Would you pay €50 per accession?

Bert Visser, director of the Centre for Genetic Resources, the Netherlands (CGN) has just sent the message below to colleagues in the European crop genebank network, and suggested that readers of this blog might also have an opinion. If you have, do leave it here as a comment.

Like so many genebanks, since a number of years CGN has been confronted with increasing costs and diminishing budgets for its core genebank tasks (collecting, regeneration, storage, evaluation, documentation, distribution). Moreover, CGN has observed a considerable increase in the number of distributed samples resulting in increased handling costs and accelerated exhaustion of our stocks with consequently higher yearly regeneration costs.

In order to manage a widening financial gap, in consultation with the Ministry of Economic Affairs, Agriculture and Innovation, CGN is considering a number of measures including a revision of seed viability testing protocols (based on recent findings regarding the storability of seeds under genebank conditions) and a much tighter planning of regeneration and acquisition activities. Furthermore, the private sector will be approached to discuss options for the sector’s continued involvement in regeneration of CGN germplasm.

In addition, we are considering a measure for which we seek your comments and advice. This measure regards the introduction of a handling fee for the distribution of CGN germplasm. The Treaty, in its Article 12, allows for a handling fee, whereas the distribution conditions under AEGIS do not exclude the possibility of such a fee. Globally, only few genebanks have introduced handling fees, notably NIAS (Japan) and AVRDC (global; vegetables). CGN handling fees would not apply to partners that carry out regeneration tasks for CGN, neither to NGOs.

CGN is considering handling fees that could amount up to € 50 per accession. Whereas we consider this a modest amount per accession, the request for large numbers of samples may be strongly discouraged. Therefore, discount fees for larger numbers of requested samples, or for pre-packed sets (core or elite collections) will be considered. In any case, a handling fee might encourage potential users to consider in more detail which accessions are really needed in planned research or breeding programmes, and may prevent poorly motivated requests or intended duplications of CGN germplasm in other collections.

We realise that any unilateral action of CGN may have an impact on you: users may shift from CGN to you assuming your distribution is still free, and you might be asked by your own government to introduce fees as well. There may be other consequences that we have not taken into account yet.

In any case, we do not wish to introduce a unilateral handling fee overnight and have not yet taken any definite decision, and this is why we are consulting you as our European colleagues to have your opinions and feed-back. In particular, we would be interested to hear of any other discussions on the introduction of a handling fee.

28 Replies to “Would you pay €50 per accession?”

  1. This example is showing what a lot of Genebanks are thinking about to do. It’s try that the cost of collections maintenance is relatively high.
    In an African context, the handling fees per accession (€50) may not be as high but the idea of getting something from those who request for germplasm definitely make sense.
    The perfect picture would be to couple the handling fees with a feedback procedure from the requester…

    The risk is to reduce the distribution of the germplasm, which is already very low.

  2. At the risk of appearing stick-in-the-mud, two issues:
    (1) Economics of uncertainty. As elegantly shown by IFPRI, it doesn’t make sense to charge when the value of the material to the user is so uncertain. Will users value the material received more highly if they have to pay for it? Not if 99% of what they are given is not fit for purpose. If you charge for a service, you have to deliver a service fit for purpose. But the remaining 1% can generate big returns if it’s used, so our aim is to promote use despite 99% of it being rubbish. That’s done by distributing free. That hasn’t changed in 100 years. In 10 years time, if we can start to predict value-for-purpose better, that will be the time to introduce charging as standard.
    (2) Politics. CGN’s financial woes are nothing against the financial straits of many in developing countries. Is it OK for a developed country genebank to charge a public sector breeder in a developing country for material originating in a developing country? Unless you answer yes, you then have to ask, Who can charge whom? That’s a minefield.
    (Which is not to say don’t discuss it. I’ve no doubt discussions will continue in perpetuity until the date charges are introduced)

  3. I don’t feel that many would object to a nominal fee for the supply of accessions (perhaps more for “commercial” outfits). I think much can be learned from the experience of microbial collections which have been exercised by these issues for decades such as the American Type Culture Collection http://goo.gl/FNQJh and UK collections such as CABI’s fungal collection http://goo.gl/Mcb71 (which used to have a free supply policy for Commonwealth countries), and the National Collection of Yeast Cultures http://goo.gl/1XSHD (my old stomping ground).

    It goes without saying that such charges should not (IMHO) be revenue raising exercises (which might lead to the collections being run on self-sustaining business models). This is why there is an emphasis in many microbial collections as being “service collections” with additional revenue gained from activities such as identification/fingerprinting, patent deposit, safe deposit, screening, contractual research etc.

    Another important issue is to what extent “duplicates” in other collections are in fact equivalent given the tendency for genetic drift following repeated regenerations. This is perhaps a separate discussion but it affects attribution in scientific papers (e.g. through borrowed samples not obtained from the parent collection as indicated by the accession number). To use modern terminology it’s a branding/quality control issue – a duplicate in another collection is no such thing.

  4. I think that introducing a handling fee for genebank accessions may be counter productive to enhancing the use of genebank materials, which already is heavily under-used. While I do appreciate the fact that many genebanks word wide are facing budget cuts and solutions for finding income to maintain its activities is important, I wonder to what extent the revenue from charging for accessions will help. The question is what is being charged? Is it the value of the accessions? or simply the distribution cost (cost of preparation, package and postage etc.? While the latter may be justified, charging of the former may be more questionably as one could argue the how are the value of an accession is determined, considering the point from Ruaraidh that 99% of accessions may be of little value for the user at any given time.
    Often genebanks holds collections arising from other countries from which the accession has been collected. Then, how ethical would it be for a country to request for materials collected from its country and have to pay for it. I think this is another point which should be taken in to consideration.

  5. I think the USDA investigated and then rejected the handling fee option about 25 years ago. Their reasoning might be useful to dig up.
    Also, at a cost of 50 euros, would it not be more efficient to get samples from genebanks in the country of origin? Certainly multiplication and labour costs and climatic selection would be lower in developing countries (a long-term advantage of CGIAR genebanks).
    I second Kevin’s point about `duplicates’. At CIAT we maintained unwittingly two collections of Phaseolus beans of about 700 samples from Iran (a smart technician spotted the duplication – code numbers, as usual, were no guide at all). The were the same original collections but were certainly not `duplicates’. One had been `pure-lined’ (and multiplication alone can cause genetic changes and picking-up of local viruses etc.).
    And I don’t see that NGOs should be excluded from paying – some are multi-million dollar operations doing very little for food production in developing countries.

  6. Well, if someone else would had made the question to me,… I would have asked Bert for advice!

    My humble reflection: we need to carefully understand the mid-term impact in the global conservation network for plant genetic resources for food and agriculture of the introduction of this fee in an important collection such as CGN.

    Following on Kevin’s input, the other interesting discussion is whether a PGRFA accession is equivalent to an authenticated micro-organism culture. I think the answer is no, but the question could be further discussed by the Commission on Genetic Resources for Food and Agriculture in the next years.

  7. I agree with Ehsan’s point that it would be very important to make sure a ‘handling fee’ would actually be charged at a level that is reasonable to cover ‘handling’ costs. If the fee is also meant to cover the costs of ‘long-term conservation’, then I feel this should be clearly stated and reflected in its name.
    50 EUR per accession is a steep price to pay for anyone at a public institution – especially researchers at publicly-funded universities (which I presume would not necessarily fall under the NGO category). As Ruaraidh states correctly, many genebank users request a diverse set of materials to engage in exploratory studies (of genetic diversity, breeding value etc.) – the results of which of course are often of great value to the genebank itself – and I would be worried that such steep fees would strongly discourage such use.
    I wonder whether it might be worth thinking about a ‘voluntary donations’ option, where users can contribute as much as they feel they can (and wish to). This could be implemented on a trial basis, to see whether sufficient returns could be achieved.

  8. Such a large fee is surely going to be prohibitive for many potential genebank users. I do not think voluntary donations would be successful.
    Instead, a small fee, something like 2 EUR, would make some cash flow but more importantly it would be enough for researchers to stop and think about what accessions they are ordering. This fee would not be a barrier for most researchers. I don’t have any figures to support this but would have to assume that at least some get over zealous at the prospect of having all the diversity of their favourite plant delivered to their door for free. As such I expect that many packets of carefully harvested, stored, counted, phytosanitized and delivered seed is left unopened.
    One concern with even a small fee is that it would grow and this would allow other funding to shrink. This could be a dangerous slippery slope.

  9. We can all agree that access provisions should not discourage use, but neither should they undercut conservation. Unless and until governments decide to fund genebanks adequately and sustainably, and unless and until certain genebanks cease making frivolous requests of others (such as for entire CGIAR collections), then proposals such as Bert’s will have to be considered seriously. His proposal is primarily about how to cover the costs of services provided by his genebank. Many comments here address the impact on use. Fair enough. But what are Bert’s options if not to charge costs? I doubt Bert would raise the issue if other options were easily available.

    To me the argument that 99% of the material accessed is not really useful (and thus Bert shouldn’t charge) is beside the point. It would be relevant IF we knew which samples were going to be useful and which weren’t, but we don’t. If we did, would we charge zero for the rubbish and perhaps millions for the valuable ones? Right? No, not really. Accessing genebank samples is fundamentally like buying lottery tickets. There are some winners and many losers, but all tickets have some monetary value. Will genebank users be willing to pay? I don’t know. But let’s hope that users feel that the value of the material equals or exceeds the cost of conservation/distribution, otherwise why should Bert’s genebank continue to provide this service? If it doesn’t make economic sense for the user, why would it make sense for the genebank? The value to the user should/must exceed the cost of conserving and distributing or else the entire undertaking is absurd.

    The PGR community, particularly at the political level, must come to appreciate the value, the “benefit,” provided by genebanks such as the Dutch facility. This benefit, which comes with a price tag that someone other than the user pays, is too often taken for granted. Much attention is given to how much money goes into the Treaty’s Benefit-sharing Fund and this is recognized enthusiastically as a “benefit,” but quick, someone tell me, what’s the value (“benefit”?) of the conservation and distribution services provided by the Dutch facility or the CGIAR genebanks and breeding programs? That figure is neither calculated, nor discussed, nor recognized. Well, Bert’s proposal will at least force people to realize that there is a cost to the service, heretofore free to users but not at all free to the Dutch government. Bert (and others in his situation) might find it easier to acquire operating funds from the government if the user community were more demonstrably appreciative (in the Governing Body of the Treaty, for example) of the service provided. But, it has been a long time since I remember countries or NGOs take the microphone and praise such genebanks and recognize the financial costs of this service as a contribution to Treaty implementation. Some benefits are recognized, others are invisible (to the eventual detriment of Treaty implementation in my view).

    Calculating costs for reimbursement purposes will be difficult of course and will vary by gene bank. In the end, maybe the marketplace will speak and users will go to low-cost gene banks if they can still get quality material. Maybe the cost is 50 Euros on average for Bert’s facility. But of course, it’s probably less for accessions frequently requested (due to economies of scale) and perhaps more for others. Should charges be based on “ability to pay?” I suppose that depends on how much of an aid program the genebank is running and what it is willing to charge to those at the other end of the scale. Yes, perhaps repatriation for free to the country that supplied the material in the first place might be a good idea. But, let us recognize that in such situations, Bert’s genebank has been providing the supplying country with a service – free conservation – and has presumably been distributing it (heretofore without compensation for costs), which has taken a financial burden off the supplying country which otherwise might be required to make it available under the ITPGRFA and the costs itself.

    One final point. Bert’s proposal would be no one’s first choice for how genebanks should be financed. It certainly wouldn’t be mine. But maybe it will generate serious discussion and action towards better solutions. If not, maybe it will at least allow that facility to continue to provide services. Services paid for by users are better than no services at all.

  10. While 50 euros per accession might be a bit steep, I think it’s reasonable for genebanks to charge something. If for no other reason to discourage frivolous requests. Even charging 1 euro would raise a little revenue, might make some people think twice before making requests, and is unlikely to be a significant barrier even for the poorest parts of the world. Of course even then genebanks would have to be open to some kind of negotiation in case of someone’s inability to pay.

    The disadvantage of charging a small fee of course is it makes genebanks look more like seed companies, and more attractive to gardeners who see it as an alternative to commercial seeds and expect customer service.

    While I’m not usually a fan of outsourcing, I think there’s really a case to be made for this here. If it really costs CGN on average €50 per accession, surly something could be gained by partnering with a third party that could do it more efficiently. I think there are many seed companies in Europe who would like to produce and sell some of these, if it were only legal…

    I also think it’s completely unreasonable to both ask someone to pay for accessions, and accept an SMTA. Either genebanks are funded by SMTAs or they aren’t. Both SMTAs and fees are a disproportionate burden on ‘small’ users of genebanks, and it’s not fair they should shoulder the burden of both.

    Surly by legalizing trade in all genetic materials, eliminating barriers like SMTAs and other property rights, then promoting the use of commercial sources, as well as achieving their goals of distribution of materials genebanks could also reduce some of their increasing burden of requests. As long as there’s a desire of the big players to restrict the open exchange of materials, they should pay the full costs of operating genebanks.

  11. 1. Making the value visible can be done by other means than increasing the price. Business schools seldom charge the advertised price for their MBAs, but neither do they give “discounts”. They rather create a foundation that gives out “scholarships”. Financially, this is exactly the same as a discount, but psychologically this is very different. Perhaps genebanks can learn from business schools to make people more aware of the costs of genebanking?

    2. Could there be a distinction between research that adds value to the genebank collection and activities that don’t? This is not only about seeds, but also about the information that goes with them. A good business model would encourage (using the pricing strategy and other means) that people “give back” to the genebank, not necessarily money but also data.

    3. Isn’t the view of a genebank as a lottery (Cary) a problem? For me, this is the implication of what Ruaraidh writes. Winning the lottery once doesn’t improve your chances of winning the next time. This should not be the case for a genebank. Winning and loosing increase our understanding of genepools and give us better chances to win the next time. A better metaphor for a genebank would be a library with a deficient but improving catalog.

    Good archaeology is not treasure hunting. Good crop breeding is not gene hunting.

    1. I agree with your point #3. However, I think that different analogies are possibly appropriate when talking about different aspects of PGR. When one is speaking of willingness to pay, to meet part of the costs of conservation/distribution, and the question is raised as to whether people would be willing to pay for samples when 99% of those samples will turn out to be useless to their breeding programs, then I think the lottery analogy is also valid. Most tickets are worthless. But, people buy them and thus establish a value because of the chance that they will win. Similarly, breeders must access more samples than they reasonably expect will turn out to be useful, precisely because they can’t tell which samples (tickets) are winners and which are losers. But, to merge the library analogy and the lottery analogy, it is certainly the case that improved information and information systems – a better catalog in your words – will improve the odds of winning. This will encourage use. And it might, in the case of Bert’s genebank, increase willingness to pay for the service. Let us keep in mind that no one yet has proposed that a genebank recover the FULL costs of conservation/distribution. So far, we have actually been discussing the recovery of partial costs, in other words, how large or small the genebank’s subsidy will be to users. The big question that Bert’s original proposition highlights is how will genebanks be funded? By governments (those willing to be charitable towards both their own national users as well as foreign users)? By users? Or some combination? My main point is that if governments refuse the first option, they make the second or third mandatory. This, I believe, may be the situation in which Bert feels he operates. So, how does he solve his problem of insufficient funds to operate his genebank? By definition, the answer to that question cannot be “don’t charge, it might discourage use” unless you presume that the government is going to step in with more money. I presume instead that that is not likely, or Bert would not have put his original proposition on the table.

      1. I think we basically agree. For clarity, I am not arguing for a “no charge” policy and also think that Bert’s question is legitimate.

        I just wanted to make the point that the value of an accession is not only its use value (or its option value in relation to future use in breeding) but also its informational value.

        An accession without passport data, for instance, has much less value to a breeder than one with good passport data. The same goes for other types of data. So perhaps the value that some types of research (evaluation, sequencing) add to accessions may actually exceed the handling and distribution costs of the seed. This does not pay the genebank, but it does add to the value of the collection it holds.

        It seems to me that this type of use is different from a “lottery” type use of a genebank — getting the right gene without looking back. It would be good if a pricing strategy could take this into account.

        Which doesn’t imply “don’t charge”. But the other thing I wanted to say that it is not only about setting the right price. The whole pricing strategy should be considered. And there are many different pricing strategies to choose from!

        Just some random ideas… Perhaps you could get (part of) your money back or discount vouchers for future orders, if you make your evaluation data public. Or demonstrate other public values arising from your use of the accessions. Or, like community seed banks, you could pay back with multiplication services (combining it with the outsourcing option, mentioned above by Patrick). A million options to consider!

        1. Thanks, Jacob. I think you make a number of good points, and one of them is that there are many different pricing strategies that could be considered. Simon also makes the point (below) that if genebanks decide not to charge a fee to cover costs, they might consider informing users of the real cost of providing the service, just to underscore the point that there is a very real cost to the “free service” that users experience, and that this service shouldn’t be taken for granted.

          This has been a useful discussion of a very topical issue.

  12. The major drawback of the handling fee that many have mentioned is that it may have the undesired effect of discouraging use. However, it would be good for genebanks to be able to capture some of the costs of providing the service of accessing conserved germplasm – especially if they are underfunded. This might also help to incentivize genebanks to distribute more efficiently and quickly if the fee covers slightly more than the cost of distribution. It might also make researchers think about what they’re requesting more carefully. And if individuals or organizations are requesting certain accessions, it means they are willing to pay an amount that is greater than 0 (even if it isn’t 50 euros / accession). In this context, the goal seems to be to determine the fee at which an acceptably low amount of use would be discouraged, while also helping to recover some of the costs of distribution.

    One way of determining this number is contingent valuation, a survey-based methodology that is used in the field of environmental economics to determine individuals’ willingness-to-pay for different goods. I would divide up the survey subjects into students, public/researchers (though this and the students could be divided up further between private/public universities, NGO’s, developing/developed world etc.), and private companies. The way it is set up generally is to pick a number that you think would be a mean willingness to pay in each category and then generate a bunch of random potential WTP’s. 50 euros seems a bit high to me so maybe the range would be something like .50 euros to 50 euros. The survey would ask, “Would you be willing to pay _$(this is a specific number chosen at random from the range)_ for an accession from this genebank.” You then run a regression on the results of the survey to construct a normal bell curve of results with the center being the mean willingness to pay. You should then be able to determine the average price at which, say, 5% of users would be discouraged, 2.5%, etc. etc. for each class, since students probably would be willing to pay the least, then researchers, and then the private sector. It might likely also differ based on crop.

    Some problems with this would be strategic behavior – I.e. Private firms might give a lower number than their actual willingness to pay if they think the survey is leading to the price the genebank is actually going to charge. You could give an incentive however to survey takers of a certain number of accession requests provided for free and emphasize the need for honesty. I feel that students and researchers would probably be more honest – for example, a student promised free access to all the germplasm needed for his or her thesis would probably not have any reason to lie about his or her actual WTP.

    It seems like a price structure would be the best way to go for such a handling fee, since a uniform and high fee might have the effect of screening out those with lower willingness-to-pay, such as students and researchers in developing countries, which doesn’t seem very equitable and could lead to only private companies in developed countries being able to afford accessing the germplasm. I also like the idea of having a requirement or incentive to provide evaluation data back to the genebank, maybe for a reduction in the fee.

    Some problems or “cheating behavior” might arise from a staggered price structure and the caveat that evaluation data is provided back to the genebank: 1) private firms might masquerade as students to get better deals, and 2) the evaluation data could be withheld. These could potentially be dealt with through penalties where those who have requested germplasm for evaluation can’t access more germplasm before providing the data and if private companies are caught pretending to be students they are no longer able to request accessions unless they pay a high “penalty” fee.

  13. I think I agree with many of the comments here that there is an arguement for making a small charge to cover handling costs but 50 euro seems very expensive and must exceed the minimum costs stated in the SMTA.

  14. NordGen Board discussed handling fee last year. The conclusion was that this would not be a good way to increase income because the administrative cost is to high. Nordic Breeding Companies have during the years been involved in collecting, regenerating and evaluating our material and their staff been on NordGen working groups. High handling fee would not be a good message for future cooperation. The political message last year is also very clear, rise of NordGen funding. We still have strong support for our activities.

  15. My feeling is that if banks are seriously considering charging a handling fee, they should test the water over a period of several months by asking customers whether they would have been discouraged from making their request by a fee of Euro 50, Euro 25 etc. Particular attention should be paid to what types of user are discouraged. Of course, too small a fee may cost more to administer than it brings in. Additionally, it is not beyond the bounds of belief that the bank’s funding may be cut by the amount it raises through fees, leaving it no better off.

    Obviously, banks need to demonstrate their value by distributing samples to a wide range of users. I would suspect that a (perhaps significant) proportion of potential users may be discouraged not only by a fee but the practicality of sending that fee – especially as a degree of bureaucracy within their organisation may be involved (i.e., it isn’t just a case of getting the credit card out). Lack of requests could have a serious negative impact on banks’ ability to demonstrate usefulness to their funders. Furthermore, users put off by the charge may decide to obtain the material from banks that don’t charge (making them outwardly appear more useful) or, more worryingly, through other less regulated routes.

    Just one final comment. Even if not charging, it may be a useful exercise to remind users of the cost of sending the samples out. This might help focus minds on the service that has been provided regardless of the end value of that material.

  16. 1. How exclusive is the germplasm, or genetic variability, that you hold? If there are alternate providers, who distribute similar goods for free, you may lose clients to your “competitors”.
    2. How well stocked with genetic variabiility are crop breeding/research programs with the germplasm they currently hold? Could they manage to survive longer without accessing germplasm from you, than you can survive without income generated on your accessions?
    3. How many germplasm requests are based on a whim or hunch, versus for targeted access & utilization. How well do we understand epistatic gene x gene interactions; or, gene x environment interactions? In a perfect world, we would dispense perfect genes that express perfect trait phenotypes. In the real world, biology interferes, and what a client receives is dependent on many factors outside of our control. Would charging for germplasm accessions raise the trueness-to-express/deliver expectations of clients?
    4. In a rational world, if funding constraints become a limiting factor, why not cease operations, outsourcing conservation & distribution to alternate suppliers?
    5. Perhaps another solution would be to thoroughly genotype an entire collection, assemble all known passport, pedigree, characterization and evaluation information, and build knowledge management systems that would allow clients to specifically select single accessions that are more likely to meet their specific needs. Better, targeted selection of germplasm, with prompt delivery, and assurances of performance, might encourage clients to pay for quality access.

  17. Several years ago CIMMYT looked into assessing charges for access to the germ plasm we hold. Several complications arose, including:
    –What would be the purpose of charging for germplasm? For full/partial cost recovery, as an incentive for clients to use less or more targeted germ plasm, or as a vehicle to contribute to the IT benefit sharing mechanism?
    –How would our relationship with clients change with regards to subsequent voluntary sharing of their germplasm and information? Would they assume reciprocal fee collections for their interactions with us? Would they require higher standards of operations from us, or higher quality of services (including better assurances of germplasm genetic identity)?
    –How to justifiably have a tiered system of payments for Developed vs. Developing Countries, given that the bulk of our funding came from the former?
    –How much to charge, that would not result in disincentives to current and potential clients?
    –How to effectively collect the funds? Perhaps today this would be different with the advent of internet banking, but several years ago this was an issue, being based in Mexico. Furthermore, the overhead costs of collecting the funds appeared to out strip the benefits that we would receive.

  18. It is the not the spirit of the International Treaty on Plant Genetic Resources for Food and Agriculture under the MLS to pass the cost of conservation to users. There is a mechanism, however, for users of PGRFA accessed from the MLS to “pay” towards genebank costs after deriving a commercial value. In this context any proposed handling fee in the process of exchanging genebank material should not be premised on recovering the cost of conservation- this is a cost that each party or government or state shoulders and constitutes its contribution to the public good put at the disposal of the global community. It is a cost that is recouped by having facilitated access to PGRFA material conserved by public genebanks in other countries. a nominal fee however which limits itself at direct transaction costs such as those associated with shipment can be considered. The 50 Euro per accessions appears to be going beyond such a nominal fee and has the potential of going against the spirit of the MLS under the Treaty and prohibitive. I agree with the comment that transactions involving repatriation of accessions to original donor countries should not be charged even this nominal fee.

  19. Bert and several of the commentators have asked very important questions, the answers to which will significantly affect how plant genetic resources are managed, exchanged, and utilized for the benefit of humankind. Many of us share a common view that gene banks play a critical role in, at least, conserving and making available genetic resources, many of which have only potential value. In other words, who other than these gene banks will maintain resources that are a potential public good, and conserve and share them to meet the needs of humankind in the future?

    As we consider this question of alternative approaches to financing gene banks in part, we must keep in mind that funding is under severe pressure globally. Developed nations are the primary source of financial support, and many people in these countries have little or no knowledge of the essential elements of food security. These people may not truly understand the risks and benefits inherent in funding decisions. It seems safe to assume that maintaining basic funding for these services will experience increased pressure. Furthermore, to date, the Funding Mechanism of the Treaty has failed to generate sufficient funds to sustain its basic program, and the approach to solicit voluntary contributions has been ineffective. This leads us to conclude that, like other ecosystem elements such as services, genetic resources must be valued in a practicable and workable way.

    Private sector breeders represent diverse stakeholders ranging from small and medium enterprises to large multinational corporations all of which value genetic resources and must sustain themselves under business models, rather than philanthropic principles. Genetic resources from gene banks are the basic raw materials of research and development, and the extent to which they are used in research programs is determined by a risk/reward evaluation. This does not mean that all genetic resources in gene banks should be treated by all users as commodities. Rather, we must all recognize the realities of this day and adjust our “business models” to one that ensures future success. Some form of payment for services may be inevitable and necessary to maintain these resources at the level needed. Importantly, because the Treaty is based on an incomplete view of breeding, it does not, in its present form, provide the solution to the problem in front of us. Rather, we must revisit the global approach to management and utilization of genetic resources within the Treaty discussions so that breeding efforts can be encouraged to unlock the potential value of these resources and put them to use for humanity’s benefit.

    Tom Nickson – Monsanto Law
    David Butruille – Germplasm Lead – Monsanto Corn Breeding
    Jasmina Susic – Genbank curator – Monsanto Vegetable Seeds

  20. Observations and some conclusions regarding this discussion on handling fees

    CGN is considering the introduction of handling fees for the samples it distributes to its users. To explore the pro’s and con’s of this option, it started a discussion in the international genebank community by (1) posting a message this weblog, (2) correspondence with the ECPGR Steering Committee via its mailing list, and (3) bilateral correspondence with some relevant actors. This request for feedback resulted in numerous valuable responses. Below we briefly highlight major outcomes of the discussion and their implications for the next steps that CGN will consider to take.

    – Budget shortages and handling fees a common theme

    As a first outcome, it became apparent that the issue of requesting handling fees for genebank samples has been recently discussed in several genebanks. However, so far only very few (e.g. AVRDC, Taiwan and NIAS, Japan) have actually introduced handling fees. Regardless the outcome of the discussion, we feel that the discussion has a value in its own right, since it triggers attention for the difficult funding position of a number of genebanks. Whether genebanks can cope with deficiencies in their funding is of course highly relevant, given the crucial role that genebanks play in plant breeding and crop research, especially in the context of longer term world food security under climate change.

    – The nature of a handling fee

    Generating regular income from the distribution of germplasm is clearly not CGNs intention; this would not be compatible with the conditions of the ITPGRFA, nor with AEGIS. Handling fees refer to relatively small contributions to cover the costs of handling the request, including the associated labour, material and postage costs, plus the transaction costs of the payment. To our understanding the ‘value’ of the accessions is thus irrelevant to answer the question of introducing handling fees or not by CGN or any other genebank, assuming this value exceeds the handling costs in the first place.

    – The fee level

    A handling fee of €50 per accession that CGN initially proposed, was generally considered far too high for various reasons. Indeed, it might be more appropriate to calculate the true distribution costs and recalculate the resulting fees, that might possibly consist of a charge per transaction and a charge per accession. However, for some specific categories of material, that fall outside the definition of PGR in the narrow sense (mapping populations, allele collections, etc.) and that have not been included in the MLS, different charges might be applied not only covering the handling fees.

    – Transaction costs

    It is expected that the costs of financial transactions can be kept low at both ends (provider and recipient) by using ICT solutions that are currently available.

    – Exemptions

    Some groups of users will be exempted from the handling fees. Groups that are currently considered for exemption include users in least developed countries (according to the United Nations category), and partners of CGN that support CGN by regenerating and/or evaluating material as an in-kind contribution. Requests that can be considered repatriation will also be exempted. It seems fair if the distribution costs made for the exempted requests will be carried by CGN, and will not be compensated by increasing the fees of the other requests.

    – Possible effects of handling fee introduction

    Handling fees will not only compensate distribution costs, they are also expected to considerably reduce the number of distributed samples, and thus in the longer term regeneration costs. Users may become more critical regarding the number of samples they request if there is a price tag connected to the individual accession, and some users might decide not to request material at all or try to get the material from other genebanks. This expected reduction in the number of requested samples can be both positive and negative, since it may avoid less well considered requests for material, but it may also deter serious users. The latter will in general be undesirable as genebanks have been mandated to promote the use of their materials. Also, the willingness of users to collaborate with the providing genebank, to give feedback and send evaluation data back to the genebank may be negatively impacted.

    – Handling fees and liability

    The service that a genebank provides should be of appropriate quality, irrespective of whether handling fees are charged or not. Introduction of handling fees should not affect liability issues: a genebank provides the material as good as it can, and cannot be held liable for any damages due to the lack of quality of the seed material or the associated information. However, this issue should be investigated more in depth before the introduction of handling fees.

    – Related issues

    In the discussion a few interesting issues arose that may justify a separate study or discussion. For example, it appeared that some of the major genebanks are confronted with a steep increase in the number of distributed samples over the last few years. What has caused this increase? To which extent might the following factors have contributed: (1) are breeding companies building up their own PGR collections since they fear these resources may get less accessible over time, (2) do new marker assisted breeding methods allow for more efficient use of exotic material, (3) or do websites and better use of other means of communication render the use of PGR much more attractive and easy. Related to this question is another lack of insight: what do we know about the distribution of genebank material to users by individual genebanks, how do different user groups compare, and what use conditions do apply on the distributed germplasm? The answers to those questions would also facilitate further deliberations on handling fees, but answers may not be feasible in the short term.

    – CGN’s decision-making process

    In the coming months, CGN will continue its consultations with stakeholders, including its users and its main funding agency, the Dutch ministry of Economic Affairs, Agriculture and Innovation. A decision regarding the introduction of handling fees is expected to be made in the last quarter of this year at the earliest. In the meanwhile, we invite all our colleagues and stakehlders to further contribute to the discusions on the introduction of a handling fee for genebank accessions. In turn, we shall update you regularly ablout any new insights or developments.

    Bert Visser & Theo van Hintum (CGN)

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