combined (public + private)
Sources: Authors, based on data from Bangladesh by Naher and Spielman (2014); Indonesia: Jamal (2014); Pakistan: Rana (2014); Vietnam: Mau Dung (2014).

16. Rate of innovation ≈ varietal aging
21 20 20
19
0
5
10
15
20
Marginal Small Medium Large
Years
Landholding size
Average age of top 5 rice varieties under
cultivation, by farmers’ landholding size,
Bangladesh
Source: Naher and Spielman (2014) based on data from Ahmed (2013)
The top 5 varieties in
Bangladesh account
for 53% of area under
rice cultivation

17. 1,294
2,185 2,070
0
500
1000
1500
2000
2500
HH
Indexvalue
Paddy Wheat
Maize
Competition ≈ seed market
concentration
Authors, based on data for Nepal from Sah (2014).
Concentration in Nepal’s seed market, by crop, 2012
1,294
2,185
2,070
0
500
1000
1500
2000
2500
HH
Indexvalue
HH index values (0-10,000)
64
87
82
9391
99
0
20
40
60
80
100
CR4 CR8
Percent
CR4 & CR8 (%)

18. Competition ≈ innovation market
concentration
0
2000
4000
6000
8000
10000
12000
0
20
40
60
80
100
120
2006 2007 2008 2009 2010
HHI
CR4(%)
Concentration in India’s innovation market
viz. transgenic R&D, based on field trial data,
1997–2008
Four-firm concentration ratio HHI

19. Innovation incentives ≈ IP protections
114 117
242
59
107 123
10
934
252 260
180
85
18 43
0
100
200
300
400
500
600
700
800
900
1000
No.ofapplications
Applications for plant varietal protection,
India, 2007-2014
Public
Private

20. Innovation incentives ≈ IP regime strength
Source: Author, based on data from Ginarte and Park 1997; Park and Wagh 2002; Park 2008
China India
Brazil South Africa
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Enforcement of
IPRs
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Coverage of IPRs