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Involving the Private Sector in Research

Date
Time (GMT +00) 13:00 14:30

Speakers:
Prof David Hall
, Professor of Chemical Ecology, Natural Resources Institute, University of Greenwich
Dr Jo Lines, Senior Lecturer in Vector Biology, London School of Hygiene and Tropical Medicine

Chair:

Stephanie Levy, Research Fellow, ODI

Prof David Hall began by stating that this topic is an enormous field. By its very nature, the agricultural sector works with the private sector. He explained that he would speak about the Natural Resource Institute's (NRI) experiences, both problems, benefits and lessons learnt, of involving the private sector in their research work.

The first question that needs to be asked is what are the benefits to the private sector of involvement in research? What can researchers and the research offer? There are three possible benefits:

  • increases in productivity, quality, reliability of supply of commodity

  • development of new products

  • evaluation and promotion of products

Prof Hall said he would go on to give three examples of projects involving the private sector which each demonstrate one of the above benefits.


Integrated Pest Management (IPM) for Cocoa in West Africa

An example of the first benefit can be seen in the integrated pest management (IPM) project for cocoa in West Africa - this is a very important 'product' for the private sector. It was a DFID-funded RNRRS project over 7-10 years, led by CABI with the NRI, Imperial College and other partners.

This was a public-private partnership, in collaboration with the Sustainable Tree Crops Programme and with private sector funding from the World Cocoa Foundation and public sector funding from the major bilaterals Additional funding also came from the UK BCCCA, the trade arm for the major cocoa-consuming companies in the UK.

There were multiple benefits for both the public and private sectors from working together on this project.

So this project constitutes a relatively uncontroversial example of the involvement of the private sector in research.


White Stemborer Pest Traps for Coffee in India

This is an example of a project which has involved the private sector for the purpose of the development of a new product.

The white stemborer is an insect which eats the stems of coffee plants which eventually destroys them. This causes both an immediate loss of income and a loss of capital for coffee growers. NRI research with the Indian Coffee Board, funded by the DFID RNRRS and CFC worked towards the development of a trap for the pest. The private sector helped to introduce the traps to the market and with the up-scaling of the traps.

There were multiple benefits for both the public and private sectors from working together on this project.

However, there were a number of problematic areas with this project, which included:

  • the intellectual property rights (IPs) of the new product are difficult to protect, although the company does benefit from the 'know-how'

  • the Coffee Board and the growers were unhappy with there being just one supplier

  • the company was not prepared to scale up until the market was more certain, and yet scale-up is required in order to establish the market

  • this is still a relatively niche market so larger players are not interested in being partners

CIMBAA

The third project example presented by Prof Hall was CIMBAA (Collaboration on Insect Management for Brassicas in Asia and Africa). This involved the patenting of toxin genes by an international vegetable seed company in order to more effectively management caterpillar pests in cabbage and cauliflower, which would help to improve food security.

There were multiple benefits for both the public and private sectors from working together on this project.

In conclusion, Prof Hall stated that, for the successful involvement of the private sector in research:

  • both sides must benefit

  • the contributions of both sides must be transparent and justified

  • risks must be shared

  • both sides must understand and respect each others' objectives, timescales and modes of working

  • the private sector in developing countries often needs training, support and capacity-building, particularly in science and technology

Dr Jo Lines started by stating that the health sector is very much more the domain of the public sector, therefore persuading people that the private sector can and should have a role is a challenge in itself.

He then proceeded with some basic facts about malaria:

  • malaria is still the no. 1 health problem in Africa, despite the increasing incidence of HIV/AIDS

  • the use of insecticide-treated nets (ITNs) can have a huge effect on preventing child deaths (20% reduction) from malaria

Despite this, there have been many arguments about how the private sector should be involved in scaling-up the use of ITNs. There are two lobbies: those who believe that nets should be provided free of charge and those who believe in social marketing, and that people will only value their nets if they have been made to pay for them.

Dr Lines then went on to describe 6 ITN myths often believed by people with a limited knowledge of malaria.

But actually:

  • untreated nets give 50% of the protection of ITNs

  • net use research shows that the diversion of nets from babies and children by fathers is not high

  • untreated nets outnumber treated nets by 5:1

  • when comparing urban and rural net use, ITNs are used more in urban areas

  • the use of nets is more concentrated in richer households

  • the gap between the straight line and the curve is called the 'concentration index' which shows just how much more concentrated net use is in richer households compare to poorer

Dr Lines then displayed a range of data which showed that ITN coverage was less equitable than untreated net coverage. He emphasized that despite this, projects hardly ever focus on untreated nets, and that the distribution of project ITNs tend to be much less equitable than untreated nets sources from local commercial markets.

Dr Lines described that in West Africa net use is a long-standing tradition and that people like tailor-made nets which are prettier, more durable and are often made from second-hand net curtains. Though richer households are more likely to buy their nets and this industry is a big business.

The key issue therefore is how to help local people sell ITNs. This can be demonstrated by the case of Sunflag (private company) in Tanzania. From 1994-97, Sunflag made round, branded nets for the mass market with a street price of $6-7. By 1998-2000 there were 3 different factories producing 3.4M nets a year. This increased competition drove down prices, improved quality and increased rural penetration. In 1998 PSI also introduced social marketing of nets. All these factors contributed to hugely increased national coverage and net sales, and reduced socioeconomic inequalities in net use.

A paper by the Catholic Red Cross regarding programmes for agricultural recovery after disasters/displacement found that it was just as effective to use vouchers and markets to promote local supplies of seeds and tools, as it would be to procure and distribute them using the international market, so why has the latter become the norm - including in the net market?

In conclusion, Dr Lines observed that the systems which delivered the results in Tanzania are locally-adapted, self-reliant and robust, and that it is imperative to avoid damaging these.


Discussion

Points and questions raised during the discussion included:

  • When scaling up in the agriculture sector, is there an equal perception of the risks and benefits? How can you deal with differing priorities/agendas?

  • Is there a price difference between treated and untreated nets and what is the impact of increased net use on the fly population?

  • Are there any restrictions on buying/selling nets in Africa?

  • Where projects involve new, externally supplied products, are there problems of market distortion and/or exploitation of technologies in developing countries?

  • What is the impact on the market of the increased demand for re-dipping treated nets? Does the re-treatment of nets depend on how often they are washed? How easy is it to distribute re-treatment kits in local communities?

  • Is there much pressure in local markets against the use of treated nets?

  • What alternatives are there to using nets?

  • Shouldn't foreign aid go towards public goods rather than private? How can this be the case if intellectual property rights (IPs) are given to only one company?

  • When new technologies are rolled out with the help of the private sector, there are issues around competition

  • i.e. there is a presumption that the technology is going to be useful for people, but it will be competing with other technologies already in the market. Is this a form of market coercion? How is it possible to do this effectively whilst respecting the diversity of technologies already in the market?

Responses

Prof David Hall replied that when private sector partners have different priorities, it is very difficult to reach common ground. There are also problems involved in taking projects from small-scale operations to the community scale. This becomes even more complex when there is a product which can be exploited and there is a danger that the whole project could fall into disrepute.

Newer approaches to pest control which have been developed as a result of the white stemborer and CIMBAA projects do need to be applied more widely, and this will have an effect on neighbouring crops. There are attempts to encourage local production of both products. There are some imports but locally produced is better and cheaper. As with India, more advanced developing countries are capable of doing this. Education in the production of these products, and in quality control is also another important issue.

On patents and IPs, Prof Hall replied that none of the projects allow any new technologies to be patented by the private sector, although private companies must be given some sort of protection. They do get the 'know-how' however, and they are given the first opportunity to take the products to the market. After that, any other private sector company could also take up the technology. Companies who are involved do therefore have a big advantage and this is important because for research to have impact, it must be taken up by the commercial sector.

At this point, Lucy Ambridge from DFID intervened to state that DFID assigns IPs to contractors (i.e. in this case NRI), but they are royalty-free worldwide. This applies to baseline research only and it is only at the commercialisation stage that patents can be registered/bought.

In the case of the IPM project for cocoa in West Africa, research field schools were set up, so that certain elements of the new technology were developed by the growers themselves, and the project has not been coercive in any way. Farmers and cocoa buyers will tend to make their own decisions anyway and as long as alternatives are freely available, there is no market coercion as such.


Dr Jo Lines replied that the fly population does decrease in response to increased net use, which means that there is a benefit not just to those using nets, but also to those in the rest of the community, so net use is very good for all. The cost of re-treatment kits is around 30c for the raw chemical. This chemical is out of patent, so readily available and it cannot be restricted. The main issue is that treatment 'kits' for nets are not so readily available. Also, the insecticide pyrethroid is unfamiliar, and it is impossible to tell the quality of it before use so it is easy to fake. Re-dipping kits are sold and semi-literate communities are able to re-treat their nets safely and effectively at a subsidised price. For example, PSI and the 3 factories in Tanzania brokered an agreement that all nets would be bundled with an insecticide kit and that these kits would also be sold separately for re-dipping.

The quality of nets is highly variable but all nets are good, even if they have holes. There are WTO specifications for nets but why is this? For example, when it was discovered that wearing shoes could prevent worms, there was no need for a WTO specification for a shoe. The WTO specification is why there is so much focus on net quality.
As demonstrated, there are lots of different local preferences with regard to net type and design, so local people need help in selling them, but local sellers are not always enabled effectively.

On net alternatives, trying to control the breeding time of mosquitoes is useless in Africa. House spraying is also very popular politically but in order to be effective, it must be ensured that every single house in a village is sprayed properly. This is much more difficult to control and for this reason, this method does not guarantee as many benefits for the community (i.e. a reduced fly population) as the use of nets does.

With regard to coercing the market, the nature of the commodity needs to be examined first. In the Tanzanian example, three companies were invited to compete and this resulted in improved quality and lower prices for nets. Sunflag claimed expertise over the government, but actually the local factory-produced nets were more tailored to local needs/preferences and thus to the market, so took it over as a result. Different forces are at work in different markets. In Nigeria, the market is badly manipulated anyway and in Kenya, the market is dominated by social marketing - i.e. the PSI own-brand net. This can also be dangerous as it concentrates power within the market.

The chair, Stephanie Levy concluded by thanking the speakers and the audience, and observing the interesting parallels with HIV/AIDS and the involvement of the private sector in research projects relating to that issue.

Description

The second seminar in the 'Learning from Experience' series focused on the lessons to be learnt about the involvement of the private sector in research, using examples from the health and agriculture sectors.