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06BANGKOK3237 SEED PIRACY IN THAILAND: A “GROWING” PROBLEM

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“65786”,”5/30/2006 7:27″,”06BANGKOK3237″,

“Embassy Bangkok”,”UNCLASSIFIED”,

“06BANGKOK3237″,”VZCZCXRO0683

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DE RUEHBK #3237/01 1500727

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P 300727Z MAY 06

FM AMEMBASSY BANGKOK

TO RUEHC/SECSTATE WASHDC PRIORITY 9131

INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY

RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

RUEHRC/USDA FAS WASHDC PRIORITY 0715”,

“UNCLAS SECTION 01 OF 03 BANGKOK 003237

 

SIPDIS

 

SIPDIS

 

STATE PASS USTR

COMMERCE PASS USPTO FOR DKEATING AND PFOWLER

 

E.O. 12958: N/A

TAGS: KIPR, EAGR, TH

SUBJECT: SEED PIRACY IN THAILAND: A \”GROWING\” PROBLEM

 

1. Summary: Behind the headlines of record losses to

optical disc and trademark piracy in Thailand lies a less

known but equally serious form of intellectual property

infringement. Plant breeders in Thailand have seen their

plant varieties and the seeds derived from them, which

typically take years and large capital investments to breed,

copied and sold by small-time seed dealers. Thailand passed

a Plant Variety Protection Act in 1999 to protect these

investments, but delays in implementing regulations and

registration procedures has meant that enforcement is

non-existent. Seed firms look forward to enforcement of

rights to their new plant varieties, but in the meantime are

using their own security tactics to protect their valuable

products. End Summary.

 

Seed sales flowering, but piracy growing like a weed

——————————————— ——-

 

2. Thailand is a net exporter of seed for both field crops

(corn, rice, soybeans, etc.) and vegetables, and a growing

site of seed production and research and development for

breeding new plant varieties. The Thai seed market is

estimated at over USD 200 million in annual sales, mostly in

field crops. Thailand imported about USD 11 million in seed

in 2005, but exported approximately USD 35 million worth and

projections are for that number to triple in the next five

years. The U.S. and Japan are the top export destinations.

Multinationals control about 80 percent of the field crop

seed market, but Thai firms are dominant in vegetable seed

sales.

 

3. Like most intellectual property, new plant varieties

are costly and time consuming to develop, but cheap and easy

to copy. Seed firms in Thailand develop their products the

old-fashioned way, selecting plants with desirable properties

such as high yield and resistance to disease and insects,

then cross breeding them to develop improved varieties.

After development and testing in field trials, the firms

contract with local farmers to grow the new and improved

variety to produce seed for sale to farms around the country

and for export. As Thailand\’s seed market began growing in

the 1990s, seed piracy grew right along with it. Seed

pirates, usually small-time sellers in rural areas but also

increasingly more sophisticated operations, purloin firms\’

new plant varieties by either surreptitiously stealing the

parent lines of the new hybrid from test fields or paying off

contract farmers for a sample. The pirates then reproduce

the new breed on their own farms and sell the resulting seed.

(Note: Genetically modified crops are not authorized in

Thailand, but there is anecdotal evidence that some farmers

are growing bootlegged GM cotton and papaya without

authorization.)

 

4. Mr. Manas Chiravavonda, director of Chia Tai, the

largest vegetable seed seller in Thailand, couldn\’t put a

figure on the percentage of seed piracy, but labeled it

\”huge\”, a problem affecting both Chia Tai\’s domestic sales

and exports. Monsanto reps estimated the piracy rate at

single digits, but saw it as a growing problem. Field theft

accounts for much of the piracy, but Manas said firms\’ own

employees were perhaps the greatest danger. Manas described

how one of Chia Tai\’s employees recently quit the company,

walked out the door with the company\’s latest line of melon

seeds and immediately set up his own business selling the

seeds to the Indonesia market. Without a means to protect

their variety, Chia Tai was helpless to prevent the theft.

\”It\’s the wild West out here,\” says Manas.

 

5. To combat seed theft firms have developed a raft of

security procedures, from stationing security guards around

contract farms and research fields to growing and storage

protocols to prevent pirates from getting the latest variety.

Chia Tai treats plant development as a trade secret, keeping

research under tight wraps and in house to prevent

disclosure. The firm develops new varieties more quickly

than before and releasing them earlier, trying to stay one

step ahead of the pirates. Simon Jan de Hoop, Director of

R&D for East-West Seed, said their farms grow the male and

female parents of a new hybrid in different fields, making it

more difficult for pirates to get both keys to the new plant.

When possible multinationals like Monsanto keep the parent

lines back in the home country.

 

6. To further avoid piracy, seed firms are moving

production bases offshore to China, India, and Thailand\’s

ASEAN neighbors, particularly countries where the seed

variety to be sold in Thailand is not being sold locally.

Although piracy occurs in these countries as well, pirates

 

BANGKOK 00003237 002 OF 003

 

are less familiar with the plant material and the risk is

consequently lower. However, seed firms worry that the

pirates are developing their own international connections,

working with partners in other countries to pilfer the best

new varieties.

 

PVP Act yet to reap benefits

—————————-

 

7. Thailand passed the Plant Variety Protection (PVP) Act

in 1999 to extend intellectual property rights to new crop

varieties, but many implementing regulations have yet to be

promulgated and registration of new varieties is only now set

to begin. East West\’s Simon de Hoop blamed some of the

delays on staff turnover in the Ministry of Agriculture, but

considered the staff capable and knowledgeable about the

issues. Nevertheless, until varieties are officially

registered there exist no legal restrictions to prevent a

seed pirate from freely selling another seed firm\’s variety.

\”It\’s free to steal,\” says Chia Tai\’s Manas.

 

8. The Ministry of Agriculture\’s (MoA) Plant Variety

Protection Office has responsibility for examining and

approving new plant varieties. Under the PVP Act only

certain crops can be protected; at the moment MoA accepts

applications for 33 crop varieties though plans are in the

works to add more crops to the protected list. Breeders can

request additional crop varieties to be added, and though the

variety must meet a set of criteria, MoA says that in

practice breeders are unlikely to be turned down. MoA has

accepted 99 applications for new plant variety protection in

the two years since they began accepting applications, but

only recently got closer to issuing approvals for the first

batch: 14 new varieties of orchids. If a new variety is

commercialized, MoA requires that one percent of revenues be

paid into a plant variety protection fund to go towards

conservation and community development projects. The fund

contribution is considered compensation for use of Thai

genetic resources in developing the product. Firms that do

not use Thai plant resources are exempt from the fund payment.

 

9. The PVP Act provides protection for new plant varieties

for between 12 to 27 years depending on the plant. The Act

lays out penalties for unauthorized sales of a protected

variety, up to two years imprisonment and/or a USD 10,000

fine, though there has yet to be a case filed. Mr. Sakorn

Tripetchposal of Pioneer Hi-bred said that a DNA

fingerprinting laboratory at Kasetsart (Agriculture)

University was available to seed firms and could offer proof

within days that a protected variety had been counterfeited.

Sakorn looks forward to enforcement authorities bringing seed

pirates to court, but it is uncertain whether authorities

will take this form of piracy any more seriously than they

have other IP piracy in Thailand. Without active involvement

from police, firms would be forced to resort to bringing

lawsuits against infringers and hoping for damages. East

West Seeds, which is expecting a new sweet corn variety to be

approved soon, said they were prepared to enforce their

rights, but were concerned that in the end a legal suit may

not be worth the cost to bring an infringer to justice.

 

10. In recent negotiations for a U.S.-Thai Free Trade

Agreement, Thai negotiators resisted a U.S. proposal for

Thailand to join the International Union for the Protection

of New Varieties of Plants (UPOV in the French acronym).

Thailand\’s PVP Act is based in large part on an earlier

version of the convention, UPOV 1978, but the 1991 updated

version tightens protections for plant breeders that Thai IP

experts consider not in Thailand\’s best interests. Dr. Tanit

Changthavorn of Biotec, part of the Ministry of Science and

Technology, explained that the RTG had concerns over UPOV\’s

restrictions on farmers saving seed for the next harvest,

resource issues on protecting all crop varieties rather than

only select crops, and the lack of a requirement for benefit

sharing for the use of local plant resources in breeding new

varieties. Some seed firms said that although they would

support Thailand joining the UPOV convention, they considered

the PVP Act to contain sufficient protection for their new

varieties and were substantially more concerned with

proceeding with enforcement of the current law.

 

11. Comment: Not as visible as the rampant trade in

counterfeit CDs, DVDs and Billabong shorts on the streets of

Bangkok, seed piracy is nevertheless having an economic

impact on Thailand, specifically on farmers, a population

perhaps least able to afford an economic blow. Firms have

been unwilling to conduct in-depth research into new

vegetable varieties that have relatively low sales, and

 

BANGKOK 00003237 003 OF 003

 

improvements in yield have lagged compared with the more

lucrative field crops. Counterfeits of new plant varieties

are typically not properly controlled in production and

farmers do not have access to detailed information on

fertilizer and herbicide spraying techniques and timing for

the new varieties, resulting in higher costs and lower

production yields. Hopes are high among plant breeders that

enforcement of the PVP Act can turn this situation around,

but it is an open question whether the police or courts will

take the crime seriously enough to put a dent in piracy. End

comment.

BOYCE

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Written by thaicables

July 11, 2011 at 8:25 am

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