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Viewing cable 06BANGKOK3237, SEED PIRACY IN THAILAND: A "GROWING" PROBLEM

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Reference ID Created Released Classification Origin
06BANGKOK3237 2006-05-30 07:27 2011-08-26 00:00 UNCLASSIFIED Embassy Bangkok
VZCZCXRO0683
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #3237/01 1500727
ZNR UUUUU ZZH
P 300727Z MAY 06
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC PRIORITY 9131
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/USDA FAS WASHDC PRIORITY 0715
UNCLAS SECTION 01 OF 03 BANGKOK 003237 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS USTR 
COMMERCE PASS USPTO FOR DKEATING AND PFOWLER 
 
E.O. 12958: N/A 
TAGS: KIPR EAGR TH
SUBJECT: SEED PIRACY IN THAILAND:  A "GROWING" PROBLEM 
 
1.    Summary:  Behind the headlines of record losses to 
optical disc and trademark piracy in Thailand lies a less 
known but equally serious form of intellectual property 
infringement.  Plant breeders in Thailand have seen their 
plant varieties and the seeds derived from them, which 
typically take years and large capital investments to breed, 
copied and sold by small-time seed dealers.  Thailand passed 
a Plant Variety Protection Act in 1999 to protect these 
investments, but delays in implementing regulations and 
registration procedures has meant that enforcement is 
non-existent.  Seed firms look forward to enforcement of 
rights to their new plant varieties, but in the meantime are 
using their own security tactics to protect their valuable 
products.  End Summary. 
 
Seed sales flowering, but piracy growing like a weed 
--------------------------------------------- ------- 
 
2.    Thailand is a net exporter of seed for both field crops 
(corn, rice, soybeans, etc.) and vegetables, and a growing 
site of seed production and research and development for 
breeding new plant varieties.  The Thai seed market is 
estimated at over USD 200 million in annual sales, mostly in 
field crops.  Thailand imported about USD 11 million in seed 
in 2005, but exported approximately USD 35 million worth and 
projections are for that number to triple in the next five 
years.  The U.S. and Japan are the top export destinations. 
Multinationals control about 80 percent of the field crop 
seed market, but Thai firms are dominant in vegetable seed 
sales. 
 
3.    Like most intellectual property, new plant varieties 
are costly and time consuming to develop, but cheap and easy 
to copy.  Seed firms in Thailand develop their products the 
old-fashioned way, selecting plants with desirable properties 
such as high yield and resistance to disease and insects, 
then cross breeding them to develop improved varieties. 
After development and testing in field trials, the firms 
contract with local farmers to grow the new and improved 
variety to produce seed for sale to farms around the country 
and for export.  As Thailand's seed market began growing in 
the 1990s, seed piracy grew right along with it.  Seed 
pirates, usually small-time sellers in rural areas but also 
increasingly more sophisticated operations, purloin firms' 
new plant varieties by either surreptitiously stealing the 
parent lines of the new hybrid from test fields or paying off 
contract farmers for a sample.  The pirates then reproduce 
the new breed on their own farms and sell the resulting seed. 
 (Note:  Genetically modified crops are not authorized in 
Thailand, but there is anecdotal evidence that some farmers 
are growing bootlegged GM cotton and papaya without 
authorization.) 
 
4.    Mr. Manas Chiravavonda, director of Chia Tai, the 
largest vegetable seed seller in Thailand, couldn't put a 
figure on the percentage of seed piracy, but labeled it 
"huge", a problem affecting both Chia Tai's domestic sales 
and exports.  Monsanto reps estimated the piracy rate at 
single digits, but saw it as a growing problem.  Field theft 
accounts for much of the piracy, but Manas said firms' own 
employees were perhaps the greatest danger.  Manas described 
how one of Chia Tai's employees recently quit the company, 
walked out the door with the company's latest line of melon 
seeds and immediately set up his own business selling the 
seeds to the Indonesia market.  Without a means to protect 
their variety, Chia Tai was helpless to prevent the theft. 
"It's the wild West out here," says Manas. 
 
5.    To combat seed theft firms have developed a raft of 
security procedures, from stationing security guards around 
contract farms and research fields to growing and storage 
protocols to prevent pirates from getting the latest variety. 
 Chia Tai treats plant development as a trade secret, keeping 
research under tight wraps and in house to prevent 
disclosure.  The firm develops new varieties more quickly 
than before and releasing them earlier, trying to stay one 
step ahead of the pirates.  Simon Jan de Hoop, Director of 
R&D for East-West Seed, said their farms grow the male and 
female parents of a new hybrid in different fields, making it 
more difficult for pirates to get both keys to the new plant. 
 When possible multinationals like Monsanto keep the parent 
lines back in the home country. 
 
6.    To further avoid piracy, seed firms are moving 
production bases offshore to China, India, and Thailand's 
ASEAN neighbors, particularly countries where the seed 
variety to be sold in Thailand is not being sold locally. 
Although piracy occurs in these countries as well, pirates 
 
BANGKOK 00003237  002 OF 003 
 
 
are less familiar with the plant material and the risk is 
consequently lower.  However, seed firms worry that the 
pirates are developing their own international connections, 
working with partners in other countries to pilfer the best 
new varieties. 
 
PVP Act yet to reap benefits 
---------------------------- 
 
7.    Thailand passed the Plant Variety Protection (PVP) Act 
in 1999 to extend intellectual property rights to new crop 
varieties, but many implementing regulations have yet to be 
promulgated and registration of new varieties is only now set 
to begin.  East West's Simon de Hoop blamed some of the 
delays on staff turnover in the Ministry of Agriculture, but 
considered the staff capable and knowledgeable about the 
issues.  Nevertheless, until varieties are officially 
registered there exist no legal restrictions to prevent a 
seed pirate from freely selling another seed firm's variety. 
"It's free to steal," says Chia Tai's Manas. 
 
8.    The Ministry of Agriculture's (MoA) Plant Variety 
Protection Office has responsibility for examining and 
approving new plant varieties.  Under the PVP Act only 
certain crops can be protected; at the moment MoA accepts 
applications for 33 crop varieties though plans are in the 
works to add more crops to the protected list.  Breeders can 
request additional crop varieties to be added, and though the 
variety must meet a set of criteria, MoA says that in 
practice breeders are unlikely to be turned down.  MoA has 
accepted 99 applications for new plant variety protection in 
the two years since they began accepting applications, but 
only recently got closer to issuing approvals for the first 
batch:  14 new varieties of orchids.  If a new variety is 
commercialized, MoA requires that one percent of revenues be 
paid into a plant variety protection fund to go towards 
conservation and community development projects.  The fund 
contribution is considered compensation for use of Thai 
genetic resources in developing the product.  Firms that do 
not use Thai plant resources are exempt from the fund payment. 
 
9.    The PVP Act provides protection for new plant varieties 
for between 12 to 27 years depending on the plant.  The Act 
lays out penalties for unauthorized sales of a protected 
variety, up to two years imprisonment and/or a USD 10,000 
fine, though there has yet to be a case filed.  Mr. Sakorn 
Tripetchposal of Pioneer Hi-bred said that a DNA 
fingerprinting laboratory at Kasetsart (Agriculture) 
University was available to seed firms and could offer proof 
within days that a protected variety had been counterfeited. 
Sakorn looks forward to enforcement authorities bringing seed 
pirates to court, but it is uncertain whether authorities 
will take this form of piracy any more seriously than they 
have other IP piracy in Thailand.  Without active involvement 
from police, firms would be forced to resort to bringing 
lawsuits against infringers and hoping for damages.  East 
West Seeds, which is expecting a new sweet corn variety to be 
approved soon, said they were prepared to enforce their 
rights, but were concerned that in the end a legal suit may 
not be worth the cost to bring an infringer to justice. 
 
10.   In recent negotiations for a U.S.-Thai Free Trade 
Agreement, Thai negotiators resisted a U.S. proposal for 
Thailand to join the International Union for the Protection 
of New Varieties of Plants (UPOV in the French acronym). 
Thailand's PVP Act is based in large part on an earlier 
version of the convention, UPOV 1978, but the 1991 updated 
version tightens protections for plant breeders that Thai IP 
experts consider not in Thailand's best interests.  Dr. Tanit 
Changthavorn of Biotec, part of the Ministry of Science and 
Technology, explained that the RTG had concerns over UPOV's 
restrictions on farmers saving seed for the next harvest, 
resource issues on protecting all crop varieties rather than 
only select crops, and the lack of a requirement for benefit 
sharing for the use of local plant resources in breeding new 
varieties.  Some seed firms said that although they would 
support Thailand joining the UPOV convention, they considered 
the PVP Act to contain sufficient protection for their new 
varieties and were substantially more concerned with 
proceeding with enforcement of the current law. 
 
11.   Comment:  Not as visible as the rampant trade in 
counterfeit CDs, DVDs and Billabong shorts on the streets of 
Bangkok, seed piracy is nevertheless having an economic 
impact on Thailand, specifically on farmers, a population 
perhaps least able to afford an economic blow.  Firms have 
been unwilling to conduct in-depth research into new 
vegetable varieties that have relatively low sales, and 
 
BANGKOK 00003237  003 OF 003 
 
 
improvements in yield have lagged compared with the more 
lucrative field crops.  Counterfeits of new plant varieties 
are typically not properly controlled in production and 
farmers do not have access to detailed information on 
fertilizer and herbicide spraying techniques and timing for 
the new varieties, resulting in higher costs and lower 
production yields.  Hopes are high among plant breeders that 
enforcement of the PVP Act can turn this situation around, 
but it is an open question whether the police or courts will 
take the crime seriously enough to put a dent in piracy.  End 
comment. 
BOYCE