The Agricultural Biotechnology Industry in the UK ... - Cabinet Office


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Costs and Benefits of GM Crops – Industry and Science
Strategy Unit
The Costs and Benefits of Genetically Modified (GM) Crops
Background Working Paper for the Analysis of the Costs and
Benefits to Industry and Science
(30 January 2003)
Page 1 of 28Costs and Benefits of GM Crops – Industry and Science
Background Working Paper for the Analysis of the Costs and
Benefits to Industry and Science
Table of Contents
1. INTRODUCTION................................................................................................................................ 4
2. BIOTECHNOLOGY AND GENETIC MODIFICATION .............................................................. 5
2.1 BIOTECHNOLOGY............................................................................................................................. 5
2.2 GENETIC MODIFICATION .................................................................................................................. 8
3.1 COMMERCIAL GM CROP DEVELOPMENT........................................................................................ 10
3.2 HORIZONTAL INTEGRATION ........................................................................................................... 12
3.3 VERTICAL INTEGRATION................................................................................................................ 12
3.4 LINKS BETWEEN AGRICULTURAL AND WIDER BIOTECHNOLOGY .................................................... 13
3.5 CURRENT SITUATION ..................................................................................................................... 14
4. AGRICULTURAL BIOTECHNOLOGY IN THE UK.................................................................. 15
6. GM CROP DECISIONS AND WIDER BIOTECHNOLOGY...................................................... 19
6.3 ISSUES OF CONCERN TO OTHER BIOTECHNOLOGY SECTORS............................................................ 21
7. PROPOSED ANALYTICAL APPROACH..................................................................................... 22
7.1 ADDITIONAL INFORMATION GATHERING........................................................................................ 22
7.2 HOW THE ANALYSIS WILL BE CONDUCTED..................................................................................... 23
7.3 LINKS WITH OTHER ASPECTS OF THE SU PROJECT WORK ............................................................... 24
7.4 QUESTIONS FOR DISCUSSION.......................................................................................................... 24
ANNEX 1. GM CROP DEVELOPMENTS......................................................................................... 26
ANNEX 2. PLANT BREEDING DEVELOPMENTS ........................................................................ 28
Page 2 of 28Costs and Benefits of GM Crops – Industry and Science
This background paper considers the costs and benefits of growing (or not
growing) GM crops in terms of their impact on the agricultural biotechnology
sector and on wider biotechnology and the associated science base in the UK.
Biotechnology offers the prospect for long-term growth as a driver of the
knowledge economy, and could generate skilled jobs and significant sources of
revenue. It is an enabling technology with potential applications in many different
areas of activity - agriculture is just one sector among many where it could be
applied. Biotechnology could address issues relating to health, ageing, food,
environment, and sustainable development. Costs and benefits in terms of the
contraction, expansion or re-direction of biotechnology in the UK will have
consequences for the economy, the environment and society.
The UK plays a significant role in international biotechnology developments,
especially in the pharmaceuticals industry and in up-and-coming areas of medical
biotechnology such as stem cell research. Two of the world’s top four
pharmaceutical corporations are UK-owned; the industry employs 65,000 people in
the UK. In addition to the presence of major pharmaceutical companies, the UK
has approximately 300 specialist biotechnology companies, providing 19,000
skilled jobs.
The UK also has a number of centres of excellence in plant biotechnology and crop
science at public sector research establishments and universities. However, this
position is not matched in commercial agricultural biotechnology. Six main
companies dominate the sector: Bayer, BASF, Dow, DuPont, Monsanto, and
Syngenta - none of these multinationals has its headquarters in the UK.
Possible areas where costs and benefits could arise under different GM and non-
GM scenarios include:
• levels of inward investment from the major multinational agricultural
biotechnology companies;
• commercial activity in new agricultural and plant biotechnology
• amount and direction of publicly-funded research in agricultural and
plant research; and
• UK involvement in other applications of biotechnology.
The proposed approach to take this part of the project forward is to assemble more
complete background information and distil from it, with advice from stakeholders,
a set of factors that appear to influence decisions about commercial and public
sector investment. The subset of factors which is brought into play under each of
this study’s GM and non-GM scenarios will be used to estimate the consequences
for biotechnology in the UK.
Page 3 of 28Costs and Benefits of GM Crops – Industry and Science
1. Introduction
This note sets out some of the background information for the analysis of the costs and
benefits of growing (or not growing) GM crops for industry and science in the UK. It
contains some preliminary thoughts on a framework for analysing the potential
consequences of different scenarios, and an outline of the proposed next steps in taking
this part of the SU project forward. The scenarios are described in detail in the SU
project’s Overview Methodology paper section 3.1. Comments are invited on the
background information and the proposed methodology.
The approach to analysing the impacts on industry and science in the UK under each
scenario could be described in terms of three main questions:
• What would be the effects on agricultural biotechnology?
• Will there be effects on other applications of biotechnology or on science
more generally?
• How will these effects be felt in terms of costs and benefits?
Another important area to consider will be the effects of changes to the agricultural
biotechnology sector on other sectors of the economy and the environment. Knock-on
effects in these areas are not addressed in this paper, but will be taken forward in
conjunction with some other areas of work within the overall Strategy Unit GM Crops
study: “Costs and Benefits in the Product Chain” and “Costs and Benefits to the
Environment and Human Health”.
The background information in this paper covers:
• a very brief outline of biotechnology and genetic modification (Section 2);
• the recent history of the agricultural biotechnology industry (Section 3); and
• an outline of the agricultural biotechnology industry in the UK (Section 4).
The framework for analysing potential consequences includes:
• an attempt to distil the background information into a set of influences on
the agricultural biotechnology sector (Section 5);
• some comments on GM crop decisions and wider biotechnology in the UK
(Section 6); and
• an outline of the next steps to be taken in assessing the impacts (Section 7).
One of the issues running through the paper is the difficulty of providing precise
definitions of the areas of activity involved. For the purposes of this initial working
paper, “biotechnology” is used inclusively, to denote the widest possible range of
activities. “Agricultural biotechnology” is used to denote any area where
biotechnology is applied to agriculture – and thus includes GM crops but also many
other applications. Where comments relate specifically to transgenic agricultural plant
varieties, they are referred to as “GM crops”. As the project progresses to its more
Page 4 of 28Costs and Benefits of GM Crops – Industry and Science
analytical stages, more precise definitions will almost certainly be required, and
comments on definitions and relevant data sources are invited.
2. Biotechnology and genetic modification
Biotechnology – the application of knowledge about living organisms, and their
components, to make new products and develop new industrial processes – has been
described as “the next wave of the knowledge-based economy” to follow information
technology . Estimates of the level of economic influence that biotechnology will have
3 4
vary ; the European Commission quote a figure of over €2000 billion by 2010 .
Governments around the world, including the UK, have been keen to develop their
5 6
biotechnology capabilities : biotechnology can generate skilled jobs and significant
sources of revenue. In addition, biotechnology could offer “opportunities to address
many of the global needs relating to health, ageing, food and the environment, and to
sustainable development” , and so contributing to global biotechnology development
may provide some important social benefits.
Central to government support is the perception that biotechnology will find
applications in many different sectors. If the potential pervasiveness of biotechnology
makes it of strategic importance to knowledge based economies, any country that fails
to develop its biotechnology capabilities could fall behind others in terms of
productivity and ultimately in per capita incomes .
2.1 Biotechnology
The principal areas where biotechnology has been applied to date are health care,
agriculture, and for industrial and environmental purposes . Applications of
biotechnology could in future go wider than life science areas. For example biological
molecules could find uses in computing and information processing . The use of
biotechnology in the life sciences has an effect on supply industries and research,

DTI (1999) Genome Valley, a report on the economic potential and strategic importance of
biotechnology in the UK.
Life sciences and biotechnology – A Strategy for Europe COM (2002) 27.
Biotechnology Indicators and Public Policy, OECD Directorate for Science, Technology and Industry
May 2002, DSTI/EAS/STP/NESTI(2002)8.
COM (2002) 27, op cit. Approximately £1,285 billion.
In a speech to the European Bioscience Conference, 17 November 2000 the Prime Minister said,
“Biotechnology is the next wave of the knowledge economy, and I want Britain to become its European
Tait, J et al (2001), “Policy Influences on Technology for Agriculture – Final Report” European
Commission DG XII Project No. PL 97/1280
COM (2002) 27, op cit.
OECD (2002), op cit.
OECD (2002), op cit.
Foresight Information Technology, Electronics and Communications group Technologies Report,
June 2000.
Page 5 of 28Costs and Benefits of GM Crops – Industry and Science
leading to a wide group of sectors where biotechnology already has an economic
influence, shown in Table 1 below.
Table 1. Sectors of the economy influenced by biotechnology
Sector Biotechnology-related activities
Animal healthcare Application of molecular & cellular biology to veterinary
drugs & vaccines, feed additives, animal improvement
Bioprocessing Supply of fermentation, culture, separation & purification
expertise and methods for manufacturing (including
Chemicals Development of biological products or processes for the
fine, speciality & bulk chemical (including
pharmaceutical) industry
Contract research Fee-for-service R&D
Crop agriculture & Application of molecular & cellular biology to plants
Database development Bioinformation generation, storage & handling tools
& management
Diagnostics Development of products for defining status or
susceptibility in any applications sector (health, food,
environment etc.)
Environmental Application of molecular & cellular biology directly to
restoration or preservation of a healthy environment or to
the avoidance of adverse environmental effects
Food technology Development, supply of enzymes & other processing aids
Human healthcare Application of molecular & cellular biology to
biopharmaceuticals and medical device development,
including drug delivery companies
Reagent & equipment For R&D purposes
Technology service Companies whose main business is in developing toolsets
providers to aid the R&D efforts of other companies
The fact that so many areas of activity could be influenced by future developments in
biotechnology creates problems in setting boundaries for the sectors that should be
included in any analysis, and which indicators should be used to show relevant
strengths and weaknesses.
Many different indicators of biotechnology activity and excellence are used. Some are
relevant to current commercial activity: numbers and sales of products, numbers of
companies and their turnover and employment, patent licensing agreements. Others
reflect the importance of the scientific knowledge base to biotechnology development,
and relate to the research and development stages: products in trial, public and private
sector R&D investment, patents, university and public sector research establishment
publications, student numbers.

Source: Arthur Andersen (2001) see,,EN-countrylist-617-
Page 6 of 28Costs and Benefits of GM Crops – Industry and Science
Patent applications are a commonly used indicator, but one which needs to be
interpreted with some caution. For example, noting the number of patents fails reflect
the fact that some patents represent more important advances than others, many patents
are taken out for ideas that are unlikely to be commercially exploited, and variations in
numbers of patents between countries can reflect differences in patent systems.
However, patents are important in marking ownership of knowledge that could find
future applications, and so are relevant to biotechnology. Figure 1 below shows some
typical patent data.
Figure 1: Biotechnology patent applications to the European Patent Office in 1990
and 1997 (OECD data )
United States
European Union
United Kingdom
Belgium 1997
0 200 400 600 800 1000 1200 1400 1600
Number of biotechnology patent applications to the EPO
By any measure the USA is the world leader in biotechnology, but the UK is also well
positioned: it vies with Germany as the leader in the EU . In 2000, the UK had around
300 specialist biotechnology companies, generating revenues of £1,300M, employing
some 19,000 sector specialists and a total of 40,000 staff in all. 35% of these SMEs are
working in biopharmaceuticals, 22% in diagnostics, 15% in agri/environmental and
over 25% are biotech-suppliers .
Many major international pharmaceutical companies also have bases in the UK,
employing 65,000 people directly . Pharmaceuticals and medical products are third in
the list of UK trade export surplus sectors (£2,400 million in 1998) . In 2000, £150
million of venture capital was invested in 98 pharmaceutical start-up companies in the

OECD (2001) Biotechnology Statistics in OECD member countries: compendium of existing national
statistics, DSTI/DOC(2001/6).
Allansdottir, A et al (2002), “Innovation and competitiveness in European biotechnology”, Enterprise
Directorate-General, European Commission Paper No. 7.
Source: DTI
Not all these jobs could be said to be directly biotechnology based: only 16% of new drugs
introduced onto the world market since 1997 were actually biopharmaceuticals (OECD, op cit.), but the
sector uses biotechnology more widely, especially in research and testing.
Source: DTI.
Page 7 of 28Costs and Benefits of GM Crops – Industry and Science
UK. DTI figures put the total market capitalisation of the UK biotechnology industry
in 2000 at £18 billion.
Biotechnology also has many applications in industrial processing and environmental
clean-up processes. Biotechnology can offer cleaner, energy-efficient and generally
more environmentally-friendly alternatives to chemical and mechanical processing in
many areas including paper making, petrochemicals refining, land remediation and
food processing . The global environmental technology industry could be worth over
$1500 billion by 2010, with biotechnological processes accounting for 15-20% of
this . However, not all biotechnological applications in industrial and environmental
areas would make use of advanced biotechnology or genetic modification, for example
all commercial uses of bio-remediation in the USA use naturally-occurring micro-
organisms .
The DTI have identified industrial and environmental applications of biotechnology as
an under-exploited area in the UK, with both the market for, and potential suppliers of,
biotechnology-based industrial products consisting of small companies in a rather
20 21
fragmented overall picture . The OECD note that “there are only a limited number
of current applications of biotechnology for industrial processing (apart from the use of
enzymes in some processes)”, and much of the discussion and information relates to
potential future exploitation of the technology, rather than the actual level of activity.
2.2 Genetic modification
Making use of living organisms, or products derived from them, is a theme that runs
through human history. However, recent advances in genetics provide a vastly
improved framework for understanding the processes that determine the potential uses
of different organisms.
Genetic modification has been a crucial tool in expanding this knowledge: identifying
the functions of particular genes and how these functions interrelate with other
biochemical processes has been made possible by modifying specific genes within
animals, plants or microbes. In addition to its importance to research, GM is also one
of a wide variety of methods that can also be used to develop new products and
processes to exploit the knowledge created.
The possibilities for developments in GM are open-ended, and any picture of what
products are likely to be produced in the future is bound to be fairly speculative.
Technical, financial and demand-side uncertainties are all influential in deciding what
products might be brought to market. Predicting the future applications of GM
techniques needs to take into account a number of different dimensions in which
developments might occur:

OECD (2002) op cit.
DTI LINK Biotech, April 2001 (ISSN 1465-4083) See also POST Note 136, April 2000,
Parliamentary Office of Science and Technology.
OECD (2002) op cit.
DTI LINK Biotech, April 2001 (ISSN 1465-4083) See also POST Note 136, April 2000,
Parliamentary Office of Science and Technology.
OECD (2002) op cit.
Page 8 of 28Costs and Benefits of GM Crops – Industry and Science
• which traits will be identified as being the direct result of particular genes or
groups of genes (and hence a possible target for transfer by GM);
• which species will the traits be introduced into; and
• how quickly will the development proceed from creating the initial concept,
through laboratory studies and development of a viable product, to
regulatory approval and market testing.
Traits which depend on the activity of a single gene or cluster of genes are the easiest
to identify and transfer successfully between species. Traits which are the result of a
number of different related biochemical pathways - regulated by a series of genes that
might be distributed across different parts of the genome - are more difficult to
manipulate. Thus the time and effort required to bring about a particular change in a
plant or animal through genetic modification is not easily quantifiable – significant
scientific obstacles can slow down the development of new products.
A list of GM crops that are commercially developed or are the subject of research or
testing is at Annex 1. Other areas of GM development include animals, where GM
mice have been used for a number of years in medical research; a therapeutic enzyme
produced in the milk of GM sheep is being tested; and GM pigs are being developed in
the laboratory that could provide a source of organs for human transplants. GM
bacteria have also been used to produce enzymes for food processing (notably a
version of chymosin used in cheese manufacture); GM bacteria are also being tested
for use as vaccines against diarrhoea and other diseases.
3. Recent history of the agricultural biotechnology industry
Within the wide range of activities touched upon by biotechnology, the agricultural
biotechnology sector is most likely to be directly affected by decisions on
commercialisation of GM crops. The story of how and why the global agricultural
biotechnology industry has arrived at its current position provides a starting point for
analysing the effects of commercialisation decisions in the future.
Since the 1960s, in the developed world conventional agriculture has been based on
high input, high yielding intensive production. The elements crucial to developing and
sustaining this practice have been highly productive crop varieties, and inputs that
allow those varieties to be grown with optimum efficiency (e.g. pesticides, fertilisers
and irrigation).
Despite supplying complementary products to the same customers (farmers), the
companies involved in plant breeding and seed production have historically been
separate from the companies that produced bulk agrochemicals.
Pesticide production has always been a global industry, with large research costs to
develop new products, significant regulatory constraints and high levels of dependence
on intellectual property protection.
Seed companies range from small privately owned companies to large co-operatives
like Force Limagrain in France. They have often operated within national or regional
Page 9 of 28Costs and Benefits of GM Crops – Industry and Science
markets for which they have developed specific seeds and networks of distribution and
Since the early 1980s the two sectors have undergone considerable vertical and
horizontal integration. There are now six multinational companies that dominate the
agricultural biotechnology, agrochemical and seed industries (although there are still
significant, independent seed companies). Whilst there are many reasons why
industries consolidate, there are some particular factors that have helped set the context
for these changes in the agricultural chemical and seed industry:
• Limited potential for growth in sales of existing pesticides and increased
costs of developing new ones - results of increasingly strict environmental
regulation and the approaching end of patent protection.
• The need to recoup investment in new genetic modification technology that
was being used to create novel value-added crops and crops that extended
the marketable life of existing broad-spectrum herbicides .
3.1 Commercial GM crop development
By the early 1980s the techniques of genetic engineering had moved on from academic
laboratory studies and were generating practical applications in many different areas.
For the agricultural industry, genetic modification of crops represented an attractive
way forward since such crops:
• took advantage of the research expertise that had been built up in plant
• allowed a single change to be made to existing crop varieties, so building on
many years of work developing elite varieties of crops;
• could be protected under patent law ;
• could extend the markets for broad-spectrum herbicides and be sold in
combined seed/herbicide deals (e.g. glyphosate- or glufosinate-tolerant
crops); and
• potentially created a range of options for crop protection, increasing crop
yield and developing product quality traits.
An outline of current and future applications of GM crops is at Annex 1. However,
genetic modification is only one of a wide and expanding range of plant breeding
techniques. Annex 2 gives a timeline for some key developments in plant breeding.
The relationship between GM and some of the other forms of plant breeding is outlined
in Box 1.

I.e. those which kill a wide range of plants, as opposed to only affecting a specific plant type.
As opposed to plant breeders protection rights, a less rigorous protection scheme that is used for
conventionally-bred plant varieties.
Page 10 of 28Costs and Benefits of GM Crops – Industry and Science
Box 1. Plant Breeding and GM
The huge diversity of plant species (and varieties within each species) has been
produced by naturally-occurring processes of genetic mutation, genome mixing from
sexual reproduction, and selection pressure from environmental changes. Human
intervention in these processes – especially via selection of offspring for particular
characteristics and manual pollination - is the basis of traditional plant breeding.
Since the turn of the last century, scientific developments have increased the range of
techniques available to plant breeders, providing methods to (i) increase the diversity
of characteristics available, (ii) overcome barriers to breeding between different plants,
and (iii) to speed up the process of selecting plants with desirable traits. Some
examples are outlined below.
Doses of radiation or mutagenic chemicals can change the DNA within plant cells,
creating the potential for a range of new characteristics that might be expressed. This
technique – induced mutation - has been used to produce many of the currently-used
crop varieties including the popular malting barley Golden Promise.
There are a number of techniques to overcome barriers to plant breeding. In protoplast
fusion, individual cells with their outer walls removed are fused, and the resulting
single cell grown in a culture medium. This approach has been applied to create new
varieties of oil seed rape and potatoes. In embryo rescue, plant embryos created from
cross-fertilisation are removed and grown outside the parent. This allows the creation
of offspring from crosses that might otherwise fail to produce viable seed.
In tissue culture selection, nutrient medium is used to grow many millions of
individual plant cells. These can then be exposed to damaging conditions or chemicals
(e.g. herbicides). Only cells which happen to possess elevated levels of resistance to
the hazard will survive. These can be grown in the culture medium and be used to
generate new plant varieties, for example the herbicide-resistant maize variety
Clearfield Corn.
Developments in genetics have opened up additional possibilities. Mapping the
genome of crop species and studying the functions of individual genes (genomics)
allows the genes that confer desirable traits to be identified. In marker-assisted
breeding, offspring from crossing experiments are screened to see if they contain
desired genes at an early stage in the breeding programme.
The desired gene can also be inserted into a plant (or switched off) using recombinant
DNA technology. Creating new varieties in this way is referred to as genetic
modification – the source of the current range of GM crops. GM techniques allow the
transfer of genes between species that are completely unrelated. GM also makes it
possible to transfer only the desired sections of DNA.
The success of a plant variety as an agricultural crop depends on the combination of a
wide range of traits (e.g. disease resistance, susceptibility to weed competition,
productive yield, timing of maturity for harvesting, and stress tolerances such as frost
resistance). Irrespective of the technique or combination of techniques used to
introduce a new trait, traditional approaches are needed to test the performance of the
new variety and to optimise the balance between the expression of the new trait and the
other characteristics that are needed to make the crop successful.
Page 11 of 28Costs and Benefits of GM Crops – Industry and Science
3.2 Horizontal integration
The GM crop industry has followed typical patterns of innovation and industrial
dynamics . The early stages were characterised by many different research groups and
companies developing different approaches to exploiting the technology. Dedicated
biotechnology firms were created and existing pharmaceutical and chemical companies
added plant biotechnology to their research portfolios (often as part of general “life
science” divisions ).
The industry was then driven onto a spate of mergers and acquisitions due to high costs
of research and development and of gaining regulatory approval. These factors offered
opportunities for economies of scale and exploitation of complementary Intellectual
Property Rights (IPR). Almost all the dedicated biotechnology firms were taken over
by multinationals; most of those that remain independent are ones which have
concentrated on providing enabling technologies (such as developing genetic markers)
to support companies involved in developing new plant varieties or crop protection
This pattern of horizontal integration was particularly clear-cut in the US, where there
had been a large number of biotechnology start-up companies working in similar
areas . In the UK and France, the restructuring of major chemical companies that had
been involved in crop science (ICI, Rhône-Poulenc) involved the selling off of their
agricultural divisions. In Germany, the major chemical companies (Bayer, BASF)
tended to maintain more diverse portfolios of commodity and speciality chemicals, and
these companies are still involved in agrochemicals and crop science research.
3.3 Vertical integration
Most of the research to develop GM crops had been conducted either by large chemical
companies or dedicated biotechnology firms, rather than by seed companies.
Consequently, the IPR relating to the modifications were held by separate companies
from those holding the seed (germplasm) on which the modifications needed to be
effected. Both IPR and germplasm are essential for commercialisation of GM crops,
and in the initial stages many of the companies owning the IPR chose to enter into
contracts with the seed companies to produce and distribute GM crop varieties. This
strategy allowed them to concentrate on the high value-added end of the agricultural
technology business but still get their GM technology into the market place.
However, two factors made this practice untenable :

Kalaitzandonakes, N and Hayenga, M (2000), “Structural Change in the Biotechnology and Seed
Industrial Complex: Theory and Evidence” Transitions in Agbiotech: Economics of Strategy and Policy
Ed. W. H. Lesser.
The basis of a “life sciences” strategy was to use knowledge of living organisms to create a range of
different biotechnological applications: seed and agrochemicals for plant protection, veterinary products
for animals, and diagnostic and therapeutic products for human health care.
The number of companies entering the US GM crop sector peaked in the early 1980s,
Kalaitzandonakes (2000) op cit.
Kalaitzandonakes (2000) op cit.
Page 12 of 28Costs and Benefits of GM Crops – Industry and Science
• Legal disputes over ownership of GM technology IPR. Many companies’
GM techniques overlapped at the level of the fundamental science, and IP
protection was found to be more effective in specific applications of GM
technology e.g. methods to create particular GM seed varieties.
• Slow development between the initial research and the final commercial
release of any product. Such long passages of time created difficulties in
drawing up initial contracts that covered all the technical and commercial
possibilities that might emerge during the product development.
Companies owning GM technology began to buy seed businesses to create vertically
integrated organisations that dealt with chemicals, GM technology and seeds. This
became the primary strategy of agricultural biotechnology firms for profiting from
their innovation, particularly in the USA. The most acquisitive companies between
1997 and 2000 were Monsanto (which bought heavily in US, South American and
European seed companies) and DuPont (which bought Pioneer HiBred, the leading US
seed company).
3.4 Links between agricultural and wider biotechnology
The life science strategy that temporarily united pharmaceutical and agricultural
biotechnology companies was founded on the idea that there would be strong potential
for synergy between genetic research across a wide range of species (humans, animals
and plants). Identifying the genes that control the production of particular proteins,
modifying them and studying their role within living systems (functional genomics and
proteomics) provides valuable information for both agricultural and pharmaceutical
However, maintaining the two activities within the same companies became
problematic since the agricultural sector had less profit potential that the
pharmaceutical sector. Furthermore, synergies at the discovery level were not
replicated in marketing and sales. The agricultural sector developed living organisms
(seeds) bred or modified to contain desirable genes that were released into the
environment. The pharmaceutical sector was interested in the chemicals whose
production was controlled by a desirable gene, or chemicals that interrupted the
activity of undesirable ones - these interests did not involve releasing GMOs into the
environment .
Links between agricultural biotechnology and industrial and environmental
applications are less often discussed. Areas where overlap could occur include food
processing, paper processing, and phytoremediation (use of plants to clean up polluted

Tait (2001), op cit.
Page 13 of 28Costs and Benefits of GM Crops – Industry and Science
3.5 Current situation
Of the six major international companies that now dominate the sector, three are US-
owned: Monsanto, DuPont and Dow, and three are European: Bayer and BASF (both
German) and Syngenta (Swiss). These companies either specialise entirely in
agricultural biotechnology, pesticides and seeds (Monsanto, Syngenta) or have
developed specialist businesses to cover these areas (Dow AgroSciences, DuPont
Agriculture and Nutrition, BASF Plant Science, Bayer Crop Science). Monsanto is the
world leader in terms of GM crop sales; in 1998 it had 88% of the total market.
The companies have varied histories – DuPont, Dow, BASF and Bayer are traditional,
well-established chemical companies, with long involvement in agrochemicals;
Monsanto had focussed on discovery of herbicides but became a leader in GM
technology and grew by acquisitions; Syngenta was formed from a combination of
ICI’s former agrochemicals division and the agriculture arm of Novartis, a Swiss
pharmaceutical and agribusiness company.
In terms of pesticides, the six companies supply 72% of the $30 billion global market.
Figure 2 below indicates their collective influence.
Figure 2. World Top 9 Pesticide Producers (2000)
The seed market is more complex, but Figure 3 shows that the same companies also
control a major proportion of the global seed market (apart from BASF – a relatively
recent entrant into the plant biotechnology industry). It should be noted that the
commercial seed market represents only about one-third of total seed used globally.

J. Bijman and P-B Joly (2001), “Innovation Challenges for the European Agbiotech Industry”,
AgBioForum Vol 4 No.1, pp4-13. At the time the data were collected, Bayer had not yet taken over
Aventis Crop Science; the table shows the combined 2000 sales of Aventis ($3,534M) and Bayer
Page 14 of 28
Dow AgroSciences
Sumitomo Chemical
Pesticide Sales in 2000 ($US million)Costs and Benefits of GM Crops – Industry and Science
One third of seed is farmer-saved, and another third comes from breeding programmes
run by national/public institutions .
Figure 3. The Top 10 in the World Seed Industry (1999)
Although major seed companies routinely make use of modern biotechnology
(molecular markers and cell technologies) in their crop development programmes ,
GM itself represents only a small part of their expenditure. A recent survey of
European seed firms estimated that only 10-38% of seed development budgets are
spent on genetic modification .
4. Agricultural biotechnology in the UK
The mergers and acquisitions that formed the main agricultural biotechnology
companies have resulted in UK-based commercial research either closing down or
passing into foreign ownership. Agrochemicals continue to generate most of the
revenue of the agricultural biotechnology industry , and none of the large
agrochemicals companies is now UK-owned. Globally, the agricultural biotechnology
industry spends about $3.2 billion on R&D.
It is not only the agrochemicals parts of UK business that have been caught up in the
international consolidation, seed companies have been affected as well. In 1996 Zeneca
Seeds (formerly part of ICI) merged with the Dutch company Royal Van der Have

C. James (1997) Progressing Public-Private Sector Partnerships in International Agricultural
Research, ISAAA Briefs No.4 ISAAA: Ithaca, NY.
Bijman (2001) op cit. The sales included for Monsanto include sales made by Delta & Pine Land
($301M), then a separate company subsequently taken over by Monsanto. The sales included for Bayer
were made by Aventis Crop Science, a separate company in 1999, taken over by Bayer in 2002.
Tait (2001) op cit.
Three of the main six companies’ shares are traded on the London Stock Exchange (BASF, Bayer,
Syngenta) and all three are listed under Chemicals, rather than Pharmaceuticals and Biotechnology.
Page 15 of 28
Limagrain (Fr)
Seminis (US)
Advanta (NL)
Sakata (Jp)
KWS (Ge)
Do Ag Scienc
w ro es
Seed Sales in 1999 ($US million)Costs and Benefits of GM Crops – Industry and Science
Seeds to form Advanta, which still has a significant research and development capacity
in the UK. Plant Breeding International (a former public sector organisation based in
Cambridge that specialises in varieties of wheat) was bought by Monsanto from
Unilever in 1998.
Public sector institutes play a major role in the UK’s plant research activities . The
main ones are shown in Table 2 below. Research is also conducted in many university
Table 2. Main public sector research institutes relevant to crop research (2001)
Institution Location Staff Income
John Innes Centre (BBSRC) Norwich 900 £27.5M
Rothamsted Research Rothamsted, Long Ashton 550 £26.8M
(BBSRC) and Broom’s Barn
Horticulture Research Wellesbourne and East 550 £18.9M
International (DEFRA) Malling
Scottish Crop Research Institute Dundee 350 £13.4M
The UK’s principal body involved in finding academic research into plant
biotechnology is the Biotechnology and Biological Sciences Research Council
(BBSRC). Their expenditure on relevant research last year is set out in Table 3 below.
Table 3. BBSRC research expenditure 2001/02 (£M)
Institute Central Research Total
Support Grants Grants
Total research investment 54.4 122.3 176.7
Agri-biotech investment 21.7 33.2 54.9
GM crops 17.9
GM animals for agriculture 4.7
One factor apparent from the BBSRC funding data is that there are many activities
within agricultural biotechnology that do not relate to GM crops.
Genome mapping and research into gene expression are being used to develop
molecular markers to accelerate plant breeding programmes for conventional and
organic farming. Biotechnology is also used to develop diagnostic techniques to
improve targeting of pesticide applications. Fungicides based on biodegradable

Public sector research has traditionally been more closely linked to seed companies and plant
breeders than with agrochemicals development.
These institutes conduct a wide range of work, only some relates directly to GM crop development.
DEFRA Central Science Laboratory, York (350 staff, £34.5M income) also conducts some crop
The Long Ashton site is due to close March 2003.
BBSRC letter to Strategy Unit, 8 November 2002
Page 16 of 28Costs and Benefits of GM Crops – Industry and Science
products and biological control systems using predators for particular pests and
semiochemicals have also been developed using biotechnology.
It is possible that if the UK and the EU were not to commercialise GM crops, some of
these other areas of research and commerce would be boosted. Supplying demand for
non-GM produce would necessitate the continued development of seed lines that have
not been genetically modified, as well as associated pesticide technology or processes
for pest management. Conversely, if the UK does not commercialise GM crops in a
context where they proved to be successful and widely grown elsewhere, it is possible
that the competitive position and profitability of UK farming could suffer. This might
have detrimental effects on research and development in support of a non-GM UK
4.1 New commercial ventures, SMEs and agricultural biotechnology
In terms of generating companies from academic research – an important step in
modern innovation policy - the BBSRC has told us that although it does not collect
detailed information on university spin-out companies, it “is not aware of any
university spin-out companies that relate specifically to GM crops. To date the
majority of University spin-out companies relating to BBSRC supported research have
been in the healthcare sector. No companies have been spun-out from BBSRC
sponsored Institutes whose business relates specifically to GM crops.”
However, other sources (e.g. Ernst and Young ) indicated that the picture gained from
looking specifically at GM crop companies from BBSRC-sponsored work alone may
be too narrow, and that different kinds of agricultural biotechnology spin-out
companies have been created. In any case, looking at the number of SMEs in the sector
may not be the best indicator of the commercial potential of research in this area. A
study of agricultural biotechnology SMEs across several EU countries including the
UK identified only a small number of truly independent SMEs. Many that were
started up had been bought by multinational companies, or were part of joint ventures
with multinationals.
One of the limiting factors in the viability of such companies (particularly ones
developing agrochemicals) is the cost of meeting regulatory barriers . Other factors
include the social opposition and political controversy that some applications of
biotechnology to the agrifood sector have aroused - SMEs have fewer resources than
multinationals to manage the uncertainties created.

Chemicals (including pheromones) which are used to send signals between organisms. They can be
used in agriculture to attract, trap or repel pests.
BBSRC (2002) op cit.
Personal Communication 02/01/03.
Part of the Policy Influences on Technology for Agriculture (PITA) project funded by the European
Commission. SMEs in Denmark, France, Germany, the Netherlands, Spain and the UK were studied.
E. Grávalos, Alejandro García and Nick Barnes (2002), “Policy influences on innovation strategies of
small and medium sized enterprises in the agrochemical, seed and plant biotechnology sectors”, Science
and Public Policy, Vol 29 No. 4, pp 277-285.
E. Grávalos et al (2002) op cit.
Page 17 of 28Costs and Benefits of GM Crops – Industry and Science
Smaller companies in the agricultural biotechnology sector can form links both with
public sector research establishments (to gain access to latest scientific advances) and
with multinational companies (to ensure their products are market-focused) . In such
networks of alliances, a better indication of commercial potential and activity might be
the number of licensing agreements for use of intellectual property, rather than the
number of independent companies.
5. Influences on the agricultural biotechnology sector
The recent history of the agricultural biotechnology industry outlined above reflects the
principal internal influences acting on the sector. These are essentially desires to:
• innovate and stay at the high added value end of the agricultural supply
• overcome sunk costs in terms of research expenditure and gaining regulatory
approval; and
• exploit the complementary nature of GM crops and pesticide products.
Many other influences are also relevant. These vary from factors that affect almost all
major businesses (e.g. exchange rates) to ones relevant to technology-driven
companies (availability of qualified personnel) to ones particularly relevant to GM
crops (public opinion). Other influences of particular importance include regional and
national industrial policies and environmental regulations.
Public sector support for plant biotechnology and crop research is dependent largely on
government policy and research council priorities. However, it is increasingly common
for sources of public funding to be made available for projects that have potential
commercial outputs or have industrial sponsorship, and many projects carried out by
public sector research establishments are funded by private companies . In this regard
the involvement of the global agricultural biotechnology industry in the UK may affect
the future of public as well as private sector research. One recent development is
Syngenta’s recent decision (18 September 2002) to terminate their research alliance on
wheat genomics with the John Innes Centre.
These external factors act on the agricultural biotechnology sector by influencing the
following areas:
1. Future Crop Development: which traits are the subject of research; which
countries varieties are developed for; and whether or not GM is the method
chosen to create new varieties.
2. Location of Facilities: multinational companies decisions about where to
locate research or manufacturing centres.
3. Public Sector Support: decisions about levels of funding for research into
GM and non-GM crops.

E. Grávalos et al (2002) op cit.
Tait, J et al (2001) op cit.
Page 18 of 28Costs and Benefits of GM Crops – Industry and Science
4. New Commercial Ventures (SMEs, University Spin-Out Companies, and
Licensing Agreements): number created in agricultural biotechnology-
related areas, and the revenue they generate.
Some of the more important influencing factors, and the areas in which they may have
an effect are shown in Table 4 below.
Table 4. Influences and effects on the agricultural biotechnology sector
Influencing Factor Future Crop Location of Public New
Development Facilities Sector Commercial
Support Ventures

Regional and national
industrial policies

Agriculture, sustainable
development policies

Speed and costs of crop
regulatory approval

Quality of biotechnology
science base, intellectual
property, qualified

Availability of venture
capital funding

Consumer demand for GM
vs. non-GM products

Public attitudes to GM crop

Direct action against GM
crop trials

Ownership of multinational

Labour laws

National and regional
adoption of GM by farmers

Pesticide use patterns and
demand for non-chemical
crop protection

International oil prices and
relative competitiveness of
raw materials from plants
6. GM crop decisions and wider biotechnology
Effects on wider biotechnology of decisions about GM crop commercialisation could
arise through knock-on effects from changes in the agricultural biotechnology sector.
Page 19 of 28Costs and Benefits of GM Crops – Industry and Science
In addition, there may be effects that arise independently of any such changes, for
example GM crop decisions may effect perceptions of wider biotechnology in the UK
– those of the public, researchers, venture capitalists and multinational companies.
Analysis of any effects on UK biotechnology generally thus requires two parts:
• an investigation of the structural links between agricultural biotechnology
and the wider biotechnology sector; and
• an investigation of areas where the broad concerns of those involved in
biotechnology might be touched upon directly by GM crop issues.
A potential obstacle to such analysis is the difficulty of defining the sectors for which
biotechnology is important. The predicted pervasiveness of biotechnology means that
effects in almost any area of current or future economic activity could be seen as
relevant. However, the principal areas to focus on are those where biotechnology is
already, and will continue to be, vital: healthcare and pharmaceuticals .
6.1 Links between agricultural and healthcare-related biotechnology
As the situation currently stands, most of the links between the two sectors come in
terms of fundamental knowledge and supporting technology (e.g. diagnostics,
modelling of biological systems, and bioinformatics to correlate genome sequence data
with metabolic function). However, since the agricultural biotechnology sector is
smaller , it could be argued that any activities useful to both are more likely to be
influenced by changes to the pharmaceuticals industry than to the agricultural side.
The use of GM plants in pharmaceutical production is a very active area of research. In
Canada, the biopharmaceutical, Hirudin, is being commercially produced in oil seed
rape. There is also a growing body of work attempting to create edible vaccines in a
whole variety of combinable crops, fruit and vegetables . Future developments in this
area may re-establish closer links between the two sectors .
6.2 Future links between agricultural and other applications of biotechnology
A number of possibilities exist for future relationships between the agricultural
biotechnology sector and other industries, including:
• maintaining the current position;
• increasing links between agricultural biotechnology companies and
multinational food processing and distribution companies ;

Information will also be collected about other areas where biotechnology plays a role in the course of
the project.
Annual turnover in agricultural biotechnology in the UK is approximately $1Bn; gross output from the
UK’s pharmaceuticals sector is approximately £12 Bn. UK employment in commercial R&D is
approximately 1,280 in agricultural biotechnology (Poole (2001), op cit.); 21,000 in pharmaceuticals
(source: ABPI).
AEBC (2002), “Looking Ahead” .
Tait (2001), op cit.
Tait (2001), op cit.
Page 20 of 28Costs and Benefits of GM Crops – Industry and Science
• re-establishing close links between agricultural and pharmaceutical
biotechnology sectors; and
• new links between agricultural biotechnology and other industries where
new crops might find applications (e.g. energy crops for electricity
generating or supply companies).
6.3 Issues of concern to other biotechnology sectors
Indications of the concerns of the biotechnology and pharmaceutical industries are
provided in a number of publications relating to the competitiveness of those sectors.
The Pharmaceutical Industry Competitiveness Task Force (PICTF) – set up as a joint
exercise between government and industry to ensure that the UK “retains its
competitive edge” – highlighted the following factors as the best indications of
progress towards this goal:
• Supply conditions:
- labour supply (especially graduates in relevant disciplines);
- investment and taxation; and
- research infrastructure.
• Demand and regulatory conditions:
- uptake of medicines;
- price/profit regulation; and
- research and medicines regulation
• Industry outputs:
- innovation; and
- macroeconomic contribution.
The BioIndustries Association, the trade body for SMEs involved in biotechnology,
highlighted the following concerns in its in its 2001 annual review:
• public perception of biotechnology;
• animal rights protests;
• access to venture capital; and
• government support for small businesses, including R&D tax credits.
Specific references to “decisions about GM crops” as a key factor for development of
wider biotechnology activities do not appear to be a feature of these documents
(although public perception of biotechnology in general could be expected to be
influenced by perceptions of GM crops). However, some of the factors identified might
be relevant to developments in agricultural biotechnology, such as labour supply,
research infrastructure, public perceptions and venture capital.
Page 21 of 28Costs and Benefits of GM Crops – Industry and Science
7. Proposed analytical approach
This note highlights some of the factors that have influenced the agricultural
biotechnology sector to date, and shows some of the links between agricultural and
wider biotechnology activities. It is these motivating factors and cross-sector links that
are expected to provide the basis for analysing the effects of decisions about GM crop
commercialisation on biotechnology in the UK.
Possible areas where costs and benefits could arise under different GM and non-GM
scenarios include:
• levels of inward investment from the major multinational agricultural
biotechnology companies;
• commercial activity in new agricultural and plant biotechnology ventures;
• amount and direction of publicly-funded research in agricultural and plant
research; and
• UK involvement in other applications of biotechnology.
More precise identification of costs and benefits depends on the particular scenarios
the overall project will consider. These are described in the SU project Overview
Methodology paper section 3.1.
Clearly, there is much more work that needs to be done for any such analysis to be
robust. What follows is a sketch of the additional activities that are currently being
considered as ways of taking this aspect of the SU project forward.
7.1 Additional information gathering
The sources of additional information form into four groups:
• responses and comments from external organisations and individuals on
papers published by the SU project (such as the scoping note and work-in-
progress papers);
• commissioned work or responses to questions posed to organisations or
individuals with expert knowledge in specific areas of interest;
• comments from the expert group appointed to support the industry and
science aspects of the SU project (Box 2); and
• reviews of published literature.
Box 2. Industry and Science Costs and Benefits Expert Group
Dr Paul Burrows, Science Strategy Manager, BBSRC.
Dr Glenn Crocker, Head of Biotechnology, Health Sciences Group, Ernst and Young.
Dr Bruce Pearce, Head of Operations and Deputy Research Director, Elm Farm
Research Centre, a charitable foundation that conducts research into organic farming.
Dr Paul Rylott, Bayer Crop Science’s Head of UK Bioscience.
Professor Alison Smith, Head of Department, Metabolic Biology, John Innes Centre.
Page 22 of 28Costs and Benefits of GM Crops – Industry and Science
Professor Joyce Tait, Director of the ESRC Centre for Social and Economic Research
on Innovation in Genomics (INNOGEN).
Dr Roger Turner, Chief Executive of the British Society of Plant Breeders and a
member of the AEBC.
The areas where additional information is needed most urgently are:
• the list of factors that motivate the agricultural biotechnology industry, and
those factors that influence the wider biotechnology and pharmaceutical
industries; and
• the regional breakdown of commercial activities in biotechnology generally
and agricultural biotechnology and GM crops specifically.
Other areas where additional information will be sought include the following:
• costs of developing GM crops compared to non-GM crops;
• a realistic timeline for the types of GM crops that might be expected to reach
the market place over the next decade or two;
• patent law and a picture of who holds the most important intellectual
property rights that will influence how agriculture (GM and non-GM) might
develop over the next decade or two;
• venture capital availability for agricultural biotechnology start-up
companies; and
• opportunities for non-GM and organic research and its commercial
exploitation that might be boosted if GM crops are not commercialised.
7.2 How the analysis will be conducted
The methodology for the overall project is described in a separate paper . A scenario-
based approach will be adopted, to allow as full as possible range of possible future
outcomes to be considered. The scenarios will be common to each of the various
aspects of the project: industry and science, human health and environment, product
chains, and developing countries (see Overview Methodology paper section 3.1).
There appears to be no purely quantitative approach that would allow the assessment of
the costs and benefits for UK biotechnology of any decisions about GM crops. It seems
inevitable that the projections will have to be made on a more qualitative level; one
possible approach is outlined below.
1. Agree lists of motivating factors for the agricultural biotechnology sector and for
the wider biotechnology (including the pharmaceutical sector).
2. Map out which of the agricultural biotechnology motivators are called into play
under each of the scenarios.

The SU project Overview Methodology paper.
Page 23 of 28Costs and Benefits of GM Crops – Industry and Science
3. Investigate the effects of varying the assumptions on the agricultural biotechnology
motivating factors active in each scenario.
4. Map out which of the pharmaceutical industry and wider biotechnology motivators
are invoked
(i) directly under each scenario, and
(ii) indirectly through the effects identified on the agricultural
biotechnology industry in steps three and four.
5. Investigate the effects of varying the assumptions on the motivating factors for the
pharmaceutical industry and wider biotechnology active in each scenario.
6. Map out how the effects identified in each of the four scenarios for the agricultural
and wider biotechnology and pharmaceutical industries will be felt as costs and
benefits for different economic sectors, social groups and geographical areas.
7. Where possible, express the identified costs and benefits in monetary terms;
identify areas of risk and uncertainty.
7.3 Links with other aspects of the SU project work
Developments in the agricultural biotechnology sector could have consequences in
terms of the types of crops developed for the UK, the prices of seeds, the types of
pesticide or pest management systems used in the UK, and the amount of organic
farming in the UK. These and other factors will have impacts on the analysis of costs
and benefits in the product chain and in human health and environment. Similarly,
environmental factors and changes in profitability and structuring of product chains
will impact on agricultural biotechnology in the UK. These links will be pursued
throughout the project.
7.4 Questions for discussion
• Is the background information assembled to date accurate? Does the list of
additionally required information in 7.1 cover all that needs to be included?
What sources of information should the SU project make use of?
• What is the most appropriate definition of “biotechnology” for the purposes
of our proposed analysis? Other than healthcare, which areas of potential
biotechnology applications should the analysis concentrate on?

For example, the product chain analysis will take into account the possibility that “the
commercialisation of GM crops could affect the range of non-GM seeds that are available to farmers.
This will partly depend on the future marketing strategy of gene providers and seed companies. The
analysis would have to take into account the structure of the seed and biotechnology industry and its
possible implications for the industry’s pricing and marketing decisions.” (Costs and Benefits in the
Product Chain paper section 3.2.4)
Page 24 of 28Costs and Benefits of GM Crops – Industry and Science
• Has this paper identified the major influences and motivating factors for
biotechnology-based industries? What others should be added or removed?
Have the decisions which would be affected been identified correctly?
[Sections 5, 6]
• Has this paper correctly identified the key links between the agricultural
sector and wider biotechnology? [Section 6]
• Does this paper paint a realistic picture of innovative or university spin-out
companies in the agricultural biotechnology field? [Section 4]
• What should be added to the range of possible ways in which the
agricultural biotechnology sector may develop in the future? [Section 6]
• Would it be more valuable to focus on the impacts of changes in agricultural
biotechnology sector on UK agriculture and food production (i.e. the link
with the product chains part of the SU study) rather than on the effects on
wider biotechnology in the UK?
• Is there a robust way of analysing any effects on the UK’s scientific
reputation of decisions on GM crops? Are there analogous circumstances
where effects on UK science and industry of similar decisions can be
• How, if at all, should the SU project investigate potential impacts on
numbers of students choosing to study biology, agriculture or plant science?
Page 25 of 28Costs and Benefits of GM Crops – Industry and Science
Annex 1. GM crop developments
Key: C denotes commercialisation
F denotes field studies
G denotes greenhouse studies
L denotes research laboratory studies
It is not possible to capture the complete range of activity in research and development
in a single table. The data here are selected from the AEBC’s horizon scanning
document (April 2002), focussing mainly on those crops which could be grown in the
Agronomic Traits Crop Stage of Development
Herbicide Tolerance Maize C
Oil seed rape C
Sugar beet F
Wheat F
Pest Resistance Maize C
Potato C
Increased Yield Maize C
Oil seed rape C
Wheat F
Viral Resistance Potato C
Oats F
Sugar beet F
Tomato F
Wheat F
Fungal Resistance Barley G
Potato G
Strawberry G
Tomato G
Wheat G
A-biotic Stress Resistance
(i) cold Oil seed rape, Potato, Strawberry F
(ii) drought Sugar beet G
(iii) salinity Tomato L
(iv) heavy metals Maize L
Smart Plants/ Biosensors L
Nitrogen Fixation L
Food Quality Traits Crop Stage of Development
Oil seed rape (not all GM) C
Oil Content
Storage Strawberry C
Tomato C
Apples F
Potato L
Tomato (vitamin changes) F
Wheat (low allergenicity) L
Animal Feed Quality Barley L
Maize L
Page 26 of 28Costs and Benefits of GM Crops – Industry and Science
Non-Food Applications Crop Stage of Development
Biopharmaceuticals Oil seed rape (Hirudin) C
Maize (Avidin) C
Vaccines Lettuce (measles) L
Maize (TGV – pig disease) L
Potato (E-coli) L
Industrial Oils Oil seed rape F
Recreation Flowers (colour) C
Amenity grass (herbicide tolerant) F
Commercialisation of a crop with a particular trait does not mean that its research and
development comes to an end. Introducing the trait into different varieties of the crop
can continue, as can the development of variations of the particular trait (tolerance of
different herbicides, or of combinations of herbicides; resistance to a wider range of
pests etc.).
No attempt is made here to interpret the stage of development (C, F, G or L) into a
timeline on which they could potentially be grown commercially in the UK. There are
many factors that confound attempts to do so. Even GM-crops grown commercially
overseas would only be grown here if they had passed through the following set of
• regulatory approval;
• development of locally-viable varieties;
• gaining national seed list status, and
• convincing farmers that they were commercially viable.
Even more uncertainty is involved in predicting the time taken for ideas being
developed in the laboratory to reach commercialisation (if they ever do). Technical
obstacles and re-direction of funding are only two of the factors that change the rate at
which ideas develop.
In addition to potential developments in the applications of GM crop technology, there
could also be developments in the technology itself. These could include the use of
gene promoters (the elements of DNA that activate genes) from the host plant rather
than ones imported from a plant virus; avoiding the use of selectable marker genes in
development of GM varieties; and the targeting of transferred genes to particular parts
of the new host genome.
Page 27 of 28Costs and Benefits of GM Crops – Industry and Science
Annex 2. Plant breeding developments
Mankind has been selecting improved plant traits since agriculture started around
10,000 years ago. Such improvements were passed on through the genes to succeeding
generations of plants. The changes led progressively to marked differences between the
crops and their original ancestors: maize and teosinte, wheat and Aegilops grass.
Scientific studies began at the turn of the last century and were based on the work of
Gregor Mendel, carried out in the 1860’s. Although Mendel is seen as the ‘father’ of
plant genetics, several significant achievements pre-dated his work. In 1583 different
varieties of beet were noted and described. In 1694 sexual reproduction in plants was
discovered. In 1719 the first records of plant hybrids between species were made and
in 1799 the first cereal hybrid was produced. This led onto the breeding of the first
hybrid crop Triticale (from wheat and rye) in 1876, with around 2 million hectares now
grown throughout the world.
The 20 century saw major scientific achievements in plant breeding as the
understanding of genetic principles and their application greatly accelerated the rate of
crop improvements. The objective of plant breeders has been to exploit natural and
induced variation in plants, crops and wild species and to overcome natural barriers to
plants interbreeding . These efforts have resulted in a series of progressive technical
developments in the evolution of selective plant breeding . These incremental
improvements were followed by recombinant DNA techniques (r-DNA) which are
used to produce the current range of GM plants.
Some milestones in chronological order :-
• Hybrid breeding (c.1900): maize, sugar beet, oilseed rape varieties produced from
selective crossing of parents.
• Protoplast fusion (1909): genetic material from differents can be combined once
the cell wall is removed.
• Induced mutation (1927): x-rays used to bombard plant DNA to produce novel
• Tissue culture (1940s): under carefully controlled conditions plant tissues can be
separated into individual cells and these can be made to re-grow into whole plants.
• Embryo rescue (1960s) enables breeders to successfully cross a wide variety of
different plants.
• Marker assisted breeding (late 1980s ) results in dramatic improvements in
breeding efficiency as it allows early identification of whether a gene has been
inherited. Markers can show inheritance of multiple genes simultaneously.
• Genetic modification (1980s): first GM plant (tobacco) produced in 1983.

R. W. Allard (1999) Principles of Plant Breeding, John Wiley & Sons, New York.
OECD (1993) Traditional Crop Breeding Practices: An Historical Review, OECD, Paris.
From Allard (1999) op cit.
N. D. Young (1999) A cautiously optimistic vision for marker-assisted breeding, Molecular Breeding
Vol. 5, pp 505–510.
Page 28 of 28