|
|||||||||
| |
|||||||||
To follow up on Dr. Alan Cork's posting, let me emphasize that the "prize" approach I am proposing in the various publications is not at all what Dr. Cork seems to have in mind in his comment on prizes -- but is in fact designed precisely as one approach to helping solve what he is saying about R&D in general. My particular prizes proposal is, in a sense, the precise opposite of what people usually think of when they hear the term "prizes". To help clarify, I am appending a short summary of the proposal below. Links to original sources are at the bottom of the posting. Will ------------------------------------------ William A. Masters Center on Globalization and Sustainable Development, The Earth Institute at Columbia University http://www.earth.columbia.edu/cgsd/masters Visiting Professor of International and Public Affairs, Columbia University Professor of Agricultural Economics, Purdue University ------------------------------------------ RESEARCH PRIZES: A NEW APPROACH TO SUPPORT INNOVATION IN AFRICAN AGRICULTURE This note summarizes a novel approach to the funding of agricultural research and extension in Africa. Current spending on agricultural R&D in Africa is on the order of one billion dollars per year, through a variety of institutions. Here, we sketch a new mechanism through which an additional one to ten million dollars annually might be channeled to support existing institutions, encourage partnerships among them, and reward successful efforts to alleviate poverty in an environmentally sustainable manner. The proposal is for a specific way to deliver prizes for successful innovations. These prizes would be paid out as a fraction of the economic gains from new techniques in the early stages of adoption, as soon as enough data are available to measure economic value. Prize amounts would be calculated using data submitted by innovators to a prize authority, which would specify the fraction of estimated value to be paid (say, 10 or 20 percent), and the research protocol for collecting the needed data (controlled experiment-station trials, farm household surveys, and market prices). The proposed prize authority would function like a small version of the U.S. Food and Drug Administration, which defines the protocols by which applicants can certify the safety and efficacy of new medical technologies. But while the U.S. FDA uses these data to issue a marketing license, the prize authority would offer a cash prize to buy out the innovation into the public domain. Because prizes are buy-outs into the public domain, innovators will apply for prizes only when they expect or discover that their innovation is valuable but not marketable -- that is, that its adoption generates measurable benefits, which cannot be recovered through product sales. The prize mechanism specified here is particularly adapted to African agriculture, where rising numbers of very poor people have no choice but to try to feed themselves on a fixed land area. Many outside donors are keenly interested in funding innovations to help these farmers--and yet local innovators have little incentive to develop and spread new technologies for them. Prizes would bridge that gap for all techniques whose benefits can be measured through controlled experiments and farm surveys. The benefits of such technologies are occasionally measured through impact studies and cost-benefit analysis for public agencies; the proposed prize mechanism would give innovators an incentive to collect more of this information and use it to set priorities. Some research institutions and their innovations that might qualify for prizes include international centers such as ICRAF for its tree-crop techniques, national programs such as Niger's INRAN for its improved sorghum, non-profit NGOs such as Sasakawa-Global 2000 for soil-fertility management, and for-profit companies such as Monsanto for biotechnology. With most innovations, achieving measurable results requires a partnership amongst several different kinds of institutions to develop the new technology and facilitate its dissemination. For example, a prize application for pest-resistant cotton in Burkina Faso might specify a three-way split between Monsanto, which provides the biotechnology involved, the national research service (INERA), which provides locally adapted varieties and testing services, and the local cotton company (SOFITEX), which provides marketing, credit and extension services. Prize applications would include signed agreements on how the award is to be shared, much like any revenue-sharing agreement, and would be subject to a dispute resolution system similar to that used to adjudicate claims of patent interference. At the start of the prize program its principal function would be to reward past successes, to channel additional income to those institutions and partnerships that have proven themselves capable of generating needed innovations and documenting their value. Only after some years would the prizes have a significant incentive effect on new work, first to induce institutions to do the kinds of trials and surveys needed to document social value, and then to ensure that promising technologies are actually disseminated, and finally to allocate R&D resources to make more promising technologies. In each of these roles, the prizes would be a marginal source of funding, aimed at complementing rather than replacing other funds. The proposed mechanism could be funded on a pay-as-you-go basis, without a trust fund or endowment, by relying on constitutional rules to ensure consistent performance over time. To accomplish this, once the rules of evidence are written by an impartial advisory board (see attached for a list of likely members), the actual management of the prize-giving institution could be governed by a board of twelve members, of which four could be elected by donors (perhaps in proportion to their financial support), four could be elected by research institutions (perhaps in proportion to the number of scientists working in Africa), and four could be elected by both groups. If each serves staggered four-year terms so that one from each group is replaced every year, and there is a ban on receiving prizes while sitting on the board, then every potential recipient and every potential donor has a consistent interest in sustaining the integrity and quality of the program over time. Donors interested in the program could start small, offering lines of credit to fund prizes in particular areas of interest to them, and then expand if they found that the mechanism was successful in identifying and supporting desirable innovations. But the success of the program should not be judged by its size: the disbursement of prizes would attract attention to demonstrably-successful institutions and innovations, leading some donors to fund those directly. In essence, the prize mechanism offers a contracting device that helps extend the market for research, by allowing donors to reward public-domain technologies proportionally to their impact. For some purposes, donors would prefer to contract directly with researchers, and for some technologies, researchers would prefer to market products under patent protection. But it seems likely that, once a prize authority is established, it would become a vibrant marketplace for innovations that donors want to pay for, that researchers can develop, and that African farmers desperately need. ------------- FOOTNOTES This note is a summary of W.A. Masters (2003), "Research Prizes: A Mechanism to Reward Agricultural Innovation in Low-Income Regions", AgBioForum 6(1&2, November): 71-74. A longer and more detailed version is forthcoming in International Journal of Biotechnology, and is available by download from www.earth.columbia.edu/cgsd/masters-news or by email from <address removed> A textbook of techniques needed to estimate the economic value of agricultural R&D is J.M. Alston, G.W. Norton and P.G. Pardey, 1995. Science under Scarcity: Principles and Practice for Agricultural Research Evaluation and Priority Setting (Ithaca, NY: Cornell University Press). A simplified version was used in annual workshops in West Africa from 1994 through 2002, teaching over 60 African scientists to do over 30 case studies, using W.A. Masters (1996), L'Impact Economique de la Recherche Agricole: Un Guide Pratique, with spreadsheet exercises. (Bamako, Mali: Institut du Sahel). An early summary of these results was published as W.A. Masters, T. Bedingar and J.F. Oehmke (1998), "The Impact of Agricultural Research in Africa: Aggregate and Case Study Evidence," Agricultural Economics, 19(1-2): 81-86.
Please visit dfid-agriculture-consultation.nri.org.