Research on the economics of the conservation and sustainable use of biodiversity is essential for proper management of genetic resources. But both biodiversity and economics are inherently complex fields.

To get a better understanding of the issues, scroll down or click on the links below.

The costs of genebanks
The value of genebanks
Costs and benefits sustaining biodiversity on farms
Economic valuation of agricultural biodiversity conservation

The costs of genebanks
Research carried out by the International Food Policy Research Institute (IFPRI) for CGIAR’s System-wide Genetic Resources Programme (SGRP) has found that simply holding a seed sample for one year (in which the sample requires no special treatment) costs less than US$1.50 per accession per year for most crops. Conserving a maize sample costs a little more, US$2.16 per accession. Cassava, which must be conserved in vitro, costs US$11.98 per accession to store. This information and more is found in Endowing Future Harvests: The Long-Term Costs of Conserving Genetic Resources at the CGIAR Centres.

This information is vital because the international community has recognized the need to protect the world’s crop diversity collections, especially the largest and most important of these collections which are those held by the CGIAR. In 1994, the CGIAR Centres placed their collections in trust for the world community under the intergovernmental authority of the Food and Agriculture Organization of the United Nations (FAO). That arrangement has subsequently been replaced by the Centres’ signing agreements with the Governing Body of the International Treaty on Plant Genetic Resources for Food and Agriculture.

To live up to their responsibilities as trustees of these collections, it is necessary for the CGIAR Centres to determine how much this would cost and find ways of securing the needed financing. This is why the SGRP commissioned detailed reports of the costs of the long-term maintenance of the collections held by CGIAR Centres.

Cost structures for national banks are likely to differ from those of the CGIAR Centres because of physical conditions, size, materials and labor. They are also likely to differ tremendously between developing and advanced economies. 

Despite these differences, the SGRP reports provided vital input to the Global Crop Diversity Trust, which is raising an endowment to meet the operational costs of maintaining the world’s diversity collections. The Global Crop Diversity Trust has been recognized under formal agreements with the Governing Body of the International Treaty on Plant Genetic Resources for Food and Agriculture as an essential element of the Treaty’s funding strategy.

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The value of genebanks
To assign exact monetary value to the benefits generated by crop genetic resources conserved in ex situ collections is difficult.

However, studies have shown that crop genetic improvement did lead to impressive productivity growth over the past several decades. Growth has been uneven and there have been serious questions of sustainability, but nevertheless this growth has had a tremendous impact. Increased food production has contributed to lower food prices globally. Average caloric intake has risen as a result of lower food prices—with corresponding gains in health and life expectancy. And it was the genetic resources held in genebanks that made the improved crop varieties possible.

It is clear that consumers and farmers benefit indirectly from the genetic resources incorporated into improved crop varieties when output expands and prices decline. For example, rice production in Asia increased 42 percent during 1968-1981, an increase of about 110 million tons per year, following the introduction of high yielding varieties developed through breeding. At a price of US$250 per ton, the increase in production generated a profit of US$27 500 million per year, several thousand times greater than the investment on the conservation of rice genetic resources

Another way to measure value of germplasm is to measure demand and use. Through quantitative analysis of the types of materials requested by different countries and institutions, we get a better understanding of the nature of benefits generated by ex situ collections. It is important therefore to document in the number of requests for germplasm of different types and the purpose for which they were requested.

Such information is being compiled for CGIAR collections by SINGER, the CGIAR System-wide Information Network for Genetic Resources. Bioversity has also taken part in a number of other studies on the demand for and use of accessions held in ex situ collections including the use of Chinese collections and the oversees use of US conserved materials.

However, the value of crop genetic resources conserved in ex situ collections includes not only current use value and expected future use value, but also option value, associated with the flexibility to respond to some unknown, future event.  The biodiversity held in genebanks is like an insurance policy against unforeseen disasters. Ensuring global food security is priceless.

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Costs and benefits sustaining biodiversity on farms
The distribution of their economic benefits and costs between ex situ conservation in genbanks and in situ conservation on farms differ in fundamental ways. The costs of genetic resource conservation in gene banks are borne largely by public investments. By contrast, both the costs and benefits of conserving genetic resources on farmare felt directly, and in a very immediate sense, by the farmers who grow them. These costs and benefits change as economies develop and farmers face new opportunities.

On farm conservation and use of genetic resources is defined as the choice by farmers to continue cultivating diverse crops in their communities, in the agroecosystems where the crops have evolved historically through processes of human and natural selection.

There are many factors that determine farmers’ decisions to continue to manage biodiversity. Although these factors are all have an economic dimension, they are not all related to money. They are also connected to ecological relationships, local knowledge, cultural practices and farmers’ rights; elements that are difficult to measure and likely to change over time. The value of biodiversity on farm is difficult to assess because of its inherent subjectivity, because different types of values exist and because these values change over time.

The objective of economics research undertaken by Bioversity in partnership with IFPRI is to document and analyse in a systematic way the various factors that encourage or discourage farmers from choosing to grow diverse crops. The research aims to identify policies that favour conservation without impeding the progress of economic development. The world’s poor cannot be asked to shoulder the burden of conserving agricultural biodiversity unless they can benefit by doing so.

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Economic valuation of agricultural biodiversity conservation
Under the aegis of SGRP, IFPRI has been undertaking a body of work on values and incentives of agricultural biodiversity conservation in association with the International Livestock Research Institute (ILRI). In this regard, IFPRI and ILRI organized an expert workshop on valuation tools, produced a paper entitled Valuation and Sustainable Management of Crop and Livestock Biodiversity: A Review of Applied Economics Literature, and an associated thematic bibliography, Economics Literature on Crop and Livestock Genetic Resources (ECOGENLit), which is a unique collection of literature that reflects the emerging interest of applied economists in crop and livestock biodiversity. The bibliography is organized by themes and is also a complete searchable database.

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