9-Misc: US land-grant universities for sale?
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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: http://www.gene.ch/genet.html ------------------
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
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
"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.
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
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&M.
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?"
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&PL 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&PL'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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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
- 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
- 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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