Meeting Report
Stephanie Levy, in the chair, opened the meeting by welcoming
the audience and the speakers. She explained that this second
seminar in the ODI/DFID CRD series,
'Learning from Experience - Linking Research and Development'
will focus on the lessons to be learnt about the involvement
of the private sector in research, using examples from the
health and agriculture sectors.
Prof David Hall, Natural Resources Institute, University
of Greenwich
Prof 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 (see
slide 2):
- 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
(see slides 3-8)
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
(see slide 4 for the
different constituents of the project).
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 (see
slide 5). Additional funding also came from the UK BCCCA,
the trade arm for the major cocoa-consuming companies in
the UK (see slide 7).
There were multiple benefits for both the public and private
sectors from working together on this project (see
slide 8).
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 (see
slide 14).
However, there were a number of problematic areas with
this project (see slide
15), 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 (see slides
19-24)
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 (see
slide 24).
In conclusion, Prof Hall stated that, for the successful
involvement of the private sector in research (see
slide 25):
- 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, Malaria Knowledge Programme, LSHTM
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 (see
slide 1).
But actually:
- untreated nets give 50% of the protection of ITNs (see
slide 2)
- net use research shows that the diversion of nets from
babies and children by fathers is not high (see
slide 3)
- untreated nets outnumber treated nets by 5:1 (see
slide 4)
- when comparing urban and rural net use, ITNs are used
more in urban areas (see slide
5)
- the use of nets is more concentrated in richer households
(see curved graph on slide
6) - 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 (see
slides 7-9) 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 (slides
10-14), 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 (see
slides 15-25). 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 (see
slide 26) 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 (see
slide 27) 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 (see ODI
meeting on the involvement of the private sector in scaling
up the response to HIV'AIDS).
