Abstract
More than 25 years after the 1991 reform of the Union for the Protection of New Plant Varieties (UPOV) treaty, the regulation of Plant Variety Protection (PVP) is still controversial. While the incentives to private innovations are unquestionable, concerns have been raised about farmers’ access to resources, the weakening of their bargaining power, their entrepreneurial freedom, and ultimately their welfare. Our paper investigates the effect of PVP regulation on the governance of agri-food value chains (AFVC) with a small-scale survey of kiwi producers in Italy. We found that AFVC trading-protected (club) plant varieties are more likely to exhibit captive governance forms than those trading the free varieties. Nevertheless, the producers of club kiwis achieve higher returns from their investments and bear less risk than others. Because of the high demand for the club fruits, the breeders must give farmers highly profitable contract terms in order to elicit the production and to promote the adoption of the new cultivar. As a consequence, farmers are capturing a share of the value of innovation, even if the breeders have a strong protection. The long-run sustainability of this win-win agreement between breeders and farmers might be jeopardized should the demand for the new varieties fall.
Highlights
This paper investigates the impact of the regulation of plant variety protection on the governance of the agri-food value chain
Since the Convention on the Union for the Protection of New Plant Varieties (UPOV) in 1961, the intellectual property rights of breeders of new vegetable varieties have benefited from increasing legal protection
Our hypothesis is that the change in the intensity of protection is associated with a change in the form of governance of the agri-food value chain
Summary
This paper investigates the impact of the regulation of plant variety protection on the governance of the agri-food value chain. The development and marketing of new vegetable varieties is a growing trend in the global food system 2019, 8, 91 regime of plant variety protection (PVP) may have an impact on the governance of the agri-food value chains. The empirical analysis conducted on a small sample of producers suggests that the governance of the value chain is different for the two varieties. The monopsony power of breeders is constrained and limited by the necessity of eliciting enough production to meet the increasing consumer demand for the new varieties.
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