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Crop Wild Relatives a Valuable Resource for Crop Development

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www.pwc.co.uk/valuations Crop wild relatives A valuable resource for crop development July 2013 Overview PwC have conducted a valuation exercise commissioned by Kew’s Millennium Seed Bank (‘MSB’), focused on estimating the current and potential indicative value of Crop Wild Relatives (‘CWRs’) in breeding new varieties resilient to biotic and abiotic factors. With the global population set to reach What are CWRs? i) Resistance to potato late blight Why was this study commissioned? approx. 9.6 billion by 20501, it is CWRs are the wild species closely related to Potato late blight is one of the most damaging The MSB sought to understand the current and reported that agricultural production crops and they have the potential to contribute 2 diseases for potato, and its negative economic potential value of CWRs in order to support will need to increase by 70% . In order 5 beneficial traits for crop improvement , such as impact is thought to be $3.5bn per year in their business case for increased investment to satisfy this demand, production will disease resistance or tolerance to drought. developed countries alone7. for the collection and research of CWR need to continue to grow at similar material. rates to that achieved in the past which They are viewed as a significant source of Resistance to late blight in the current includes the dramatic impact of the biodiversity for crop production and their use European potato varieties has been exclusively This study also allows the MSB and other Green Revolution3. Furthermore, due in the breeding of new crop varieties is likely derived from CWRs. Varieties of potato with stakeholders in the value chain to better to the expected downward pressure on to prove important. CWR-derived late blight resistance such as the understand the value of the wider benefit of productivity from a variety of factors, C-88 potato are also being introduced into their collection and research activities. including climate change and land use How could we benefit from CWRs? China. Contributors to our research development, a significant shortfall in CWRs can provide diverse genetic material for In one of the case studies, it was estimated that agricultural production is predicted. crop breeding which may lead to the CWR derived resistance was responsible for We interviewed 38 different industry experts, development of improved, higher yielding crop preventing the loss of approximately 30% of all key stakeholders in the value chain, as CWRs are an important source of varieties, with beneficial traits such as illustrated below. genetic biodiversity which can be the annual yield, where conditions for blight increased overall productivity and improved were prevalent. utilised in the breeding of improved tolerance to biotic and abiotic stresses. crop varieties. CWRs hold the potential Academic and CGIAR centres to increase agricultural production, ii) Improved abiotic tolerance of wheat research groups Examples of abiotic and biotic stresses: making them a valuable resource to the Wheat varieties such as ‘Veery’ have benefitted Key institutions focused Key pre-breeding 4 from the introduction of genes from rye, a on CWR research research institutions agricultural system . • Extreme temperatures relative of wheat. The beneficial traits We estimate the potential value of • Drought • Flood inherited include tolerance to extremes of Key CWRs to the future production of the Abiotic • High winds temperature and drought conditions, as well as stakeholders MSB’s 29 priority crops to be $120bn. • Soil quality (including salinity, pH, etc) resistance to a variety of wheat diseases such This compares to an annual gross as wheat rust6. Commercial Industry production value (‘GPV’) of these crops • Bacteria contacts specialist groups • Viruses e.g. Seed breeders, seed e.g. Trade associations, of $581bn in 2010. This highlights the Biotic • Fungi These wheat varieties have had a significant merchants and crop growers government bodies and • Insects impact in the developing world, as well as importance of CWRs to the future of industry consultants agricultural production. It is therefore • Other plants developed world markets such as the US. viewed that their loss would have a significant impact on our ability to Many CWRs face risk of extinction Over the past several decades, case studies The interviewees have provided us with meet the demands of the future global There is a considerable risk that many in situ have demonstrated the benefits of using CWRs current and historical case studies of CWR use population. CWRs are lost through changes and damage to in the development of improved crop varieties. in crop development, as well as guidance on their habitats driven by climate change and Ongoing research suggests that CWRs are key assumptions underlying our analysis. continued land use development, which could likely to provide significant benefits to lead to their extinction in severe cases8. increasing agricultural production in the future6. This could lead to genes with specific beneficial traits being lost from the gene pool, Our research highlighted a number of case leaving less genetic resources and potential studies of the benefits derived from CWRs solutions with which to meet the demand for through improvement of crop varieties. increased agricultural production. PwC Valuations | July 2013 Valuation methodology We have performed our valuation exercise on Key assumptions four sample crops of wheat, rice, potato and cassava, and have extrapolated our findings underpinning across MSB’s 29 priority crops. For each of our sample crops, we have analysed our valuation the current and potential value of CWR traits using inputs derived from existing case studies Our analysis has been based on a number which show examples of traits conferring: of key assumptions. The most influential • Yield improvement – CWR genes can result assumptions are summarised below. in an uplift to the total production of a crop variety through yield improvements; Basis of value: We have estimated the • Disease resistance – the yield loss saved incremental economic benefit from use of due to resistance against a disease (e.g. CWR material in breeding programs fungal or bacterial) that is conferred by the based on gross production value. This is transfer of resistance genes from CWRs; and the value received by farms from the sale of agricultural produce at the farm gate. • Abiotic stress tolerance (e.g. drought, heat) – abiotic stresses cause losses to the crop We selected this basis so that our yield as they impact upon the growth valuation analysis covers the full value ability of the plants. CWRs can help to chain up to farm gate sales, and allows us reduce this loss through improving the to analyse the value accruing to many tolerance of commercial varieties. It is this stakeholders. yield loss saving that we assume and value as the benefit. Projections: We have used publically We have used the findings from these case available forecasts of gross production studies to analyse the current value and also to values for our crops until 2021, sourced inform our assumptions for potential value of from the Food and Agricultural CWR traits in future crops. Organization of the United Nations Current value is derived from the economic (‘FAO’) in collaboration with the benefit over the useful economic life of traits in Organisation for Economic Co-operation current crops. Potential value is derived from and Development (‘OECD’). economic benefits from future improved crops into perpetuity given that the CWR collection Extrapolation: Our analysis was will be preserved for hundreds of years. performed on 4 sample crops of potato, Value is attributed to the ‘system’ producing rice, wheat and cassava. We took the these crops and we have not sought to allocate average value uplift in these crops from our assessment of value to any particular CWR benefits, and applied a simple stakeholder within the value chain. In extrapolation method to estimate the addition, we have not considered the value current and potential value for the MSB’s downstream, i.e. post farm gate. 29 current priority crops, using a pro-rata Important assumptions we have adopted are uplift based on relative 2010 gross outlined in the ‘Key assumptions underpinning production values. our valuation’ section opposite. Our valuation of CWRs Key matters arising from our study Based on our assessment of the potential value Without adequate funding for CWR collection, Illustration of crop production value chain Current and potential value of CWR benefits of MSB’s contribution to crops developed to there is a risk that many of the in situ wild in commercial crop varieties withstand biotic and abiotic factors, it is clear relatives will suffer from a loss of genetic that there is a substantial value in the use of diversity, or in severe cases become extinct. ) 300 n b $ CWRs for future crop development. This could lead to the loss of genes with ( 196 t i f 200 e specific traits of potential value. Seed bank n e 120 Our value accrues to stakeholders in the crop b 68 73 Collection, storage, research and R 100 W 42 value chain which includes academics, Investment is also necessary in the research of distribution of CWR material C 25 - pre-breeders, commercial breeders and CWR traits feeding into crop development, as Current value Potential value farming stakeholders; as well as society in without this the potential value of the CWR Value of sample crops ($bn) Pre-breeding research Value of MSB's 29 current priority crops ($bn) general through increased agricultural collections may remain locked away without Value including maize, sugar cane and soya bean ($bn) productivity both in the UK and abroad. realising their potential. Study and use of material to identify potential beneficial traits A large proportion of the benefit is therefore Concluding remarks The current and potential values of CWR not for the private sector, but more for society benefits attributable to the whole of the crop and the public good.
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