Purpose

The regulatory approval process of new biotech crop varieties is said to be slow and expensive, presenting barriers to the development and commercialization of new cropping technologies. Researchers claim that for some crops, these barriers may be prohibitive, resulting in technological orphans.

Alternative approaches to regulating new crop biotechnologies could be less expensive, but to date the private and social costs of the current regulatory system have not been analyzed or measured, let alone compared with alternatives.

Background

The techniques of biotechnology have been employed for almost 30 years and since 1996, over 580 million cumulative acres of bioengineered soybeans, maize, cotton, and canola have been grown around the world. Economists have estimated the social benefits from biotech crop varieties to be in the billions of dollars.

In spite of this apparent success, some observers have been disappointed at the rate of development and commercialization of new biotech crop varieties. Indeed, evidence is building that agrobiotechnology innovation and product development have recently slowed, and spiraling costs of compliance for regulatory approval has been sited as a key factor: Further, the perceived high regulatory costs appear to have affected establishment of new biotech firms and the flow of venture capital that finances them.

Objectives

The objective of this research is to provide the first estimates of the private compliance costs of the regulatory approval system for agrifood biotechnologies. In pursuing this aim, researchers will make three main contributions:

1. Will describe and document the regulatory requirements and examine how such requirements translate into relevant compliance costs. Compliance cost estimates will be based on reviews and analysis of dossiers submitted to regulatory agencies by several major biotech companies and universities and interviews with regulatory affairs practitioners and regulators.
2. Will provide estimates of representative compliance costs for key biotechnologies. Will also characterize the structure of compliance costs.
3. Will examine the proposition that regulatory compliance costs have increased over time and will identify factors that might have caused such increases, if any.

Impact

Few public policies have the same potential as regulation has to retard product development and commercialization of new biotech varieties. Increasingly, the focus of the public debate on proper regulatory policies has been on risk management. Optimal public decision making requires that regulatory costs should also be taken into account.

Unfortunately, very little is known about such costs as information has been diffuse and confidential. This project will provide a first glimpse into such costs and will inform public decision making at a time that appears critical to agrobiotechnology innovation.