Ivan Starikov: “Vavilov’s ashes are beating in my heart” - what plant breeders said at “Where the Margin is 2020”
Within the framework of the international agricultural conference “Where the Margin is 2020” on February 6, the HSE Technological Transfer Center (TTC) held a panel discussion “Russian seed production in light of world experience: problems and opportunities”. The main points of discussion were presented as exclusive material thanks to the Agro XXI portal.
The discussion was moderated by Mikhail Kharchenko, director of the TTC, and he also opened it with a brief report where he described the first results of the “Selection 2.0” research project of the Higher School of Economics. Why did the university decide to concentrate on the market of selection and seed production? Mikhail recalled the provisions of the Federal Antimonopoly Service of Russia (FAS) for the Bayer-Monsanto deal, one of them stipulating that the Higher School of Economics was to become the operator of the technology transfer from Bayer to the Russian breeding companies. In addition to administrative support and transfer control, the TTC implements research projects focused on the agricultural sector and the selection and seed production market in particular. The “Selection 2.0” project is now in its final stages.
Across many cultures, Russia is dependent on foreign breeding. Over the past ten years, the share of imported varieties in corn crops has grown from 39% to 62%, and sunflower from 53% to 73%. The situation with wheat is not so critical, today imported seeds make up only 2%, however, its rapid technological development following the example of other crops means it is only a matter of time and investment, because the selection of wheat around the world “lags behind” due to the complex genome. Financing of Russian wheat breeding through state subsidies is limited, and foreign companies will very soon pay close attention to the Russian wheat market, so it will be difficult for our breeders to maintain their positions.
The TTC experts have analyzed the agro-industrial complex as a long value chain, where each link significantly affects the others. The analysis showed that the aggregate margin of the breeding and seed industry is lower than its potential due to underinvestment, and as a result, agricultural production suffers multiple losses, and Russian companies lose market share. All budget support and financing in the field of selection today is directed to state breeding institutions; there are subsidies for state assignments, and R&D financing and projects of the Federal Scientific & Technical Project (FSTP), yet private companies receive minimal support. In Russia, the links between the market and breeding join weakly, and the scheme for channeling money to selection and seed production does not work at all. The royalties from the sale of crops stand at 0.0001%, while in foreign countries the usual rate is 2%, or even higher. There is an urgent need to change the existing system, but not by directly copying Western models so that foreign companies do not become the main beneficiaries, but instead by new approaches.
The speech by Vladimir Chirkov, Executive Director of EkoNiva-Seeds, was a practically clear illustration of the theses and statistics that Mikhail outlined. Vladimir noted that his company is a vertically integrated holding with a full production cycle, so they can observe the processes “from above”, having a broad overview of all parts of the chain. According to Vladimir, when planning, you need to build on the export revenue indicators and focus on the world market, because domestic needs are already provided for. However, there is no need to talk about the competitiveness of Russian applied breeding abroad, are there is a lack of competitive advantages.
Three conditions must be met for development. The first of these is access to genetic resources. For private selection companies, access is completely limited: both the VIR collections and the Monsanto bases are closed. The main driver of Soviet selection and its success was precisely the collections collected by N.I. Vavilov. The second condition is access to technology, new selection methods to speed up work, and this is also limited -
“We do not create or buy new technologies,” and this is directly related to the third condition - the lack of financial resources. State support programs, credit lines... There is no progress for breeding startups there. EkoNiva-Seeds has launched programs for the selection of soy and frost-resistant winter wheat, but so far this area has not brought profit. Scaling up requires access to financing: expensive technologies, imported breeding equipment, high salaries for specialists. “The want for personnel can be solved with worthy remuneration; the personnel problem of the industry is itself the problem of underfunding.”
Today, according to Vladimir, the market shifts in conjunction with the fact that Russian companies are becoming producers of agricultural products exactly on those conditions and with exactly the margin that foreign companies supplying genetic material will establish. At the same time, the termination or revocation of the license and the termination of the supply of seeds will mean complete isolation and catastrophic consequences for the population of the country, therefore, the agricultural sector and the competitiveness of applied breeding in particular should be considered in terms of national security, under the auspices of the military-industrial complex.
The SoyuzSemSvekla breeding and genetic center, which was represented by Elena Kolesnikova at the session, was created specifically to change the situation of dependence on foreign breeding. The company is faced with the task of developing highly effective hybrids of sugar beet and bringing its own production share to 20% of the country's needs. More than a dozen varieties from the center have already passed registration tests. The project is being implemented as part of the FSTP on co-financing terms: fifty percent of the costs are borne by private companies, and the second half is allocated from budget funds.
Denis Tsesarenko, Managing Partner of Sporos, spoke about the unique experience of cooperation between state breeding research institutes and private business in the Far East. Three main sources of seeds prevail in this region: 99% are from research institutes, a very small share is from frequent breeding companies, and the third significant sector is Chinese smuggled seeds. Research institutes do not have the material and technical base in order to propagate seeds and produce them on an industrial scale, to engage in marketing and distribution, to bring the seeds to farmers. Sporos assumed all these functions in order to close the gap in the region’s need for seeds that are in great demand and have always been in short supply. "There is a demand for selection, farmers want to buy seeds on a different scale and better quality." The company built the first seed plant in the Far East, equipped with the most advanced foreign equipment, and concludes with the research institute long-term exclusive contracts for working with a particular variety.
Alexey Ivanov, Director of the HSE-Skolkovo Institute for Law and Development, noted that the lack of access to genetic resources to create new varieties and hybrids is a very important barrier. Breeding in Russia does not work in a clear market logic, unlike other industries. That blueprint, which was formed by Nikolai Ivanovich Vavilov and other prominent genetic scientists, today remains closed out of the breeding business, while the richest collections are immersed in an institutional system which still functions as a Soviet model. There is no effective link between the accumulated national treasure and the market. Alexey outlined two reasons for the current state of affairs. Firstly, the ambivalence of the structure of collection rights. On the one hand, these are physical assets, on the other - they are the objects of intellectual rights. Such duality blocks a series of operations that could launch collections into circulation and provide access to them. There is also a flip side: the colossal accumulated resource is still being used - however, in the gray zone in the “under the counter” trade mode. There are no legal instruments for transferring the Soviet heritage into the hands of those who can and are willing to integrate their achievements into global value chains. Experts have long been talking about the need to link Russia's agrotechnological development with global economic processes and bring the richest Russian genetic collections to the light.
According to Alexey, the situation is paradoxical: “We are trying to use the resources of our Western partners [we are talking about the transfer of Bayer technology, which is carried out in accordance with FAS regulation]. To support the development of domestic selection, we give businesses free access to foreign assets, and our own colossal resource of genetic collections does not work for the needs of breeders.” The HSE forces have developed specific legal solutions that will allow for the introduction of “dormant” collections and open access to them for Russian companies.
Alexey saw support in Ivan Starikov, a political public figure, agricultural economist, and breeder. He believes that it is not necessary to separate applied and fundamental genetics, because both directions are ultimately aimed at bringing a new variety to the fields. “The work of the breeder is akin to the work of the artist, the more colors - genetic markers - the better the picture,” said Starikov. However, the unique collection is in an encapsulated state. Ivan Valentinovich Starikov recalled that in the besieged Leningrad, scientist-breeders of the All-Union Institute of Plant Growing were starving to death, but they did not open a single bag to cook their porridge and save themselves. “Today, these bags are traded from under the table. They need to be digitized, genetic markers must be selected and brought to market.” Starikov proposed redistributing part of the funds of the national scientific project to support Russian breeding and genetics and to bring the problem of import dependence on foreign genetic resources and the fate of Soviet collections to the agenda of the Security Council of the Russian Federation.