WCMC Biodiversity Series No. 7 Industrial Reliance on Biodiversity T. M. Swanson and R. A. Luxmoore WORLD CONSERVATION MONITORING CENTRE DIN S404 Digitized by the Internet Archive in 2010 with funding from UNEP-WCMC, Cambridge htto://www.archive.org/details/industrialrelian97swan WCMC Biodiversity Series No. 7 Industrial Reliance on Biodiversity A Darwin Initiative Project T. M. Swanson Faculty of Economics and Politics Cambridge University R. A. Luxmoore World Conservation Monitoring Centre WORLD CONSERVATION MONITORING CENTRE World Conservation Press 1997 The World Conservation Monitoring Centre, based in Cambridge, UK, is a joint venture between the three partners in the World Conservation Strategy and its successor Caring For The Earth: IUCN - The World Conservation Union, UNEP - United Nations Environment Programme, and WWE - World Wide Fund for Nature. WCMC provides information services on conservation and sustainable use of species and ecosystems and supports others in te development of their own information systems. Prepared for publication by the World Conservation Monitoring Centre with generous funding from the Darwin Initiative. WORLD CONSERVATION MONITORING CENTRE Published by: World Conservation Press, WCMC, Cambridge, UK. ISBN: 1 899628 06 1 Copynght: 1997 World Conservation Monitoring Centre, Cambridge Copyright release: Reproduction of this publication for educational or other non- commercial purposes is authorised without prior permission from the copyright holders, provided the source is acknowledged. Reproduction for resale or other commercial purpose is prohibited without the prior written permission of the copyright holders. The views expressed in this book do not necessarily reflect those of WCMC or its collaborators. The designations of geographical entities and the presentation of material in this publication do not imply the expression of any opinion whatsoever by WCMC, the Commonwealth Secretariat, the Darwin Initiative for the Survival of Species, or other participating organisations concerning the legal status of any country, territory, or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. Citation: Swanson, T. M. and Luxmoore, R. A.. 1997. Industrial Reliance on Biodiversity. World Conservation Press, WCMC, Cambridge, UK. O8pp. Cover design by: Michael Edwards Printed by: Victoire Press Ltd, Cambridge Available from: World Conservation Monitoring Centre 219 Huntingdon Road, Cambridge CB3 ODL, UK Tel: +44 1223 277314: Fax: +44 1223 277136 Email: info@wemce.org.uk; URL: http:/;www.wemc.org.uk CONTENTS 1. INDUSTRIAL RELIANCE ON BIODIVERSITY: A SUMMARY ..... 1.1 INTRODUCTION: THE INDUSTRIAL USEFULNESS OF BIODIVERSITY .............. 1.2 BIODIVERSITY AS A COMMODITY: DIRECT USE OF DIVERSE WILDLIFE RESOURCES . 1.3. BIODIVERSITY AS AN INFORMATIONAL INPUT INTO BIO-INDUSTRY .............. 1.4 THE PROJECT ENVIRONMENT (INDUSTRIAL AND NATURAL) PROPERTYORIGHMTSISS UES) feo nes che ee ee ea) nce ao ok a Sigg CONCLUSIONS scgna: octane ecaeae Ce asp ore ce ay earn) Scud 6 Sie She arsesyeuc ets cease eee HOM REFPEREN CES PSE eect nen arte ne ten eee ee a eae toe as Sse oon re ene entree ee, eee 2. THE VALUE OF THE WILDLIFE TRADE ........................ 2:1 PRINTRODUCTIONS 4f Simheyen LISD ona eel eee BD. 2 eS De ORESTIRESOURCES se cars Mei cas atte od fer isid fie Recess hare AE oe ne eee DS AUEISHERIES HSAs TR, PRED TIRE 2 eine. esc acy nt SA eM Ot PD ete Pe DAs SWIPE PAIN TIVMIATE STIR AD B ee oataaace Sas e oae ge ee e tio c eeie 24:1 , Furdradesssiehos (45ers 206 eee Penis ah oh eters to. meek... 8.8 ae. 2:42, Reptile;Skinvbrade sanjay. meet So. LS, Scie eee eosieeal. ...£.,.72.2).: 2.4.3. KivesAnimaliPradeywst ant, ass, Se oes See A Ae er en ae DAv4 \CoraissPearlsssShellssand Other Marine Trade... 15-44 547 Sees ee) eee 24/5. Rhino/Horm\and!Elephantilvory Mirade 45 = 3.20202. is, = Oe eee) eee 2.4.6 ‘Animals/asiFood:GamesMeatet ein emai Re poem at pe eiawbal ait 0.0 Se. 24°] AnimalsvfonMedicinalktUsert, waetins Aye... -... eee A. Bee ie: BES... 224685 “Animals:for Biomedical/Researchyn-s ea cise a eis ee eae ee ae DS (PIGANT TRADE, \o.co. ores este vec cis att rose ab tee eaece adie Oe Sy Serge hep seo ne rae Sas he ee one's a 2.5.1. QOmnamentalliWildiPlants: pewereget gt a A 5. we eB i ee 25D) s iPlantSaSebO0dien tee ee eke eet BEBE ne weds hn ec ct ee ee Alea 25:3". /PlantiGeneticNRESOURCES sci se aa Pd es, Buca yey rap an- eae ED awe Cu ob ae DOs FU OURIS Me ce ach cc seca cc) fo aes se Ee cesta nfo oe USS Cane gee Rene neg) ec, oa 2.7 OVERVIEW OF TRADE AND CONCLUSIONS ..................-...2-.--.---.-- dag AED SI Ed NY C) ERS ates ae ea CELI BIL POU SI OR IY hk ORE, Ne eI a AME eee 3. BIODIVERSITY AND THE PHARMACEUTICAL INDUSTRY ..... S21t INTRODUGHONGSS Ca eee Cee nn eee et Rese Sree tenen shoes Stee cer are erie: nero) 3:2, SURVEY RESULT Sigg: noes Soke atn ae IF Chaete ke DOTE TE tye cates creceei ie ood) Ba 3.2.1. Drug Discovery and Natural Products Research: Evolution to the 1990s ............... OY, 3.2.2 Expenditure on Research and Development of Natural Products .................... 60 32:3) S'CompanyStratesies, Saat so Lene DN eh ena cenee ame scree peo ets, ASE Be Ba Ue 62 3.284) Sample:Collectionsiea.. .-rey t-te eee emer em eee ee ey ae eye nee 64 BH2'5e WorkiwithvExtracts) nt cties Seah Gee Sires See nn SR EE Re 67 BU2"61 SSCLEEMIMG Ver hoes cy cetera oa Tay ah eta eo es pene hor meen eet ees Cre 68 3257, DetailsiofsNaturalProduct/Research’ Programmes’ = a) 2s > eee ae eee 70 32:8) peCollaborations#\. 2.2.5 Ateccn CAN Aas POR NEN AREER A SOND Ds Ee A oe 70 39229" Chemicaltibraries: 3 spy ae ie Sena eae ce ae eel een ae a ean ee eae 73 3.2.10 The Convention on Biological Diversity .........................-.-.---4.2. 73 353" SUMMARY 2 fies cunsis fi cle. Bae ees eA RERE CeMO SSeS eae cla ens 2 ea Si sacks ee oe 75 SrAPWIEONCEUSIONS: sci eee a a aA i es re eh a 75 4. THE USE OF PLANT GENETIC RESOURCES IN AGRICULTURE 77 4.1) SINTRODUCTION, «1:25, 272 ice ere ie eis Se tee. nc en ee Oc dai 4.2), THE BASICSIOF PLANT BREEDING © 32 2aeeeee es 2h 2 le See one 77 4-27 lee Determinants/of¢GermplasmyWsea meri ieee oir nye eae ee 78 4.2.2. The Dynamic Use of Wild Genes in Research: The Cascade Effect .................. 79 453. SSURVEYIRESUETS: «3:5 oie teen eee SS a ee en 80 435 SeediCompaniesyandyPlantyBrecdersi-w yee peer ae ewe nner 80 4:32) _ (Usevof/Germplasmin'ithe)BreedingyIndustnye. ys ye cis eee ee ee 82 4°33)» lnstitutional/SourcesiolGennplasma eee eee ec eee eee eee ee 86 43354) AllocationiofiBreedineyActivitieSies-yemq-ucr cee eee ne ee een a 88 4.3.5, . Research: Priorities... << Sscsn co secu eee) en eM eta Papas ee Tote rem Tay ee me 91 4°3:6, ‘Breeding. Methods... 35/55 aces cies sae ee es lS ES PA PMY OE Eeeey |, sees 92 4.3.7. The Industry's Perceptions of the Maintenance of Germplasm ..................... 93 Giems Jsioalagia7 Ema GMIS oo onadonedeasdcuacanacuaesdsceépondoagbouges 97 4545 SUMMARYCAND I ECONGIEUSIONS ear ie aerate ence eee ee 97 TABLES | World timber trade: roundwood, sawnwood and other forest products 1980-1991 ......... 15 Di, World timber prices: sawlog and veneer log prices of coniferous and non-coniferous 1980-1991 16 2.3 Estimated total international trde in fishery commodities ......................... 18 2.4 European imports of whole, raw furskins from 1986 to 1989 ...................... 19 Je) Major countries of origin of the trade in reptile skins and items to the USA (1984-1990) .... 21 2.6a Major countries of origin and importing countries of skins of Caiman crocodilus (1990-1) ... 22 2.6b Major countries of origin of Caiman crocodilus manufactured products exported by Italy and France (199021) “34 ea eee ee REE Re ee eee Pee ee Pee 23 De Japanese Testudinata skin imports by region (kg) ............-.--.-.....+..-2-.. 23 2.8 Minimum net trade in classic crocodilian skins detailed in CITES annual reports ......... 24 2.9 Japanese imports of reptile skins and leather (1983-90) .......................... 25 2.10 Minimum number of CITES Appendix II species traded (1983-1988) as live animals, Parts;anddenivitivestor both sera-2 te eo on me re erm esis) see ee tee } Phe enE oleh siI: at? lias ME base Age fine ness009 Ai boisiliucy qn ee A LOM ed oa Absa emmenpntod . 10,000 skins/year) and items (> 100,000) to the USA (1984-1990) Export Raw Re-export Export (Skins) Raw manufactured (Skins) (Items Venezuela 36,500 & omy Origin/re-exporte iat ibe Tait eh | 12.700 | 96.300 12,700 pee wi | Singapore 12,500 107,900 acini) doin | Country | ie} % h ° [= = Japan Re-exporter only 86,700 Origin/re-exporter/manufacturer Thailand 274,276 737,388 Argentina 908,175 panty 215,877 Philippines 37,800 i al 528,675 ) Taiwan 103,264 6,233,949 Indonesia 20,900 224,232 Re-exporter/manufacturer 107,900 503,036 Spain ee ae 86,800 2,564,093 Germany France Italy 101,900 2,517,633 105,400 344,979 Manufacturer only lacie aurnz ad Viwe-a 2 eats ang Aa Rae a tors. pie Td dso | eee 119,837 Note: Some countries appear as manufacturers only although they have wild populations Canada Austria Mexico due to the small size of their raw skin exports. Source: Jenkins and Broard, 1994. INDUSTRIAL RELIANCE ON BIODIVERSITY Long-term trends in reptile skin trade are complex. There has been a general broadening of the market from the traditional high-value skins, such as crocodile, turtle and python, to those of the smaller and cheaper species, such as caiman, lizards and small snakes. Part of this has been due to a reduction in supply (over-harvesting), part to trade restriction (all turtles and many crocodiles are on CITES Appendix I), but mostly it has been due to greater market penetration and a demand for cheap, high volume, skins, notably the small snakes. Fashion also plays a role, and has affected the relative proportions of snake and lizard skins. Trade in reptile skins usually consists of a two stage process in which producers of raw skins export them to countries with tanning and manufacturing industries, where they serve both the local market and re-exports to international markets in final goods. In recent years, however, countries of origin have tried to integrate vertically and export more processed goods (Jenkins and Broad, 1994). Table 2.6a Major countries of origin and importing countries of skins of Caiman crocodilus eg eee eee (1990-1) Source: Luxmoore and Collins, 1994. N Ne The Value of the Wildlife Trade Table 2.6b Major countries of origin of Caiman crocodilus manufactured products exported by Italy and France (1990-1) Country of Italian exports by final product French exports by final product origin of raw an Shoes Watch Items Belts Shoes Watch Items Belts straps a le | 71.569 | 11,495 | 15.861 | 861 173, | 173.286 | 3, Laz il | aor | 10,348 48,652 18,164 8,356 = 41,889 6,036 fe [Referee a hme etl ined Pir apie gc | are Eee RR ia cc le es | aie) El Sado gin meron bow hee | Ne (me ede ll a Eel wl ee Fase |r| as |e ee | rao Ear 65.399 | 30.678 ouss58 | 15301 Source: Luxmoore and Collins, 1994. Table 2.7 Japanese Testudinata skin imports by region (kg) America Pe ee ee eee eee eee a ee ee just fg} as} ts 1987 1986 39,562 31,058 1983 : 25,953 a58)| eh enti jisr | 25.6 | toss | | 5.902 jiseo | az] mass] | 5.509 | Source: Japanese Customs Statistics, 1980-1990. 13,961 13,349 Ao 27,310 ys | INDUSTRIAL RELIANCE ON BIODIVERSITY All species of crocodile, larger snakes and lizards used for the skin trade are included in Appendices I or II of CITES, and so good data are available on the size of trade. However, many of the smaller snakes are not listed in CITES, and are, therefore, difficult to monitor accurately. Turtles Large scale use of turtle leather started in the 1960s, with skins originating in Mexico, Ecuador, Pakistan and Indonesia and being processed in Italy, France and Japan. Most of the trade was in Lepidochelys olivacea, with lesser quantities of Chelonia mydas. All species were listed on CITES Appendix I in 1975, although the three main importers maintained reservations and continued trading. By 1984, Italy and France withdrew their reservations, leaving Japan as the main importer. Table 2.7 shows the level of imports to Japan between 1976 and 1990. Japan withdrew its reservation on Chelonia mydas in 1988 which explains the drop in that year and the previous peaks showing opportunistic high harvest before the ban. A similar trend may be showing with the withdrawal of the reservation on Lepidochelys olivacea in 1991 (Jenkins and Broad, 1994). Table 2.8 Minimum net trade in classic crocodilian skins detailed in CITES annual reports 1984 1985 1986 1987 1988 1989 1990 Total 21519 20718 33278 51838 125483 146829 522,659 emeen. | seal acutus ee oes) jc jomsni_— | asr| | |e |x | me | aoe ee ee ee ee eee Pevensie atte} a Lemme | Neti Pee eo es ee | |e eee ES eee fractiegets |) aT 65,245 80,545 | 92,081 115,419 | 128,670 180,968 | 230,248 | 245,082 | 1,138,258 * Gross exports from the USA. Source: Table 32 in Luxmoore and Collins, 1994. The Value of the Wildlife Trade Table 2.9 Japanese imports of reptile skins and leather (1983-90) Quanity kg) | Value (00 ye Lizard skin Lizard leather . : Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather { ; Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather : Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather , 4 Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather ’ Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather ; Alligator and crocodile skin Alligator and crocodile leather _ Snake skin Lizard skin Lizard leather ‘ ? Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather ; : Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather , ’ Alligator and crocodile skin Alligator and crocodile leather Snake skin Lizard skin Lizard leather Alligator and crocodile skin Alligator and crocodile leather Snake skin 1,019,423 308, 1 575,496 74,096 1,388,000 135,220 701,780 581,367 93,497 1,259,000 307,823 696,657 "374.175 1,088:380 "2287912 343,156 "523/108 723.794 "506,424 528.185 INDUSTRIAL RELIANCE ON BIODIVERSITY Crocodilians Crocodile leather varies in quality depending on, among other factors, the amount of bony structures (called osteoderms) in the ventral area. This species-specific characteristic has meant that some “classic” species are preferred to others, and explains why trade was slow to move from the preferred crocodiles to the lower quality caimans. Farming operations have resulted in an increase in the availability of the high quality classic crocodilian leather. Legal world net trade in the four main species of classic crocodilian rose from around 60,000 in 1984 to around 165,000 in 1989 and 240,000 in 1991 (Table 2.8). Of the skins traded in 1991, 146,829 were of Alligator mississippiensis exported from the USA, both a range state and a major consumer. Around 60% of exports were destined for Europe, where France was the main importer, with almost 64% of the European share. Japan was the second most important importer, with 26% of world trade reported to CITES. A proportion of the trade is not reported to CITES, but it is difficult to obtain solid evidence for it (Luxmoore and Collins, 1994). Documented trade in caiman skins was around 800,000 skins in 1988, supplying mainly the European tanning industry. France and Italy are the chief European countries with a significant tanning industry. Japan is the third major consumer of reptile skins after the EC and the USA. Table 2.9 shows the quantity and value of imports of various reptiles for Japan. Lizards Only the genera Tupinambis and Varanus feature significantly in the international skin trade. With regard to Tupinambis, the USA is the largest consumer, with over one million skins per year between 1984 and 1989 and over half of world trade, followed by the EC with 23% of total imports over the same period. Japan accounts for 34% of world imports of Varanus skins (1983-89) followed by the EC (27%) and the USA (9%). Table 2.9 shows the level of Japanese lizard skin imports. As mentioned before, the increased difficulty in obtaining sufficient 'classic' crocodilian skins at a low cost has served as an incentive to turn to other reptile species, such as lizards. Swanson (1991a), showed that demand for Varanus salvator was lower with higher income, indicating that the species was normally purchased as a cheaper substitute to the preferred but more expensive crocodilian skins. Snakes As mentioned previously, a significant number of snake species are not included in the CITIES Appendices and, as a result, estimation of total trade is made difficult. Apart from three species from Latin America and one from Africa, all significant trade in skins is in snakes of Asian origin (Jenkins and Broad, 1994). Table 2.9 shows the level of snake skin imports into Japan as reported by the Japanese Customs Statistics. 2.4.3 Live Animal Trade Although of smaller volume than the skin and fur trade, the trade in live wild animals, involves a much broader range of species (Table 2.10). According to some estimates, hundreds of millions of fish, reptiles and amphibians are traded each year. In 1980, for instance, more than 400,000 live reptiles entered the USA for the pet market, and in 1978, 260 million tropical fish, valued at more than US$17 million, were imported (Oldfield, 1989). It has been estimated that, between 1976 and 1980, the USA imported US$346 million worth of ornamental and pet species each year, of which at least US$90 million came unequivocally from wild sources (Prescott-Allen and Prescott-Allen, 1986). The value of trade in wildlife is often concentrated on a small number of species. It has been estimated that between 1967 and 1968, 38% of species (the rarest) comprised 90% of the value of trade (Oldfield, 1989). 26 The Value of the Wildlife Trade Table 2.10 Minimum number of CITES Appendix II species traded (1983-1988) as live animals, parts and derivatives or both Type of traded specimens Taxon ; ; : Only live Both live & Not live other [a ima llr bp Amphibian hee Et ped pen Beno Invertebrates Source: Calculated from Anon., 1991a. Worldwide, trade in live animals is worth many millions of dollars. Japanese imports of live animals in 1990, for instance, were valued at more than £10 million while declared European imports of live animals were almost ECU90 million in the same year. Among the main reasons for concern about the live animal trade are the conditions of transport. The supply of just a few individuals to the zoo market is estimated to involve the loss of many others during the inadequate capture and transport conditions (Anon, 1993). Most live animals traded internationally, apart from primates (see below), are either for the pet market or for zoos. The level of trade is not known since there are no statistics available other than from CITES, which covers only those species listed in one of the CITES appendices. However, these provide the best information available and for some groups, for example primates, boas and crocodiles, are fairly complete. Live Reptiles Reptiles are traded internationally not only as skins, but also as live specimens. The live animals are primarily for the pet market, but are also used in oriental medicines. For some species, such as the small land tortoise, the pet trade represents the only significant form of international trade. The number of specimens involved in the reptile live trade has increased significantly over the period 1988-92, from under 400,000 to nearly 1,000,000 specimens per year, mostly due to increases in snakes and lizards being traded or added to CITES appendices. Table 2.11 shows the net imports in live reptiles and amphibians in CITES-listed species. Snakes Trade in live snakes showed a very significant increase in 1990, from 88,329 specimens in 1989 to 421,668 in 1990, declining to 290,805 in 1992. This change can largely be explained by three species which were moved from Appendix III to Appendix II in January 1990: Pryas mucosus (rat snake), Naja naja (Asian cobra) and Ophiophagus hannah (king cobra), resulting in a significant increase in reported trade in these three species. Although this sharp increase could be due partly to a genuine increase in INDUSTRIAL RELIANCE ON BIODIVERSITY number of animals, it is more likely a spurious increase due to better reporting. In particular, trade reported from China showed a marked increase in 1990 in all three species, with a subsequent drop in reporting in 1992. Table 2.12 shows the trends in reported trade from China between 1988 and 1992. Unlike the larger boids, it is likely that these three species are traded mainly for oriental medicine and not as pets. Between 1989 and 1990, reported trade in live snakes grew by 331,339, an increase of almost 200%. However, 214,540 of that rise was due to increased reported trade in P. mucosus, which was also the most important snake in trade over the period 1988-90. Reported trade in Naja naja, the third most important snake in trade after the Python regius, showed an increase of 75,271 in 1989-90, and numbers of O. hannah, the seventh most important snake in reported trade, increased by 13,162 in the same years. The vast majority of trade in these three snakes was for commercial purposes, with the exception of 63 specimens for zoos, 61 for circuses and travelling exhibitions, and 55 for other purposes such as education and science. With regard to other snakes, the fourth most important snake in trade was Boa constrictor, with just over 15,000 specimens traded annually, followed by Python reticulatus and Python molurus bivittatus. These are all widely kept as pets. Land tortoises Tortoises are very popular as pets, particularly the small land tortoises. More than 90% of all tortoises recorded in CITES statistics, traded between 1988 and 1992, were land tortoises. Nearly half of them were one species, Testudo horsfieldii, a small tortoise occurring east of the Caspian Sea, in Afghanistan, eastern Iran and northwest Pakistan, and possibly in extreme western China. At present, the major threats to this species are both the heavy collection for the pet trade and the loss of habitat (Swingland and Klemens, 1989). The second most important species in trade was Kinixys belliana, with an average of 6523 specimens per year over the period. The three sub-species of this small tortoise, with a carapace length of up to 20cm, range from Senegal and Cameroon eastward to western Kenya and from Tanzania to Natal in South Africa and into Madagascar. Apart from the pet trade, the species is also eaten locally. Prior to 1984, the major species in trade were three European tortoises. The introduction of restrictive legislation in the European Community resulted in a shift to the Asian and African species (Luxmoore and Joseph, 1986). Freshwater turtles Red-eared terrapins (Pseudemys scripta-elegans) are probably the most common species kept in captivity, but they are not included in the CITES Appendices. During a study on turtle-associated salmonellosis in Puerto Rico, it was found that P. scripta-elegans was widely sold. The ease of farming and shipping the species has made it very popular commercially. It is estimated that the USA exports around three or four million turtles a year, most of which are P. scripta-elegans (Anon., 1985). The most important species recorded in CITES statistics were Pelomedusa subrufa and Pelusios niger, both having around 2000 individuals traded annually, representing 88% of all CITES-recorded trade in freshwater turtles. A number of South East Asian species of freshwater turtle are traded live within the region for food. The main species is Amyda cartilaginea, but this trade does not show in CITES statistics. Sea turtles Reported levels of trade over the period 1988-92 were very low, although five out of six sea turtle species were reported in trade. The most important species in trade is Chelonia mydas (green turtle). The Value of the Wildlife Trade Table 2.11 Net imports in live reptiles and amphibians in species listed in CITES, 1988-1992 1989 1 TAXON Turtles/Tortoises Crocodylia soe | [90 | toon | tse | re | AMPHIBIANS 29+ Source: CITES database, WCMC Table 2.12 country, 1988-92 Species/Reporting country 1988 1989 1990 2,100 150 0 5,832 >) 0 0 0 248 0 0 214,870 211,718 1,535 Ptyas mucosus China Hong Kong Naja naja China Hong Kong Japan Ophiophagus hannah China Hong Kong 30 0 0 78 0 0 0 108 0 0 Source: CITES database, WCMC. 12091 8336 11676 13769 53999 CITES reported trade in selected live reptiles originating in China by reporting 191 147,944 97,309 147,922 97,309 59,207 S337 47,170 0 0 0 [fas 1,200 0 INDUSTRIAL RELIANCE ON BIODIVERSITY Crocodilians Over the period 1988-92, 57,173 live crocodilians were reported in international trade. Of these, 27,259 were Caiman crocodilus crocodilus, for which some range countries have established a low quota of live hatchlings for the pet trade. The second most important crocodile in trade was Crocodylus niloticus, with 17,692 live animals traded over the same period. Caiman crocodilus fuscus was the next most important taxon in trade with a peak of 7002 individuals traded in 1990, followed by a sharp decrease in 1991-92 to less than 40 specimens reported. Lizards In the live lizard trade, [guana iguana was by far the most important species, with an average of 278,291 specimens being traded live between 1988 and 1992. The changes in trade in this species explain the main trends in the whole of the reported live lizard trade since /. iguana represented almost 68% of all trade. Live trade also represents most of the international trade in the species. There were sharp increases in live exports from Colombia and El Salvador in 1990 and 1992. Colombia in particular has seen a rapid increase in the number of registered caiman farms, many of which also breed /. iguana (Luxmoore, 1992). Guyana, Honduras, Peru and Surinam were also significant regular suppliers. Table 2.13 shows the main trends in live trade in /. iguana from range countries by source. As can be seen, most of the trade came from Colombia, with El Salvador somehow substituting the previous levels of exports of Honduras. Table 2.13 Trade in live J. iguana by main countries of origin and type of source reported in CITES, 1988-92 19.500 20.8 | 26.451 | 24001 roses | 9507 | 23.90 Source: CITES database, WCMC. 18,262 11,600 Most iguanas are exported from South America to the USA. In 1992, 462,490 live specimens were imported into the USA, out of which 33,793 were re-exported, mainly to Canada (14,112), Germany (6907), Japan (5569), Great Britain (2853) and Italy (1150). The USA therefore represented over 86% of the market for iguanas in 1990. The second most important lizard reported in CITES statistics was Chamaeleo senegalensis, an African species. Trade was relatively low in all countries, with the single exception of Togo, which accounted for 99% of trade in 1988. Additional trade from other countries may be hidden in the large numbers of unidentified chameleons traded, averaging 3282 between 1988 and 1992. 30 The Value of the Wildlife Trade Table 2.14 Net live imports of CITES-listed mammals, 1988-1992 feud ema seared bad ben sel re seas |e doesn eo [nee a a inns otha pea by oped ree amet: male Pero jesmaes foe |e | ss | tw | | | | feos fo | toe | te | os | ae | |e | loans ts | | | | || ee ee ee ee es Pe Deere cosines wwe we lss2De| tS Otters Mustelids and viverrids pee fees ee Ts | ose | os | tor | ss | as | area pemearyater te| egsrner ete far eens ts | ise | | we | | os | Pie oe eee pesemtnae fa on} ft teats eel a Antelopes, gazelles, duikers and 1694 goats Total Mammals | 307 | aso0s | 47010 33372 | anise | 26047 | 26947 | 195499 Source: CITES database, WCMC. | 31 INDUSTRIAL RELIANCE ON BIODIVERSITY Live Amphibians Frogs and salamanders are very popular pets. The main CITES-listed species in trade was a salamander Ambystoma mexicanum, with 36,768 being traded internationally between 1988 and 1992, accounting for most CITES-recorded amphibian trade, as can be seen from Table 2.11. The second most important amphibian was the frog, Rana tigerina, with 3187 individuals traded. The purpose of this trade is uncertain, since this species is used in large quantities as meat. The live trade may represent breeding stock for attempts at captive breeding or they may simply result from an error in reporting. The third most important species in trade was Dendrobates tinctorius of which 2840 specimens were reported in trade. Live Mammals By far the most important trade in live mammals is in primates (see Table 2.14) for biomedical research; these will be treated separately in section 2.4.8. In the period 1988-92, more than 181,000 primates were traded internationally. Felids were the second most important group in trade with just over four thousand specimens traded over the five year period, of which more than half were big cats. Among the big cats, Panthera tigris (tiger) was the single most important species in trade with 866 traded, followed by Panthera leo (lion) with 639 and Panthera pardus (leopard) with 358 traded. With regard to small cats, the wildcat (Felis silvestris) and the leopard cat (Felis bengalensis) were the most important species in trade. As with many other mammals, the volumes of trade in individual species appear to be relatively low, particularly if compared with trade in live reptiles. This trade is mostly for zoos, education, breeding or introduction programmes and, to a lesser extent, for the pet market. Live Ornamental Fish Trade in ornamental fish, although minimal in comparison with trade in fish for food, nevertheless produces significant revenues in the international market. European trade statistics indicate a total value of imports of almost ECUS55 million (Table 2.15). It is difficult to obtain estimates of the proportion of wild-caught trade. Prescott-Allen and Prescott-Allen (1986) estimated, for imports to USA, that about 80% of Thai exports came from the wild, while the figure for Latin America was around 85%. Together, they accounted for 75% of the almost US$8 million worth of imports between 1976 and 1980. Table 2.15 Live ornamental fish imports into the European Community _ | ele [saver didi aur tom The Value of the Wildlife Trade Live Birds Birds have been among the most sought-after animals in live trade, with 2600 of the 9600 described bird species recorded in international trade statistics in the last 20 years. Trade in birds has been estimated to be in the range of two to five million specimens per year. There is a further unreported trade in Chinese songbirds, possibly adding some two or three million to the total, although data on trade in non- CITES species are incomplete (Inskipp, 1990). The current level is believed to be lower than in the early 1970s, due to increased trade restrictions and improved control. This estimate does not take into account the high mortality rate during capture and transport, nor domestic trade. Pre-export mortality rates have been estimated as low as 5% (India) and as high as 60% (Mexico) for illegal export. Some estimates suggests that the domestic markets use several hundred thousand birds per year (Thomsen et al., 1992). Africa is the major source of wild-caught songbirds in trade, supplying over 68% of all CITES-listed species recorded in trade in 1988. Within Africa, Tanzania and Senegal are the most important exporters, together they exported 127,262 and 684,679 birds respectively, accounting for 53% of CITES trade in 1988. Central and South America are the second major suppliers of live birds (mostly psittacines) with 14% of CITES-reported exports (Inskipp, 1990). From the consumer side, the major importers are the European Community, the USA and Singapore (Inskipp, 1990). The USA imported some 700,000 birds annually between 1984 and 1988 (Thomsen er al., 1992). France, the largest EC importer, imported 234,000 birds in 1988, and the UK received between 150,000 and 250,000 per year between 1978 and 1989 (MAFF, 1979-1990). Singapore, the third largest consumer, imported 31,000 CITES-listed birds (Inskipp, 1990). In response to tighter restrictions on trade and the rising prices of rare species, captive-breeding operations are increasing. At present, they supply a significant fraction of the market. In the USA alone, it is estimated that around 15% of imported birds are captive bred. Despite the high value of the bird trade, very little of it is captured by the local communities. The international bird trade has been valued at US$1.6 billion of gross retail value. The share of the revenues in the different stages of ‘production’ are characteristic of wild-captured animals, with the trappers having the smallest share (estimated at US$33 million) and middlemen significantly more (US$114 million) with the final retailer extracting the greatest share of the revenue (Thomsen er al., 1992). Second only to the reduction in habitats, hunting and trapping have been the main causes of declining bird populations. Birds are hunted for food, sport, or occasionally for plumage. Eggs are also taken for food or collections. However, none of these products features significantly in international trade, where it is the live bird trade which gives the greatest cause for concern. As with furs, fluctuations in the live trade are largely due to fashion and trade restrictions. 2.4.4 Corals, Pearls, Shells and Other Marine Trade Corals Coral reefs are one of the most productive and diverse of all natural ecosystems; they have been described as the marine equivalent of the rain forests. The richness of the coral reefs derives from the diverse environments and habitats created by the different assemblages of corals and the resulting heterogeneous food resources. Reefs help protect coastlines, prevent erosion, provide nutrients and breeding grounds for many commercial and subsistence fish species and habitat for many crustaceans and mollusca that are also caught for food. In addition, the tourist industry benefits from coral reefs (Groombridge, 1992). 33 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 2.16 Summary of reported trade in CITES-listed stony corals by country of export (1986-1989) Exports 1986 Indonesia 2220 Philippines 9149 One 2 1987 | 2ss706 | [1009 | 15388 Taiwan 263706 omg to| 74099 Total 1988 Indonesia 467057 Philippines Meat ae Total 33276 1989 A . ta ~) _ an we Wo | Indonesia 75894 18525 Philippines ae oo Taiwan ee -etoaane|) tanerey op 43929 Other 10511 Total sua Source: CITES annual report data. Reproduced from Mulliken and Nash, 1993. 34 The Value of the Wildlife Trade Some of the main threats to coral reefs are natural, such as storms, hurricanes and disease. However, human intervention can also have an adverse effect, either indirectly (through sedimentation or pollution) or by direct over-exploitation of reef resources (over-fishing, excessive number of tourists, coral mining, etc). The rapid growth in coral trade during the 1970s and 1980s has created great concern over the sustainability of this international trade. In 1973, a ban was imposed on Philippine coral harvests as they were being depleted due to over-exploitation and poaching from Japanese and Taiwanese fishermen (Mulliken and Nash, 1993). Little information is available about the quantities of coral involved in trade. Foreign statistics for many countries often classify coral under the same heading as shells and no country separates precious from stony corals in their trade statistics (Wells, 1981a). The listing of 17 genera of the most popular corals in trade in CITES Appendix II in 1985 has allowed better monitoring in recent years. CITES data, however, provide an incomplete picture of the coral trade, not only because of the limited number of genera in CITES, but also because a significant portion of trade is recorded as “pieces” with no indication of size or weight. The Philippines appears to be the largest exporter of coral in 1989, followed by Indonesia. The main importer has been the USA, with more than 70% of the market over the period 1986-88 (Mulliken and Nash, 1993). Most of the stony corals are traded internationally for ornamental purposes. A very small amount is also used for surgical operations. A total of 95 species from 10 genera were reported in international trade from 1985 to 1990. Table 2.16 presents a summary of reported trade in CITES listed corals between 1986 and 1989. Despite the drop in trade shown for 1989, more recent data suggest that by 1991, world trade had increased to previous levels. Table 2.17 European annual imports in coral, shells and cuttle bone (tonnes) (‘000 ECUs) (ECU/kg) Pe Fan Lar | —— es ee ee ees 19 34,388 16,866 061 35 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 2.18 Pearl imports into the European Community Year cooecy'y | cure 2,891 2,891.00 108,936 864.57 2,961 93,582 742.71 848.38 1,278.09 166 41,627 1,040.68 120,115 1,429.94 Natural, not mounted TOTAL Natural, not mounted TOTAL 146 35,632 100,969 Natural, not mounted Natural pearl articles TOTAL Natural, not mounted Natural pearl articles TOTAL 54 32,545 104,456 Natural, not mounted Natural pearl articles TOTAL Natural, not mounted 3,001.09 3,204.50 Natural pearl articles TOTAL 1 1 Natural, not mounted Natural pearl articles 1 TOTAL 200 1 1 1 Natural, not mounted Natural pearl articles TOTAL Natural, not mounted Natural pearl articles 112 TOTAL Natural, not mounted Natural pearl articles TOTAL Note: Quantities less than 500Kg are denoted by 0. 392.54 2 Ay 4 1 4 8 3 3 6 3 5 2 4 6 1,224.73 1 6 0 6 0 2 9 0 0 4 0 15 9 0 11 0 0 8 0 4 9 0 2 0 6 2 Source: Eurostat/nimexe series 4B. European Community, external trade statistics. International trade in corals is of minor importance in some countries in relation to domestic use in cement manufacture and the construction industry. 36 The Value of the Wildlife Trade Shell and pearl trade Although some of the most important uses of mollusca have been food production, their shells, composed mainly of calcium carbonate, are used for decoration and have a number of industrial applications, including lime for pottery, toothpaste, food additives and even road construction (Wells, 1981b). Pearls (produced by oysters and mussels) and nacre are used for decorative purposes. European statistics on coral, shell and cuttle bone trade are presented in Table 2.17; they show a rapid increase in volume during the 1980s, from 31,180 tonnes in 1981 to 60,623 tonnes in 1989. Pearls are both cultivated and extracted from the wild. Half the imports of unmounted pearls and pearl articles into Europe in 1987 (see Table 2.18), involved natural pearls, as opposed to cultivated ones. 2.4.5 Rhino Horn and Elephant Ivory Trade Rhino horn trade Rhinoceroses have attracted much attention in recent years and are some of the world's most endangered large mammals. The decline in rhino populations has been due principally to over-exploitation resulting from the demand for rhino products, mainly horn (used to make dagger handles and medicines). More than 95% of Africa's black rhinoceroses have disappeared since 1970 (Milliken et al., 1993). In South East Asia, Sumatran rhinoceroses number fewer than 1000 and Javan rhinoceroses number fewer than 100. Overall, the world's five rhinoceros species are on the edge of extinction. Recent studies estimate the worldwide population of rhinos to contain less than 12,000 individuals (Nowell et al., 1992). The horn, skin, blood and urine of rhinos are all important ingredients in traditional oriental medicine. Rhino horn derivatives are used to treat maladies including strokes, nosebleeds, dermatitis, fevers and headaches (Mills, 1993). Asian rhino horn is believed to be more effective than African. In a recent study on the perceptions of doctors in South Korea with regard to rhino horn and its effectiveness, 79% regarded rhinoceros horn as an essential medicine. Moreover, 43% of all oriental medicine shops surveyed claimed to sell medicines containing rhinoceros horn (Mills, 1993). These findings show that there is still a significant market, despite a prohibition on international trade. Research into potential rhino horn substitutes suggests that saiga antelope horn, buffalo horn or cattle horn could substitute for the anti-pyretic properties of rhino horn, but the oriental medicine community is reluctant to change (Nowell et al., 1992). In Yemen, African rhino horn is used to manufacture dagger handles, which are an important status symbol. Since the 1970s, North Yemen has been importing about half of the rhino horn on the world market, despite a ban in 1982, it has continued to be smuggled into the country (Cumming et al., 1990). As a result of the reduced number of rhinos, the price of their horns has increased dramatically over the last two decades (Table 2.19). Over the 1970s, prices in India and Japan increased more than sixfold, while over the same time, prices quadrupled in South Korea and Taiwan and in the following year (1980) prices in Taiwan had risen to be nine times higher than in 1971. Elephant ivory trade Under similar pressures to those of the rhinos, African elephant populations have been reduced and fragmented. In less than a decade, during the 1980s, the population has almost halved. For years, it was thought that the forest elephant was less vulnerable to poaching and that the main threat to it was reduction of its habitat. However, recent evidence indicates that for both savannah and forest elephant, illegal hunting in a poorly managed ivory market is the most important threat (Barbier et al., 1990). 37 ‘7661 ‘SwuIRIT||A\-Japea] Woy payiduiod :adun0g “SOIBDOUINY UBILYY 10J 1B Salas 1atiO “AjUo aotid WO punog ‘sosadouIY URIS JO s\odxg (|) | 0661 | | oat | 881 | sor | sor | | S86r | | sot | 08 6b '6£ | 6L6T €€ Sp | BLOT pens = 3 | moog | or eS Ee ee Treo ce cS fe Ee eee Pee ut ae ee Ce Pee eo | on ee | cour Oe a eae re327 ees | Par O9€T C — oS Ceol 6ST 96L 168 98L oos ‘9 000°T "9 91S €97Z 9€I as See Ba 9 cL OES Chl 9LP Ly LS 9zE LIZ LLP Fics i €8E €9OL SL9‘1'9 | SCE SIE p8I Ras Ipe LSE 008L 87 0] v Les O0€ + ¢ + \o is \o ~ ea Beet © [eae Peed ee a ws SEs oS eng See (eee Peas (eeea [Be Ss Liane 6 — wo Oo} +] = ojrn A] wo +] =| oc ie) ioe) Q co v CLI LOE 6 LLC (aXe VIZ eSé CO} 0O lool ie) [pee | Le ve 0081 S eps yy 95 OLTI 6971 co > N i) oo So ica ise) wn co > w oy = ay N fi (1) Bipuy Aayunos Aq UAOY OUTYA JO (3¥/¢SQ puke By Ul) sd1I1d pue sUIN[OA 617 AGB L The Value of the Wildlife Trade The ivory market experienced a sustained growth from 1945 through the mid-1980s, after which the price increased dramatically as a result of the lower volumes reaching the market. The decline in volume has been accompanied by lower average weights of tusks per individual, resulting in more elephants being killed per kilogramme of ivory. As with other wildlife resources, ivory is exported to the manufacturing (carving) countries, and a proportion is re-exported to the final markets. Japan and Hong Kong have traditionally been the main carving centres, jointly covering 70% of the trade. Japan is one of the major consumers of ivory (Table 2.20), the USA and Europe are also principal importers. Table 2.20 Japanese imports of ivory: 1980-1990 Seog et Pee Year Ivory Value Ivory Value Ivory Value || tome | connyen9 | commen | conn sea | come | como ye_ | we | eo | somes | aso | sono | a7 | ares | : | | The more stringent regulations and better enforcement in some countries caused a shift to new ivory markets, such as Singapore and Macau. This phenomenon is illustrated in Table 2.21. The African elephant was listed in Appendix II of CITES in 1976, and in 1985 a Management Quota System was adopted to control the ivory trade and to allow the producer states to capture the returns from the trade. However, the system failed to control the growing illegal ivory trade and populations continued to decline. In 1989, the African elephant was transferred to Appendix I, effectively imposing a ban on trade. 39 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 2.21 Net imports (tonnes) of raw and worked ivory by major consumers, 1979-1988 eo | fet stot ef Pel PT SEE Ea Lael sade ee ed ed ed eee Source: Barbier e7 al., 1990, Table 1.3 Table 2.22 Estimated minimum net imports (tonnes) of game meat: 1980-1985 Total 35292 34043 30101 30659 30737 34322 vssmiion |e | | | ws | | | (*) Net exporter this year. Source: Table 2.1, Luxmoore, 1989. 40 The Value of the Wildlife Trade 2.4.6 Animals as Food: Game Meat Trade in game meat is recorded in published Customs statistics, but, unfortunately, appears in different levels of aggregation for different countries, while some countries do not provide any figures. Therefore, only a broad view of the game meat trade can be obtained. Total volume of international trade in game meat varied from 30-35 thousand tonnes between 1980 and 1985 and was worth some US$85-146 million. West Germany was the main importer, with just over half of net imports in 1985. Table 2.22 shows the estimated minimum net imports of game meat between 1980 and 1985. In terms of species composition of trade, Customs statistics provide little insight. Therefore, it is necessary to turn to the exporting countries to ascertain the species in trade. For instance, Argentina, the main supplier of game meat during 1980-85 providing between a quarter and a third of all game meat, exports meat of the brown hare (Lepus capensis) almost exclusively. For the second major supplier, the UK, 2 of its 4.4 thousand tonnes per year of game meat were of red and roe deer, with the rest composed of small game (hares, rabbits and birds). Other fairly specialized producers are: Australia (mostly kangaroo meat), New Zealand (venison, particularly red deer), and South Africa (springbok, blesbok and ostrich). Imports of these species can be quite substantial. Table 2.23 shows a steady decline in the volume of imports to the EC between 1980 and 1989. Canada and the United States are not included in the list of major importers of game meat because public health restrictions on imports require an ante-mortem veterinary inspection, precluding the import of game meat shot in the wild. European health regulations also effectively limit the range and amount of game meat being imported. Given these restrictions, it is surprising that so much game meat is exported. Table 2.23 European imports of game meat (excluding rabbits and hares) Price Source: Eurostat/nimexe series 4B. European Community, external trade Statistics 41 INDUSTRIAL RELIANCE ON BIODIVERSITY Some frog species are traded internationally for food, especially Rana tigerina and Rana hexadactyla; both are now listed in Appendix II of CITES. The main suppliers of reported trade are Bangladesh, India and Thailand. A significant proportion of trade consists of re-exports from Belgium, Canada, the Netherlands, and the USA in the form of "French frogs' legs". During the period 1985-89, the main consumer was the USA, with over 80% of the imports, almost entirely for human consumption (Inskipp et al., 1991), followed by Canada, the Netherlands, France, and Belgium. Table 2.24 shows the imports of frogs' legs into Europe during 1980-87. Table 2.24 Frogs' legs imports into the European Community* Value (000 CUS (ecu 5.764 18.62 */ On original statistics, frogs' legs are aggregated with whale and seal meat over this period. By inspection of the dissagreggated data in Table 2.26, we assumed that most previous trade data reflected primarily frogs’ legs trade. Source: Eurostat/nimexe series 4B. European Community, external trade statistics 2.4.7 Animals for Medicinal Use Many animals or animal products are traded for their value as medicinal compounds. Most of the uses for western medicine are found in hormone extracts and antibodies, although these are usually extracted from domestic animals (Luxmoore, 1989). In contrast, traditional oriental medicine has greater reliance on products from a variety of wild animals. Many of the most popular products are derived from deer; the most valuable being the velvet from their antlers (Table 2.26). Other products include hard antlers, tail, bones, penes, heart, liver, sinews, placenta, blood and skin (Lee and Ch'ang, 1985) and musk. Rhino horn, discussed above, is also quite important. Velvet is used mostly in the Far East, although a substantial demand arises from Chinese communities around the world. Data on international trade in medicinal products are incomplete. However, Thailand, Taiwan, the Republic of Korea and Hong Kong are probably the main importers of deer products. Table 2.26 shows the imports of medicinal products of deer to the Republic of Korea. Among the other animal products used in traditional medicine, Fel Ursi is reported separately in Japanese Customs Statistics. Imports of Fel Ursi (bear's gall bladder) and Toad cake to Japan between 1989 and 1990 were worth 377 million yen on average (some £1.4 million). Fel Ursi is the source of medicinal compounds used to dissolve stones in the urinary tract. Table 2.27 shows the imports to Japan The Value of the Wildlife Trade between 1970 and 1990. Musk imports are also reported separately by Japanese Customs statistics (Table 2.27). Musk derives from several species of musk deer (Moschus spp.), all of which are included in CITES Appendix I and should, therefore, be banned from trade. The legality of the imports shown by the Customs statistics is in question. Bear gall bladder mostly derives from the Asiatic black bear (Selenarctos thibetanus), which is in CITES Appendix II and yet no imports appear in the CITES Statistics. Table 2.25 Fats and oils of marine mammals, fractions of oils, excluding chemically modified preducts Whale oil and oils of other Fats and oils of marine mammals Total cetaceans other that whale oil Source: Eurostat/nimexe series 4B. European Community, external trade statistics. Given the wide range of products involved and the lack of data on most medicinal applications, it is difficult to estimate the true value of the international trade in medicinal products, but from wild ungulates alone it is probably worth well in excess of US$30 million a year (Luxmoore, 1989). As with other wildlife products, illegal trade is likely to account for a considerable share of total trade. 2.4.8 Animals for Biomedical Research Biomedical research represents another major use of wild animals and, in some species, such as primates, it is the biggest stimulator of trade. Parallel to more sophisticated demands by the scientists and advances in technology, growing concern over the levels of use has led to a reduction in the number of primates in research. Circuses, travelling shows and the exotic pet trade provide only a small market for live primates (Kavanagh, 1984). 43 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 2.26 Imports of medicinal products of deer to the Republic of Korea aE ee oe Ge lame err el he re as pes fs els ao Tle Lu Tu jussio | em | so | oe | me | iss | as | Source: Luxmoore, 1989, Table 2.5. Table 2.27 Medicinal products of animal origin imported by Japan ieee rsd (kg) (‘000 yens) (kg) (‘000 yens) (kg) (‘000 yens) 152,943 Pe os [|e] of se [es [| a a 472,497 | ga9 | 386,515 15,365 42,117 ssooer | ins | asa | | 725,319 349,003 13,273 34,915 a [anaes | nu [a (1) Bile, cantharides, civet, castoreum and ambergris. Source: Japanese Customs Statistics, 1978-1990. 44 The Value of the Wildlife Trade Data on the historic levels of trade are scarce. However, it is known that the research market was relatively small in the 1940s, but by the 1950s, primates were routinely used in tests. For instance, it is estimated that some 1.5 million monkeys were used during the development of the polio vaccine (Kavanagh, 1984). Primates are mostly demanded as subjects for biomedical research because of their genetic proximity to humans. As can be seen from Table 2.14, more than 36,000 CITES-listed primates were traded annually between 1988 and 1992. Their main markets were Europe, North America and Japan. Historically, Indonesia and Philippines have been the biggest suppliers of Macaca fascicularis, the long-tailed macaque, and this is still the main species traded, with an average of 21,441 individuals traded over 1988 to 1992, most of which were wild-caught. The USA imports large quantities of the species and re-exports them to research centres in Europe and Japan. Table 2.28 shows the Japanese imports of live monkeys during the 1980s. The second most important species in trade was the vervet monkey, Cercopithecus aethiops, with an annual average of 4319 individuals. The two main countries of origin, Kenya and Tanzania, jointly accounting for 72% of all trade. Saimiri sciureus, the squirrel monkey, is the next most important primate in trade. Guyana was the main exporter, providing 9171 out of the 12,911 specimens reported traded over the period. Other primate species with significant international trade are Papio anubis, the olive baboon, exported mostly from Ethiopia and Kenya and re-exported from the USA, Macaca mulatta, the rhesus monkey, mostly from China and Callithrix jacchus, the common marmoset, with nearly 29% of trade originating in the UK where the species is bred in captivity. All the great apes are in CITES Appendix I and trade has, therefore, been limited to essential purposes. The main species used has been the chimpanzee (Pan troglodytes), with a total trade between 1988 and 1992 of 365 individuals. Table 2.28 Japanese imports of monkeys, 1980-1990 195,719 128,769 200,378 Source: Japanese Customs Statistics, 1980-1990. 45 INDUSTRIAL RELIANCE ON BIODIVERSITY 2.5 PLANT TRADE 2.5.1 Ornamental Wild Plants Ornamental plants are an important commodity in international trade. World imports of cut flowers, cut foliage and plants amounted to US$2488 million in 1985 (WCMC, 1992). Despite their economic importance, the conservation of plants is usually given a low priority. Although some trade is in exotic and sometimes endangered plants, most trade involves mass cultivation of domesticated plants. The Netherlands are by far the most important exporter of both cut flowers and live plants, supplying a significant share of the European market (see Table 2.29). A study on nurseries carried out in 1991 (Jenkins and Oldfield, 1992) concluded that trade in wild- collected species still persisted within Europe. The nature of the trade fell into three categories: i) mass importation of some species for general or 'supermarket' trade, ii) importation of prestige 'specimen' plants for non-specialist trade, and ili) importation of plants for the specialist collector. Some of this trade is concentrated on a limited range of species, such as the Dutch plant and cut-flower trade. However, horticultural trade has shown an ever wider diversification of plant species demanded. Despite the fact that some plants have been selectively bred from their wild ancestors and are now produced through a variety of methods, a surprising quantity of plants are still collected directly from the wild. The wild-collected plants include a variety of bulbs, corms and tubers, air plants and Venus fly-traps. Cycads, cacti and other succulents also appear in garden centres. In the specialist trade, a much wider range of wild plants, especially orchids, cacti and succulents, is available. Regulation within the EC protects native wild plants. However, a wide range of horticultural plants is imported from other countries around the world. The size of the trade is difficult to assess accurately since it is largely not monitored or managed and some of it is illegal. The listing of a number of species in the CITES Appendices has allowed some data to be gathered on the legal trade. Over 5000 orchid species were recorded in CITES statistics during the period 1983-1989. An average annual trade of 14 million cacti and 135,000 CITES-listed succulents came annually from Madagascar alone. Estimates of the trade in cacti and orchids are shown in Table 2.30. Another category of plant trade, the bulbs, is less well monitored, because few of the genera were covered by CITES regulations prior to 1989, but it is very significant. For instance, the UK, exported nearly 87 million narcissus worth £4 million in 1987. Collection for international trade has had significant effects on wild plant populations and, together with habitat loss and the introduction of predators, has resulted in 25,000 species (10% of world's flora) being under some degree of threat (Groombridge, 1992). If sustainably managed, wild plant populations could provide a source of income and an incentive to maintain natural habitats. Unfortunately, proven examples are difficult to find. Species as diverse as the Mexican living rock cactus and the South Indian lady's slipper orchid and the giant pitcher plant, all endemic species, have been driven near to extinction by collectors. As with many other species, the people who collect wild plants are usually paid very low rates compared with the prices paid by final consumers. 46 The Value of the Wildlife Trade Table 2.29 Value (US$ millions) of world trade in flowers and plants, 1981-1985 Cut flowers [aime ermnretace eemanenee ee eee ee mean mean a Sa iil pera oan Cait rl Ecos Be oe eee a ee er ee roa | oss | sooo fro | ama | too | sovee Tne 257. Groombriee 192 Source: Table 25.7. Groombridge, 1992. 2.5.2 Plants as Food Of the estimated 250,000 species of flowering plants, only 3000 have been regarded as a food source. Around 200 plants species have been domesticated for food, with only 15-20 of major economic importance. In fact, the four big carbohydrate crops (wheat, rice, maize and potatoes) feed more people than the next 26 crops combined (Swanson ef al., 1993). Despite this, at a local level, plant resources provide a varied source of nutritional needs. For instance, in a region of Peru, fruits of 193 species are regularly consumed; of these, 120 species are exclusively wild-collected and a further 19 originate in both wild and cultivated sources (Groombridge, 1992). Some of these wild-collected plant products, such as Brazil nuts, are traded internationally. 47 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 2.30 Cactus and orchid trade data for 1989 Orchids a asi sors2 asset asl ro pe a ion sos 5203 [oceania | ote | | || ar pee Get Source: Table 25.8. Groombridge, 1992. The biggest brokers of Brazil nut kernels from Brazil, Bolivia and Peru have an approximate volume of about seven tonnes of nuts per year entirely harvested from the Amazonian forests, with a market value of around US$14 million. Nuts are normally exported to confectioners in the USA, Brazil and Australia, where they are processed and packed for final consumers. The growing demand for ‘organic’ and ‘sustainable harvest’ products has also increased the demand for products, such as honey and nuts, which are harvested in the wild and marketed by local communities. 2.5.3 Plant Genetic Resources Biomedical research, medicinal plants, pharmaceuticals Around 119 pure chemical substances are still extracted from higher plants. At a local level, however, a much wider range of species is used medicinally (Groombridge, 1992). The WHO lists over 21,000 plant names with reported medical uses, and around 80% of people in developing countries rely on traditional medicines. These medicinal plants are largely harvested from the wild. In recent decades, greater attention has been paid to traditional medicines and there are various examples of pharmaceutical companies importing wild plant specimens for screening programmes. The biggest programme carried out on wild plants was the National Cancer Institute's programme, which, over 20 years, screened thousands of plants in search of drugs to fight cancer. In total, 1400 plants with some pharmacological activity were identified, one of which yielded compounds currently in clinical trials. Another programme that has attracted much attention is the screening programme at INBio, where Merck has invested over US$1 million in a contract involving the payment of royalties for each successful compound that eventually reaches the market. It is estimated that the USA alone annually imports over US$20 million worth of rain forest plants for medicinal purposes. In 1979, the former Federal Republic of Germany imported over 28,000 tonnes of medicinal plants worth US$56.8 million. The European Community in 1980 imported 80,738 tonnes of 48 The Value of the Wildlife Trade ‘vegetable plant material used in pharmacy’ (ITC, 1982) and in 1984, Germany, France and Italy were the largest individual consumers of prescription drugs using plant extracts (Principe, 1990). In addition, a large quantity of medicinal plant material was used for the preparation of herbal and medicinal teas and, while India was the major individual supplier, Eastern Europe (as a region) remained the major source (ITC, 1982) It appears that allopathic and herbal medicine will increase in the future, mainly as a result of changing consumer preferences, EEC legislation favouring herbal medicine and aggressive marketing techniques (Lewington, 1993). Plant breeding The fact that only a handful of plant species are regarded as food sources does not imply that the remaining species serve no purpose in food production. The genetic material stored in wild specimens can help to improve existing varieties and increase production or avoid diseases. In this respect, the economic value of such a genetic pool can be quite substantial. The preservation of wild genetic material is currently keeping these options open. However, the owners of such genetic pools are seldom compensated for their preservation activities. Of the various characteristics that can be selected through plant breeding programmes, the most common use has been in the introduction of resistance to pests and diseases. The tomato, maize and potato are prime examples of this process. The fourth chapter in this publication reviews the current state of wild genetic resource use by plant breeders and no further comment will be made in this section. Prescott-Allen and Prescott-Allen (1986) carried out a detailed study of the economic contribution of wild genetic materials to the improvement of crops in the US economy. By estimating the proportion of crop supplied by cultivars with wild germplasm and attaching a fraction of the value of those cultivars to the factors controlled by the wild germplasm, they were able to produce a monetary value for wild germplasm in current production. They estimate that, in the 23 crops considered, the value of the crops with wild germplasm was US$6040 million out of which US$342 million was attributable to the contributions of wild germplasm, with US$229 million coming from imported crops. 2.6 TOURISM Wildlife-related tourism can broadly be divided into two types: Eco-tourism (aimed at minimizing disturbance of habitat with no consumptive use) and game hunting tourism. Apart from the value of the game in the second type of tourism, it is difficult to ascertain the value of tourism attributable to wildlife. Game hunting is a major industry in Africa, attracting mostly foreign hunters, therefore providing a source of foreign currency for the countries that allow it. The usual practice is to charge a fixed daily fee for accommodation and the services of a professional hunter and camp staff, with additional trophy fees depending on the species of game shot. Average daily rates in 1983 varied from US$333 in Namibia to US$1200 in Zaire, whereas trophy fees ranged from US$19 for a duiker to US$6,783 for a white rhinoceros (Luxmoore, 1989). Estimates of the expenditures for wildlife tourism are difficult to obtain. The World Tourism Organization estimates annual expenditure by all international tourism to be around US$195 billion. International tourism represents a significant proportion of domestic exports (Table 2.31). 49 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 2.31 Distribution of international tourism revenues (1987) Region Arrivals Receipts Total Tourism Revenues and Share of domestic exports Sub. Africa $ 3.5b (11%) Source: Swanson, 1991b, Figure II.3. Domestic tourism may account for around US$1.5 trillion. It is not known what proportion of these revenues is wildlife-related, but it is estimated that special-interest tourism (which includes wildlife and adventure) is growing at some 10-15 per cent per annum, compared to 8 per cent mass tourism (Barnes et al. 1992). In countries where wildlife tourism is a major attraction, particularly in African countries, it is possible to get a more refined idea of the amount of tourism attributable to wildlife. For instance, Kenya attracts some 500,000 tourists every year, and wildlife tourism accounts for US$400 million per year (Barnes et al. 1992). This kind of tourism is sometimes associated with a particular species, such as the migrating monarch butterflies in Mexico or the gorilla in the Parc National des Volcans in Rwanda. However, in other cases, it is unpossible to assign the value to a single species. Apart from the specialised tourism noted above, most tourism is motivated by a mixture of reasons. Evidence of this has been provided by a survey carried out by E. Boo in 1990 on the reasons for selecting travel destinations in Latin America (Groombridge, 1992). The results of the survey are illustrated in Table 2.32. Table 2.32 Reasons for selecting travel destinations in Latin America ronnie err ees eee | visting entrees | ime | Sun, beaches, entertainment hear age, wane I bes fh erie Ldorsaer | jarmmeoy —| ws | 50 The Value of the Wildlife Trade 2.7 OVERVIEW OF TRADE AND CONCLUSIONS Obtaining an accurate figure for the value of worldwide trade in wildlife products is not possible, given the major gaps in existing data. Illegal trade, under-reporting, mis-reporting and the discrepancies between declared and market values are major limitations. In Table 2.33, an attempt to obtain such a figure is made by compiling the data presented in the previous sections. Whenever possible, the original data for each region were used, or an estimate derived from their market share. The table combines estimates for different years, and thus it does not portray the nature of trade in a given year, but rather attempts to show the likely size of wildlife trade in the major economies, which are also the major consumers. The inclusion of processed materials in the calculation of the overall wildlife trade is a controversial matter, given that the reported value will also include the cost of manufacturing. In their study, Prescott- Allen and Prescott-Allen (1986) considered that the inclusion of processed products distorted the overall contribution of wildlife to the US economy less than if they were excluded. For the present estimate, both values are quoted whenever they were reported, and manufactured products were excluded from the global estimate. Another issue is the separation between wild-caught and captive-bred specimens. In the case of furs, we relied on the data used by Prescott-Allen and Prescott-Allen (1986) but, in other cases, we have tried to indicate whether wild or domesticated specimens were involved. In the final calculation, the items combining both domesticated and wild-caught animals or plants were excluded from the calculation. This excluded major markets with a high proportion of domesticated produce, such as the cut and live plant trade. The inclusion of such markets would have distorted the overall picture of wildlife trade and it was thought best not to include them without more data on the wild-caught share. Therefore, the figures in Table 2.33 have to be taken as absolute minimum estimates of the value of wildlife imports into the USA, the EC and Japan. Due to the lack of comparable data for all three regions, it would be incorrect to draw any conclusion about the relative shares in the total wildlife trade apart from partial comparisons on particular wildlife products. The total value obtained for the USA was over US$566 million. Other estimates based on total declared wildlife imports into the USA (including manufactured products) valued US wildlife trade at US$1.1 billion in 1989. Some other reports (Prescott-Allen and Prescott-Allen, 1986) placed the value at US$9.8 billion annually between 1976 and 1980 including forestry and fishery products. Our values were much smaller, mainly due to the cautious approach taken when dealing with manufactured products or domesticated wildlife, otherwise our estimate would conform with the previous estimate. With regard to the European and Japanese wildlife markets, it was not possible to find a reliable figure for wild plant imports for industrial or food purposes, a significant share of value in the US calculation. The European total was US$430 million, whereas the Japanese wildlife trade reached US$72 million. Sustainable wildlife use is not only a strategy for the conservation of species, it is also a necessity for human development. This report has shown how wildlife is used at different levels by human beings. From food to ornamental uses, wildlife contributes significantly to global welfare. International trade is only one dimension in the full spectrum of uses of wildlife at a local, national and global level, but its importance, reflected in the data shown here, underscores the value of efforts to promote sustainable management of those wildlife resources which are traded. Although the wildlife trade accounts for a relatively small share of international trade, it is vital for some purposes such as its uses in medicinal and biomedical applications, for which there are no good substitutes. 31 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 2.33 Estimated minimum value of wildlife imports into the USA, the EC and Japan by type of resource (excluding fisheries and timber) in US$ Importing Region ere Furs, reptilian skins, shark skin and products Japan Raw 49,000,000 74,195,703 31,022,371 Reptile skins and leather Manuf. 257,000,000 ions | hidese | ES, JB 21,358,000 16,686,000 Alligator & ES,JB 2,937,000 19,581,000 crocodile 1,111,988 12,681,374 14,685,715 14.38 27,987.00 jk desma | arts | sceoarsomn| frambinre fsa | oer | sssocom | Sa eS eA ee Jsaema desea | sem | seers | freuen es || ces | i tie i pg PR iit ons tea Opera ius ado bina RES sa Pll acess eat nc a eee eae ee ee [ropes i i al nS za jcrusesets esa | 0se000 | saasssns |_| [agurumnsn dsr | 30.000 | arson] PrP clad ia da ro 2,544,282 P. P 1 A A A A The Value of the Wildlife Trade Natural pearls, parts & buttons 1,880,000 Raw 3,350,669 Manuf. 41,297,488 [elles etna ce] ee ee ee ide; | 7s aad tal Medicine [rictcmnipins te || sesnonora | ee Pe ee ee Bienes saeeeseoa ue a ee re Bile, cantharides, civet, castoreum and 520,693 ambergris Plants Wild genetic resources ee ran. aoe Estimated minimum wildlife resource trade /f a 566,756,920 429,785,580 71 | 71,657,610 | 610 “ Source: AL Lewiston (1993), PA Prescott-Allen and Prescott-Allen (1986), ES European Statistics 1980-1990, JB Jenkins and Board (1994), JA ear Customs Statistics, LW Leader-Williams (1992), BA Barbier et al.(1990), TEM Thomsen, Edwards, Mulliken (1992), GB Groombridge (1992), WE Wells (1981a). Estimates of total wildlife mots to the USA are around US$1.1 billion, suggesting that the above estimate may be considerably lower than the real value, possibly for all three regions. nspf not specified. a/ estimated 1% wild-caught proportion. b/ includes wild and domesticated. u/ unknown proportion of wild and domesticated. c/ estimates from TEM data assuming average bird value equal worldwide. d/ German imports only. e/ figures in brackets denote net exports f/ excludes manufactured reptile and pearl products, and combined wild and domesticated items. Humanity cannot afford to loose the goods and services provided by DWR for future generations. National and international agencies are now moving towards closing the gap between use and conservation, making sustainable wildlife management a key tool in both development and conservation programmes. The design of effective and sound management programmes will depend on the successful interfacing between the different systems involved: biological, economic, political and cultural. 53 INDUSTRIAL RELIANCE ON BIODIVERSITY 2.8 REFERENCES Anon. 1985. The hazards of pet turtles, TRAFFIC Bulletin, 8(1): 12. Anon. 1991. Review of Significant Trade in Species of Animals Listed on Appendix II of CITES, 1983-88. Background Data. Wildlife Trade Monitoring Unit, WCMC, May 1991, Cambridge. Anon. 1993. Significant Trade in Wildlife: A Review of Select Animal Species in CITES Appendix II, Draft Report to the CITES Animals Committee. WCMC/IUCN/TRAFFIC International, June 1993, Cambridge U.K. Barbier, E.B., Burgess, J.C., Swanson, T.M. and Pearce, D.W. 1990. Elephants, Economics and Ivory, Earthscan, London. Barnes, J., Burgess J. and Pearce, D. 1992. Wildlife tourism. In: Swanson, T.M. and Barbier, E.B. (Eds.) Economics for the Wilds. Earthscan Publications Ltd., London Boo, E. 1990. Ecotourism: the Potentials and Pitfalls. World Wildlife Fund, Washington. Callister, D. 1992. Illegal Tropical Timber Trade: Asia-Pacific, A Traffic Network Report, TRAFFIC International, Cambridge. Cumming, D.H.M., Du Toit, R.F. and Stuart, S.N. (Compilers) 1990. African Elephants and Rhinos: Status Survey and Conservation Action Plan, \UCN/SSC African Elephant and Rhino Specialist Group. FAO 1990. Review of the State of World Fishery Resources. Marine Resources Service. FAO, Rome. FAO 1991. FAO yearbook: Fishery statistics, commodities 1989. FAO, Italy. FAO 1993. FAO yearbook: Forest Products 1980-1991. FAO, Italy. Groombridge, B. (Ed.) 1992. Global Biodiversity: status of the Earth's living resources. World Conservation Monitoring Centre, Chapman & Hall, UK. Inskipp, T.P. 1990. Overview of the Numbers and Value of Birds in Trade. Paper presented at the Symposium on Trade in Wild Birds, Twentieth World Conference of International Council for Bird Preservation, Hamilton, New Zealand. Inskipp, T.P., Corrigan, H., Allan, C., Heywood, M., Luxmoore, R., Brautigam, A. and Howes, J. 1991. Review of Significant Trade in Animal Species Included in CITES Appendix II. Based on data for the years 1983-1988, Draft Report to the CITES Committee prepared by WCMC and IUCN/SSC with assistance from the TRAFFIC Network, August 1991. ITC 1982. Markets for Selected Medicinal Plants and their Derivatives. International Trade Centre/UNCTAD/GATT, Geneva. Jenkins, M. and Oldfield, S. 1992. Wild Plants in Trade. A Traffic Network Report, TRAFFIC International, Cambridge. Jenkins, M. and Broad, S. 1994. International Trade in Reptile Skins: A Review and Analysis of the Main Markets, 1983-91, A Traffic Report, forthcoming. Kavanagh, M. 1984. A review of the international primate trade. In: Mack, D. and Mittermeier, R.A. (Eds.) The International Primate Trade: Legislation, Trade and Captive Breeding. TRAFFIC USA, Washington. Leader-Williams, N. 1992. The World Trade in Rhino Horn. A Traffic Network Report, TRAFFIC International, Cambridge. Lee, C.H. and Ch'ang, T.S. 1985. Marketing and utilization of deer products in Asia. Royal Society of New Zealand Bulletin 22: 307-310. Lewington, A. 1993. Medicinal Plants and Plant Extracts: A review of their importation into Europe. A Traffic Network Report, TRAFFIC International, Cambridge. Luxmoore, R.A. 1989. International trade. In: Drew, K.R. and Baskin, L.M. (Eds.) Wildlife Production Systems: economic utilisation of wild ungulates. Cambridge University Press, Cambridge, UK. Luxmoore, R.A. (Ed.) 1992. Directory of Crocodilian Farming Operations. Second edition, WCMC/IUCN, Cambridge, UK. Luxmoore, R.A. and Joseph, J. 1986. UK trade in tortoises. TRAFFIC Bulletin, 8(3): 46-48. 54 The Value of the Wildlife Trade Luxmoore, R.A. and Collins, L. 1994. World Trade in Crocodilian Skins, 1990-1991. Prepared for the International Alligator and Crocodile Trade Study, Wildlife Trade Monitoring Unit, WCMC. MAFF 1979-1990. Importataion of Birds. Mortality statistics from quarantine returns. MAFF, Surbiton. Mills, J.-A. 1993. Market under Cover: The Rhinoceros Horn Trade in South Korea. A Traffic Network Report, TRAFFIC International, Cambridge. Milliken, T., Nowell, K., and Thomsen, J.B. 1993. The Decline of the Black Rhino in Zimbabwe: implications for future rhino conservation. A Traffic Network Report, TRAFFIC International, Cambridge. Mulliken, T.A. and Nash, S.V. 1993. The recent trade in Philippine corals. TRAFFIC Bulletin 13(3): 97-105. Myers, N. 1984. The Primary Source. W W Norton & Co, New York. Norse, E.A. 1992. Marine Biological Diversity Strategy and Action Plan. First draft, January 6, 1992. To be published by the Center for Marine Conservation, Washington DC, USA. Nowell, K., Chyi Wei-Lien and Pei Chia-Jai 1992. The Horns of a Dilemma: The Market for Rhino Horn in Taiwan. Final Report for WWF Project 113637.03, TRAFFIC International, Cambridge. Oldfield, M.L. 1989. The Value of Conserving Genetic Resources. Sinauer Associates Inc., USA Oldfield, S. (Ed.) 1991. Pre-project Study on the Conservation Status of Tropical Timbers in Trade. Final report prepared for ITTO by WCMC. Prescott-Allen, C. 1988. Genes from the Wild: Using Wild Genetic Resources for Food and Raw Materials. Earthscan, London UK. Prescott-Allen, C. and Prescott-Allen, R. 1986. The First Resource: Wild Species in the North American Economy. published in cooperation with the World Wildlife Fund for Nature, Yale University Press, USA. Principe, P.P. 1990. Valuing diversity of medicinal plants. In: Akerele, O., Heywood, V. and Synge, H. (Eds) Conservation of Medicinal Plants. Cambridge University Press, Cambridge, U.K. Redford, K.H. and Robinson, J.G. 1987. The game of choice: patterns of Indian and colonist hunting in the Neotropics. American Anthropology 89: 650-667 Robinson, J.G. and Redford, K.H. (Eds) 1991. Neotropical Wildlife Use and Conservation, University of Chicago Press, Chicago, USA Sleeper, B. 1988. The High Price of Fur. Animals, November-December 1988: 14-19. Swanson, T.M. 1991a. An Economic Framework for the International Regulation of Wildlife Utilization: A Case Study of Varanus salvator Demand in Japan. TRAFFIC review of the reptile skin trade. CITES. Swanson, T.M. 1991b. Wildlife Utilisation as an Instrument for Natural Habitat Conservation: A Survey of the Literature and the Issues. London Environmental Economics Paper DP 91-03, May 1991. Swanson, T.M., Pearce, D.W. and Cervigni, R. 1993. Appropriation of the Global Benefits of Plant Genetic Resources for Agriculture: An Economic Analysis of Alternative Mechanisms for Biodiversity Conservation, A report to the Commission on Plant Genetic Resources, CSERGE, London. Swingland, I. R. and Klemens, M.W. (Eds) 1989. The Conservation Biology of Tortoises, Occasional Papers of the IUCN Survival Commision (SCC) No. 5, IUCN. Thomsen, J.B., Edwards, S.R. and Mulliken, T.A. (Eds) 1992. Perceptions, Conservation & Management of Wild Birds in Trade. TRAFFIC International, Cambridge. WCMC 1992. Global Biodiversity : status of the earth’s living resources. Chapman & Hall, London. Wells, S.M. 1981a. International Trade in Corals. \UCN Conservation Monitoring Centre (now WCMC), Cambridge. Wells, S.M. 1981b. Jnternational Trade in Ornamental Shells. YUCN Conservation Monitoring Centre (now WCMC), Cambridge. 55 olin AARLIEH Wh Vo sala at? ele berilbo VOM OO. AUK soiinnnart) it seen bbe a ie ST RUOTER eT ie aime tlk sf hittin d vars ANNO atidivibincapy arta Pe gl oHalt ea bars mgt eh ARBRRADS Saal tne ith es 4 secre Sh ny Cone Shui eye sala ail wena pi why Fright oeit wort i" a r) sexier 3. BIODIVERSITY AND THE PHARMACEUTICAL INDUSTRY Nathalie Olsen, Timothy Swanson and Richard Luxmoore 3.1 INTRODUCTION In order to assess the use of biological diversity in the pharmaceutical industry and the industry's perception of the importance of such biological diversity, a survey was made of appropriate institutions. A questionnaire was circulated to pharmaceutical companies, 25 of which responded. This was followed up with interviews either in person or by phone and additional literature was collected. These three sources were combined to prepare the results summarised in this chapter. Except where public sources were used, the names of the companies have been removed to respect commercial confidentiality. 3.2 SURVEY RESULTS 3.2.1 Drug Discovery and Natural Products Research: Evolution to the 1990s The role of nature in medicine and health care Natural products have of necessity always been used in the treatment of human ailments. Today, one out of four prescription drugs in the USA contains active ingredients extracted or derived from plants. Nevertheless, only 40 different plant species are used, and less than one percent of the world's 250,000 tropical flora has been screened for biochemical activity. Despite the considerable contribution of natural products to health care, less than ten percent of the estimated 250-500,000 flowering plant species have been screened for pharmacological activity. The expansion of synthetic chemistry in the twentieth century has meant that there are limited resources available for natural product research (NPR). However, public unease prompted by the unexpected side effects of synthetic drugs - for example, the thalidomide tragedy of the 1960s - has renewed interest in drugs from natural sources. Plants produce a vast range of diverse chemicals. Where other organisms may react physically to stress, danger and environmental changes (by moving away), plants tend to react or adapt to changes by producing chemicals called secondary metabolites. Similarly, marine and terrestrial invertebrates produce a variety of chemicals and toxins. Secondary metabolites produced by plants and microorganisms are not part of universal primary metabolism, i.e. they are not crucial for the basic operation of the organism; but they are produced for chemical defence. Examples include a wide chemical diversity of alkaloids, terpenes, rubbers, sterols and steroids, and tannins. Many of these complex molecules have therapeutic potential for a number of human ailments and are useful as medicines, pesticides, dyes, flavourings, and building materials. A handful of wonder drugs from nature have helped to spur investment in NPR research and development (R&D). For instance, the synthesis of contraceptive steroids is based on the use of the steroid diosgenin from the Mexican yam Dioscorea discovered in the 1960s. The serendipitous discovery of the anti-cancer properties of the rosy periwinkle (Catharanthus roseus), a pan-tropical weed native to Madagascar, resulted in sales of US$100 million in 1985. Taxol, a treatment for ovarian cancer, was originally extracted from the bark of the Pacific yew tree (Taxus brevifolia). 57 INDUSTRIAL RELIANCE ON BIODIVERSITY Natural product research in the 1990s Since World War II, investment in R&D of natural products in the pharmaceutical industry has been characterised by significant cyclical fluctuations and has focused on micro-biological programmes. The 1990s has witnessed a resurgence and diversification in NPR. The larger pharmaceutical companies are re-establishing NPR programmes and small companies are being created to develop highly targeted and specialised approaches to drug discovery. The cyclical fluctuations in investment in NPR are the result of the changing balance between the cost- effectiveness of NPR and that of alternative methods of drug discovery, notably rational drug design. Since the 1920s, many pharmaceutical companies have repeatedly launched NPR in response to clear evidence that nature contains innumerable chemicals with therapeutic effect. The idea of tapping the vast reservoir of diverse chemicals contained in nature is widely accepted as sound. However, to do so may not be cost-effective; the development of the ability to synthesise drugs chemically has made natural products research relatively expensive. Research programmes are evaluated on the basis of productivity, i.e. research must produce a marketable drug with potential for significant commercial success within a time horizon of only a few years. One scientist at a large pharmaceutical company emphasised that NPR requires a longer time horizon than rational drug design, and felt that management and non-NPR scientists do not sufficiently appreciate this. Another scientist commented, only half-jokingly, that a new NPR programme could not be launched in his company until those who had been involved in earlier NPR retired. Perceptions of the difficulties associated with NPR appeared to lag behind technological advances which would significantly reduce those difficulties. Some scientists would argue that NPR has in the past appeared less cost-effective than other research approaches as a result of using standards and criteria that may be appropriate to other research programmes but not to NPR. Others would argue that a research programme must yield results within a given period of time, in order to be viable. Technological synergies with other research programmes NPR programmes cannot be considered in isolation from other ongoing research programmes. It is largely technological advances in the screening of synthesised chemical libraries that have increased the cost-effectiveness of screening natural products. Chemical libraries are collections of chemical structures that have either been synthesised in the laboratory or isolated from natural sources. These compounds are "screened" in simple biological tests which measure activity with respect, often, to only a single enzyme. The test may be scaled to allow a large number of diverse compounds to be tested against the enzyme (termed high through-put screening). The objective is to determine whether a chemical compound or natural product extract can alter the activity of the enzyme in a particular way, i.e. cause a "hit". Advances in natural products chemistry and molecular biology have increased the ability to identify and synthesise compounds, encouraging pharmaceutical companies to use natural product novel compounds as blueprints for the synthesis of drugs. If a natural product extract produces a positive result during a screen, a range of tests will subsequently be undertaken to identify, isolate and characterise the exact structure of the active compound. A series of analogues are then synthesised for further testing, structurally modified to alter their behaviour or potency, etc. Natural products chemistry encompasses structural elucidation (determination of the structure of a molecule), purification technologies (to remove chemicals which may produce false "hits" in screens), and analytical and spectroscopic capability. The top priority of all large companies and most of the small companies is to synthesise lead molecules. In effect, the final drug may be a biochemically modified, fully synthesised chemical in which the natural 58 Biodiversity and the Pharmaceutical Industry source of the initial compound may be virtually forgotten and difficult to trace. In this sense, the initial molecule is used as an idea, a blue-print for the synthesis of new drugs. Some of the small, specialised pharmaceutical companies exploit plant cell culture (PCC) technologies to scale up the production of chemical compounds. PCC is based on cell cultures which produce secondary metabolites in mass quantities. Furthermore, the secondary metabolites produced in a plant cell culture may be manipulated by varying the conditions under which the culture is grown and maintained. Scaling up production may be desirable if compounds cannot be synthesised on a commercial scale or if plant material is scarce. For example, Phytopharmaceuticals was started up to mass produce the anti-cancer drug taxol for commercialisation because of the scarcity of yew trees and the extreme difficulty of synthesising the taxol molecule. PCC technology is also used to increase the diversity of chemicals produced by organisms. At Phytopharmaceuticals, cultures from Taxus plants have been manipulated using chemical genetics to induce the production of new taxoid molecules which, although related to taxol, may differ in therapeutic or pharmacodynamic potential, and may develop into "second generation" drugs. The production and screening of analogues of lead compounds is an approach widely adopted in the industry. Microorganisms are highly sensitive to the conditions under which they are grown. Using plant cell culture, microorganisms are grown under varying conditions of light, temperature, motion, etc. to encourage the production of novel chemicals. Finally, almost all companies surveyed emphasised the importance of pursuing different types of drug discovery programmes simultaneously. Different types of research complement each other not only through technological advances but also in support networks. For example, the NPR new leads discovery division at one of the largest pharmaceutical companies screens both natural products and synthetics for leads, and is heavily supported by other groups in the company, e.g. biochemists and pharmacologists. Research objectives The changes in the technology on which drug discovery is based have caused a shift in the objectives of NPR. Twenty years ago, NPR was geared toward the discovery of new drugs. Today, the main objective is to isolate novel structures from natural products to serve as blueprints, or starting material, for the biochemical synthesis of new drugs. The critical difference is that discovering a new drug entails identifying an active molecule from a natural source which can be developed into a marketable drug without the aid of biochemistry and synthesis (such a drug is termed a "silver bullet" in the industry). A novel structure, on the other hand, simply refers to discovery and identification of a novel molecule which may be modified to change behaviour or facilitate synthesis. In effect, discovering structures is a less stringent process than discovering drugs: molecules which need modification or molecules from organisms that are not widely available or cultivable are still useful. In the pharmaceutical industry today, the value of an organism lies in its potential to contain an unique biologically active compound that can be fully synthesised in the laboratory. Companies are concerned with problems of the continuity of supply of raw material. If the lead molecule is highly complex and biochemical modification cannot be used to simplify its structure (while maintaining its activity and potency), the source organism may be cultivated. If it is not easily and cheaply cultivable, the lead will most likely be dropped from the research programme. 59 INDUSTRIAL RELIANCE ON BIODIVERSITY 3.2.2 Expenditure on Research and Development of Natural Products Total R&D expenditure on natural products It is difficult to provide estimates of corporate expenditure on NPR. Firstly, this information is commercially sensitive and therefore confidential. Secondly, it is often not possible to delineate NPR clearly from other research programmes. For example, the drug discovery programmes of the larger pharmaceutical companies are based on the screening of diverse compounds for a broad range of therapeutics. Both synthesised compounds and extracts from natural products are screened; tracing the origin of compounds becomes important only after a hit occurs. It would require too much time and too many resources to establish the nature of compounds prior to signs of bio-activity because of the large numbers of compounds currently being screened. In spite of renewed interest in NPR, R&D expenditure on natural products remains low relative to expenditure on rational drug design programmes. In the larger pharmaceutical companies, NPR absorbs a small percentage of total R&D spending, roughly 5-20%. While some smaller pharmaceutical companies specialise predominantly, if not exclusively, in NPR, the total amount available for R&D in these firms is quite small, i.e. ranging from US$1-5 million per annum. Roughly one-third of the companies involved in this study are small specialised companies, most of which undertake collection, screening, and drug development activities. Most of these small companies were set up in the late 1980s, and therefore very few of them have drugs in production and on the market. Only Shaman Pharmaceuticals, Genelabs and Phytera have drugs derived from natural products on the market. Reasons given for low levels of expenditure on NPR in the industry as a whole are: 1. NPR is a relatively high risk activity due to complications of supply and resupply, extract treatment, the reliable identification and classification of biotic samples, and the lengthy process of molecular characterisation. 2. Because of the long lead time for drug development, it is too early to determine whether NPR which took place in the 1980s will consistently produce new drugs. Dimasi ef al. (1991) have estimated that in the 1980s the cost of producing a marketable drug was US$231 million (out of pocket costs and the costs of drugs abandoned during development) and 12 years (time costs). As discussed above, the cost-effectiveness of NPR in the 1980s have been increased dramatically by advances in technology, especially advances in screening technology; new methods to purify extracts to increase efficiency in screening (by avoiding false positives); and advances in molecular chemistry which increase the ability to manipulate the chemical behaviour of compounds and synthesise molecules. 3. Despite advances in the treatment and purification of extracts, the screening of natural products is more problematic and more costly than screening synthetics. Plant extracts, for example, contain chemicals such as tannins and chlorophyll which cause false positives and register binding proteins. 4. Structural elucidation of natural products takes time and money. When synthetic compounds are screened, their structure is known because they have been produced by chemists in the laboratory. When a hit occurs, subsequent development is fairly straightforward, the structure is known and because it is simple (chemists will not willingly produce complex molecules) it will be easy to synthesise and easy to modify to allow testing of analogues and the development of "second 60 Biodiversity and the Pharmaceutical Industry generation” drugs. On the other hand, signs of biochemical activity in a natural products extract must be followed by a long period of testing to isolate and characterise the active compound. The active compound may be highly complicated and chemists may alter its potency or behaviour in attempts to simplify the structure. Because most natural products molecules are not simple, they will be more difficult to synthesise. Expenditure on collection, extract treatment and screening There are a number of activities common to all research programmes in the companies surveyed: prospecting, treatment of and work with extracts, screening and molecular characterisation/biochemistry. Each requires different levels of expenditure. The past decade has witnessed attempts to harness commercial forces to fund conservation of natural habitats. Very few companies have the financial resources to offer a significant amount of money up- front to institutions or communities undertaking collection. This suggests that the scope for money being provided up-front to fund conservation in biodiversity-rich (but resource constrained) countries is limited. Nevertheless, there is potential for source countries to benefit from collection and maintenance of medicinal plants. Profits from the successful development of drugs derived from natural products may be channelled to source countries and conservation projects through some type of royalty arrangement and, in some instances, through the contribution to local research facilities by pharmaceutical companies. All the pharmaceutical companies involved in collection have stated a willingness to negotiate royalty payments with collecting institutions if and when a drug enters the market and some of the more specialised companies already have royalty agreements in place. A royalty agreement simply helps to ensure that a fixed proportion of profits from a commercially successful drug is returned to the country which supplied the organism from which a drug is derived. Companies are hesitant to reveal the level of royalties, but emphasised that royalty payments were going to be lower than expected by source countries. First, source countries tend to overestimate the profitability of successful drugs. Second, the percentage of profits offered for royalty payments is contingent upon the role played by the natural product; if a drug is the result of extensive biochemical modification and is fully synthesised, pharmaceutical companies view the contribution of natural products as minimal. On the other hand, a unmodified natural product drug may produce far higher royalty payments. Under the Merck-INBio agreement, Merck provided US$1 million up-front to fund collection of plants and insects by the National Institute of Biodiversity (INBio) in Costa Rica. This was the first collaborative agreement to provide funds up-front. Expenditure on collection is generally low as compared with other stages of drug development. Expenditure on the treatment of extracts varies; this stage of research has, however, remained relatively labour intensive, and most large companies and some of the smaller companies prefer to receive crude extracts of plants and invertebrates. Different organisms also require different degrees of treatment. Microbes and fungi are usually received in soil samples and processed in-house because of the effects that variation in conditions of storage or growth have on the secondary metabolites they produce. Expenditure on treatment may be significant due to the labour and facilities required. A small number of companies are screening collections of microorganisms developed by academic researchers or developed for other purposes. By far the highest expenditure is allocated to screening. It is, however, difficult to get an estimate of the proportion of the NPR budget allocated to screening because most screening programmes encompass 61 INDUSTRIAL RELIANCE ON BIODIVERSITY both natural product compounds and "pure" synthesised compounds. Moreover, in the larger companies, only a small proportion of compounds screened are natural product compounds. It has been suggested that expenditure on a particular NPR activity does not reflect its importance Telative to other activities in the NPR programme. For instance, prospecting activities require relatively little expenditure while biochemical modification and testing absorbs a large proportion of the NPR budget. Yet many companies have emphasised that the collection and acquisition of diverse compounds is the most important stage in the process of drug discovery. The likelihood of discovering novel active compounds rests on maximising the diversity of compounds screened. 3.2.3 Company Strategies There is a broad range of approaches to NPR developed by pharmaceutical companies. Large companies, whose NPR is only a small component of total R&D and who have extensive screening facilities, usually try to maximize the number of diverse compounds acquired and screened. The greater the number of diverse organisms (and hence chemicals) screened, the greater the probability of discovering a lead compound. Large pharmaceutical companies While emphasis tends to remains on microbial research, NPR programmes now include microbes, fungi, plants and marine and terrestrial invertebrates. Only a handful of companies are analysing terrestrial invertebrates, notably insects, spider and snake venom. Large pharmaceutical companies tend to contract out collection activities and prefer to receive samples in the form of crude extracts. A crude extract is a biotic sample that has been ground up, but not yet purified. It is cheaper and politically expedient for companies to link up with infrastructure and expertise already existing in academic and research institutions rather than establishing prospecting facilities in- house. Sample collection from collaborations with research institutions may be supplemented by informal in- house collection i.e. employees on holiday in exotic places may return with soil samples and fungi. For example, two of the more unusual hits have come from extracts developed from fungi growing on an old Tusty mailbox and a log picked up by an employee of a pharmaceutical company waiting for a plane in Phoenix, Arizona. This type of informal collection, however, is not encouraged for plants and marine organisms because of the possibility of overexploitation of endangered species and intellectual property rights issues. Small companies Smail to medium sized pharmaceutical companies (often funded with venture capital or developing as commercial offshoots of academic and research institutes) who do not have the budget and facilities to screen vast numbers of diverse compounds develop different strategies for sample collection and for the treatment of extracts. Specialised collection strategies are designed to increase the chances of drug discovery through careful selection of organisms and/or regions to compensate for the lack of facilities to screen large numbers of compounds. For instance, Shaman Pharmaceuticals restricts collection to tropical rainforests because this habitat has the greatest number of biologically diverse organisms per hectare. Small companies, e.g. Sharman and Phytopharmaceuticals, may narrow the range of compounds considered by focusing exclusively on plants. Biodiversity and the Pharmaceutical Industry Specialised drug discovery approaches may rely on the use of particular types of information in collecting biotic samples; for instance, Shaman Pharmaceuticals uses ethnobotanical information. Alternatively, particular technologies may be exploited to increase the diversity of compounds available and to avoid complications of resupply, e.g. the use of plant cell culture by Phytera and Phytopharmaceuticals. Company cases: 1. Shaman (the name means medicine man) Pharmaceuticals Inc. of San Francisco base their collection entirely on ethnobotanical information using tropical plants with a history of medicinal use. Their source material comes entirely from tropical forests from all around the world. Shaman has formed collaborative arrangements with Merck and Eli Lilly for screening and development of certain compounds identified by Shaman. To date, the company has produced two products in clinical trials and ten compounds which are being evaluated in animal studies. 2. Phytopharmaceuticals (PPI) utilises plant cell culture following primary screening to increase access to potentially useful active compounds. PPI has developed proprietary chemical genetics technology which is designed to optimize the therapeutic properties of lead molecules. Chemical genetics uses plant cell culture to manipulate gene expression in numerous successions to create thousands of distinct but related molecules. Plant cell culture is also used to mass produce compounds for commercialisation when they cannot be synthesised. For example, PPI came into existence to scale up the cheap mass production of taxol. 3. Phytera, on the other hand, uses plant cell culture before primary screening to produce a wide range of secondary metabolites to be screened. The US parent company undertakes screening and medicinal chemistry, while Phytera UK (a spin-off from Sheffield University) focuses on plant tissue culture and genetic manipulation. Phytera is trying to construct a library of tissue cultures from a wide range of plants and to apply genetic engineering, hormones and other elicitors to "turn on" production of secondary metabolites. 4. Genelabs provides an example of a small pharmaceutical company which has maintained its emphasis on the biochemical synthesis of new drugs and has only a very informal and unsystematic method of natural products collection. Genelabs focuses on developing novel assays and approaches to drug discovery rather than on novel sources of drugs. Scientists may receive purified compounds through collaborating academic researchers or chemical libraries/banks of collaborators. One of its major drugs (anti-HIV) is a modified plant compound. A semi-synthetic anti-cancer drug is now in Phase I of clinical studies. 5. Merck, one of the largest companies surveyed, conducts 5% of the research by pharmaceutical companies worldwide (35 plants in 17 countries and eight research laboratories in seven countries) and in 1992 invested more than US$1 billion in research and development. Public service drugs produced from natural source compounds by Merck include Ivermectin, highly effective in preventing human and veterinary parasitic disease, including onchocersiasis (river blindness); Lovastatin is the active ingredient in Merck's cholesterol-lowering drug Mevacor which is produced by acommon soil microorganism. Merck has an agreement with the National Institute of Biodiversity in Costa Rica to provide plant, insect and soil samples for potential natural products which is designed to return conservation benefits to Costa Rica. 6. At Glaxo, another of the larger pharmaceutical companies, some 7,000 staff are engaged in the process of discovering and developing new medicines, and in 1992-1993 revenue expenditure increased to £739m. In the search for new medicines from natural products, The Glaxo Institute of 63 INDUSTRIAL RELIANCE ON BIODIVERSITY Applied Pharmacology, officially opened at the end of 1992, works within the Pharmacology Department of the University of Cambridge. Another new centre for natural product research is the Institute of Molecular and Cellular Biology at the University of Singapore. At the Natural Products Discovery department at Glaxo Group Research in Greenford, UK, the search for new leads is intensifying with supplies from China (some 9,000 plants and up to 750 soil samples and microbial cultures expected between 1993-1996), the University of Illinois in Chicago, French Guyana, Colombia, Mauritius and the Chelsea Physic Garden in London, among others. Extracts of marine organisms are also screened in the UK. 7. Biotics Ltd., UK, was launched in 1983 as a biotechnology consultancy service company specialising in areas of natural product chemistry. In 1986, it was approached by the European Commission Biotechnology Unit to explore opportunities for promoting the sustainable utilisation of the indigenous genetic resources of developing countries, and Biotics has undertaken to share any royalties on any subsequently developed phytochemical leads with the original plant source country. Together with its plant extraction facility BioEx (UK), it has today marketed over 3,000 plant samples and extracts for screening by pharmaceutical and agrochemical companies. Natural product factionation, structure determination and analog synthesis are additional services jointly provided by Biotics and the School of Chemistry and Molecular Sciences at the University of Sussex, UK. 3.2.4 Sample Collections Prospecting refers to preliminary research (for non-random collection) and the physical collection of organisms, including transport to laboratories. Preliminary ethnobiological research may be undertaken using literature searches, databases (e.g. NAPRALERT), casual reports of collectors, ethnobiological information, etc. While prospecting may be the least expensive component of NPR, it is the most politically sensitive and publicly visible activity linked with issues of intellectual property rights. Prospecting is the activity least amenable to control by pharmaceutical companies. The complexity of dealing with foreign governments, indigenous peoples and academic institutions and the public goods nature of genetic resources have encouraged most pharmaceutical companies to contract out the collection stage of NPR. The players Preferred collaborators are institutions and individuals who, through existing research and collaborations (or simply more specialised activities), have the resources and knowledge to obtain high-quality biotic samples while avoiding conflict over property rights and compensation. With a few exceptions, prospecting is at least in part contracted out to botanical gardens, research institutes, universities, or prospecting organisations. Prospecting is contracted out for a number of reasons: 1. Pharmaceutical companies often have neither the personnel with the necessary skills (botanists and taxonomists) nor the infrastructure available. The infrastructure and knowledge required for high quality and reliable collection already exists in botanical gardens and universities; tapping in to established institutions is both less costly and less risky. 2. Concern has also been voiced that poor collection procedures could result in the inadvertent decimation of plant populations. Such comments suggest that pharmaceutical companies are wary of endangering future access to genetic resources by being seen to exploit these resources in unsustainable ways. 64 Biodiversity and the Pharmaceutical Industry 3. Collaborations with non-commercial research institutions brings credibility to commercial companies and provides assurance about their respect for genetic resources. For instance, the pharmaceutical companies contacted for this survey worked variously with the Missouri Botanical Garden, the New York Botanical Garden, Kew Gardens, the University of Illinois and a number of individual botanists. 4. Source countries are concerned that their genetic resources might be exploited unsustainably and without due compensation. Scientists associated with academic and research institutions who have worked in high biodiversity countries for many years on identification and classification of genetic resources may help to ensure mutually beneficial exploration and extraction. Their interests are seen to lie more in expanding knowledge of national genetic resources and conservation than in profiting from commercial use of these resources. 5. Ciba-Geigy emphasised that it does not deal directly with source countries and institutions because there is such large scope for misunderstanding: pharmaceutical companies are often accused of plundering genetic resources, and there is a feeling that source country universities do not fully realise the high degree of risk and the low level of returns to NPR. Biodiversity rich countries see the handful of successful natural product drugs grossing hundreds of millions of dollars annually, but they do not see the thousands of failed drugs that cost pharmaceutical companies millions of dollars. Types of information used There are a variety of types of information used in the collection of samples. Most of the companies interviewed undertake some random collection, in addition to using taxonomic and ecological information in sample selection. The dominant philosophy seems to be to maximize the diversity of compounds screened. This entails maximising environmental diversity, genotypic and phenotypic variation, the number of families considered, etc. Some companies have interest in plants close to the limits of their ecological niche because "stressed" plants produce a greater number of potentially interesting secondary metabolites. If a compound shows activity in a screen, research may focus on closely-related chemicals. Companies receiving samples or crude extracts from other institutions often leave methods of collection to the discretion of the collecting institution. Collectors are required to have the necessary authorization from source country governments and abide by acceptable codes of conduct. Pharmaceutical companies may or may not provide guidelines depending on the nature of the particular research programme/therapeutic area in question. At the stage of collection, the dominant priority is to acquire chemical diversity which in turn requires diversity of organisms from diverse ecological systems. Some companies seem surprisingly flexible (given their size and commitments) with regard to the types of organisms they accept from collaborating institutions, provided that collection procedures fall within accepted policies and guidelines, and that the funds and interest exist. Ethnobiology Use of ethnobiological information frequently supplements other information used to guide collection. Most pharmaceutical companies use ethnobiological information sometimes; this has changed very little in the past five to ten years. Companies expect future use of ethnobiological information to remain roughly at today's levels. It may be that companies with established NPR programmes have fairly rigid research approaches/strategies which tend to evolve slowly in line with other in-house research programmes, rather than change dramatically over time. 65 INDUSTRIAL RELIANCE ON BIODIVERSITY Companies take note of traditional uses of organisms and may on occasion use this information systematically in tightly-targeted research programmes. Often pharmaceutical companies who contract out collection do not know whether ethnobiological information is used. However, one scientist suggested that current pharmaceutical use of approximately 75% of the 121 plant-derived medicinal compounds on the market is correlated with original, traditional use by indigenous peoples. Shaman Pharmaceuticals is the only company interviewed that concentrates on collecting plants solely based on ethnobotanical knowledge contained in indigenous communities. If a plant is used for the same purpose in three different communities, investigation is undertaken. Shaman has a hit rate of 50%. After only two years, Shaman has two products in human clinical trials (Provir and Virend, anti-virals), statistics which the company feels support the use of ethnobiological information. Both anti-viral drugs currently in clinical trials contain active ingredients from a plant grown in several South American countries. Using random screening, perhaps only one molecule in 10,000 may reach the market as a drug. What is important in considering the debate about hit rates is that the level of activity screened for may differ between research programmes. Large companies screening tens and hundreds of thousands of extracts annually cannot handle too many hits from samples screened. To limit the number of hits registered, the level of activity at which a hit is revealed is raised. Some companies register only high potency compound hits in their screens. This directly affects the hit rate. Because Shaman restricts the number of compounds screened, through the use of ethnobotanical information and the exclusive screening of botanical compounds, the company is able to screen for various levels of activity. This may be an advantage because high potency compounds are not necessarily the most promising for drug development. Reservations about the use of ethnobiological information were voiced by a range of companies. The dominant concern is that use of ethnobiological information limits the diversity of compounds screened for activity, although it may result in the discovery of a drug. Advances in molecular biology have opened up opportunities to study undreamed-of targets. There is no point in limiting the range of compounds screened to compounds with past medicinal use. Pharmaceutical companies want unique compounds, so they want as much diversity as possible. The use of ethnobiological information imposes restrictions (unnecessarily) on the diversity of compounds screened. In addition, the utility of ethnobiological information is limited to therapeutic areas where symptoms are clearly visible. For example, a company may research on anti-fungals. Medicine men and women use local plants extensively as anti-fungals since fungal infections can easily be diagnosed and rainforest peoples are particularly at risk from fungal infections due to the climate and the slow healing of open wounds. Moreover, the target compounds that developed country pharmaceutical companies and research institutions are interested in today differ from those used by indigenous peoples. The ailments which afflict ageing populations in the West are different from those, such as malaria, that afflict rainforest peoples. On the other hand, use of an organism to treat an ailment may indicate biochemical activity which, although not employed for its traditional remedy, may work in other therapeutic areas. For example, oil of evening primrose from Oenothera species was used by native peoples in Madagascar for skin problems. This traditional treatment relates to its current use for eczema, but not to is use against pre-menstrual syndrome. Similarly, anti-cancer activity of etoposide was discovered in the mayapple, Podophyllum peltatum, traditionally used for diabetes. 66 Biodiversity and the Pharmaceutical Industry Sources of ethnobiological information A variety of sources of ethnobiological information are used in conjunction with each other. Literature searches are common. Databases such as NAPRALERT at the University of Illinois are consulted frequently. This contains information about traditional uses, location, general properties, current use, medical research already undertaken (insofar as this information is published), etc. Companies may use NAPRALERT at different stages of research. The database may be used to guide collection activities or it may be consulted following an interesting hit under screening. For some of the larger companies, it is ethnobotanical information contained in NAPRALERT that is consulted prior to extraction and screening, particularly when undertaking targeted research programmes. Information acquired casually with random collections tends to be limited. Access to this type of information depends to a great extent on the identity of collectors and their relationship with local communities. This type of informal information would not be consistently reported and the individuals contacted via this survey might not have been aware of it. Evidence of use by native groups may also be important. Shaman sends collecting expeditions composed of ethnobotanists and medical doctors into the field with indigenous medicine men and women. 3.2.5 Work with Extracts The procedure Expenditure and labour requirements for obtaining extracts from different organisms vary because treatment methods used, and the quality and form of samples received, differ. In general, the treatment involves grinding, extract preparation and isolation of compounds, including the isolation of undesirable compounds. Quality varies not only with the organism, but also with the collecting institution. Collectors have different degrees of expertise and extract preparation facilities. Most fungi and microbes are received as soil samples and are grown in a variety of culture conditions to generate secondary metabolites. By providing conditions which inhibit the growth of common microbes, the chances of discovering a novel compound are increased. Given a fixed number of samples, chemical diversity can be manipulated through the treatment of extracts and many companies prefer to maintain control over this process in-house. Upon receipt of plants, samples are ground up, extracts are prepared and pre-treatment measures are undertaken to remove tannins and other compounds which may cause false positives to register in screens. The treatment of marine and terrestrial invertebrates includes similar stages. For insects, some companies prefer to separate body parts prior to grinding; others grind the entire animal. While companies often prefer to contract out collection activities, preference for biotic samples or crude extracts differs between companies and it is difficult to generalise. The proportion of biotic samples received as extracts depends on the type of organism, the source country, and the collaborating organisation. Organisation of extract treatment Some companies prefer to produce their own extracts from samples to maintain control over this process, because the extracting treatment determines which chemicals are retained. The equipment and expertise necessary for extraction procedures frequently do not exist in source countries. It is, however, more costly to process extracts in-house. A general impression gained from the pharmaceutical industry as a whole is that there is, indeed, a willingness to contract out the processing of samples to source country institutions, provided the expertise and technology are sufficient 67 INDUSTRIAL RELIANCE ON BIODIVERSITY to ensure the maintenance of quality. Often companies prefer to restrict themselves to high-tech activities, avoiding routine work whenever possible. Some source countries have shown increasing interest in producing and exporting crude extracts. Brazil and Australia, for example, have banned the export of entire plants. Pharmaceutical companies may soon have to accept receipt of extracts (and the consequent loss of control over this stage) as source countries try to capture additional value added and control over genetic resources. Some companies have high quality collaborations with institutions in source countries. These include significant funding of local research, training and the provision of equipment, and having extracts produced at source (see Phytopharmaceuticals); more technologically advanced procedures, such as plant cell culture, are also being planned for the future. 3.2.6 Screening Recent changes in screening technology Since World War II, research has focused on the discovery of new antibiotics via research on bacteria and fungi. Drug discovery research is based on the screening of chemical compounds. The 1970s and 1980s saw the screening of fermentation broths for antibiotics extended to screening in other therapeutic areas, notably use of anti-cancer assays. The 1990s has seen a dramatic increase in the types of screens used, the range and number of therapeutics covered and the diversity of organism included in research programmes. Screening in the 1990s no longer focuses on anti-cancer and anti-virals. Pharmaceutical companies may screen for activity in 30 different bio-assays; competition between therapeutic areas is often fierce and turnover of screens is rapid. Jn vitro screens have in the past been fairly general, but in the last decade screens have become highly specific, testing for a particular type of activity in a clearly defined type of bio-assay. The choice of screen type varies between companies according to scientific criteria and is shaped by the needs and character of the overall research programme. The resurgence in NPR in the 1990s can, in large part, be attributed to changes in technology and the subsequent emphasis on access to biological and chemical diversity. The development of efficient automated screening techniques has changed the search for novel compounds into a "numbers game”. The speed at which samples can be screened has increased one hundred-fold. This has allowed expansion of the range of organisms screened and has reduced screening costs. To complement advances in screening technologies, advances in molecular biology have increased the ability to modify natural products compounds (to enhance potency, decrease toxicity); increased use of these biochemical modification techniques have increased the utility of natural products as blueprints for the development of new drugs. These advances greatly enhance the potential of biodiversity as a source of molecules which may be modified directly or used as leads for the synthesis of analogues. Given the growth in the number of therapeutic areas covered, the increased efficiency of screening and the advances in molecular biology, access to biologically diverse compounds has become a crucial determinant of success in drug discovery programmes. The dominant strategy in the pharmaceutical industry is to maximise the number of diverse compounds screened to maximise the probability of discovering novel compounds for drug development. Pharmaceutical companies constantly search for diversity of structures, and the industry has known for many years that natural products contain this diversity. However, not until the 1990s has the background technology been adequate to exploit these products. 68 Biodiversity and the Pharmaceutical Industry Screening activities include both natural products and "pure" compounds synthesized in laboratories by chemists. The larger pharmaceutical companies screen these chemical libraries, often with little concern for the origin of compounds (until, of course, a compound shows activity in a screen). The proportion of compounds in these chemical libraries originating in natural products is often as low as 5%. Numbers range from around 300 plant species per year screened in a small company to hundreds of thousands of natural products and synthetic compounds screened annually at large ones. Most screening is undertaken in-house. A handful of companies have collaborators in source countries who undertake preliminary screening, but this appears limited because of the need for special equipment and reactants. The amounts of material required by research programmes have also decreased dramatically. This has allowed a broader range of organisms to be considered. For example, screening of spider venom today Tequires only a few microlitres of venom (extracted using a catheter and mild doses of electrical shock to stimulate venom secretion so spiders do not need to be killed). This simply was not possible 25 years ago. Research on scarce or difficult-to-obtain organisms was out of the question because the number of organisms required merely for testing (let alone development) was prohibitive. As novel compounds emerge from the research process, significant quantities of the compound need to be prepared for clinical trials. If the compound passes successfully through clinical trials, large-scale production processes and manufacturing capacity are developed. Limitations on screening A drawback arising from the increased speed of screening is that companies limit the number of active compounds on which they undertake future research by demanding a higher threshold potency to register in today's bio-assays. However, low potency compounds are not necessarily inferior to high potency compounds in their usefulness as blueprints for drug development. With current emphasis on biochemical modification and synthesis, disregarding low potency compounds may cause many potential drugs to be overlooked. Another potential problem with screening is the increasing specificity of in vitro screens used by many companies. This results in compounds being screened for highly specific activity in a limited number of therapeutic areas. A compound may be discarded as inactive simply because it is not screened in an assay in which it is active. Some scientists would like to see more general screens more widely used. Choice of organisms There are a range of factors which influence the selection of natural products to be screened. All companies, regardless of size and research priorities, are concerned primarily with ease of supply and, more importantly, with the reliability of future supply. Only one company reported the rate of success with samples to be the most important determinant. Ease of use in laboratory (referring to treatment of extracts and screening complications) and the cost of samples seem to be least important. Two companies emphasised that all of the above factors were considered when choosing organisms to screen, yet ultimately the aim is to screen as broad a range of diverse organisms as possible to maximise chemical diversity. NPR has been and remains dominated by microbial research. This is in large part because of the greater control over research and development through fermentation technology. Using fermentation techniques in which genetically identical microorganisms are reproduced rapidly and under controlled conditions, it is relatively easy to scale up and modify natural product compounds. This is not the case for higher organisms and research into non-microbial natural products may be inhibited as a result. However, useful drugs resulting from screening of bacteria and fungi may be mostly limited to antibiotics. In effect, microbial research is restricted to a small number of therapeutic areas. A scientist 69 INDUSTRIAL RELIANCE ON BIODIVERSITY interviewed described the screening of microbes as "a bit of a dead horse" because companies have been screening microbes for years with no new results. Hundreds of thousands of microbes are being fed into assays and companies may well be screening the same organisms repeatedly as it is difficult to identify and keep track of those screened. Historically, plants have been avoided in the pharmaceutical industry. Firstly, there has been a lack of plant science experience in the pharmaceutical industry. Scientists with skills in plant cell propagation, cell biology and natural products chemistry have been in short supply. Secondly, supplies have been unreliable and inconsistent. If a company discovers a natural product lead compound which can not be synthesised, production will have to be based on a reliable supply of raw material of consistent quality. While initial testing of natural products requires increasingly smaller amounts of material, testing following a hit in a screen may require significant amounts of material and unless this has been accurately identified and can be produced reliably, further research will not be undertaken. Thirdly, there have been problems producing a supply of material. A major concern of the pharmaceutical industry is having to be dependent on a small number of countries (which may lack infrastructure, may suffer from environmental calamities or political instability) and collectors for raw material for the production of a major drug which may gross over $100 million per annum. A major problem with marine organisms is that chemical activity is closely related to what they have eaten immediately prior to collection. This sensitivity makes research on marine organisms particularly risky. Signs of biochemical activity may be difficult to trace to their origin. Other problems with marine invertebrates are that they cannot be cultured easily, cannot be collected on a large scale, and recollection is a problem. In addition, a scientist commented that compounds from marine organisms often cannot be synthesised. Given the great number of alternative organisms to be included in research programmes, many companies are hesitant to tackle the numerous complications linked to marine organisms. 3.2.7 Details of Natural Product Research Programmes Organisms screened and geographical focus of NPR by each company All of the companies questioned in this survey use plant material for their NPR, but 40% specialise in microbes and fungi. Marine and terrestrial invertebrates are used by a minority of companies (Table 3.1). Most companies use material from more than one region, although some specialise in the New World (Table 3.2). There is a clear preference for tropical regions. 3.2.8 Collaborations Collaboration with non-commercial institutions is becoming widespread as companies make use of existing infrastructure, expertise and institutions to gain access to biodiversity. Meanwhile, non- commercial institutions obtain much-needed financial support for targeted programmes and their own collection activities. Good quality collaborations are characterised by high quality samples, correct identification, accurate locational records, reliable resupply and general expertise. Collaborations with universities and research institutions tend to be of this type and are increasingly sought after. Collaborations with developed country institutions Several large pharmaceutical companies have collaborative arrangements with botanic gardens for all or some of their collection. This ensures that the quality and identification of material is of a high standard. Resupply of materials is also the responsibility of the collaborating institution. 70 Biodiversity and the Pharmaceutical Industry For instance, Pfizer has just entered into collaboration with Dr Michael Balick at the New York Botanical Garden (NYBG). NYBG performs all collection and identification in addition to the processing of extracts. Pfizer has helped to set up the facilities and procedures for extract treatment, and does not want to receive raw materials. All screening and chemical elucidation are done by Pfizer. Through this collaboration Pfizer has side-stepped problems of supply. Resupply of material is the responsibility of the NYBG and the quality and identification of material is of high quality. Through this interaction, Pfizer is contributing to a floristic survey of the US which, although unlikely to uncover new species, is providing new geographical information on the incidence of species which will prove useful for conservation efforts. Biotics Ltd. is a commercial prospecting organisation which has developed a novel approach for interfacing new sources of tropical plant material with the high through-put screening technology of pharmaceutical companies. A major condition of the supply of plants or extracts is the payment of royalties on any natural product derived drug, which Biotics will share equally with the source country. Collaborations with developing country institutions Source country research institutions and universities are becoming increasingly involved in the commercial use of their genetic resources. As expertise and facilities are expanded, source country institutions are able to play a greater role and thereby appropriate a larger portion of value-added. In Costa Rica, INBio's agreement with Merck provides funds not only for collection, but also for technical training. A number of pharmaceutical companies emphasised that the financial aspect of collaborations does not accurately reflect the benefits accruing to both parties. Small companies who are unable to provide funds for collection directly, stress that training of local personnel in taxonomy, cataloguing (developing herbarium sheets), extract preparation, preliminary screening, and even plant cell culture helps to ensure that source country institutions receive foreign funds enabling them to expand their own facilities and research. For instance, Phytopharmaceutical's collaborators in Thailand, Brazil and China not only receive funding for training purposes, but also receive funds to develop their plant cell culture technologies. If an extract of interest is identified, plant cell culture procedures can be undertaken in source countries. There may be stringent conditions placed on collaborating institutions. Companies pay for the selection of biotic samples according to their guidelines and protocols (protocols in this context deal with the technical details of the drying and treatment of samples). Usually all costs are covered and further funds are provided for training. It is felt by some companies that while the principle of royalties is fine, it is more important to provide immediate benefits through training and transfer of technology. Shaman Pharmaceuticals does extensive research not only on indigenous peoples and their traditional medicine systems, but also on the needs of the communities prior to collection expeditions. Approximately ten percent of the funds of expeditions are ploughed into the local community, based on the requests of individuals from that community. For instance, on a research expedition to Amazonian Ecuador, Shaman provided resources to expand a Jocal community's airstrip so planes could take more than one passenger at a time. Shaman also provides direct support for laboratories in developing countries, e.g. research materials and scholarships are provided annually to a Nigerian laboratory working on plant treatments for malaria. 71 INDUSTRIAL RELIANCE ON BIODIVERSITY Table 3.1 Major groups of organisms screened by 15 pharmaceutical companies questioned Company Microbes and Marine organisms fungi il Poneto er ia ger eho oe ea ee ee eee Terrestrial invertebrates eg fe sat ae mp onion Soetoro SS og are an er te rs ee ee ee ee eae The National Cancer Institute natural product extract collection The National Cancer Institute (NCI) is currently offering to "lease out" its collection of extracts (from all types of natural products) to a number of pharmaceutical companies. Under a specific arrangement, pharmaceutical companies pay a minimal fee per extract and undertake to screen extracts for anti-AIDS and anti-cancer activity. Pharmaceutical companies may also undertake screening for other therapeutic areas, but hits must be shown to have relevance to cancer or AIDS. Identification of extracts is given down to the level of family of the source organism. When positive activity is found, more information is provided, and the identity of the collector is given to the pharmaceutical company, who may approach the collector for further material. Furthermore, the company must provide the government with highly confidential information about the compound. In addition, this information must be shared with scientists from the source country; investment in the source country research facilities is also encouraged. If a drug is developed, the pharmaceutical company must negotiate intellectual property rights and royalty payments directly with the source country. Pfizer has declined to enter into this leasing arrangement because it is not clear what institution is to be negotiated with. Pfizer would prefer to have a fixed royalty arrangement with the NCI, and leave negotiations with source country institutions to the NCI. Pharmaceutical companies prefer to avoid arrangements with uncertain/ambiguous elements. Biodiversity and the Pharmaceutical Industry Similarly, Pfizer avoids shared funding of research programmes to avoid ambiguity over who owns what. Pfizer also emphasised that the rules of the game change significantly when there is government participation. 3.2.9 Chemical Libraries Pharmaceutical companies are primarily interested in plants because many of their active compounds are unlikely to be synthesised de novo for screening programmes. Advances in screening technology have dramatically increased the relative importance of screening in drug discovery and development. Some scientists are of the opinion that the dominance of screening may undermine NPR. A major disadvantage of NPR is that once activity is discovered in a screen, it takes time and resources to discover the structure of the active molecule. A scientist interviewed estimated that it costs approximately $60,000 to determine the chemical structure of a natural product compound. Despite improvements in structural elucidation technologies, four to five years pass between a hit and Phase I clinical trials. When screening chemical libraries of synthetic compounds, on the other hand, the structure of molecules is known; when a hit takes place, it is relatively straightforward to move on to drug development stages. NPR tends to be more expensive and to incorporate more factors less amenable to control/manipulation than synthetic chemistry, but the natural products add diversity to research programmes. However, some scientists feel that it will eventually be possible to get sufficient diversity in synthetically derived chemical libraries. The potential of chemical libraries is limited only by existing technology, which is advancing quickly. For instance, for one pharmaceutical company surveyed, two-thirds of screening activities used to be focused on natural products, but the past few years have witnessed a shift to increased screening of synthetic compounds. Advances in technology have allowed the synthetic production of the chemical diversity previously available only in nature. Unique complicated molecules are unlikely to be found in synthetic chemical libraries, but for the most part it is not the complicated molecules that are the most useful leads. Much effort is spent modifying molecules of natural products to make simpler molecules while maintaining/accentuating the required activity. However, no company has a sufficiently diverse chemical compound file and there will always be a need for "Nature, which is the supreme chemist for synthesis of novel structures" (Dr Gordon Cragg, NCI). A major drawback of the screening of chemical libraries of pure compounds and their relatives is that one simply gets a group of compounds with the same activity profiles. All the compounds are somewhat related, and relatives of leads show similar negative side effects, rendering screening of relatives slightly pointless. 3.2.10 The Convention on Biological Diversity The general feeling among the pharmaceutical companies interviewed is that the Convention on Biological Diversity (CBD) provides basic guidelines for use of genetic resources and contains a number of useful concepts. US-based pharmaceutical companies find the CBD to have limited implications for their activities as the US interpretive statement (linked to President Clinton's signature of the CBD) allows the US, in effect, to ignore difficult clauses. 73 INDUSTRIAL RELIANCE ON BIODIVERSITY Shaman emphasized that the improved equity and management of genetic resources arising from the CBD is better for all parties. In light of concern about challenges to intellectual property rights in the pharmaceutical industry, the CBD provides positive guidelines. While there may now be control gates with regard to use of genetic resources, access will be greater. If companies work up front with sound collaborative arrangements, the CBD should not be a problem. Table 3.2 Major regions and ecosystems used for source material for NPR by different pharmaceutical companies questioned. (NZ- New Zealand; ] - included with S. America; ? - ecoregion uncertain) ee eee eee nnd os ehenl a e s li o ed ee ee jomnmsa ty y| yt h | | | it tt ed ee ase ikl Vel ci enn ell re el ern at ere lee cl eis ili rg | ee ee ee eee a eee a ee si) so ona a a lo PS ees fos |e ORM alc elon eo 2 aoe 74 Biodiversity and the Pharmaceutical Industry 3.3 SUMMARY It would appear that virtually all research and development (R&D) in the pharmaceutical industry has its source in some naturally generated information. However, the time and money spent on this R&D remains difficult to quantify as the industry is not very precise as to what it considers to be "Natural Products Research" (NPR). Previously, NPR used to focus on the identification of material from within an organism which could be used directly in medicinal products (called a “silver bullet’). It is very seldom that nature provides such a ready-packaged molecule, already purified and isolated for direct use by humans (although many of the pharmaceuticals now in use derive from about 40 such substances). Pharmaceutical companies usually declaim NPR for the high cost of either: a) developing biological material into synthetic material; or b) procuring secure supplies of biological material through time. More often, the value of biological material lies in its more generalised, but fundamental, information that has to be refined and developed. It seems that the vast majority of screened molecules are of this once-removed nature, derived from human modification of natural templates. Literally hundreds of thousands of permutations may be built upon the foundation of a single template, and so synthesised substances are seen as being the focus of the screening industry. However, it cannot be overemphasised that the raw material for this enterprise comes initially from natural templates. The industry seems to be able to run long cycles of discovery based upon periodic injections of these templates from nature. There are some pharmaceutical companies that claim that it is now possible to produce wholly ~ rationally designed’ pharmaceuticals. For the most part, these substances are identified through screening, but by means of specially identified screens and by developing the screened molecules in logical directions from natural templates. Although this is sometimes said to represent a new independence from nature, it might simply imply much shorter cycles of discovery (between injections of new biological materials) if the new technologies mean that the screening process becomes much more efficiently directed. This survey of the pharmaceutical industry indicates that, as would be anticipated, biological diversity is a crucial factor in the production of modern medicine, even though the industry itself recognises its contribution only when it works most directly and completely. It appears that naturally generated information has had at least some role in the creation of virtually every pharmaceutical to date, and continues to provide the templates for current research. Although modern medicine has moved away from the use of plant and herb extracts, and toward reliance upon the isolation and modification of chemicals produced in nature, it still appears that the degree of fundamental (albeit indirect) reliance is nearly absolute. 3.4 CONCLUSIONS 1. Although 25% of prescription drugs contain active ingredients derived from plants, these come from only about 40 different species. 2. Whereas research used to be focused on identifying naturally occurring active compounds which could be used directly without further synthesis ("silver bullets"), the trend is now towards isolating lead compounds which can be synthesised into active drugs. 3. Technologies for screening for pharmacological activity have advanced so that large numbers of compounds or natural products can be screened at low cost. This has increased the through-put and scale of screening. 75 INDUSTRIAL RELIANCE ON BIODIVERSITY 4. The use of ethnobotanical information to narrow down the number of organisms screened is widespread. 5. Once activity has been detected, the active compound must be isolated and its structure identified. This tends to be more time-consuming and expensive than the initial screening. 6. Bulk production of active compounds is usually achieved through chemical synthesis or through cell culture techniques for more complex molecules. Extraction from natural organisms is not favoured because of the cost and problems of securing a reliable supply. 7. All the pharmaceutical companies questioned use plant source material for NPR, but many prefer to use microbes or fungi which are easier to grow in cell culture. 8. With the exception of a few specialist companies, expenditure on natural product research and development tends to be low because it is slow and high risk. Screening of synthetic compounds is preferred. 9. Little money is available in advance for obtaining natural products for screening, but some collaborative arrangements have been developed to build research capacity in source countries. Royalty payments for production drugs are already in place with some collecting institutes, and most companies expressed a willingness to consider them in future. 76 4. THE USE OF PLANT GENETIC RESOURCES IN AGRICULTURE Nathalie Olsen, Timothy Swanson and Harriet Gillett 4.1 INTRODUCTION Genetic material is the source of new information for the development of new products and the improvement of existing ones. Genetic information stored in different species is regularly being used by industries such as the pharmaceutical and those involved in plant and animal breeding. In these industries, the availability of new information is of paramount importance in the search for new products and the long term development of the industries. Indeed, the development of gene banks and their use by industry is evidence of the importance of genetic resources. Developments in technology, i.e. biotechnology, have increased the range of searches and improved the ability to retrieve information stored in genetic resources. In other words, they have effectively increased the amount of information available and made it easier to retrieve. When searches of existing genetic material become unproductive, new accessions are made to the "library" of unexplored wild genetic material. This has been the main source of new information, although the development of new techniques, such as induced mutation, also now provides a source of genetic material. Hence, in order to asses the importance of biodiversity conservation to the section of the agricultural industry concerned with plant crops, we have to examine the role of plant genetic resources. Questions such as: what is the current and future value of the genetic resources for the industry? or what is the quantity and quality of biodiversity that the industry is keen to preserve for commercial reasons? can be answered only by understanding the decision-making process within the industry. We therefore decided to carry out a survey of the industry, this involved sending a questionnaire to plant breeding and seed companies and interviewing various representatives, to gauge their views on a number of these issues. This report presents the findings of the survey and is based on the information obtained from the 20 companies which responded to the questionnaires. In order to preserve confidentiality of commercially sensitive information, the names of the firms have been concealed. 4.2 THE BASICS OF PLANT BREEDING The primary objective of plant breeders is to develop new domesticated varieties, containing desirable traits, superior to existing commercial cultivars. New varieties may have greater disease/pest resistance, may produce higher yields, may thrive under stressful conditions of drought, high salinity, temperature, etc. Research and development (R&D) efforts therefore focus on identifying seed (from cultivars’, landraces* or wild material) with desirable traits from as closely related species as possible and incorporating these into existing cultivars. Desirable traits may be found in a wide range of germplasm. Cultivated variety. An assemblage of cultivated plants with clearly distinguished characters which are maintained when produced sexually or asexually. Highly variable, local crop cultivars that have evolved in diverse environments under traditional agricultural practice, over a long time period. 77 INDUSTRIAL RELIANCE ON BIODIVERSITY The generally high costs (in time and money required) of breeding programmes mean that they tend to be highly targeted, i.e. they respond to current problems encountered in agriculture. The type of germplasm used to improve domesticates is shaped by three factors: the rarity of the desired characteristic, the ease of transferring the desired characteristic and the importance of the crop/domesticate. 4.2.1 Determinants of Germplasm Use The rarity of the desired characteristic Preferred sources of germplasm are locally available commercial cultivars or closely related minor crops. Breeders may, however, look abroad for closely related commercial cultivars; while these varieties may not be adapted to the local climate, they display the required yield and quality characteristics. Desired cultivars, in general, display characteristics of yield, quality and environmental adaptation required for commercial success. If, however, the trait sought is quite rare, then breeders may turn to wild species and primitive landraces despite the more complicated breeding procedures that are usually required for unadapted material. This material broadens the range of characteristics available for use in commercial agriculture. Even though wild species generally contain traits that are undesirable in agriculture, such as weediness and low yield (hence they have not been domesticated), they may be far more hardy or more resistant to pests and diseases than domesticates. Wild species are species which reproduce independently of human control. The habitat required by wild species for reproduction and nutrition can regenerate without human intervention. Wild species grow in closed, primary habitats, in open, naturally disturbed habitats and in both open and closed areas disturbed by human activity. Primitive landraces are races or populations of crops that have become adapted under natural and artificial selection processes to the local conditions under which they are cultivated. Ease of transfer of the desired characteristic The ease with which a characteristic can be transferred to a domesticate is a critical factor in the selection of germplasm to introduce into a breeding programme. It is often a complex procedure to isolate and incorporate the desirable trait into the domesticate while minimising the number of undesirable traits carried over in conjunction with the desirable trait. Wild species are used only as a last resort due, firstly, to possible difficulties of crossing and, secondly, to the so-called package-deal effect. 1. Difficulties of crossing The ease of crossing depends on how closely related the domesticate to be improved and the plant embodying the desired characteristic are. The closeness of relation and the subsequent ease of breeding are indicated by the category of gene pool into which the new germplasm falls. The primary gene pool (corresponding to the concept of a biological species) is made up of domesticates and wild species which are inter-fertile and hybridise easily. The transfer of genes is relatively easy and the offspring are fertile. The secondary gene pool is made up of species that can be crossed with the domesticate using conventional breeding methods. Gene transfer is less easy and only some of the offspring are fertile and may not reach maturity. Species in the tertiary gene pool can be crossed with the domesticate only by using techniques of grafting or tissue culture, and hybrids are sterile and non-viable. 78 The Use of Plant Genetic Resources in Agriculture Breeding programmes select offspring displaying different degrees and combinations of the characteristics of the parents. Offspring are crossed over a number of generations to recover the required characteristics of the domesticates while incorporating the desired trait of the wild relative. Because commercial cultivars grown in the same region tend to be closely related and easy to cross, they are considered first when a new trait (e.g. disease resistance) is required. It is less likely that a wild species will be in the primary gene pool of the domesticate. It must be noted that advances in genetic engineering are blurring the distinction between gene pools as ways to identify, isolate and move genes, using biotechnological methods, are developed. In fact, biotechnology is dramatically changing the accessibility of individual genes to breeders. Breeders may cut short many years of conventional breeding by technically manipulating and transferring genes between plants. Current use of biotechnology and implications for germplasm utilisation are discussed later. 2. The ~package-deal' effect Difficulties are encountered when using wild species over and above the difficulties associated with crossing techniques. The so-called ~ package-deal' effect refers to the fact that genes for a particular characteristic may be linked to genes for many undesirable characteristics. For instance, a gene for high yield may be linked to genes for poor quality and foul smell. It can be extremely difficult to separate these genes. This linkage of genes means that even if a wild plant is one of the few species known to carry a required resistance and even if this species is in the primary gene pool of the domesticate, there may still be reasons to avoid its use. As a result, wild species tend to be employed in breeding programmes to improve particular crops and traits, but are not used a generalised or frequent basis. The importance of genetically improving the domesticate Whether a breeder is willing to attempt the complicated process of using wild species depends mainly on the importance of the crop to be improved (and the importance of the trait required). The relative importance of the crop in question is reflected by its position in world agriculture. Commercial breeders must be able to recoup R&D expenditure through seed sales and royalties from seed sales. It is more likely that wild species will be utilised for crops which feed a large proportion of the global population, e.g. cereals and oil crops, and which therefore are the subject of extensive breeding programmes, than for crops consumed on a small scale and limited to particular regions of the world. 4.2.2 The Dynamic Use of Wild Genes in Research: The Cascade Effect Comments concerning the source of germplasm used should be treated cautiously, as the tendency is to vastly misinterpret the reality of the situation. Wherever possible, breeders will use a genetic resource only once. If a breeder identifies a useful character in a wild species or landrace, and incorporates it into a variety, other breeders will then use that variety (i.e. adapted cultivar), rather than the original source material. This continual re-use is known as the cascade effect. The cascade effect is well-demonstrated in the instance of breeding grassy stunt virus resistant rice. Something like 17,000 rice accessions and over 100 wild taxa were tested, during a four year programme, to identify the one accession of Oryza nivara with grassy stunt virus resistance. Once this work was done, at the request of plant breeders, only one accession needed to be given to breeders. Merely to report on numbers given to breeders without taking account of work done to identify characters is to undervalue the use of the genebank (i.e. the entire genebank was "used" previously to identify one relevant accession) and entirely misrepresents the true source of the selected material. Thus, the use of genetic resources per se is reduced, but their value (as source material of the character) is 79 INDUSTRIAL RELIANCE ON BIODIVERSITY dramatic. In the rice example cited above, the character is now present in nearly all newly released varieties of rice, with a multi-million dollar value. Nevertheless, the genetic resource is reported to have been "used" just once in one breeding programme. 4.3. SURVEY RESULTS 4.3.1 Seed Companies and Plant Breeders The companies included in the survey undertake breeding, production and marketing of crop seed, with a handful also acting as agents. A European company is involved in agrochemicals in addition to plant breeding, and one US company leans more towards being an agricultural biotechnology company than a seed company, but, in general, questionnaires were directed to companies involved directly in research and breeding activities. Geographical range Eighteen European-based companies and two US-based companies provided information about their research and breeding activities. These companies are not necessarily the largest seed companies, but rather represent different types of companies with diverse turnover and research expenditure, and significant variation in the major crops they breed. In general, the firms that provided data in this survey were involved in breeding European or North American crops. Size range An indication of the size of breeding companies is provided by approximate annual revenues from seed sales. For 1993, annual revenues ranged from £1.5-£65 million. Because companies did not provide time-series data on annual sales revenue over the last decade, it is difficult to determine a time trend in seed sales revenue. Also, in light of the spate of mergers and acquisitions in the seed and agrochemical industry in the 1980s, some respondents provided information on the breeding activities of a particular subsidiary, while others provided data on the overall multinational operations of a large diversified corporation. Expenditure on research and development The proportion of annual turnover spent on breeding and research programmes ranges from 0.5-66%. The breeders allocate, on average, 18% of annual turnover to breeding and research activities. Most breeders (73%), however, spend between 0.5 and 15% of annual turnover on research and breeding. The large variance in the proportion of turnover invested in research and breeding may reflect the diverse activities of the companies questioned. For instance, while most companies undertake breeding, production and marketing of seeds internationally, some have diversified into agro-chemicals or other activities. As a result, spending on breeding and research may be dwarfed by these other enterprises. Furthermore, the sums of money involved may vary dramatically from year to year as expenditure tends to be higher when breeders are setting up operations or expanding existing breeding programmes. For example, of the three breeders with the highest research expenditure (as a proportion of turnover), two set up plant breeding facilities in 1987 and spent 66% and 65% of annual turnover on the companies breeding and research programme in 1993. The third highest spender was privatised in 1987, and in 1993 spent 33% of turnover on research and breeding. Recouping R&D expenditure Fourteen breeders provided information on the proportion of marketed new varieties which recouped R&D expenditure. Although responses ranged from 5-100% (Figure 4.2), an average of 75% of the new 80 The Use of Plant Genetic Resources in Agriculture Figure 4.1 Investment in R&D as a percentage of total turnover Investment in R&D as a percentage of total turnover TC o = had o > SG uw o > ° § x 10 11 12 13 14 15 varieties were reported to recoup R&D cost. However, it was clear from the survey that most varieties fail before reaching the market. In effect, it is highly likely that a variety will be profitable if it successfully completes the pre-marketing stages of registration and testing. Figure 4.2 Percentage of marketed varieties that recoup R&D costs Percentage of marketed varieties that recoup R&D costs % of marketed varieties 81 INDUSTRIAL RELIANCE ON BIODIVERSITY While it takes 10-11 years, on average, to develop a new variety, it then has only 6-7 years to recoup costs once on the market, because of competition from other varieties. As a result, even if the duration of patent protection was extended this would do little to spur investment in breeding, as the chances of recouping breeding costs would not be increased. In essence, difficulty getting returns on investment in breeding is not associated with inadequate implementation of property rights for new varieties. However, a number of breeders have emphasised that, with the advances in biotechnology, the ability to patent genes and particular combinations of genes is crucial if breeders are to be provided with incentives to allocate the necessary resources to breeding programmes. Range of crops bred Most of the companies have highly diversified breeding activities and grow at least two types of crop. Cereals and oil crops were bred most commonly, by 14 and 11 companies respectively. The cereals include maize, winter wheat, winter and spring barley, sorghum, and some other minor cereals. The oil crops include winter and spring oilseed rape, linseed, sunflower, soybean and safflower. Nine companies breed root crops such as potatoes, sugar beet, fodder beet and swedes and four breed vegetables (vining peas, beans, tomatoes, onions, peppers, lettuce, carrots, all species). Other crops covered are fruit (melons), commodity crops (tobacco), fibre crops (cotton, flax), new industrial crops (lesquerelles, cophea, meadow joan), flowers (bedding and pot), and amenity and forage grasses (clover, alfalfa and forage maize). Some information on grape vines and root stock is also included. This information is presented in Table 4.1. 4.3.2 Use of Germplasm in the Breeding Industry Breeders were asked to report on the relative importance of different sources of germplasm used in their breeding programmes. The germplasm could be conserved either in situ or ex situ. In this context, in situ conservation refers to the maintenance of a wild gene pool in its native habitat, e.g. in a national park or a nature reserve, or of a landrace in the region in which it evolved. Ex situ conservation refers to the maintenance of the wild gene pool outside its natural habitat; germplasm may be maintained in a seed bank, or the living plant may be conserved in a botanical garden or plantation. In this survey, ex situ conservation implies the storage of seed in seed banks. The operational definition of "use" in this context is the incorporation of source material into a breeding programme. In general, the breeders providing data for this survey focus on European and/or North American crops. This is probably because the availability of domesticates with desirable traits is more common in temperate crops than in tropical crops. In addition, the range of species available per crop, and the range of traits available per species contained in ex situ genebanks, is also greater for temperate crops than for tropical crops. However, breeding programmes differ according to the crops bred and the characteristics sought. On the whole, if a wide range of traits is available in closely related domesticates, wild species will be rarely be used as a source of germplasm. Sources of germplasm used The source of the germplasm used in breeding programmes differs between crops and depends, in part, on the number of genes controlling the desired characteristic. Table 4.2 shows the importance of the different sources of germplasm averaged across all crops (mostly temperate species) and for a number of individual crop types. As can be seen from this table, the germplasm source differs quite dramatically depending on the particular crop. For instance, wild species from a genebank are frequently (19%) used when potatoes are involved, but rarely (1%) for oil crops. However, the most important source by far (83.4% - averaged across all crops), is the adapted material of commercial cultivars. The advantages of using these cultivars include the fact that they present the fewest obstacles to successful crossing and that many of the traits desired by breeders are present in these closely related domesticates. The Use of Plant Genetic Resources in Agriculture Table 4.1 Crops Covered by Survey CROP cereals oil crops commodity crops new industrial crops flowers amenity and forage grasses grape vines and root stock Number of Companies breeding crop maize winter wheat winter and spring barley triticale sorghum other minor cereals winter/spring oilseed rape linseed sunflower soybean safflower potatoes fodder beet swedes sugar beet vining peas winter and spring beans tomatoes onions peppers lettuce carrots cantaloupe melon cotton flax lesquerelles cophea meadow joan bedding and pot grass clover alfalfa forage maize 1 1 83 INDUSTRIAL RELIANCE ON BIODIVERSITY Roughly 7% of germplasm used is unadapted material of various types. The dominant type of unadapted material used is germplasm from wild species obtained from genebanks, which totals 2.6% of germplasm utilised. The second most commonly used unadapted material is germplasm from primitive landraces obtained from genebanks, amounting to 1.6% of breeding programme germplasm. Germplasm conserved in situ makes up the remainder of unadapted material used with 1.4% of germplasm from primitive landraces conserved in situ and 1.1% from wild species conserved in situ. While germplasm from wild species constitutes only a small proportion of the germplasm used in breeding programmes, almost all (c. 94%) of the breeders reported using wild species from either genebanks or in situ conservation areas. Similarly primitive landraces are rarely used, but just under 70% of breeders use landraces from genebanks and in situ conservation areas as breeding material. As previously discussed, despite the fact that this material is only injected into the research process in a small proportion, once their genes enter into commercial cultivars they are repeatedly re-used in the future. The results also suggest that breeders prefer to obtain unadapted material from ex situ genebanks rather than in situ conservation areas. Genebank material is more accessible to breeders, who simply request a number of accessions; it also tends to be free of charge, there may be fees to cover transactions costs, but these are minimal. Moreover, genebank material tends to be more highly characterised, i.e. traits relevant to breeding efforts are available. Furthermore, material in genebanks may have undergone a small degree of germplasm enhancement, i.e. early stages of breeding may have transferred a desired characteristic of unadapted material into adapted material displaying traits required by commercial breeders. On average, 4.5% of germplasm utilised is obtained through biotechnological methods. In this context, biotechnology refers to technologies such as tissue culture, molecular genetics and genetic engineering. However, biotechnological methods can be applied to only some crops. The importance of biotechnology relative to other sources of germplasm should be evaluated on the basis of data from individual crops. For example, almost no biotechnology is used in vegetable breeding programmes, while just under 18% of germplasm in potato breeding programmes is produced by biotechnological methods. Around 2.2% of germplasm is obtained through induced mutation by either ionising radiation or chemical treatment. As with biotechnological methods, the use of induced mutation is far more prevalent for particular crops. For instance, less than one percent of breeding material for cereals and vegetables, but over seven percent of breeding material for oil crops, is obtained via mutation. In general, genebanks offer a greater range of germplasm for temperate than for tropical species. This is partly due to the tendency for tropical species (including important crop species such as cocoa, coconut, mango, cinnamon, nutmeg, avocado, tea, breadfruit and jackfruit) to produce recalcitrant seed - that is seed that cannot withstand drying. Seedbanks cannot be used for their conservation and they have usually been conserved in field genebanks. Although such genebanks take up considerable space and have other limitations, valuable collections of crops such as banana, plantain, oil palm and coffee exist. Cereals Almost all (87.6%) germplasm used in breeding cereals comes from adapted material, the vast majority (87%) from commercial cultivars, with only 0.6% from minor crops. In contrast, only 4.3% of germplasm was from unadapted material, with 1.7% of this from primitive landraces obtained from genebanks. About 75% of the cereals breeders used this type of germplasm, with quantities ranging up to 10% of total breeding material. Approximately 1.2% of germplasm was 84 The Use of Plant Genetic Resources in Agriculture Table 4.2 Source of germplasm used in all crops and in four crop types averageg average average average average eens 01% Primitive landrace from genebank 1.7% Primitive landrace conserved in situ 1.4% ae ee eee 0.4% 0.3% * minor crop cultivated on a small scale with some improvement over wild ancestors. ———————————————————————eeeeeEeeEeeeEeeeeellllllleeeeeSSSSESSESSNOOOOOO from wild species maintained ex situ in genebanks; 50% of the cereals breeders used at least some (1- 10%) germplasm from wild species obtained from genebanks. Cereal breeders use very little in situ unadapted material. The same, small, amount of breeding material (0.7%) was used from wild species conserved in situ 2s was used from primitive landraces conserved in situ. It is worth noting that in situ conserved germplasm was used mostly in maize (3.3%). These figure suggest that although the proportion of breeding material that was unadapted material is quite small, the majority of breeders use at least some unadapted material despite the associated breeding difficulties. This suggests that breeders are often unable to find the characteristics they require in adapted material. Hence, the actual value of the unadapted material in the breeding Industry may actually be underestimated by the proportion used in R&D. The use of mutation was very limited in the breeding of cereals. Just under one percent of germplasm was obtained using these methods. On average, between 3-4% of germplasm was obtained using biotechnological methods, but one cereal breeder relied on biotechnology for 40% of its germplasm, while half of the cereal breeders relied on biotechnology for only 1%, or thereabouts, of germplasm. Oil crops As with cereals, most (805) of the germplasm used to improve oil crops was from adapted material, with commercial cultivars providing 78.8% of this. The percentage of commercial cultivars in total oil crop germplasm used ranged from 50 to 95%. Slightly more than one percent of germplasm was obtained from minor crops. Approximately 6.2% of oil crop germplasm used was obtained from unadapted material, predominantly from landraces conserved both ex situ and in situ. Some 2.8% of germplasm used in breeding programmes was from landraces conserved in situ; while 2.3% was from landraces obtained from genebanks; 1% was germplasm from wild species obtained from genebanks and only 0.1% from wild species in situ. 85 INDUSTRIAL RELIANCE ON BIODIVERSITY Most (c. 75%) oil crop breeders use some induced mutation of germplasm. Approximately 7.2% of total oil crop germplasm was obtained in this way. Similarly, just under 7% of germplasm was obtained through biotechnological methods. A very high proportion of oil crop breeders (87%) use some biotechnology in crop improvement. Vegetables Breeders of vegetables rely more heavily on adapted material than any other breeders, obtaining 95.7% of their germpalsm from commercial cultivars and a further 0.3% from minor crops. Most of the small amount of unadapted material used is from landraces and wild species in genebanks (1.7% and 1.4% respectively). Use of induced mutation and biotechnology by these breeders is almost non-existent (0.4%) Potatoes Potato breeders rely less heavily on adapted material than do breeders of other crops. Only 50% of germplasm was obtained from commercial cultivars, while just over 8% was obtained from minor crops. Instead, potato breeders rely most heavily on the use of germplasm from unadapted material. Over 20% of germplasm was obtained from unadapted material; 19% was germplasm was from wild species conserved in gene banks, 1.7% was from primitive landraces conserved in genebanks and a further 0.7% was from landraces conserved in situ. Only one potato breeder uses induced mutation, amounting to 10% of germplasm in the breeding programme. All three potato breeders surveyed, however, use biotechnological methods which provide, on average, around 18% of germplasm. 4.3.3 Institutional Sources of Germplasm In light of the dominant use of germplasm from commercial cultivars in crop- improvement programmes, it is no surprise that all breeders have extensive in-house collections of germplasm. In-house collections Germplasm contained in a breeder's in-house collections comes from a variety of sources (Fig 4.3). Around 75% is material from the company's current breeding programme, while 15% is material from other companies’ breeding programmes. This suggests that, despite the extremely high degree of competition, breeders are able to use the released material of other breeders to improve their own varieties. In-house collections contain predominantly adapted material, on average only 4% is unadapted material, most of which is ex situ maintained genebank material (3%), while the remaining 1% originates in in situ conservation areas. The dominant factor determining the extent of in-house germplasm collections is security (Fig 4.4). Around 55% of breeders believed that ensuring a stable supply of high quality breeding material was the top priority of in-house collections. Having in-house collections also makes it easier to establish property rights over some of the germplasm. Some 44% of the breeders felt cost to be an important determinant of in-house germplasm. Just over a quarter of breeders maintain some germplasm in-house because of non-availability or scarcity of particular species in genebanks and in in situ conservation areas. In light of the rising rate of extinction of plant species, through overexploitation and habitat encroachment, breeders are keen to ensure they have access to relatives of commercial crops which may in the future provide useful characteristics. One grass breeder noted that there are differences between collecting for breeding and collecting for gene conservation. The implication is that the raw and adapted material contained in genebanks and some public research institutes may not be the material which breeders find most useful. 86 The Use of Plant Genetic Resources in Agriculture Figure 4.3 Sources of in-house germplasm Sources of in-house germplasm Other companies' breeding programmes 15% Ex-sifu gene banks Company's current = 3% breeding programme In-situ 75% conservation areas Other 1% 6% Figure 4.4 Determinants of the extent of in-house germplasm holdings Determinants of the extent of in-house germplasm holdings Non-availability of particular species 20 30 40 50 60 80 Proportion of firms that considered the factor as important 87 INDUSTRIAL RELIANCE ON BIODIVERSITY This is also another reason for breeders to perform their own collections and maintain that germplasm for future breeding material. Genebanks and public research institutes utilised All but one of the breeders access public genebanks and obtain germplasm from public research institutes and universities. Two breeders used genebank material passed on by other private plant breeders. On average, breeders obtained genebank germplasm between two and three times in the period from 1987 to 1993 for each major crop bred. The frequency with which genebanks are approached for material is determined by the crop. Unfortunately, there are not sufficient data to provide information by crop. Data on the frequency of use of genebank germplasm in the years 1987-93 should be considered with caution. Acquisition of germplasm is infrequent and slow unless a breeder is starting a new programme. Hence use of genebank germplasm may be underestimated if many breeders expanded breeding programmes or launched new programmes prior to 1987 and subsequently required no further material. Alternatively, use of genebank material would be overestimated if there had been a general expansion in breeding programmes after 1987. Furthermore, the frequency with which breeders access genebank material tells us little about the quantities used. Whether a breeder receives 400 accessions once a year or 40 accessions ten times a year makes little difference in reality. Similarly, in their publication The Review of UK Policy on the Ex-Situ Conservation of Plant Genetic Resources the Ministry of Agriculture, Fisheries and Food (MAFF, 1992) emphasises that frequency of requests for material is not a valid indicator of the benefit ultimately derived, given the potential for improving a variety with high commercial and agronomic potential. 4.3.4 Allocation of Breeding Activities The activities of plant breeders and seed companies range from plant exploration and collection, testing of unadapted material, introgression of traits, growing out/viability tests, breeding, and the development and application of genetic modification techniques. Not all of these activities are undertaken in-house; activities may be contracted out to other private plant breeders, gene banks and/or other public institutes. Due to preexisting infrastructure and expertise, other institutions may have a comparative advantage in performing some of these activities. Table 4.3 summarises the findings of the survey, indicating how the diverse breeding activities are distributed among the various bodies involved. Plant collection Systematic exploration and collection of crop plant genetic resources was essentially started in the 1920s by the Russian geneticist Nikolai Vavilov. Vavilov, under the auspices of the All-Union Institute of Plant Industry in Leningrad, was the first to identify the major centres of genetic diversity. When it became clear, in the 1950s, that genetic resources were being eroded and that a high percentage of accessions contained in genebanks were no longer available in living collections and presumably extinct in the wild, the US set up the National Seed Storage Laboratory (NSSL). National gene banks were established in most of the industrialised countries. Since the 1960s, the Food and Agricultural Organisation of the United Nations (FAO) has been actively involved in the formulation and implementation of international policies on the exploration, collection, conservation, documentation and evaluation of plant genetic resources. The International Bureau for the Protection of Plant Genetic Resources (IBPGR) (currently known as IPGRI) was set up under FAO auspices in 1974 specifically to deal with plant genetic resources. Establishing a global network of plant genetic resource collections was one of the mandates of IPGRI. The participating genebanks included 88 The Use of Plant Genetic Resources in Agriculture some regional and national ones, as well as those of the Consultative Group on International Agricultural Research (CGIAR). Table 4.3 Organisation of research and breeding activities Activity In-house Private | Gene bank | Other public | % of breeders involved plant institute in activity breeder Plant exploration and 40% 2% 28% 30% 89% collection Testing of unadapted 61% 29% 89% Essie anor eee Saet of traits 85% ——— 14% ie earl emhae| Growing out/ 76% 2% 11% 11% 711% viability tests ee ee rear Breeding Genetic 62% 16% 22% 16% modification: development Genetic 84% 2% 0% 13% 11% modification: application Since the 1960s, in effect, activities associated with collection and conservation of plant genetic resources have moved away from individuals and governments to a small number of international bodies. Nowadays the FAO and IPGRI provide guidelines for the collection of plant genetic resources, and the expeditions are undertaken by national and international institutions, collecting for genebanks. These genebanks, and other public institutions, have an important role in the plant breeding industry as sources of germplasm. Data from the survey indicate that more than half (58%) of germplasm collection is contracted out to expeditions supplying public genebanks and other public institutes. In effect, no individual contracts are signed. Instead, in accessing genebanks for germplasm, breeders allocate responsibility for exploration and collection to an institution that has the infrastructure, expertise and experience to collect a wide range of species over a broad geographical are, and thereby avoid political complications of collecting plant genetic resources themselves. On average, some 40% of all collecting activities are performed in-house (Table 4.3). The extent of in- house collection varies. Some breeders undertake 100% of collection, while others undertake as little as 5%. A very small proportion (2%) of exploration and collection is contracted out to other private plant breeders. This may seem surprising high in light of the emphasis that breeders have placed on the use of commercial cultivars in crop improvement programmes. However, 40% may be a fairly large proportion of a very small number, i.e. given the infrequent use of wild species and primitive landraces, the total volume of plant exploration and collection is likely to be small. 89 INDUSTRIAL RELIANCE ON BIODIVERSITY To illustrate the nature of in-house collection, a breeder of forage grasses undertakes 95% of collection in-house, collecting accessions mainly from intensively used natural pastures and from roadsides (yet the breeder asserts that "we do not believe in in situ conservation"). Germplasm from these pasture areas makes up 25% of all new breeding material used by this breeder. Germplasm enhancement Germplasm enhancement (also known as pre-breeding) includes two stages: firstly, testing of agronomic characteristics and secondly, the introgression of desirable traits into breeding material. Several cycles of selection and crossing may be required to produce a plant sufficiently adapted to be bred with domesticates. Short-term germ enhancement programmes aim to identify potentially useful accessions and increase the willingness of breeders to invest in longer-term breeding programmes by ensuring that breeders know the characteristics of the material they are working with. On average, 61% of the testing of unadapted material and 85% of the introgression of traits into breeding material is performed in-house by commercial breeders (Table 4.3). Such in-house activities are carried out by most (90%) of the surveyed breeders (Fig 4.5). The second most important providers of enhancement activities are the public research centres and universities, with half of the breeders contracting out some of their activities to them (Fig 4.5). Public research institutes and universities perform 29% of testing of unadapted material and 14% of the introgression of traits. Some germplasm enhancement is also undertaken within genebanks, and about one quarter of breeders receive germplasm that has been pre-bred in genebanks (Fig 4.5). On average, 8% of the testing of unadapted material takes place in genebanks. While very few firms contracted out enhancement activities to other private breeders (5%), 20% of breeders contracted out to public plant breeders (Fig 4.5). Germplasm enhancement is a fundamental preliminary stage in breeding, and is so closely linked with breeding programmes that there is little to be gained by contracting out to other breeders (who would have little interest in performing germplasm enhancement alone when they could use the results for long-term breeding programmes themselves). It is not clear whether breeders prefer to have public institutions provide preliminary information and testing of germplasm, while they retain greater control over the introgression of traits, or whether public institutions simply do not have the resources to develop comprehensive germplasm enhancement programmes, and therefore have a greater role in the earlier preliminary work. Growing out/viability tests If humidity and temperature conditions in genebanks are not controlled adequately, germplasm collections lose viability, experience mutations, and/or die. Seeds also lose viability when not grown out regularly. Even well-controlled storage at low temperatures affects the genetic material within seeds. Genetic material stored for long periods of time needs to be regularly grown out and tested for viability. Poor management and lack of resources in many of the world's genebanks result in the demise of a significant number of crop species. In fact, according to a survey undertaken by IPGRI, the majority of the world's genebanks do not meet generally accepted safety standards. According to the survey results (Table 4.3), most (76%) growing out and viability testing was undertaken by the breeders themselves; to ensure the quality of their breeding material, breeders must undertake activities they might prefer to contract out. About 11% was performed by public research institutes. A number of plant breeders have commented that they might approach institutions with genebanks more frequently if these institutions accepted a greater share of germplasm enhancement activities, and if they maintained the quality of their collections through growing out and viability tests. However, it is not clear if breeders would be prepared to pay for the real cost of implementing this. 90 The Use of Plant Genetic Resources in Agriculture Figure 4.5 Distribution of germplasm enhancement activities Distribution of germplasm enhancement activities. In-house ; Contract out to public § researchfmiversity Pre-bred material from F gene banks Contract out to public breeder Contract out to private breeder Proportion of firms performing some enhancement activities. Breeding Virtually all breeding is done in-house. While 96% of breeding activities are undertaken in-house, only 2% is contracted out to public research institutes and 2% to private plant breeders (Table 4.3). Genebanks undertake no breeding activities. 4.3.5 Research Priorities The breeding programmes of commercial breeders tend to be highly targeted, and are a response to a particular problem commonly encountered in agriculture. As discussed above, the type of germplasm used to improve a commercial domesticate depends on the crop in question and the ease with which breeders are able to transfer the desired characteristic (the number of genes controlling a characteristic dictates the ease of transfer). Breeders were asked to provide an indication of the properties of new germplasm that were selected for and incorporated into new varieties (Fig 4.6). Disease and pest resistance The largest portion of germplasm, about 45%, incorporated into new varieties is aimed at developing disease and pest resistance. In general, resistance is controlled by a single dominant gene, so it is easily manipulated and transferred. In addition, disease resistance is very visible to breeders, much more so than, for example, marginally higher yield. As a result, disease resistance is the most important benefit to agriculture obtained from wild species. One breeder estimated that it takes roughly 10-11 years to develop resistance. However, it takes only 4-5 years for resistance to 'break down’ as pathogens and pests evolve far more quickly than does crop resistance. This implies that a constant supply of new genes with durable resistance is required. 9] INDUSTRIAL RELIANCE ON BIODIVERSITY Figure 4.6 Properties of new germplasm incorporated into new varieties Properties of new germplasm incorporated into new varieties Improves stress Improves quality sears Other 9% ° 2% Develops } diseas e/pest 35% resistance 45% Increases yield Yield In the past 30 years, improvements in crop yield have, to a large extent, been due to the application of genetic resources from domesticated species. To date, the role of wild species has been quite limited. In general, yield is controlled by a number of linked genes, and it is difficult to increase yield in a domesticate without undermining other desired characteristics such as stress resistance and quality. Increases in yield in the UK since World War II are the result of years of painstaking conventional plant breeding. The fact that yield is controlled by a number of linked genes might suggest that the scope for future use of wild species in yield increasing breeding programmes will be greatly expanded by the increased application of biotechnological methods. In our survey, 35% of germplasm incorporated in new varieties aimed to increase yield. Stress resistance Some 10% of the germplasm was aimed at improving the stress resistance of commercial varieties. Stress resistance includes the tolerance of soil problems, extreme temperatures and varied water conditions. Quality Overall quality improvement was sought by breeders only 9% of the time. The relative unimportance of this property was possibly due to the higher value put on improving particular characteristics, such as disease resistance and yield, in existing crops. Additionally, quality is a less tangible property, more likely to be associated with a wider range of genes and more subject to changes in consumer preferences. 4.3.6 Breeding Methods Traditional crossing and backcrossing still form by far the most important (91%) method of plant breeding, while biothechnological methods, mostly combined with traditional methods, are being used in 6% of research (Fig 4.7). Advances in biotechnological capability are likely to increase the demand The Use of Plant Genetic Resources in Agriculture for genetic resources as techniques for genetic manipulation develop. Biotechnology has the ability to introduce greater biodiversity into agriculture as techniques develop to move germplasm between organisms that do not exchange genes naturally. Using conventional breeding methods, it may take 15 years for the basic introduction of a characteristic from a commercial cultivar, and using wild material often doubles that time. Biotechnology allows the selection of individual genes mechanically instead of through tedious years of crossing and selection. In effect, the desirable characteristics of wild species can be used avoiding the package-deal effect arising from the linkage of genes. However, there are no genetically modified agricultural crops on the market in Europe yet and breeders have emphasised that application of biotechnology in their breeding programmes is still very limited (pure biotechnological methods account for only 1% of research). Approximately 76% of the breeders are allocating resources to develop biotechnological methods to genetically modify crop cultivars. Approximately 62% of biotechnological development programmes are performed within the breeding company itself, 16% is contracted out to other private plant breeders and 22% is contracted out to public research institutes. Over 70% of firms are already applying these genetic modification techniques in their crop breeding programmes. Some 84% of these biotechnological applications are performed in-house with most of the remaining (13%) performed by public research institutes (Table 4.3). 4.3.7 The Industry's Perceptions of the Maintenance of Germplasm In situ conservation It is clear from the analysis of the types of germplasm used in current crop improvement programmes, that germplasm from in situ areas is little used. A total of 2.5% of germplasm used in breeding programmes is obtained directly from in situ conservation: 1.4% is germplasm from primitive landraces and 1.1% is from wild species. Given the inherent complications of obtaining germplasm from in situ areas and given the cornplications in using breeding material which may contain a small number of desirable traits with many undesirable traits, it is unsurprising that the amount of germplasm obtained from this source is small. However, the fact that 32% of breeders access this type of germplasm, in spite of the breeding complications, testifies to its importance. There is a range of means for obtaining germplasm maintained in situ. Over 70% of breeders who do use in situ germplasm obtain germplasm through in-house collecting activities, an equal proportion of breeders source from germplasm collected by intermediary public research institutions or universities. Roughly 30% of breeders have collection undertaken by an intermediary commercial organisation (Fig 4.8). In an attempt to estimate a value for advantages accruing from use of in situ conserved germplasm, breeders were asked whether they would be willing to pay (more) for germplasm maintained in in situ conservation areas than for ex situ genebank material. About 80% responded that they would not be willing to pay (more) for in situ germplasm, 13% responded positively, and one breeder (7%) responded "possibly". Germplasm obtained from genebanks is not charged for and breeders see no direct commercial advantage in using germplasm that has evolved over time in a natural environment, especially if it is more costly. In effect, the range of germplasm that is availabie from ex situ genebanks is perceived by breeders to be greater than current requirements, and they do not expect the exhaustion of genebank material in the foreseeable future. 93 INDUSTRIAL RELIANCE ON BIODIVERSITY Figure 4.7 Methods of development in new marketed cultivars Methods of development in new marketed cultivars Combination of traditional and Other biotechnological 3% methods 5% Biotechnological methods i} ee Traditional crossing/ backcrossing breeding methods 91% Figure 4.8 Proportion of firms accessing in situ sources directly Collecting sources of the germplasm maintained in sizz . In-house collecting activities Other commercial organizations Research\public institutions Other 60 70 80 90 Percentage of firms that obtain germplasm from these sources Ex situ conservation Breeders were asked their perceptions of the quality of germplasm obtained from genebanks. In particular, they were asked to characterise the quality of storage facilities (reflected by the germination rate), the range of species available for given crops, the range of traits available for given species, and changes over time in genebanks. Details were to be provided for the breeders' major crops and genebanks accessed. 94 The Use of Plant Genetic Resources in Agriculture Germination rate The germination rate of seed obtained from genebank collections is indicative of the quality of storage facilities and procedures (regular growing out, viability tests, etc.). Low germination rates are problematic because they reduce the material breeders have to work with. In addition, genetic drift, shift and contamination all present serious problems. On average, the proportion of seed obtained from genebanks which germinates successfully is quite high as a result of widespread concern over the quality of storage facilities in genebanks. The average rate of germination experienced by the respondents was 80%. Roughly 50% of breeders considered that the germination rate had improved in the last twenty years; the other half considered that the germination rate had not changed over time. Range of species available The number of different species available is an indication of whether genebanks have collected as many species as possible to provide a variety of traits to breeders. However, most breeders felt unable to evaluate the performance of genebanks because they accessed them so infrequently. Only eight breeders responded; of these, three felt the range of species to be broad, three found it to be adequate, and two felt it to be narrow. On balance then, for 75% of breeders the range of species is at least sufficient. Three of the eight responding breeders felt that the range of species available for given crops has improved, while the remaining five considered the range of species to have remained the same. This may reflect the fact that genebanks have not performed extensive collection of new plant genetic resources in recent years. It is important to bear in mind when considering the range of species available that the breeders involved in this survey are predominantly involved in breeding temperate crops. The plant genetic resources of temperate crops are more extensively characterised in genebanks; there are few known species not accessible through some international genebank. It may well be that the range of species contained in genebanks specialising in non-temperate crops is less adequate. . Range of traits available A second indication of the quality/utility of a germplasm collection is the range of traits available for a given species. The number of traits that a genebank has identified (termed the characterisation of a plant) is crucial for the utility of that plant germplasm in breeding programmes. Having a broad range of species which have not been adequately characterised, so that breeders are not aware of the traits contained in the genebank collection, makes that collection somewhat useless. Of the six responding breeders, one found the range of traits available for a given species to be broad, four found the range to be adequate and one identified it as narrow. Two of the responding breeder found that the range of traits available per species had become better, while three considered it had remained the same. The need for evaluation/characterisation The more detailed information an institution is able to provide about the germplasm holdings in its genebank and individual accessions, the more useful it is for breeders wanting to use that germplasm. The quality of germplasm characterisation was mentioned as one of the major problems with some genebanks and this prevents greater commercial use of genebank resources. Preliminary evaluation data may include information on basic agronomic characters such as maturation time, plant height, percent germination and disease resistance. Breeders can devote intensive breeding efforts to only a small number of accessions, so information which allows breeders to identify accessions with the greatest potential is critical. Increased availability of this information would augment use of genebank material. 95 INDUSTRIAL RELIANCE ON BIODIVERSITY It is not solely the responsibility of institutions with genebanks to acquire these data. The dominant users of germplasm are both private and public plant breeders. Dr Donald Duvick has emphasised that the plant breeding and gene resource communities must cooperate in the provision of financial, organisational and practical stimuli to gather these data. Of the breeders that use genebank germplasm in breeding programmes and who feel in a position to evaluate the quality of characterisation, 92% find that genebanks provide sufficient information regarding the geographical origin of plants. This type of information is the most developed (Fig 4.9). On the other hand, only half of the breeders feel that genebanks have sufficient information regarding the phenotype (the physical characteristics) of plants. Less than 15% of breeders consider that sufficient information regarding the genotype (a particular combination of genes) of plants is provided (Fig. 4.9). It is far easier to grow out seed in order to describe phenotypes, which are clearly visible, than to identify the genetic make-up of plants. Because some genes are recessive and their existence cannot easily be ascertained, genotypic characterisation would require resources not currently available. Figure 4.9 Replies to the question "Do gene banks have/give sufficient information regarding the following:"? Do gene banks have/give sufficient information regarding the Geographical ongin Phenotype Genotype Percentage of positive answers Only 25% of breeders found that the genebank institutions had sufficient information regarding problems currently being encountered in commercial agriculture (Fig 4.9). In effect, institutions with genebanks are not seen consciously developing their germplasm collections to meet the current needs of breeders. Given the severe resource constraints on genebanks, it is difficult to even maintain the viability of the collections, it is hardly surprising that resources are not allocated to programmes targeted at the particular problems of commercial breeders. Fifty percent of the breeders support, financially or technically, the testing/and or enhancement of germplasm maintained within genebanks. Breeders contribute to the maintenance of germplasm by multiplying accessions and by taking part in evaluation programmes. Some breeders fund genebanks directly (although none of those included in this report do so). On the other hand, some breeders regard the support of genebanks to be strictly a governmental responsibility and see a clear division of labour between public institutions and commercial breeders. 96 The Use of Plant Genetic Resources in Agriculture 4.3.8 Biodiversity and Agriculture Breeders were asked for their opinion about the impact of the Convention on Biological Diversity on their work. Their answer to this question was either negative, or not given, implying either that the convention was seen to have little relevance to their work, or that they were unaware of the implications of the convention. There was a general agreement that breeding activities increased genetic diversity in agriculture, but that little impact was made on nature. 4.4 SUMMARY AND CONCLUSIONS The survey results from the plant breeder/seed industry provides a portrait of biodiversity reliance that fits the description provided in the initial sections of this paper. The stock of germplasm relied upon by society for the maintenance of its agricultural system may be seen as a continuously eroding asset. Research and development is constantly required in order to maintain the current production system against the forces of biological invasion; this is what the industry terms research into “resistance' and ‘stress’. The industry reports that the viability of any given product is only about five years, with pests and disease being primary factors for the obsolescence of the product. In order to combat these biological forces for the erosion of the system, the industry continues to perform research on the development of resistance. In order for this research to take place (and to provide the raw materials for the new resistant strains) a stock of germplasm must be maintained for reference. The industry cannot merely resort to the same stock of biological material for an indefinite period of time, as there would be insufficient variety to provide resistance to the wide range of invaders. Instead, the industry must provide infusions of new genetic material in order to maintain adequate diversity to preserve the existing equilibrium. The primary result of this study is that the industry's current rate of utilisation of diverse germplasm indicates a rate of required injection in the order of 7-8% p.a. of the germplasm base. That is, at present rates of replacement, the plant breeder/seed industry is totally renewing the stock of germplasm in use over a period of about 10-15 years. If this is indicative of the rate of depreciation of the existing germplasm pool (i.e. if this rate of injection is necessary in order to forestall substantial losses of agricultural product), then the loss of a pool of diversity from which to draw new characteristics would be disastrous in the near term. The figures supplied by the eighteen companies that responded to the questionnaire demonstrated, not unexpectedly, that the vast majority of germplasm utilised in breeding programmes comes from existing cultivars, from genebanks. However, the fact that the majority of those that responded used some wild material, even if this represented a very small percentage of the total germplasm incorporated, demonstrates the vital role that such material plays, given the relative difficulty of incorporating wild material. Additionally, it is clear that some of the value of wild material is continuously used through the storage of “once wild’ genetic material in commercial cultivars. However, it is difficult to assign a value to these repeated accessions to genetic material that is incorporated in commercial cultivars. By the perceptions of the plant breeders, it is clear that such repeated accessions are not considered re-use, nor a valuable source of wild germplasm. Comments from the breeders demonstrated that, in general, they were not prepared to pay more for germplasm maintained in in situ conservation areas than for ex situ genebank material. However, it was 97 INDUSTRIAL RELIANCE ON BIODIVERSITY noted in several instances that such conservation areas were of vital importance, and that they should be supported by government funds. This situation is partly the result of the view of genebanks (the other major source of “exotic' genetic material) as a public resource, which the industry can use at a very low cost. This is also evidenced by the division in opinion regarding the adequate involvement of breeders in genebanks, while less than half of them support genebanks, the rest considers them a government responsibility. The technological developments in the industry seem to indicate that new techniques are unlikely to become a substitute for the use of wild material. However, they may enhance the potential benefit of wild material by reducing the difficulties in breeding and transference of desired traits from wild to existing domesticates. Overall, the survey results show that biodiversity plays an important part as a source of new information to the plant breeding industry. This information is refined and exploited in subsequent phases of research. However, the breeders themselves do not appear to recognise the importance of the world's biological diversity. 98 WORLD CONSERVATION MONITORING CENTRE Industrial Reliance on Biodiversity This study provides an assessment of the extent to which industry in the developed world relies on biodiversity as a primary input. The first section of the report reviews the direct consumptive use of wild species for food, fur, skin or other products and compares these with the two main industries in this field, fisheries and forestry. The remaining sections examine two specific industrial inputs: the use of wild genetic resources in plant breeding and the use of substances derived from the wild in the pharmaceutical industry. The project was funded under the UK Government Darwin Initiative. The WCMC Biodiversity Series presents the results of projects carried out by the World Conservation Monitoring Centre, often in partnership with other organisations. This series is focused on providing support to the Parties to the Convention on Biological Diversity, helping them to identify and monitor their biodiversity, to manage and apply information on biodiversity effectively and to exchange information. The WCMC Biodiversity Series General Editor is Mark Collins, Chief Executive of the World Conservation Monitoring Centre. Other titles in the series: Biodiversity Data Sourcebook The Biodiversity Clearing House - Concept and Challenges Priorities for Conserving Global Species Richness and Endemism The Diversity of the Seas: a regional approach Assessing Biodiversity Status and Sustainability Biodiversity Conservation in the Tropics Oarkons The World Conservation Monitoring Centre, based in Cambridge, UK, was established in 1988 as a company limited by guarantee with charitable status. WCMC is managed as a joint venture between the three partners in the World Conservation Strategy and its successor Caring For The Earth: IUCN - The World Conservation Union, UNEP - United Nations Environment Programme, and WWF - World Wide Fund for Nature. WCNC provides information services on the conservation and sustainable use of the world's living resources and helps others to develop information systems of their own. 7 oY @ YOO ———_ Mewcemmne UNEP WWF Further information is available from World Conservation Monitoring Centre 219 Huntingdon Road Cambridge CB3 ODL, United Kingdom Tel: +44 (0)1223 277314 Fax: +44 (0)1223 277136 Email: info@wemce.org.uk WORLD CONSERVATION PRESS ISBN 1 899628 06 1