Listener 5 October, 2002.
Keywords: Growth & Innovation;
Thirty odd years ago a Banks Peninsular farmer noticed a ewe who produced 33 lambs in 11 years. Subsequently A281, as she became inelegantly called, was handed over to the Invermay branch of what is now AgResearch, one of the Crown Research Institutes. Painstaking research by a team of New Zealand scientists determined A281 had a gene on her X chromosome which caused high fertility. But it was not until the late 1990s (with help of a Finnish scientist) they identified BMP15, usually called the ‘Inverdale’ gene, which differs from the standard gene by one neutral protein sequence being replaced by an acid protein in the DNA.
The Inverdale gene elevates a sheep’s fertility by about 60 percent, enabling farmers to reduce their livestock over winter when there is a shortage of feed, but still have plenty of lambs in spring when the grass grows. (Over ten years the national flock of breeding ewes decreased 22 percent, but scientific innovations – and informed farmers’ application of them – resulted in higher lambing rates and great lamb weights, so the meat available increased by 14 percent.)
While in principle it is possible to patent a gene, it is often difficult to keep the new knowledge from being exploited by others without payment. What about keeping it a secret? But science involves international interchange, and in any case an Inverdale sheep could be smuggled out of the country. (One means of discouraging smuggling is AgResearch’s commercial arm, Celentis, promotes stud rams with the gene on their sole X chromosome, in Australia and Europe.) Or foreigners could engineer the gene. (However the Inverdale story is not about GE, but selective breeding, something mankind has been practising for thousands of year. The phenomenon is explicitly mentioned in Genesis when Jacob selects his flock.)
Fortunately, the scientists also identified a patentable test which tells whether a sheep has Inverdale genes. Since it speeds up the selective breeding, it is commercially valuable. That a ewe with two Inverdale genes is infertile, further enhances the test’s value.
Eventually the gene will be bred into as many sheep as possible (unless some better super-fertility gene is found), at which point the test will be less valuable, and the return of the gene to farmers will be near zero, as meat prices fall. But in the interim, and that could be a long one, New Zealand science will benefit from the royalties on the test and the stud rams. Meanwhile prices will be higher than the long run equilibrium, and New Zealand farmers with the more fertile sheep will benefit from their innovative edge. (If the increased productivity means the price of lamb falls relative to the price of other meats, farmers will also benefit from the increased sales of lamb.)
Which illustrates a common truth. The competitive mechanism pressures firms to innovate in order to survive, but in the long run it is the consumers who benefit – from lower prices and better products. But our farmers would be worse off if the Inverdale gene had been developed overseas and their foreign competitors got it first.
Because the mammalian gene codes are similar, knowing the location of the fertility genes from the human genome project, speeded up the identification of BMP15. Hence New Zealand was a beneficiary of overseas research it did not fund – but that was because we were funding research which involves our scientists working in an international community. Conversely, since most of our lamb is bought by overseas consumers, the very long run beneficiaries of our research will be mainly foreigners.
Perhaps BMP15 has relevance to human fertility. It is not a matter of replacing the existing gene in a woman who wants to super-ovulate. (The idea is ludicrous, but I heard a journalist make a parallel suggestion.) Genes design organs which trigger hormones. Apparently the Inverdale sterilizing effect takes place after the fifth division of the cells surrounding the maturing egg in the ovary, rather than the twelfth which the current oral contraceptives affect. It is possible that the double BMP15 could lead to a new class of oral contraceptives. However, the notion is so revolutionary that every pharmaceutical company in the world will be after it, and New Zealand cannot afford to defend any patents by itself. AgResearch has teamed up with the New Zealand company Ovita, which arose out of the Meat and Wool Boards, and a consortium of international scientists and companies to advance the original discovery and defend the intellectual property. .
This column shows how farm innovation depends on ordinary farmers; how science is still exciting; how quality research involves team work, international cooperation, and open communication; how it is not always possible to commercialise useful research, but sometimes – almost by accident – it is; how the benefits of research eventually go to consumers, but there is still the scientific and commercial pressure on firms to be there first; and how as a nation we need to understand the underlying biology and the overlying economics. If the populace is ignorant, public policy formation and economic growth is going to suffer.