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TITLE:  Universities For Sale?
SOURCE: The Progressive Farmer, USA, by Jim Patrico
        This is an extended version of the article from the magazine
DATE:   November 2001

------------------ archive: ------------------

Universities For Sale?
A lack of government funds for ag research has led land-grants to make 
deals with private companies. Is the public research system compromised?

You might as well hang a "For Sale" sign on the front doors of land-grant 
universities. So say critics who charge that in a rush for research 
dollars, public institutions are making too many deals with agribusinesses. 
The results, these critics say, are that professors have become profit 
centers, companies often are setting the research agendas for universities, 
and supposedly unbiased research is bought and paid for by the companies 
that sponsor it.

"At land-grant universities today, the guy who puts up the loot is the guy 
who benefits . . . and that's not always farmers and ranchers," says Fred 
Stokes, president of the Organization for Competitive Markets, an advocacy 
group for family farms.

Stokes and others say that land-grants take too much research money from 
chemical, pharmaceutical and seed companies. Sponsors then use the research 
to develop expensive private-label products, which farmers feel compelled 
to buy to remain competitive.

"I believe this violates the mission of our land-grant institutions, 
promotes concentration of agriculture and contributes to the demise of the 
family farm," says Stokes.

That is quite a load to lay on the academic world. After all, public 
colleges and private industry have long been research and funding partners. 
And those partnerships have led to many of the advances that fueled the 
Green Revolution and shaped the way we farm.

But that relationship has gotten out of whack in recent years, critics say. 
They cite this evidence:

In 1998, the University of California-Berkeley signed an agreement with 
Novartis that gave the university access to some of the company's 
proprietary technology. Novartis also gave $25 million over five years for 
research in the Department of Plant and Microbial Biology. In return, the 
company will receive first rights to license up to 33% of the patents that 
result from work using those funds. The deal also grants Novartis (now 
Syngenta) two of five seats on the department's research committee, which 
determines how the $25 million is spent.

The deal didn't sit well with some UC-Berkeley faculty members. As Ignacio 
Chapela, a UC professor of microbial ecology, told Atlantic Monthly 
magazine, "This deal institutionalizes the university's relationship with 
one company, whose interest is profit. Our role should be to serve the 
public good."

Land-grant researchers increasingly find themselves shut out of the 
scientific process by patents owned by industry. For instance, William 
Folk, a professor of biochemistry at the University of Missouri, recently 
found that he could not obtain licenses to use certain plant-transformation 
techniques developed by industry. He wanted to use the techniques to 
improve plant nutritional quality. "A large part of this [ag research] work 
is done in the public sector," says Folk. "But broad patents on the 
technology make them inaccessible to us."

Michigan State University recently licensed patents to Amway for health 
products MSU researchers developed in part with funds from the Cherry 
Marketing Institute. The deal came as a shock to CMI Director Phil Korson, 
who had no idea MSU had patented anything as a result of its work for 
cherry growers.

"I would warn any commodity group that funds university research to make 
clear at the beginning who is going to own the intellectual property rights 
for what they develop," says Korson. "Growers can't take their relationship 
with [public] universities for granted any more."

Long Ties Strained

Farmers have long thought of state universities as their own, ever since 
the Morrill Act of 1862 gave federal lands to states as a way to fund 
education based on "agriculture and the mechanical arts."

But three developments in the last 20 years have put a strain on the 
university-farmer relationship, while pushing the public sector and big 
business closer together.

First, federal funding for ag research has been flat since the 1980s, yet 
the price of research keeps rising. (By one estimate, it takes an average 
of $300,000 a year to keep one university researcher on staff and properly 
equipped.) As a result, land-grants have had to scramble to find new 
sources of funding.

Second, Congress in 1980 passed the Bayh-Dole Act, which enables 
universities to patent inventions and processes developed during federally 
funded research. Suddenly, public institutions had access to the profits of 
the marketplace, and they responded with vigor. By 1998, the top 10 
research universities held 1,921 patent licenses, earned more than $370 
million a year in license revenues and had started up 78 for-profit 
companies, according to an article in the Chronicle of Higher Education.

The third event made agriculture a prime target for patents. When the U.S. 
Supreme Court in 1980 ruled that life forms could be patented, it made 
biotechnology a goose that promised to lay unlimited golden eggs for those 
who owned the patents. Private industry rushed into biotech, and so did 
land-grants. Within months of that Supreme Court decision, faculty members 
at UC-Davis created Calgene, a private company and one of the first biotech 
companies out of the chute.

Money Trail

University administrators interviewed for this article acknowledge that 
funding needs have created new ground rules for ag research.

"Farmers and land-grants have always had a good relationship, because 
colleges could respond to farmers' needs," says James Fischer, dean for 
public service research at Clemson University. "But now the faculty is 
having to go to outside sources [for funds]. Colleges are no longer in the 
driver's seat. My concern is, Who is setting the research agenda?"

Researchers have to seek outside sources, because federal funds have not 
kept pace either with inflation or with the cost of new technology. In 
1978, the USDA food and agriculture budget was about $1.6 billion. By 1998, 
it had fallen to about $1.5 billion.

Formula funding (the federal government's dollar-for-dollar matching funds 
for state land-grants) has decreased 8% in the last 10 years, says Fischer. 
Meanwhile, federal funding for other types of research (health, energy, 
defense, etc.) has increased. Agriculture gets a mere two cents of every 
research dollar Uncle Sam spends.

While federal funding for ag research has declined or remained flat, 
private industry has increased its spending an average of 4.5% each year 
since 1980. It now spends about 60% of all money spent on ag research in 
the U.S., says Fischer. With the federal cupboard increasingly bare and 
with private industry willing to spend, it's little wonder that researchers-
and universities-look longingly to the private companies for funds.

Partners or Payola?

The perception that universities have sold out is unfair and inaccurate, 
says Mike Chippendale, former head of Extension Research at the University 
of Missouri. "Put it in perspective," he says. "Only 8% of total college 
support comes from outside industries. The rest is nonindustry support. But 
it's that small piece [8%] that gets everyone's attention."

Chippendale is keenly aware of public scrutiny of university-industry ties. 
Monsanto contributes mightily to UM ag research, and the university has 
taken some heat for its perceived closeness to the St. Louis-based company. 
Particularly snide critics have given UM a nickname: The University of 

Chippendale shakes his head at the intended slur. "Monsanto's home is in 
this state," he says. "We work on many of the same things they do. It's 
only natural that we work together somehow. Partnering is not the same as 
selling out."

The concern over university-industry partnerships is overblown, says Terry 
Wolf, an Illinois farmer who is president of the National Coalition for 
Food and Agriculture Research. The group was formed early in 2001 by 
universities, private companies and individuals with the goal of doubling 
federal funding for ag research in the next five years.

"We have always had a partnership with public and private research," says 
Wolf. "The populist philosophy that says we shouldn't [have such 
partnerships] doesn't have much foundation in fact."

Even if universities wanted to avoid partnerships-and they don't-government 
encourages them to seek outside sources to supplement their income.

"When we go to the state legislature and a senator from Dallas asks the 
question, 'Is the industry providing matching funds for our appropriation?' 
our answer better be 'yes,' " says Ed Hiler, deputy chancellor and dean of 
agriculture at Texas A&AMPM.

Administrators aren't the only university employees feeling the pressure to 
get closer to private companies. On condition that we not use his name, a 
researcher at a Midwestern land-grant university told Progressive Farmer, 
"We are being told we need to form relationships with private industry. Our 
main mission is revenue generation. There is not a big pool of money for 
research. So we are all fighting to get our share."

Other current and former researchers tell the same story. One who left a 
public institution to go to work for a private company says he did so in 
part because fund-raising became too much of a distraction.

"I probably spent 15 to 20% of my time [at the university] submitting grant 
proposals. In the private sector, you don't spend nearly as much time on it 
[fund-raising for research]. You can do what you're trained to do," he says.

The researchers we interviewed deny, however, that ties with industry 
affect the objectivity of their research. Says one researcher at a land-
grant, "Even though we take that money, we show no bias. We can't, and we 

As for bias in setting research agendas, Chippendale and other university 
administrators insist that the public's good is their first concern. Strict 
procedures ensure that research proposals come in and are evaluated, voted 
on and prioritized without bias. Farmer "stakeholders" are a part of the 
process along the way.

"But we have to look very, very closely at our priorities, because we can't 
do many of the things we'd like to do. The money isn't there," says 

Seed breeding is a good example of a research area that has suffered from a 
lack of funds.

"In cotton, there are probably fewer than half the cotton breeders in the 
public sector that there were 15 years ago," says Tom Kerby, Delta and Pine 
Land Company's vice president of technical services.

He lists land-grants that got out of the cotton-breeding business. He says, 
"The heads of university ag research programs look at plant breeding and 
see that they don't get much money from state legislatures for applied 
research like that. So they drop it."

"There is a real concern, especially for minor crops," says Chippendale. 
"Industry will take care of the major crops, because that's where the money 
is. But minor crops? Niche crops? Who is going to work on them?"

Who, indeed?

Industry's Stake

Kerby will tell you that his company has a stake in strong land-grant plant-
breeding programs. "We are not in competition with them," he says. "We pay 
royalties every year [to universities] to use important varieties they 

What's more, if land-grants cut all plant-breeding programs, where would 
future plant breeders go to learn? And without trained breeders, how could 
D&AMPPL develop new cotton varieties?

Private companies will tell you that they don't have-and don't want-land-
grant universities in their pockets.

"I don't think it's happening," says Rob Horsch, Monsanto's vice president 
of product and technology cooperation. "The No. 1 issue for us with 
universities and with science is to get good information . . . unbiased, 
believable, reproducible information."

If growers perceive university research as biased, the perception becomes 
reality. Then they stop trusting what land-grant scientists tell them.

"Even the possibility that it could happen is a good argument for public-
sector funding," says Horsch.

That's one reason Monsanto is a member of National C-FAR, whose goal is to 
increase federal funding for public universities.

"From our perspective, we want to see a healthy university system," says 
D&AMPPL's Kerby. "We want to see universities taking on plant breeding and 
teaching that to students. But we also want to be in a position to provide 
some support." --with reports by Del Deterling

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Patents Pending

When it was written, many saw the Bayh-Dole Act as a way to prevent public 
universities from becoming too reliant on research funds from industry. 
They thought universities could patent discoveries, sell licenses and 
provide a new cash stream to finance more research. And some of that has 
happened. In fact, the University of California alone has garnered more 
than $73 million from license revenues. Since the Bayh-Dole Act, nearly 
every major university has created its own intellectual property rights 
office. And its sole job is to obtain and license patents on potentially 
valuable ideas developed in university labs. "If research leads to 
something with commercial value, everyone wants a piece of the action . . . 
including us," says the University of Missouri's Mike Chippendale. "It's a 
new era of doing business."

But business is not always good. "Most patents are not winning lottery 
tickets," says Norm Pollack, assistant vice president for the Office of 
Intellectual Property at Michigan State University. In the early 1980s, MSU 
licensed patents on two cancer drugs that brought $25 million in revenue. 
The other 400 patents that MSU has acquired in the last 20 years have not 
done so well. "They are not a blip on the screen," says Pollack.

Since university research is often basic research, what universities 
usually patent are processes or ideas that eventually could lead to 
marketable products. But it is private industry-not universities-that do 
the practical research that turns ideas into products and then into big 

Legal Landmarks
- The Morrill Act of 1862 gave each state federal land grants (30,000 acres 
each) equal to the number of congressmen from that state. With the sale of 
that land, the states were to establish colleges "where the leading object 
shall be . . . to teach such branches of learning as are related to 
agriculture and the mechanic arts." It was the beginning of the land-grant 
college system.
- The Hatch Act of 1887 authorized Congress to make direct payments of 
federal funds to each state to establish experiment stations.
- The Smith-Lever Act of 1914 formed the basis for the cooperative 
Extension service. It was to disseminate to farmers and the general 
community information and practices developed at land-grant colleges.
- The Bayh-Dole Act of 1980 enabled universities to patent inventions and 
processes developed with federally funded research.
- The U.S. Supreme Court ruled in 1980 (Diamond v. Chakrabarty) that 
genetically engineered life forms could be patented.


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