The Impact of Plant Variety Protection Regulations on the Governance of Agri-Food Value Chains

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.

Keywords

• plant variety protection
• agri-food value chains
• agri-food governance
• kiwifruits club-varietal