The case studies
presented in this chapter were developed through key informant interviews with a small, local seed company based in Kenya, correspondence with a university bean breeder, and a review of documents provided by the company and found in online searches. Names of some individuals and entities have been omitted to maintain the anonymity of those consulted. The case studies involve the same seed company interacting with two different universities. The examples are contrasting: one is a successful example of EGS sharing, and the other is an example of how the lack of EGS access can hinder commercialization of a new variety.
3.1 Case Study 1: Successful Partnerships for Highland Bean Varieties
The maize lethal necrosis (MLN) disease
was first reported in Kenya in 2011 and caused significant losses to households (FSNWG 2013). According to de Groote et al. (2016), an estimated 500,000 mt of maize were lost in 2013, an amount valued at US$180 million and equivalent to 22% of average annual production
. As the disease spread in the highlands of the Rift Valley, Kenya’s agricultural extension service
recommended that small-scale farmers plant crops other than maize to avoid infection and spread of the disease. Given that the main staple crops in the Kenyan diet
are maize and beans, beans were a logical choice for farmers to plant. Common beans have not been grown historically in the highland areas because average temperatures were too low,Footnote 1 but in the last two decades rising average temperatures have made it possible to grow beans in these locations (MoALF 2016). Beans grown at high elevation, however, can be more vulnerable to diseases such as angular leaf spot, rust, common bacterial blight and root rot (Wagara and Kimani 2007).
, in collaboration with the International Center for Tropical Agriculture (CIAT)
, developed and was starting to commercialize medium- to high-altitude bean varieties with disease resistance, and three varieties (Chelalang, Ciankui and Tasha) were deemed suitable for the situation arising from the MLN crisis. Between 2011 and 2014, the university partnered with several local seed companies. The involved parties signed contracts through which the university sold breeder seed (a type of EGS) to the seed companies, who received non-exclusive rights for multiplication, upscaling and commercialization. With funding received from AGRA in 2014, the university promoted and marketed the new varieties to help farmers learn about them. One variety in particular, Chelalang, has since been adopted by farmers in the highlands affected by MLN
and is growing in popularity in the Rift Valley region. In 2017, Chelalang was included in an input-supply programme of the Kenyan government, the Kenya Cereal Enhancement Programme
, through which 30,000 farmers each received enough seed to plant half an acre with that variety. A total of 300 mt of Chelalang seed was distributed prior to the long rainy season, stretching from March to May (pers. comm.).
With the spread of MLN disease
creating an urgent need for action, the university and the seed companies quickly reached an agreement on the provision of the necessary breeder (EGS) seed, which was readily available in sufficient quantities. The cost for one ton of breeder seed was approximately US$2900. Egerton did not charge the companies a licensing fee, and under the agreement the companies pay a 5% royalty on gross sales to the university. The marketing efforts funded by development partners (received after the licensing agreements had been signed) helped raise awareness among farmers and stimulate demand. Using Fig. 8.1 as an analytical framework for assessment of this case study, the breeding had already been done in anticipation of future needs, the early generation breeder seed was in stock at the university, and the university quickly shared it through an agreement with local seed companies. The breeder was eager to see it reaching farmers and helped align the public good with commercial interests. Because they had previously worked together, there was an adequate level of trust between the university breeder and the seed companies that the contracts would be honored and the correct royalties paid. The companies were then able to bulk up the breeder seed and obtain all the necessary approvals from the Kenya Plant Health Inspectorate Service (KEPHIS)
to get certified seed to market and thus available to the farmers who needed an alternative to maize. In this case, there was sufficient trust between the actors and smooth coordination for contract establishment, and EGS availability and access were not a hurdle.
3.2 Case Study 2: The EGS Hurdle for a Bean Variety
High in Iron and Zinc
The second case study, by contrast, illustrates the difficulties that often arise. Two NGOs serving small-scale farmers were interested in procuring a bean variety high in iron and zinc
that had been developed by a breeder at a local university using breeding lines provided by CIAT. This variety was developed through a project aimed at increasing the micronutrient quality of beans (CIAT 2005). The variety had been registered by the breeder in the Kenya seed catalogue of 2012, but it was not yet commercially available. One of the NGOs
requested a sample of the seeds from the university breeder to use in demonstration plots, and the other NGO placed an advertisement in a national daily newspaper tendering for seed of a bean variety with the required characteristics. The first NGO also asked a seed company (one of the same companies involved in the project described in the first case study) if seeds of bean varieties with high iron and zinc bioavailability were available. The seed company, realizing a market need due to both the inquiry and the newspaper advertisement, made contact with the breeder at the university with the hope of paying for non-exclusive rights to commercialize the variety, which would allow the company to provide certified seed to the interested NGOs and to sell the variety in the open market.
The seed company, breeder and university office for intellectual property management went through several rounds of negotiation over the course of a year to try to reach an agreement but were unable to do so. The seed company was planning to start with production of 20 mt/year (increasing in subsequent years as demand rose). The draft contract proposed by the university stipulated that the seed company must purchase at least 2 mt of breeder seed every season to cover the costs of human resources, land, technical support, etc., in addition to paying an annual licensing fee. The company, however, was requesting a one-time purchase of only 50 kg of breeder seed. It planned to then bulk up this seed into the required amount 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.