New challenges for public research organizations in agricultural innovation in

developing economies: Evidence from Embrapa in Brazil’s soybean industry

Paulo N. FigueiredoBrazilian School of Public and Business Administration (EBAPE)

at the Getulio Vargas Foundation (FGV), Brazil

Columbia Global Centre, Rio de Janeiro, 2 December 2016

This work is concerned with the characteristics of technological capabilitiesfor agricultural innovation in indigenous public research organisations indeveloping economies.

This issue is examined in the context of the Brazilian Corporation forAgricultural Research (EMBRAPA) and its contribution to innovativetechnological capability accumulation in the soybean industry.

Focus

• Demand for agricultural products faces an unprecedented increase, asthe world’s population is expected to reach 9 billion by 2050.

• Most of this population will reside in developing countries, have higherincomes and desire a richer diet. By 2050, there will be a 35% increasein food demand, notably from China, India, other Asian countries andAfrica.

• However, worldwide agricultural productivity growth has been slowing:annual growth is estimated at only 1% over the next two decades, muchslower than historical trends.

• Meeting food demand in 2030 will require an additional 175 million to220 million hectares of cropland

• By 2050, climate change is expected to cause water scarcity and seriousdeclines in yields of most important crops in developing countries,particularly Africa and South and Central Asia as well as large foodproducers such as Brazil.

• By 2070, in Brazil, there will be significant damage to crop species suchas corn, rice, beans, cotton, sunflower and cassava, and soybean lossesmay reach 40%. Climate change will lead to price increases foragricultural crops such as rice, wheat, maize and soybeans.

• Furthermore, in a more optimistic scenario, by 2050, the numbermalnourished children is expected to range from 76 million to 84million, depending on the extent of climate change.

Over the past several decades, effective efforts in technological innovation haveplayed a major role in increasing agricultural productivity and food security. Insome developing economies, governments have implemented relevantagricultural innovations through their indigenous public research agriculturalresearch organisations.

However, innovative activities in agriculture have become increasinglyinterdependent and collaborative. Additionally, multinational enterprises (MNEs)have played a major role in agricultural innovation in certain developingeconomies

This work addresses some of the new challenges for indigenous public researchorganisations in the light of increasing food demand and greater complexity ofagricultural innovation management. This issue is addressed herein through anempirical examination of the Brazilian Corporation for Agricultural Research(EMBRAPA), a public research organisation, from the standpoint of itstechnological capabilities for innovative activities in the soybean industry

Zero Tillage is among the most important agricultural technologiesadopted in Brazil over the last 50 years: it reversed soil degradation,enabled the expansion of agriculture into marginal areas (notablythe Cerrados), boosted farmers’ profitability and increased Brazil’sagriculture competitiveness.

Innovative Activities: Implementation of Zero Tillage in Brazil’s Savanah (or ‘Cerrados’)

5

10

15

20

25

Mill

ion

s o

f H

a

32

EMBRAPA develops a Brazilian ZT package, with input from UK company ICI

ZT technology disseminated in the Mid-West and Cerradosregions

Expansion of ZT into large scale farms

Expansion of ZT into small scale farms

Phase 1 1974 - 1979

Phase 21980 - 1990

Phase 31991 - 2000

Phase 42001-2012

Evolution of zero tillage implementationin Brazil (1974-2012)

Development of new soybean cultivars

Specifically, during the early 1970s, EMBRAPA Soybean engaged in thedevelopment of new soybean cultivars adapted to Brazil’s soil and climateconditions.

During the 1980s, due to the spread of disease (e.g., cancer stem, the cystnematode and powdery mildew bacterial pustule), EMBRAPA intensified itsefforts to develop new cultivars. The highly ‘latitude sensitive’ soybeanvarieties flourish in the tropics’ shorter day length and mild, wet climate.

From the early 1970s to the mid-2000s, EMBRAPA developed more than300 new cultivars specific to different regions of Brazil.

0

500

1,000

1,500

2,000

3,000

3,500

1st generation of soybeanscultivars

1970-1989

Note: *RR = Roundup Ready with Monsanto

SoybeansProductivity

(Kg/ha)

2,500

2 nd generation of soybeanscultivars

1990-2000

3 nd generation of soybeanscultivars

2001-2012

Embrapa BR1BR 6 (Nova Bragg), 13 (Maravilha), 14 (Modelo), 16, 23, 24, 29 (Londrina), 30ParanagoianaDoko, CristalinaTropical, Timbira

BR 36, 37, 38Embrapa 1 (IAS 5 RC),4 (BR 4 RC), 48, 58, 59, 60, 61, 62,

BRS 132, 133, 134, 135,

136, 155, 156, 157,183,184,185

GM

BRS Favorita RR*, Valiosa RR’, Silvânia RR’, Baliza RR’, 243RR, 244RR, 246RR, Charrua RR, Pampa RRCultivance(with BASF)

BRS 212, 213, 214, 215, 216, 230, 231, 232,

233, 239, 240, 241, 242, 243,244, 245, 246, 247, 252, 255,256,

257, 258, 259, 260, 261, 262, 263, 266BRS Macota, Torena , Raimunda, Tianá, Carnaúba, Pala, FEPAGRO 23, Cambona, Candiero, Invernada, BRS Candeia, Raiana, Sinuelo, TebanaBRSGO Caiapônia, Chapadões, Ipameri, Amaralina, Indiara, Raissa, Mineiros, laraBRSMG 250 [Robusta]

1,140

1,720 1,750

2,400

2,950

3,200

World record

Some examples of developed new cultivars and productivity increases.

2008 2009 2010 2011 2012 Total

Database, software biologic collection and scientific methodologies 10 7 4 8 9 38

Cultivars generated/launched 5 20 15 10 15 65

Cultivars tested/recommended 7 11 16 11 9 54

Agricultural feedstock, agricultural practice/process 6 1 9 4 2 22

Total 28 39 44 33 35 179

Developmemt of technologies, products and processes at EMBRAPA Soybean

Source: Embrapa Soybean (2013).

Technological Capabilities Underlying Innovative Activities

The innovative activities described in the previous section reflecttechnological capabilities accumulated by EMBRAPA Soybean.

These technological capabilities reside in the physical systems andprofessionals of the National Centre of Soybean Research (CNPSo), knownas EMBRAPA Soybean. Created in the early 1970s, it is located in the stateof Paraná, Southern Brazil.

By 2012, the CNPSo and its Technological Nuclei of Seeds and Grains wereupgraded into five laboratories, acclimatised chambers, and trainingfacilities.

Activities/participants Crops

2002/2003 2003/2004 2004/2005

Demonstration units 92 78 89

Field days 77 69 84

Number of participants 68,552 84,554 97,859

Source: Embrapa Soybean.

Evolution of Field Days for soybean in Southern Brazil

Inn

ova

tive

act

ivit

ies

• Increased level of inter-organizational management of multiple technological capabilities for innovativeactivitities

• Increased level of difficulty for transferability of technological capability for innovative activitites

Innovative activities

Relatively complex changes based on the adaptation of existing technologies based on informal or not management R&D (e.g., implementation of ZT technology in the mid – west region and Cerrados; Cross –breeding based on genotype molecular makers.)

Innovation activity close to the international technological frontier (e.g., breeding based on phenotype and genotype selection; development of new agriculture process).

World class innovation activities that advance the technological frontier and create new technological segments (e.g., develops of latitude sensitive soybeans based on cross breeding (genomic selection; mutation (molecular biology) and genetic engineering); developer of new versions to the world agricultural processes.)

Minor adaptation which are mostly experience-based and novel to the organization or part of (e.g., Basic adaptation agricultural process seed as ZT suit regional needs) Cross -breeding based on phenotypic selection.

Basic level Intermediate level World leadingAdvanced level

EMBRAPA Soybeans’ external organizational environment

EMBRAPA Soybeans’ internal organizational environment

EMBRAPA SOYBEAN’S

TECHNOLOGICALCAPABILITIES

Tech

no

logi

cal

cap

abili

tie

s

Other public organizations

related directly or indirectly to agricultural

research

Subsidiaries of MNEs

Local federal universities and

research institutes

International universities

and research institutes

Other private organizations

related directly or indirectly to

agricultural

Local state-level universities and

research institutes

State-level organizations

for agricultures research

Professionals’ skills and qualifications

Techno-physical systems

Representation of EMBRAPA Soybean’s technological capabilitites

Inter-organizational arrangements

This article has explored the main characteristics of the technological capabilitiesrequired for innovation and productivity growth in agriculture and the role of indigenousresearch organisations in developing economies. The article has empirically explored thisissue for the case of EMBRAPA in Brazil’s soybean industry.

To analyse this issue, the article has drawn on a robust conceptual framework thatincludes a comprehensive perspective on innovative activities and correspondingtechnological capabilities from the viewpoint of latecomer organisations. By adopting acomprehensive approach to both technological and innovative activities that goesbeyond standard proxies used in the mainstream innovation literature, the article takes anuanced view of the characteristics of technological capabilities of innovative activitieswithin the soybean industry from the standpoint of EMBRAPA.

The article suggests that the technological capabilities accumulated at the level ofEMBRAPA Soybean, which have played a decisive role in innovative activities underlyingBrazil’s achievement of world-leading soybean yields, vary across different technologies,diverse in terms of levels of novelty and complexity and inter-organisationally distributed.However, these technological capabilities are subject to weakening and evendisappearance. Although these capabilities are intrinsic to the context in which they havebeen developed, they are transferable.

Given the developing world’s unprecedented demand for food and increasedinterdependency of the innovation process, indigenous public research organisations, suchas EMBRAPA, are expected to play an even more active but complementary role inagricultural innovation in developing economies over the next decades. To achieve this,these organisations will need to avoid the weakening and loss of existing technologicalcapabilities as they seek to develop new types of technological capabilities for newinnovative activities. They will also have to learn how to manage a multiplicity of types andlevels of technological capabilities suitable to increasingly inter-organisationally de-composed innovative activities. Specifically, they must learn how to explore synergies withmultiple partners as sources of innovative technological capability development. This isimportant not only for crops that compete in international markets but for crops commonin family-based farming.

Furthermore, in light of the challenging scenarios of increased food demand andconstraints, agricultural research organisations in developing economies should exploreopportunities for transfer of their technological capabilities. Therefore, effective investmentin strengthening their existing innovative capabilities and creating new ones should rankhigh on the agendas of managers and policy makers in developing economies.

Empraba P&D and TT

Suppliers

ATER organizations

Educational institutions

Credit institutions

Organization of farmers

and communities

Institutions and

government agencies

Regional and international organizations

Non-governmentalorganizations

Researchinstitutites

Embrapa’s partnerships for technology transfer

Embrapa’s partnerships for technology transfer

Figueiredo, Paulo N. (2016). New challenges for public Research organizations in agricultural innovation in developing economies: Evidence from Embrapa in Brazil's soybean industry. The Quarterly Review of Economics and Finance, v. 62, p. 110-126

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