220. The representative of UPOV said that the task of UPOV was to provide and to promote an effective system of plant variety protection aimed at encouraging the development of new varieties of plants for the benefit of society, whether in a developed or developing country. UPOV had 51 Members, many of whom were developing countries, who had experienced beneficial effects with regard to productivity, competitiveness, income and development through plant variety protection. He said that the plant variety protection system of the European Union was based on the UPOV Convention, and that 13 of its member States were contracting parties to the UPOV Convention. He pointed out that UPOV was the only existing sui generis system for the protection of new varieties of plants which was internationally recognized. He referred to paragraph 77 of the EC concept paper (IP/C/W/383) enumerating the criteria for an effective regime for plant variety protection and said that the plant variety protection system established on the basis of the UPOV Convention met all these criteria and was therefore compatible with Article 27.3 (b) of the TRIPS Agreement. The UPOV Convention provided for an effective sui generis system at the national level as well as a system of international harmonisation for plant variety protection so that all breeders in all UPOV member countries could enjoy the same level of protection. He said that enhancing international harmonisation was an indispensable tool for the protection of new varieties of plants, for international trade and transfer for technology. If a country were to introduce its own system of protection, plant breeders in that country would not enjoy the benefits derived from international harmonisation and this could complicate and distort international trade in seeds. In such a case, breeders in UPOV member countries would be hesitant to release their varieties there and this would mean that farmers in that country would lose the possibility of benefiting from the use of the best varieties developed. Further, the introduction of a system which was not compatible with the internationally harmonized system raised questions with regard to the spirit of the TRIPS Agreement.
221. He continued that at the national level, the most important element in agricultural policy was the development of the seed industry and the protection of new varieties of plants was considered to be one of the most effective tools for that purpose. All countries wanted to have a competitive seed sector composed of companies from both the public and private sectors and, since both sectors needed financial resources to maintain a breeding programme for new varieties, additional financial resources could be provided through an effective system of plant variety protection. He said that the UPOV Convention required, for reasons of market transparency, the use of a given variety denomination whenever seed of a protected variety was traded. He referred to IP/C/W/383 and said that it described the possibility of reducing the level of protection by allowing the sale of seeds without using the variety denomination. This carried the risk of creating confusion and undermining the whole system because it made it difficult, if not impossible, for the breeder to recover the cost of his breeding program. He emphasized that the practices of farmers in relation to unprotected varieties and land races would not be affected in any way by the introduction of the UPOV system of plant variety protection. The UPOV system was designed to encourage the development of new varieties of plants for the benefit of society that provided benefits to both breeders and farmers. It included exemptions to farmers for the use of protected varieties for private and non-commercial purposes, including for subsistence farming. Farmers could, for example, use protected varieties for experimental purposes and for breeding other varieties. In addition, farmers might be permitted to use farm saved seeds of protected varieties but such permission should be within certain constraints designed to ensure that the incentives for breeders to develop new varieties were not undermined. Further, farmers could develop and protect their own varieties under the UPOV Convention.
222. Moreover, he said, the UPOV system provided greater flexibility to a public breeding station that had been granted breeders' rights with respect to conditions for permitting the exploitation of the protected variety. The breeder might, for instance, allow a farmer to exchange or sell seeds to neighbours. Public research institutes in many developing countries played a very important role in the breeding of staple food crops and were free to allow their protected varieties to be distributed through traditional channels from one farmer to another, while excluding the varieties from commercial use by other competing entities. In this regard, the UPOV system was compatible with the use of traditional channels when breeders, especially public research institutes, wished to use such channels. Therefore, the lack of adequate protection for new varieties in developing countries could result in a failure to provide a key incentive for potential investment to develop agriculture. Consequently, developing countries would lose an opportunity to develop their national agriculture, horticulture and forestry sectors and to enhance their overall economic development. He said that UPOV recognized the importance of capacity building and had a capacity building programme covering more than 90 countries in Africa, Asia, the Pacific region, Latin America, the Caribbean and in countries in transition.4