Part 1
Biotechnology in the Mercosur countries

Chapter 1
Biotechnology in Brazil

Introduction

The term “biotechnology” has gained currency since the mid-1970s, due mainly to advances achieved in the areas of cell and molecular biology, which led to genetic engineering (NOSSAL, 1987). With the discovery of restriction endonucleases, it became possible to manipulate the genetic material of eukaryotes. Soon afterwards emerged DNA cloning vectors, gene probes (to detect specific gene sequences) and strategies to control the transcription and expression of genes from higher organisms inserted into bacteria and yeasts. Parallel to these developments, new bioprocessing methods were developed, which made it possible to isolate and purify the products produced by microorganisms modified by genetic engineering.

The breadth of application of biotechnology has resulted in many definitions of this technology, depending on what it is used for (CERANTOLA, 1991). Foremost among these is the following definition given by the Organization for Economic Cooperation and Development (OECD): “Biotechnology is the application of scientific and engineering principles to the processing of materials by biological agents to provide goods and services” (BULL et al., 1982).

Other definitions, narrower in scope, have been added to that one, this time focusing on genetic engineering and recombinant DNA (rDNA), according to which “industrial applications are obtained with new or exogenous genetic material being incorporated and expressed in cells, bacteria or cultured cells and tissues” (ZIMMERMAN, 1984).

In general, biotechnology, which consists in obtaining industrial products and processes arising from direct or indirect actions of living organisms or parts thereof, has until recently been characterized as a field of scientific and technological knowledge specifically within the competence of professionals in the fields of microbiology, biochemistry, genetics, chemical engineering and biochemistry.

Cerantola (1991) classified these techniques through the lens of complexity and technological sophistication, as explained below:

The prominence which biotechnology has attained is also due to the use of different technological approaches focusing on rDNA technology and genetic engineering, cell fusion techniques and new types of bioprocessing. Such technological advances, widely discussed in documents of the US Congress (UNITED STATES, 1984), reflect the high capacity to modify and control biological systems at the cellular, subcellular and molecular levels.

Briefly, the main techniques used in modern biotechnology (CERANTOLA, 1991) could be described as follows:

The emphasis given to biotechnology is due not only to the current possibilities for manipulation of biotechnological processes (rDNA, modern bioprocessing methods, advanced techniques in cell biology), but also to the wide range of technology-based businesses emerging from applications of modern biotechnology. In Brazil, important sectors of the economy are biotechnology users (MOREIRA-FILHO et al., 1996), but the institutional environment and economic scenario have sometimes hampered the development of modern biotechnology in Brazil.

New technological applications require a certain amount of time for both consumers and industry – and especially legislation – to adapt, during which time the following variables come into play: the cultural and economic environment, factors determining the acceptability of certain products, and also adjustment of legal mechanisms relating to patents, trade agreements, licensing, etc.

The possibility of growth of biotechnology in Brazil is closely tied to leading international companies, which invest huge sums in new product research and development (R&D). Most of this research is carried out in countries of origin, due to various factors, including: the high degree of maturation of cooperative relations with universities, easy access to equipment and reagents, skilled labor and especially the existence of specific property rights laws.

Although the current global economic crisis has seriously impacted governmental science and technology (S&T) and private-enterprise research and development (R&D) programs, especially in developing countries, the recent adaptation of Brazilian law to intellectual property rights and biosafety standards is helping to keep the country on the path of R&D investment.

According to Castro (1999), a biotechnology industry as big as the one that developed in the United States did not occur in Brazil, for the following reasons:

Brazil has 1,718 research groups working in biotechnology, registered in the Directory of Brazil’s National Council for Scientific and Technological Development (CNPq) [Conselho Nacional de Desenvolvimento Científico e Tecnológico], representing 7,713 research associates (Table 1).

With reference to research groups, the available data is more precise. There are 24,170 groups concentrated in the universities of São Paulo and Campinas, in the Federal Universities of Rio de Janeiro, Minas Gerais, Rio Grande do Sul, São Paulo, and finally, at the various Units of the Brazilian Agricultural Research Corporation (Embrapa) [Empresa Brasileira de Pesquisa Agropecuária], which altogether represent 50% of the research groups in the country

The government supports the training of human resources in companies and R&D centers through the Human Resources Training Program for Strategic Activities (RHAE) [Programa de Capacitação de Recursos Humanos para Atividades Estratégicas], of the Ministry of Science, Technology and Innovation (MCT) [Ministério da Ciência, Tecnologia e Inovação], which finances training activities through the entire course of execution of technological development projects. This program has been successful in the field of biotechnology and has facilitated the organizing of innovation networks. In 1996, 16 biotechnology projects were approved, and 26 in 1997. A similar program in the State of São Paulo is planned to complement the financing of technology projects.

The adaptation of Brazilian law to international legal requirements was provided by the following instruments: accession to the GATT; the Biosafety Act of 1995; the Patents Act of 1996; the Plant Variety Protection Act of 1997; the Seeds and Seedlings Law [No. 10,711 of 2003]; and the Public Information Access Law [No. 12,527 of 2011]. Accession to the International Union for the Protection of New Varieties of Plants (UPOV) allowed the entry of Brazilian agriculture into the world economy and agriculture.

Table 1. Groups, lines of research and researchers by sectors of activities in the biotechnology sector, by state.

State

Groups

Lines of research

Researchers

Acre

3

5

9

Alagoas

7

17

25

Amazonas

26

49

107

Bahia

47

113

202

Ceará

28

68

1,001

Distrito Federal

51

126

227

Espírito Santo

3

3

15

Goiás

25

53

131

Maranhão

13

17

30

Mato Grosso

3

4

14

Mato Grosso do Sul

20

30

104

Minas Gerais

208

493

863

Paraíba

23

39

104

Paraná

118

248

472

Pará

22

47

87

Pernambuco

92

182

404

Piauí

8

14

33

Rio Grande do Norte

11

15

33

Rio Grande do Sul

148

350

570

Rio de Janeiro

292

668

1,038

Rondônia

4

8

12

Santa Catarina

61

137

214

Sergipe

13

35

39

São Paulo

488

1,115

1,961

Tocantins

4

8

18

Brazil

1,718

3,844

7,713

Source: National Council for Scientific and Technological Development (CNPq) [Conselho Nacional de Desenvolvimento Científico e Tecnológico] / Diretório dos Grupos de Pesquisa no Brasil – Version 4.1.

The São Paulo Research Foundation (FAPESP) [Fundação de Amparo à Pesquisa do Estado de São Paulo] has a positive influence on genome research and the formulation of a scientific research model for developing countries. Having no laboratories and researchers of its own, and only a modest administrative staff, who work in a nondescript building located in a residential area of the city, the Foundation owes its achievements to prudent management and judicious choices.

In July 2000, a Brazilian consortium organized and funded by the Foundation became the first institute to sequence the genome of the plant pathogen Xylella fastidiosa, an insect-borne bacterium which infects orange trees. A few months later, FAPESP announced that the consortium had completed sequencing the genome of another pest, Xanthomonas citri, popularly known as citrus canker, which, by attacking citrus, consequently causes serious damage to the country’s thriving fruit export industry. Called the FAPESP Genome Project, it has allocated a budget of approximately US$ 12 million. Its initial focus has been on Xylella fastidiosa, the bacterium that causes citrus variegated chlorosis disease (CVC) [praga-do-amarelinho], which is threatening the citrus industry in the State of São Paulo, and which has also spread to coffee and plum crops.

Through the network, the sequencing of Agrobacterium tumefaciens [updated scientific name: Rhizobium radiobacter] has also been completed, which attacks grapevines, tomatoes, peaches, and other fruit plants. When transferring its gene into the genome of the plant, the bacterium induces uncontrolled growth of plant cells, causing a disease called crown gall [galha-da-coroa]. It is believed that this study will facilitate research on transgenic plants.

Also underway is the study of the genome of Anopheles gambiae (vector of malaria), and also eucalyptus and sugar cane. A recent partnership with the United States Department of Agriculture (USDA) resulted in Brazil being initiated into the genomic era with the creation of FAPESP’s Agronomical and Environmental Genome (AEG) Program, from the sequencing of Xylella which causes Pierce’s disease of grapevine, of Leifsonia which causes sugarcane ratoon stunting disease and Xanthomonas axonopodis which causes citrus canker. This partnership is dedicated primarily to comparative genomics, as well as functional genome analysis.

This type of networked study is tending to gain strength in Brazil, resulting in an increase in publications and partnerships with foreign organizations, thanks to the optimizing of research investment made possible by the fact that the actors in the network collaborate virtually, thus eliminating the installation of infrastructure (buildings and new laboratories), since each researcher works in their own laboratory. Following this model, FAPESP’s Viral Genetic Diversity Network (VGDN) and Structural Molecular Biology Network (SMolBNet) have also been created.

The biotechnology industry and its products

Significant sectors of the Brazilian economy are big users of classical biotechnology. In turn, Brazil’s research institutions have shown a reasonable level of competence in generating knowledge in various areas of biological sciences. In agribusiness, pioneering developments have occurred in the genetic improvement of coffee and corn, and recently in the soy, eucalyptus and poultry broiler segments, in which the country has an outstanding international position, with great competitive advantages to be leveraged (MOREIRA FILHO, 1996).

Thus, there is no doubt that the rapid progress of biotechnology will have a strong impact on important sectors of the national economy. The country must therefore be prepared to absorb as well as to generate innovations. Otherwise, we will not only lack the technology base for future growth, but will also run the risk of losing positions already achieved (such as in the agricultural sector and production of vaccines). If we neglect this issue, we will be doomed, in the coming decades, to the status of mere consumers of knowledge and technology generated by others. It is generally accepted that the ability to produce new knowledge is now a major factor in the distribution of economic power in the world; that is, scientifically and technologically developed countries increasingly tend to distance themselves from countries which simply consume knowledge.

In the face of globalization and open markets, some structural changes are already being felt by farmers and companies that develop technologies for agribusiness. These include: the need for increased productivity, improved quality of food and its greater utilization. This combination of factors will lead to increased competitiveness only if there is a reduction in costs. All these trends can be replaced by a single trend: the increasing demand for biotechnology which results in the improvement of agricultural crops.

In conjunction with certain situational factors such as the depletion of non-renewable resources and the search for new energy sources, increasing environmental awareness is driving us towards the creation of recycling policies, the need for wastewater treatment, the recovery of degraded environments and the consolidation of bioremediation. All these conditions also lead to increased demand for biotechnology.

In human health, the aging population, together with the increase of urban diseases, highlights the need for development of new diagnostic systems in medicine, the creation of molecular strategies for the controlled release of drugs in the body, and new drugs, reaffirming the importance of biotechnology in this context.

The current increase in demand for biotechnology should also be analyzed as a requirement of agriculture structured as agribusiness, whose greatest challenge is to supply the growing domestic market and remain competitive in an external market affected by protectionism and excess supply (JESUS et al., 1998). There has also been an increase in the regional market in Latin America. Concomitantly, a new procedure has become established, especially abroad, which consists in greater interaction between education and research institutes (ERIs) and the productive sector, a path that has been taking effect in Brazil thanks to increased political-institutional coordination. The development of biotechnology products and processes is, like the research that gives rise to it, essentially interdisciplinary. This makes it difficult to carry out R&D at companies which are biotechnology users, even at the large ones. Thus, there are opportunities for technology-based companies operating at the business-university interface.

Craveiro and Guedes (1995) show that the period of 1981 to 1992 was when then most intense development of the biotechnology industry occurred. Thirty-six companies were created and biotechnology enclaves and government actions emerged to demonstrate the viability of the sector. Approximately 50% of the companies created in this period were small and medium sized, with approximately 20 employees. Annual investment in biotechnology R&D is estimated at US$ 16.7 million for private companies and US$ 38.3 million for public research institutions. The average investment in R&D relative to sales was 7.2%. Research in the field of biotechnology is carried out in universities and public institutions.

According to the same study, the subsequent events which occurred were: (a) the creation of Embrabio (Empresa Brasileira de Biotecnologia S/A) and the Microbiológica company in 1982; (b) the emergence of production poles, foundations and centers to promote biotechnology, with the support of federal, state and foreign governments (Polo Bio-Rio, Centro de Biotecnologia do Rio Grande do Sul, Fundação Biominas, Centro de Desenvolvimento Biotecnológico); (c) the emergence of biotechnology companies linked to the production poles (Simbios, Genoma, Millirio, WL Imunoquímica, Backtron, Vectron, Biológica); (d) the emergence of environmental biotechnology companies importing products and providing specialized services (Biobac, Microbac, Bactrat); (e) the starting up of companies producing equipment and raw materials for biotechnology (Pharmacia); (f) the participation of enzyme producing companies (Knoll, Novo Nordisk); (g) the proliferation of small plant biotechnology companies (Multiply, ProClone) and human health (Genome) or animal (Pitman-Moore) biotechnology companies; (h) the creation of biological inoculant and biological control production companies (Geratec, Solofix), among others.

According to Ernst & Young (BIOTECNOLOGIA..., 2002), the biotechnology industry closed 2001 with a record volume of over US$ 27 billion in transactions from about 60 deals completed, compared with transaction volume of US$ 9 billion from 84 deals completed in 2000. These deals included the announcement of the acquisition of Immunex Corporation by Arngen Inc. in a transaction worth US$ 16 billion in cash and stock, thus making it the largest merger in the history of the industry. The trend in mergers and acquisitions in the biotechnology sector continued in the year 2002 (BIOTECNOLOGIA..., 2002), as a result of the fact that several pharmaceutical companies, realizing the imminence of the deadline for patents on important drugs, chose to invest in this area, in order to be able to include new drugs in their portfolios.

In the 1990s, it was estimated that there were 76 biotechnology companies in operation. Most were manufacturers of biotechnology-based products, but many were local companies and subsidiaries of multinationals engaged in the distribution of imported biotechnology products. The presence of companies providing consulting services and companies manufacturing analytical equipment and instruments can also be noted. About 57% of companies report that they perform R&D, with approximate annual investment of approximately US$ 16.6 million, or US$ 447.90 per researcher.

The Cooperative of Sugarcane, Sugar and Ethanol (Alcohol) Producers of the State of São Paulo (Copersucar S.A.) [Cooperativa de Produtores de Cana-de-Açúcar, Açúcar e Álcool do Estado de São Paulo] through its Technology Center, conducts research for genetic breeding of sugar cane, with a view to achieving more productive and longer lived species. In the industrial area, it conducts various projects to optimize fermentation, utilize by-products and develop new biotechnological processes that use sugar as a carbon source. Its varieties represent approximately 50% of all sugar produced in the country. Other companies operating in this sector include Omtek Indústria e Comércio Ltda., which investigates the production of sugarcane derivatives using biotechnology-based processes.

Brazil’s agricultural economy ranks in ninth place globally (ODA et al., 2000), but the country exports only 7% of its agricultural GDP. Among the major crops, the most prominent are soybeans, corn and sugarcane. Brazil’s soybean production ranks second in the world market: it had a volume of 35 million tons in the period 1998-1999 and reached the figure of 51 million tons in 2003 (versus 65 million tons from the United States). Corn is the second biggest product. It has a cultivated area of 7.8 million hectares and an annual production of 32.6 million tons, with low productivity. The expansion of soybean cultivation in the South was accompanied by the installation of industries producing inoculants.

Several companies perform R&D activities associated with the agricultural sector, for example: Yakult S.A., which investigates the cultivation of meristems for the improvement of fruit varieties; Fundação Bio-Rio, which is developing protocols for micropropagation and somatic embryogenesis of eucalyptus; Biotecnologia Aplicada, which works in fermentation processes and formulation of biological insecticides (CRAVEIRO; GUEDES, 1995). Other highlights include the Biológica company, a consultancy firm that conducts R&D in microbial leaching of phosphorus in minerals, biodegradation of cyanates and biological removal of mercury.

In the field of human and animal health, Biobras S.A. is investigating various fields of study with human insulin, vaccines against leishmaniasis, fermentation and recombinant proteins. Vallée S.A. develops animal vaccines, growth hormones, parasites for fermentation and veterinary diagnostic kits. This company received the Innovation Award in 2001. Ten institutions produce diagnostic kits, including the Oswaldo Cruz Foundation [Fundação Oswaldo Cruz], Bayer S.A., the Paraná Institute of Technology (Tecpar) [Instituto de Tecnologia do Paraná], Rhodia-Mérieux Veterinary Ltda. and WL Produtos Imunoquímicos Ltda.

In Brazil, there are 32 business incubators in operation and 15 more in planning, including: the Center for Technology Business Incubation in São Paulo (CIETEC) [Centro de Incubação de Empresas Tecnológicas em São Paulo]; the Business Center for Production of Advanced Technologies of Santa Catarina [Centro Empresarial para Laboração de Tecnologias Avançadas de Santa Catarina]; the Technology Park Foundation of Paraíba [Fundação Parque Tecnológico da Paraíba]; the Incubator of Technology-Based Businesses of Pernambuco (INCUBATEP) [Incubadora de Empresas de Base Tecnológica de Pernambuco]; the Technology Development Park of the University of Paraná [Parque de Desenvolvimento Tecnológico da Universidade do Paraná]; the Technology-Based Business Incubator of the Biominas Foundation (Habitat) [Incubadora de Empresas de Base Tecnológica da Fundação Biominas]; the Betin Technology Incubator (ITEBE) [Incubadora Tecnológica de Betin]; and, finally, the Technology-Based Business Incubator of the Federal University of Viçosa (CENTEV/UFV) [Incubadora de Empresas de Base Tecnológica da Universidade Federal de Viçosa].

Companies and public research institutions working in the field of biotechnology prepare a wide range of products, which include the use of first and second generation biotechnological techniques, and products involving modern biotechnology and genetic engineering using recombinant DNA techniques.

In the agricultural biotechnology sector, seeds, pesticides, biological pesticides, additives, fertilizers and diagnostic kits are produced. A sector of great prominence produces inoculants and micronutrients for legumes, and biological insecticides. Nitral Indústria e Comércio de Inoculantes e Produtos Agropecuários Ltda. leads the national market for inoculants. The company formed a joint venture with Urbana Laboratories, the largest American company in the industry, creating Nitral Urbana. The Brazilian seed market has sales of approximately US$ 1 billion a year (PIMENTA-BUENO, 2000). Brazil has not yet authorized the production of transgenic crops, but various research institutions, especially Embrapa, do have varieties which can quickly reach production scale.

In the field of biotechnology for human health, antibiotics, vaccines and serums, hormones and therapeutic products are sold commercially. This area has a significant participation by public sector entities, such as the Butantan Institute [Instituto Butantan] and Fiocruz.

In the area of biotechnology for animal health and production, vaccines, hormones, pesticides and veterinary diagnostic kits are produced. In the food industry, additives, enzymes, organic acids, amino acids, and bioadditives and sugarcane derivatives are produced.

Policies, incentives and financing

Brazil has tools to support science, technological development and innovation. The main sources of funding are the National Council for Scientific and Technological Development (CNPq) [Conselho Nacional de Desenvolvimento Científico e Tecnológico] and FINEP (Research and Projects Financing) [Financiadora de Estudos e Projetos], also known as the Brazilian Innovation Agency, which report to the Ministry of Science, Technology and Innovation (MCT) [Ministério da Ciência, Tecnologia e Inovação]. The MCT operates the National Scientific and Technological Development Fund (FNDCT) [Fundo Nacional de Desenvolvimento Científico e Tecnológico] for research projects conducted in university centers and institutes and the Support Program for Scientific and Technological Development (PADCT) [Programa de Apoio ao Desenvolvimento Científico e Tecnológico], which promote integrated projects capable of producing significant impacts in strategic areas. PADCT has granted an annual average of 7% of its total funds to biotechnology projects.

Brazil allocates approximately 0.9% of its GDP to science and technology. About 30% of this value corresponds to funds companies spend on R&D. This investment is US$ 1 to 1.2 billion per year. One study found investment in R&D and innovative engineering of US$ 1.4 billion in 1997.

Brazil’s venture capital market is emerging, with efforts seen from the Brazilian Development Bank (BNDES) [Banco Nacional de Desenvolvimento Econômico e Social], through its subsidiary BNDES Participacões S.A. (Bndespar) and FINEP. BNDES is a financial institution with a history of more than 15 years of venture capital investments. Since its inception, the two main programs of Bndespar have invested the equivalent of US$ 106.5 million: US$ 45.5 million for the Capitalization Program for Technology-Based Companies and US$ 61 million in emerging companies. Bndespar launched its fifth venture capital program for small and medium enterprises with more than US$ 200 million, in addition to providing financial support to emerging technology-based companies in Santa Catarina and Rio de Janeiro. Participants in these funds include the Multilateral Investment Fund (FUMIN) [Fundo Multilateral de Investimentos] of the Inter-American Development Bank (IDB), Brazil’s Micro and Small Business Support Service (Sebrae) [Serviço Brasileiro de Apoio às Pequenas e Médias Empresas], private investors and state pension funds (PIMENTA-BUENO, 2000).

FINEP has a tradition of supporting science and technology projects and institutions. In recent years, it has sought to transform itself into the country’s agency for renewal. FINEP operates mainly in supporting technological development and innovation, making use of various instruments in a coordinated and integrated manner. It gives preference to companies and institutions that participate in the development of new products and processes. In 2000, FINEP launched its Innovation Project in support of the venture capital industry, which is associated with the IDB, Sebrae, the Petros Pension Fund, the National Association of Science Parks and Incubators (Anprotec) and the Software Export Promotion Agency (Softex). The Innovation Project works in six areas: Venture Capital Fund, Support System for the Creation of Funds, Venture Capital Rounds, Venture Capital Portal, Broker Network and Entertainment Programs.

The impact of the Internet sparked strong interest from the private sector and led to the creation of at least 30 investment funds, banks and companies, with capital totaling over US$ 1,600 million, according to a survey done by the consultant Steffen & Pozzi, of Porto Alegre. The main funds are: Opportunity (US$ 260 million), Cadepar (US$ 110 million), Bank Boston (US$ 80 million), Banco Fator (US$ 60 million), Pactual (US$ 40 million), Dynamo (US$ 30 million) and Westsphere (US$ 30 million). Trade magazines highlight the presence of individual investors, whose businesses range from towel factories to biotechnology startups (ODA et al., 2000).

In 1981, the federal government created the National Biotechnology Program (PRONAB) [Programa Nacional de Biotecnologia]. As of 1990, government policy on biotechnology was transferred to the Biotechnology Department of the MCT, without, however, affecting the continuity of PRONAB’s activities. The 2000-2003 Multi-Year Action Plan (PPA) [Plano Plurianual de Ação] contributed funds from the Treasury, around US$ 270 million for the Innovation for Competitiveness program [Inovação para a Competitividade], out of a total of US$ 3.1 billion. It’s still too early to confirm whether there’s the will to increase the priority of R&D as part of public planning. The budget for 2000 allocated funds of approximately US$ 120 million for the National Scientific and Technological Development Fund (FNDCT) [Fundo Nacional de Desenvolvimento Científico e Tecnológico], while in 1999 the amount invested was US$ 25 million.

The CNPq has a Biotechnology Program to Support International Competitiveness of Agriculture (Bioex) [Programa de Biotecnologia de Apoio à Competitividade Internacional da Agricultura]. Its goal is to help along with the productive sectors of agriculture in order to reduce existing technology gaps, while at the same time stimulating the competitiveness of products using biotechnological processes. The program promotes partnerships between the CNPq, Embrapa, universities and the productive sectors, for the formulation of projects, studies, etc. Projects are evaluated and approved by the CNPq, which finances them and also performs monitoring and final evaluation.

Embrapa’s Development Program for Basic Research in Biotechnology [Programa de Desenvolvimento da Pesquisa Básica em Biotecnologia] is a tool for guiding Embrapa’s biotechnology policy in accordance with market demands. It encourages research into fundamental biological processes to generate knowledge and new technologies for sustainable development of the agricultural sector. Its main objectives are: (i) to contribute to the development of new varieties with resistance to the stress of agro-ecological systems; (ii) to assist the recovery and maintenance of the environment; (iii) to reduce the need for agricultural inputs; (iv) to increase the area under cultivation. Uncertainty over the subject of genetically modified organisms causes difficulties in fund-raising for biotechnology research.

Finally, it is worth noting that the Brazilian states have legislation providing instruments to support R&D, translated into specific institutions. A highly relevant case is the State of São Paulo, where the São Paulo Research Foundation (FAPESP) [Fundação de Amparo à Pesquisa do Estado de São Paulo] provides more than 60% of state-level funds for science and technology. After São Paulo, the next most prominent states are Rio de Janeiro and Minas Gerais, with these three providing 80% of state-level resources. Business incubators also play an important role. Technology parks focused on biotechnology (Bio-Rio, Biominas, the Biotechnology Development Center (CDB) [Centro de Desenvolvimento Biotecnológico] in Joinville, and the Biotechnology Center of the State of Rio Grande do Sul (CBERGS) [Centro de Biotecnologia do Estado do Rio Grande do Sul] have received a total public investment on the order of US$ 30 million.

Research infrastructure and human resources

Fiocruz works with methods of epidemic control and clinical and social monitoring of diseases, as well as the development of basic inputs for the sectors of immunobiology, medicines and blood products. This foundation focuses on R&D for infectious and parasitic diseases. The Institute of Immunobiological Products [Instituto de Produtos Imunobiológicos] is Latin America’s leading developer and producer of bacterial and viral vaccines, as well as diagnostic materials. Its departments are studying the molecular mechanisms of infection in diseases such as Chagas disease and leishmaniasis, and specialize in immunoparasitology, genetics, multiplication of adenovirus antigens and the development of antigens against hepatitis B and hepatitis C using recombinant DNA techniques. This foundation is the reference center for development of diagnostic materials and diagnostic kits. Fiocruz accounts for about 44% of domestic vaccine production and has a capacity of 200 million doses per year.

Embrapa has advanced technology for animal breeding, such as transfer, freezing and micromanipulation of embryo sexing. It also plays a dominant role in the technology of breeding improved plant varieties, which allows reducing production costs, while increasing productivity. Tissue culture techniques make it possible to produce seeds which are free of pathogens for economically valuable plants such as bananas, peaches, potatoes, and others. The area of biological control develops processes for producing biological insecticides and using natural control agents against pests affecting cotton, corn, cassava, soybeans, tomatoes, and others.

In 1985, the Butantan Institute organized the Biotechnology Laboratory [Laboratório de Biotecnologia], with the goal of modernizing and developing serums, and producing vaccines. In 1988, the Center for Biotechnology [Centro de Biotecnologia] was created, oriented towards developing new technologies in the fields of serums and antigens, blood products, diagnostic equipment for bloodborne diseases and monoclonal antibodies. The Center develops and transfers processes to the productive sector, such as the recombinant vaccine against hepatitis B. The Butantan Institute, together with the Adolfo Lutz Institute and Fiocruz, is developing a vaccine against meningitis B/C.

The Biotechnology Center (the Chemical Division of the Institute for Technological Research (IPT) [Instituto de Pesquisas Tecnológicas]) created in 1975, is a development and technology transfer group. Since the 1980s, it has returned to researching new processes for controlled action of microorganisms and enzymes, generating economically and socially important biological products. The IPT’s activities in biotechnology involve other groups at the institution, organized within the Biotechnology Program. They focus primarily on fermentation processes for environmental, agricultural, mineral, and energy areas, and raw materials for the chemical and food industries.

The Biotechnology Center of the State of Rio Grande do Sul (CBERGS) [Centro de Biotecnologia do Estado do Rio Grande do Sul], of the Federal University of Rio Grande do Sul (UFRGS) [Universidade Federal do Rio Grande do Sul], was created in 1981 as a result of an agreement between that state’s federal university and the state government, the Fundação de Amparo à Pesquisa do Estado do Rio Grande do Sul (FAPERGS) [Research Support Foundation of Rio Grande do Sul], the Banco de Desenvolvimento do Rio Grande do Sul (BADESUL) [Rio Grande do Sul State Development Bank], CNPq and FINEP. Its lines of plant research include: diagnostic reagents –viruses and parasites, entomopathogenic fungi, molecular biology and quality control of the Rhizobium genus. It also works in the field of animal breeding and development of diagnostic reagents and mechanisms of mutagenesis. In 1988, it was merged into the Biotechnology Department of the Biosciences Institute of the Federal University of Rio Grande do Sul (UFRGS).

The Brazilian Biotechnology Society (SBBiotec) [Sociedade Brasileira de Biotecnologia], founded in 1988, is a nonprofit civil institution founded for the purpose of promoting biotechnology through basic and applied research and technological development in an integrated manner, in order to provide enabling technologies to the production and service sectors. In 1999, SBBiotec was restructured to support scientifically rigorous development in this area.

Public perception

In 1988, a pilot plan was carried out for assessing the public perception of biotechnology, taking as reference similar experiences in the UK. Five hundred interviews were conducted in three cities: Porto Alegre, São Paulo and Rio de Janeiro. The results provide the following statistics: 53% of respondents indicated they had heard of the term biotechnology, while 47% hadn’t; 53% agreed with idea of using genetically modified crops resistant to insecticide, versus the remainder who did not share this idea. Official food inspection controls were considered weak by 63%, average by 29% and effective by 3%.

The recent introduction of recombinant DNA technology applied to agriculture has stimulated public mobilization by consumer protection agencies and nongovernmental organizations, resulting in political and legal repercussions. Recently, Brazil’s Federal Regional Court of the Fourth Region established a precedent by banning the use of genetically modified corn from Argentina for animal feed.

The debate about whether to maintain the situation regarding the commercialization of transgenic soybean was analyzed by the president, who decided to coordinate policy on this matter, in view of the various approaches made by public sector bodies. The Brazilian Society for the Advancement of Science (SBPC) [Sociedade Brasileira para o Progresso da Ciência] was in favor of mandatory labelling.

Strengths, weaknesses and prospects

In Brazil, between 30% and 40% of GDP comes from the agribusiness complex. The great contribution of biotechnology to helping issues such as environmental pollution and agricultural management is to increase food production, improving quality without harming the environment. This tendency, coupled with the need to be responsive to the domestic market and remain competitive in protectionist foreign markets with their excessive supply, is deserving of increased investigation. Scientific research institutes have shown a reasonable competence in generating knowledge in various areas of the biological sciences. In agribusiness, positive results have been obtained in genetic improvement of coffee and corn, and recently, soy and eucalyptus, segments where the country has the possibility of becoming internationally prominent, with huge competitive advantages to be leveraged.

Brazil plays a major role in the development of agricultural biotechnology, thanks mainly to its domestic market and the capabilities developed by its R&D centers. The country has the greatest biodiversity on the planet, a major source of raw material for biotechnology in this coming century. One example worth noting is the study in which 20 laboratories collaborated on sequencing the genome of the bacterium Xylella fastidiosa, an organism that attacks citrus.

The country has opportunities, expertise, institutional infrastructure and laws which make it possible to develop agricultural biotechnology with satisfactory biosafety conditions. Embrapa is developing a plant genetic improvement program for plants grown in tropical and subtropical zones. The incorporation of genetic constructions conferring resistance to pests and diseases and the adaptation of varieties to adverse environmental conditions, with increased nutritional and pharmaceutical value, can consolidate the country’s position in the production of grains, fiber and oilseed crops.

In human health, the aging of the population and the intensification of urban diseases require increased production of diagnostic kits, mechanisms for the controlled release of drugs and new drugs (COLLET, 2002). Brazil has good capacity in biotechnology, where a dominant role is played by human health research specializing in biotechnology.

Sources of funding for research activities are diverse, with a wide range of instruments available for promoting technological innovation. Commercial activity being conducted using biotechnology is limited. It is connected to the areas of human and animal health and also has some applications to agriculture, yet there are few companies applying modern biotechnology to their production processes, which thus results in limited industrial production.

At both the scientific and the commercial level, Brazil faces difficulties, in researching and applying biotechnology, respectively. With the exception of agribusiness and pulp and paper companies, the remaining companies encounter limitations when building their innovation network, mainly because they lack sufficient financial resources. To change this situation, government and the private sector have drawn attention to the need for greater interaction between R&D institutes and the productive sector, as well as better political-institutional coordination, recognizing that increasing the amount of products and processes using biotechnology requires an interdisciplinary approach. The conducting of R&D in companies using biotechnology and the establishment of small and medium enterprises more consistent with the current Brazilian situation are hindered by this lack of interdisciplinary perspective (JESUS et al., 1998).

Chapter 2
Biotechnology in Argentina

The biotechnology industry and its products

The development of biotechnology in Argentina had its greatest impetus during the 1980s. In 1982 the government of Argentina launched the National Biotechnology Program and programs of cooperation were simultaneously established with Brazil (CABBIO, the Argentine-Brazilian Biotechnology Center) and with industrialized countries (France, the European Economic Community). Official scientific and technological institutions took part in this process, but the climate did not last through the 1990s, affected by the economic crisis, by the opening up of the economy and by changes in business and government strategy.

There hasn’t been an updated survey on the size and structure of the biotechnology industry in Argentina. However, it is possible to arrive at an estimate, based on various databases. Using these sources of information1, it is possible to confirm the existence of more than 50 companies, a figure that includes a wide range of activities, ranging from the use of inputs in production processes to the preparation of modern biotechnology products with recombinant DNA techniques. Several companies have their own R&D laboratories2.

The industrial application of biotechnology has had its greatest impact in the pharmaceutical industry, which combines a long tradition in biomedicine with an active domestic industry, controlling around 50% of the market3. Next in order of importance is the veterinary medicine sector. The diagnostic reagents industry has also had a strong impetus, strengthened by a good pre-existing production base. The presence of biotechnology companies and products in the pharmaceutical industry is significant. There exist a considerable number of products based on internal development efforts, as well as and several products manufactured and sold commercially under license. Among these companies is BioSidus, which produces various modern biotechnology products using recombinant DNA techniques. Also present in this sector are PC-GEN SRL, Laboratiorios Beta, and Rontag S.A.

The pharmaceutical industry is represented by the Argentine Chamber of Medicinal Specialties (CAEME) [Cámara Argentina de Especialidades Medicinales], which includes the multinational industry members, and the Argentine Association of Pharmaceutical Laboratories (CILFA) [Cámara Industrial de Laboratorios Farmacéuticos Argentinos] and Argentina’s Business Chamber of Pharmaceutical Laboratories (COOPERALA) [Cámara Empresaria de Laboratorios Farmacéuticos], which include the domestically owned industry members. Another prominent industry organization is the Center for Studies in Development of the Chemical and Pharmaceutical Industry of Argentina (CEDIQUIFA) [Centro de Estudios para el Desarrollo de la Industria Química-Farmacéutica Argentina], composed of professionals from various fields emphasizing the advancement of scientific and technological knowledge as a key factor to controlling disease, and cooperation between the scientific and medical sectors and government and industry.

In the area of diagnostics, capabilities are available in molecular oncology; leukocyte differentiation antigens; paternity testing and forensic identification of individuals; genetic predisposition to hereditary diseases; and diagnoses of infectious diseases such as cholera, HIV and hepatitis B and C. There are national companies that use advanced technology, including: Laboratorios Britania S.A., Organon Teknika Argentina S.A., Polychaco S.A.I.C., and Wiener Laboratorios S.A.I.C. Smaller companies with a strong emphasis on R&D are also found, such as Tecnología Genética, which is a research center that works as a support structure for third parties, and sophisticated service providers for human health analysis and diagnostics, such as Biocentífica. Finally, it is worth highlighting the activities of transnational corporations in the field of infectious diseases, although most are involved in the commercial sale of products. This sector is represented by the Argentine Chamber of Diagnostic Reagents (CAPRODI) [Cámara Argentina de Reactivos para Diagnóstico].

A significant number of biotechnology companies are represented by the Argentine Forum on Biotechnology (FAB) [Foro Argentino de Biotecnología], which is a private, nonprofit organization. Its objectives are to spread biotechnology within the county, to develop policies in the area, and to serve as tool for coordination and a liaison for developing joint strategies between the private, scientific-technological and state sectors. Its members include more than 30 entities: companies and business associations, colleges and university departments and national bodies in science and technology – including the National Institute of Agricultural Technology (INTA) [Instituto Nacional de Tecnología Agropecuaria], the Secretariat of Technology, Science and Productive Innovation (SeTCIP) [Secretaría de Tecnología, Ciencia, e Innovación Productiva], the Science and Technology Commissions of the Chambers of Deputies and Senators of the National Congress, and the Bank of the Province of Buenos Aires [Banco de la Provincia de Buenos Aires].

The agricultural sector is a vital component of the Argentinian economy. Agricultural production is 63 million tons and the export balance is 50 million tons – Argentina is the world’s fourth largest producer of food. Approximately 30% of production corresponds to the varieties genetically modified using biotechnology, which makes the country the second largest producer of these seeds. In 1999, soybean exports were 19.95 million tons, worth approximately US$ 3.600 billion, of which 90% were transgenic. In 2001, Argentina exported a total of US$ 1.374 billion in oilseeds and oleaginous fruits, representing a 36% increase over 2000. In the 2000/2001 season, more than 10 million hectares of these crops were under cultivation. The area under cultivation planted with insect-resistant transgenic corn went from 6% in 1999 to about 25% in 2000/2001, and insect-resistant cotton went from 1% in 1998 to 3.6% in 1999.

The market for seeds from Argentina involves a volume of approximately US$ 500 million, plus about US$ 110 million corresponding to hybrid seeds. The private sector consists of more than 22 companies that pursue activities of breeding, plant micropropagation, herbicide and insecticide protection and development of inoculants. The seed companies are subsidiaries of national-owned companies and multinationals. They work with corn, wheat, sunflower, cotton, potato, soy and chili. The companies in this sector include: Advanta, Bayer, Monsanto, Novartis, Zeneca, ICI Argentina and Criadero Klein. New developments have been applied to oilseed rape, strawberries and flowers. The production of oils and pellet protein soybean meal reached the figure of 13,386,000 tons and 9,922,000 tons, respectively. The export of soybean meal protein was 13 million tons in 1999, worth US$ 1.800 billion.

The entity representing seed producers and breeders is the Argentine Seed Growers Association (ASA) [Asociación de Semilleros Argentinos], which is also an institutional member of the Argentine Forum on Biotechnology (FAB) [Foro Argentino de Biotecnología]. Its objectives are to promote the activity of seed production, provide Argentinian producers with seeds of the best possible quality and contribute to maintaining the international competitiveness of Argentinian agriculture. The ASA supports the incorporation of new technologies, in order to provide transparency on the issue in official and domestic spheres, between producers and users, meet biosafety standards, and participate in the development of legal and regulatory aspects of this new activity.

Also noteworthy is the presence of companies that produce biopesticides, such as Síntesis Química, and others using plant tissue culture technologies and micropropagation of seedlings, such as Agrogenética, Garbi and Tecnoplant S.A. The inoculants producing industry has performed well, although it is affected by decreased demand and the resulting inefficiency of production plant.

Companies producing veterinary vaccines constitute an important sector4. A number of firms – domestically owned Laboratorios Paul, Instituto Rosenbusch, Sanidad Ganadera, San Jorge-Bagó and Biogénesis, and foreign-owned Bayer, Coopers, Estrella-Mérieux and Pfizer – participate in a market of US$ 75 million per year5. The sector of biological products includes sales of US$ 25 million annually. The poultry vaccine market is important: currently, there are certain innovations made by companies such as Bedson S.A. and Laboratório Delamer. Also significant is the development of high-quality antiparasitic compounds, with a market of US$ 38 million annually. This contrasts with the limited progress in the application of biological products using biotechnology for the control of diseases such as brucellosis and tuberculosis, which have been endemic for the past 30 years. Annual sales in the area of small pets reach US$ 12 million. Another area worth noting in this industry are firms that produce growth promoters, such as Biotay and Bedson S.A.

The Argentine Chamber of the Veterinary Products Industry (CAPROVE) [Cámara Argentina de la Industria de Productos Veterinarios] brings together representatives of companies producing biological and/or pharmaceutical products for veterinary use. The Chamber has 52 active members, including domestic companies and representatives of multinationals from the industry. R&D activity is concentrated in companies of national origin and use of biotechnology is reduced to a small universe of companies. CAPROVE is an active player in establishing the regulatory framework for this activity in Mercosur.

In the country, enzymes are produced for industrial use. From the perspective of biotechnology, the most important company in the sector is Milar – a joint venture between Arcor and Miles. Other companies participating in the sector include Enzur and Enzimas S.A. In the food industry, a study funded by CamBioTec6 (VACCAREZZA, 2000) identified the applications of advanced biotechnology in the sector. The data from the study showed that only 8% of companies have incorporated the above-mentioned techniques into their production process; approximately 46% used inputs which they themselves produced; and the remaining 46% have no linkage between them.

In recent years, the dynamic of creating production poles, technology parks and business incubators has resulted in a limited number of new companies in biotechnology. These include companies located in INTA’s Technology Innovation Parks and others created by undergraduate students in Biotechnology at the National University of Quilmes [Universidad Nacional de Quilmes]. The Cell Culture Laboratory of the Biochemistry and Biological Sciences School of the Universidad Nacional del Litoral incubated the technology company Zelltek SRL. Its creation is linked to the repatriation of researchers who had done their post-doctoral studies at Gesellschaft für Biotechnologische Forschung (GBF; now Helmholtz Center for Infection Research, HZI) in Germany. The company produces recombinant human erythropoietin. It has, either in development or ready for transfer, a recombinant human colony-stimulating factor for granulocytes and macrophages and interferon beta 1. At the time of this writing, it is working on an investment project to upgrade its pilot plant, increasing its production capacity and locating the plant in the Center Coast Technology Park [Parque Tecnológico del Litoral Centro], involving 34 people, mostly professionals.

In the pharmaceutical field, most of the products result from using recombinant DNA technology (rDNA). The main products are prepared by BioSidus, a leading private biotechnology company in Latin America, which sells its products to Asia, Africa, Eastern Europe, and Latin America. BioSidus produces the following recombinant products: human erythropoietin, human interferons, colony-stimulating factors and growth hormones. In 2000, the company BioSidus was the largest exporter among the laboratories in Argentina, with a value that exceeded US$ 23 million, representing approximately 60% of the country’s total sales. Some biopharmaceuticals sales data give an idea of sales in the Argentine market: (a) recombinant human interferon, US$ 15 million, distributed among the four companies commercializing it; (b) human erythropoietin, US$ 20 million; (c) colony-stimulating factors, between US$ 10 and US$ 12 million; (d) insulin, US$ 15 million; (e) human growth hormones, US$ 7 million. In the year 2000, the country exported about US$ 30 million in products for the healthcare sector obtained using recombinant DNA technology.

Vilmax S.A. is another company making contributions to the field of biotechnology, developing specific stains for protein purification.

In the area of veterinary vaccines, there is the production of a vaccine against bovine neonatal diarrhea caused by rotavirus, a product developed as the result of a joint project between CEVAN (Center for Animal Virology) and CONICET (National Council for Scientific and Technical Research). Other examples of public-private collaboration include the vaccines developed by the Virology Lab of the National Institute of Agricultural Technology (INTA) which were produced and commercialized by Biogénesis and San Jorge-Bagó labs. Biogénesis is also responsible for producing vaccines against foot-and-mouth disease (FMD).

The activity in the biotech food industry focuses on production of high-fructose corn syrup, and its intermediate product, glucose syrup. This activity is developed by five companies: Alimentaria San Luis, Arcor and Georgalos, which are domestically owned, and Industrias de Maíz and Refinerías de Maíz, which have been acquired by global food companies. The products are used by the food and beverages industry. The Lactobacillus and Bifidobacterium species are considered probiotic, contributing to the intestinal microbial ecosystem. SANCOR and La Serenísima-Danone, two leaders of the Argentine dairy industry, have modified probiotic strains and incorporated them into their products (Leche BIO from SANCOR, and Yoghur GG from La Serenísima-Danone).

Several local companies produce inoculants based on Rhizobia for nitrogen fixation in soy, alfalfa and bean crops. Síntesis Química produces an insecticide based on Bacillus thuringiensis, and Agrogenética, Garbi and Tecnoplant S.A. produce bananas, strawberries, blueberries [arándano], yerba mate and ornamental plants by micropropagation.

In the agricultural sector, Argentina has entered the GMO era with the marketing of transgenic soybean seeds (Roundup Ready), which are resistant to glyphosate. The genetically modified seeds sold in the country are: herbicide-resistant soybeans, Lepidoptera-resistant Bt corn, Lepidoptera-resistant Bt cotton, and glufosinate ammonium tolerant LL corn. The areas under cultivation for the first three crops during the 2000/2001 season were 8.55 million ha, 560,000 ha and 25,000 to 30,000 ha, respectively. The area cultivated with glufosinate ammonium tolerant corn in the 1999 season was 8,000 ha. At the Ministry of Agriculture, Livestock, Fisheries and Food (SAGPyA) [Secretaría de Agricultura, Ganadería, Pesca y Alimentación], authorization applications were pending for the commercial release of new varieties of Bt corn, glufosinate-tolerant soy and glyphosate-tolerant cotton.

Policies, incentives and financing

The financing of research, development and innovation is handled mostly by the National Agency for the Promotion of Science and Technology (ANPCyT) [Agencia Nacional de Promoción Científica y Tecnológica]. Its resources come from contributions from the national budget and loans from the Inter-American Development Bank (IDB). It operates through the Fund for Scientific and Technological Research (FONCyT) [Fondo para la Investigación Científica y Tecnológica] and the Argentine Technological Fund (FONTAR) [Fondo Tecnológico Argentino]. FONCyT supports the generation of new knowledge in basic and applied topics at public, nonprofit institutions. Between 1998 and 2000, it funded 44 biotechnology projects with a total value of US$ 46,468,581.

FONTAR supports projects to improve private sector productivity, through innovation and the development of new alternative technologies. It uses the following instruments: technological development, with contingent reimbursement, tax credits and subsidies; technological modernization, with obligatory reimbursement and tax credits; technology services and training and technical assistance with subsidies; and is supported by the application of Law No. 23,877 for the Promotion and Development of Technological Innovation.

Since its inception7, 12 companies have received financial reimbursements for US$ 5,011,021 for biotechnology projects, out of a total of US$ 6,432,932. In 2000, FONTAR began carrying out the Technology Innovation Program of the IDB/SeTCIP (Secretariat of Technology, Science and Productive Innovation). This program introduces new instruments to finance technological innovation activities, such as non-returnable contributions (ANR) [Aportes No Retornables], which subsidize up to 50% of the cost of innovation projects conducted by companies.

With regard to the private sector, the University of San Andrés estimates that 160 innovative technology-based companies have been created recently. The main catalyst has been the presence of international funds, their alliances with local capital and the emergence of a small group of “angel” investors. It is estimated that in 1999, approximately US$ 120 million was invested in venture capital projects. That same year, the Endeavor Foundation in the US evaluated 116 companies. There are also private funds specializing in the environment, such as Terra Capital, with a fund of US$ 25 million, for projects with positive impact on biodiversity and environmental conservation.

The Inter-American Development Bank (IDB) signed an agreement with Banco Credicoop Cooperativo Limitado, committing an investment of US$ 20 million to establish a Venture Capital Fund for to capitalize small businesses. The Multilateral Investment Fund (MIF) of the IDB will contribute US$ 6 million, Banco Credicoop will contribute a similar amount, and US$ 8 million will be obtained from national and international investors. The program includes training in managing venture capital and disseminating experience among administrators of financial institutions.

The government is supporting the development of private markets for venture capital, by passing a National Technology Venture Capital System law, which is being drafted in the National Parliament. The law allows the Executive branch to create promotional tools: direct contributions from the Treasury for the incorporation of venture capital companies and funds; tax incentives for companies, funds or venture capital investors; and special incentives for creating technology-based companies. Firms may be listed on the stock markets and exchanges.

Promoting and encouraging the development of biotechnology in Argentina has historically been the responsibility of the Department of Science and Technology [Secretaría de Ciencia y Tecnología], which has participated in this field since 1983, using various instruments: the National Biotechnology Program, the National Priority Program for Biotechnology and the Biotechnology Program of the Multi-Year National Science and Technology Plan (PNPCyT) [Plan Nacional Plurianual de Ciencia y Tecnología].

The PNPCyT adopted an approach focused on promoting and developing industrial biotechnology, encouraging the development of skills and the consolidation of a regulatory framework to enable innovation processes. The plan’s priorities were established based on recommendations from an exercise conducted by the Argentine Focal Point of CamBioTec. Its elaboration and subsequent implementation included active participation by leading scientists and technologists and major business entities involved in the field of biotechnology: the Argentine Forum on Biotechnology (FAB) [Foro Argentino de Biotecnología], the Argentine Chamber of the Veterinary Products Industry (CAPROVE) [Cámara Argentina de la Industria de Productos Veterinarios] and the Argentine Chamber of Process Industries (CIPRA) [Cámara de Industrias de Procesos de la República Argentina].

The authorities who took over in 1999 deactivated the PNPCyT and with it, its Biotechnology Program, although some activities and priorities continue to be used, in an inefficient manner. In 2001, the organization of a Biotechnology Commission under the National Outlook Observation Committee [Observatorio Nacional de Prospectiva], created by an agreement between the United Nations Industrial Development Organization (UNIDO) and the Secretariat of Technology, Science and Productive Innovation (SeTCIP) [Secretaría de Tecnología, Ciencia, e Innovación Productiva], failed to implement a project focusing on biotechnology in the food industry.

In the area of biotechnology in the agricultural sector, the National Institute of Agricultural Technology (INTA) [Instituto Nacional de Tecnología Agropecuaria] has had, since 1994, a National Advanced Biotechnology Program (PNBA). Its priority issues have been: plant protection, animal health and plant and animal breeding, with a strong focus on technological research. In February 2001, INTA adopted a programmatic prioritization and organization of the PNBA’s activities in order to develop basic knowledge considered to be a strategic resource for biotechnology development. The new research priorities are genomics and proteomics research, and bioinformatics as a support tool.

Finally, mention should be made of the work carried out by the production poles, technology parks and incubators created by public institutions and universities, to support the creation of new businesses. Recent research indicates that there are nine incubators with a total of 97 companies incubated and 83 in pre-incubation8. The most important are: the Coast Technology Park [Parque Tecnológico de Litoral], driven by the Santa Fe Regional Research & Development Center (CERIDE-CONICET) [Centro Regional de Investigación y Desarrollo de Santa Fe], INTA’s Network of Innovation Parks [Red de Parques de Innovación], and the Constituents Technology Pole (PTC) [Polo Tecnológico Constituyentes], which brings together various national technology organizations. Within these organizations, several biotechnology companies are being developed.

Research infrastructure and human resources

There are more than 60 research centers, institutes and groups in the country affiliated with universities and national institutes, which perform R&D in biotechnology. There are also various organizations which have developed a consistent supply in the area of technology, and more than 30 national centers, institutes and laboratories developing activities partnering with and providing services to the productive sector.

In the field of plant biotechnology, there are several relevant groups, such as INTA’s Biotechnology Institute [Instituto de Biotecnología], the Research Institute for Genetic Engineering and Molecular Biology (INGEBI-CONICET) [Instituto de Investigaciones en Ingeniería Genética y Biología Molecular] and the Center for Studies in Photosynthesis and Biochemistry (CEFOBI-CONICET) [Centro de Estudos Fotosintéticos y Bioquímicos], which have developed transgenic plants, some of which are in the stage of field trials. There are also prominent groups at the Agriculture School of the University of Buenos Aires and at the National Universities of Córdoba, La Plata, Mendoza, Nordeste and Rosario.

INTA’s Biotechnology Institute brings together a critical mass capable of developing different lines of research. It is divided into two main areas: plant biotechnology and animal biotechnology. The animal area is oriented towards developing diagnostic reagents, next-generation vaccines and molecular studies of veterinary pathogens for birds and mammals. The plant area is dedicated to projects in molecular plant pathology, genetic engineering of plants, genomic analysis, gene prospecting and developing and delivering molecular identification services.

INGEBI has a skill set giving it a multidisciplinary nature, with the critical mass to implement new technologies like genetic engineering and molecular biology, including groups related to plant biotechnology. The Institute develops agreements with local industry. CEFOBI conducts basic and applied research in plant biochemistry and molecular biology. Its priorities are: Fusarium-resistant transgenic wheat, insect-resistant transgenic cotton, and obtaining transgenic corn with resistance to the Fall Army Worm (Spodoptera frugiperda). The Northeast Botanical Institute (IBONE-CONICET) [Instituto de Botánica del Nordeste] has the country’s most important group doing tissue culture and micropropagation of woody plants, fruit trees, alfalfa, etc.

In the field of animal health, the most important groups are located at CEVAN and the Biotechnology Research Institute (IIB) [Instituto de Investigaciones Biotecnológicas] of the National University of San Martín. CEVAN, with strong capabilities in molecular virology of foot-and-mouth disease virus and rotavirus, is currently working on viral diseases impacting production. The IIB is oriented towards production of diagnostic methods and recombinant vaccines. Recently, the IIB joined the Technological Institute of Chascomús (INTECH) [Instituto Tecnológico de Chascomús], to develop recombinant proteins for application in pharmaceutical, human and veterinary medicine, and vaccine antigens, classical and recombinant vaccines. Several of these developments have been conducted in collaboration with CEVAN.

In the field of human health, there is the Institute of Experimental Biology and Medicine (IBYME-CONICET) [Instituto de Biología y Medicina Experimental], which does research in physiology, biochemistry and molecular biology. The Institute has capabilities in the areas of human and animal health, and provides advice to the productive sector in selecting and adapting technology and transferring research results. In the same field, several other institutions of excellence are worthy of note: the National Academy of Medicine [Academia Nacional de Medicina], the Institute of Biochemistry and Biophysics (IQUIFIB) [Instituto de Química y Fisicoquímica Biológicas] and various groups in the Schools of Medicine and of Pharmacy and Biochemistry at the University of Buenos Aires.

The Biochemistry Research Institute – Campomar Foundation (IIB-FC) [Instituto de Investigaciones Bioquímicas – Fundación Campomar] performs research in the fields of Biochemistry and Molecular Biology on topics such as reagents for cancer diagnosis, identification of markers specific to cystic fibrosis, and studying and developing methods to overcome problems caused by the fly Haematobia irritans irritans in cattle. The IIB-FC, the Eva Perón and Clínicas hospitals, the Ángel Roffo Oncology Institute and the School of Veterinary Science at the University of La Plata are researching the development of a genetic vaccine which would make it possible for patients to produce their own T cells to defend against different types of cancer.

The Microbiology Industrial Process Pilot Plant (PROIMI) [Planta Piloto de Procesos Industriales Microbiológicos] is dedicated to research and development of processes related to biotechnology, especially in the areas of fermentation and the use of microorganisms of industrial interest. Microorganisms are used in a wide variety of processes such as: production of alcohol, organic acids, solvents, amino acids, vitamins, hormones, cheeses, pickles, canned goods, secondary oil recovery, nitrogen fixation, wastewater treatment, biogas production, etc.

Finally, it should be noted that in the food field, there are 51 groups that perform R&D. Only 25 have satisfactory critical mass, 34 have an infrastructure in conformance with their activity, 14 have a pilot plant and 30 have equipment suitable to their activity.

There are no updated statistics on biotechnology researchers in the country. In the research centers, institutes and groups affiliated with universities and national institutes, and at companies which have biotechnology R&D departments, there are more than 300 researchers involved in biotechnology, covering a wide range of disciplines and specialties9.

INTA’s Biotechnology Institute has 56 professionals specializing in different fields, and centers belonging to the institution and to agencies promoting science and technology. The staff of INGEBI is composed of 20 researchers, most of them belonging to the research staff of CONICET and professors from the University of Buenos Aires. IQUIFIB has 27 researchers from CONICET and research fellows from 42 different institutions. The staff of IIB-INTECH is composed of 25 researchers, plus 45 research fellows from CONICET and other national and international institutions. IBYME has 36 researchers from CONICET and 39 research fellows. The Campomar Foundation has 33 researchers and 40 graduate students. CEFOBI has 5 researchers from CONICET, 8 university researchers and 8 research fellows. CEVAN has 7 researchers from CONICET, 7 university researchers and 3 research fellows.

In this sector, the activity of training of human resources is important, developed through grant systems from CONICET and, more specifically, from courses for academics and companies promoted by the Argentine-Brazilian School of Biotechnology (EABBIO). From 1986 to 2000, EABBIO funded courses attended by just over 2,000 students from Argentina, Brazil, Uruguay and Paraguay.

Public perception

In the year 2000, biotechnology-related issues started to become part of the country’s political and social agenda. This fact has highlighted some limitations of the activity, which affect its ability to develop and shape a working agenda for the public bodies responsible for updating and improving regulations. The authorities have therefore been working on creating an adequate framework for adopting governmental decisions that determine access to markets, but have been neglecting consumer-related issues.

According to a survey of entrepreneurs in the food sector (VACCAREZZA, 2000), the incorporation of advanced biotechnology would provide benefits for production, which suggests that these techniques will eventually be imposed. A greater impact of biotechnology is being observed on the environment than on human health. There is significant caution about the effects of transgenic crops on international trade and about the competitiveness of Argentine exports, in addition to questions about the processes of monopolization and technological dependence that the imposition of advanced biotechnology techniques could cause in the industry.

The Argentine Seed Growers Association (ASA) [Asociación de Semilleros Argentinos] has taken a clear position on genetically modified crops and genetically modified food labelling, stating: “The transfer of genes through recombinant DNA techniques is the most predictable construction and therefore potentially is the safest of all methods of plant breeding.” The ASA conducts a program called “Why Biotechnology” [“Por qué Biotecnología”], directed to the education sector and the public in general, via a web portal10.

Argentina recently acceded to the Cartagena Protocol on Biosafety, which regulates the exchange of genetically modified organisms, in particular seeds and other products associated with the environment, and unprocessed agricultural products meant for human food and animal feed. The Protocol states that countries can make decisions using the “precautionary principle,” based on scientific studies. The Miami Group, in which Argentina is a participant, argues that respect for the biosafety of the environment should not be used to establish barriers to trade. The group seeks to exclude from the Protocol processed food products and products derived from genetically modified organisms, and to restrict the application of the treaty to GMOs intended only for intentional release in the importing country. The country officially rejects labelling, characterizing it as a tax measure.

The Convention on Biological Diversity is the national law in Argentina, but has not been regulated to date. Thus, there are currently no regulations governing access to biodiversity. Due to the lack national legislation, research institutes, such as INTA, are governed by international agreements such as the Code of Conduct for Access to Genetic Resources, of the United Nations Food and Agriculture Organization (FAO). At the moment, regulations for access are under discussion.

The national debate on genetically modified organisms intensified in the year 2000, starting with a campaign launched by Greenpeace, which denounced the supposed hazards of use of GMOs and demanded a moratorium on the commercial distribution of transgenic crops. Pressured by the debate, the private sector set up the Biotechnology Group, composed of the Argentine No Till Farmers Association (AAPRESID) [Asociación Argentina de Productores en Siembra Directa], the Coordinator for Food and Beverage Industries (COPAL) [Coordinadora de las Industrias de Productos Alimenticios], the Grain Exchanges of Buenos Aires and Rosario, the Association of Agricultural Technology Chambers (ACTA), the Argentine Forum on Biotechnology (FAB) [Foro Argentino de Biotecnología] and thirteen other entities from the field of biotechnology in the agricultural sector. The Group called for a state policy to support the development of biotechnology and rejected mandatory labelling for foods derived from genetically modified organisms.

Strengths, weaknesses and prospects

Biotechnology has quality human resources in various areas. Although some areas do not have a sufficient number of researchers, resources are available such as the following: mastery of information and laboratory-scale techniques, important international contacts, in many cases with joint research projects, and equipment that is up-to-date but not sufficient in terms of quantity. Research results are seldom translated into products or services.

In terms of basic sciences, the greatest needs are observed in certain strategic disciplines such as molecular genetics and bacterial physiology. Technological developments and pilot or production plants are few and far between, and few efforts have been made in training professionals in biochemical engineering, large-scale cell cultures and downstream processing. Applied research and technological development are not sufficiently promoted, and there are not sufficient criteria and procedures recognized and accepted in the academic and institutional spheres for assessing the activity’s relevance and impact.

The main constraints to industrial development of biotechnology stem from the lack of private investment, a situation which researchers attribute to the lack of a strong tradition of global and industry investment on the part of entrepreneurs. These low levels of investment could be remedied through measures which initially facilitate private sector investment. In developing countries, this function cannot be delegated by the State. The presence of institutes and companies in the development and promotion programs shows a relatively large range of capabilities available, although they are not organized into a portfolio of projects capable of motivating the interest of potential investors from the capital markets.

Argentina is one of the countries of Latin America which has more quickly used and developed new biotechnology products, in particular certain recombinant proteins for therapeutic application, as well as plant varieties resistant to herbicides and insects, and has thus achieved a significant increase in international competitiveness. The potential for these developments may in the near future reduce the resistance of local consumers and international markets. Clearly, a country where the agrifood sector is a pillar of the economy must attribute the appropriate value to these types of scientific development11. The successful introduction of genetically modified crops will encourage innovative behavior in other agribusiness sectors, promoting R&D, the use of modern technologies and the strengthening of inventive activity. Agricultural biotechnology is still a growing area: Argentina is receiving licenses for technology transfer from foreign companies and is competing, in world markets, with exporting countries that also have transgenic varieties.

Chapter 3
Biotechnology in Paraguay

The biotechnology industry and its products12

The most important center for the production of plant varieties micropropagated in vitro is the National Agronomical Institute (IAN) [Instituto Agronómico Nacional] that reports to the Directorate of Agricultural Research (DIA) [Dirección de Investigación Agrícola] of the Ministry of Agriculture and Livestock (MAG) [Ministerio de Agricultura y Ganadería]. The production uses equipment donated through international cooperation and has infrastructure, contributed by MAG, for the production of plantlets of species of agricultural interest. Investment in equipment, buildings and conservatories reached the figure of US$ 650,000.

The rapid multiplication of seedlings of fruit and vegetables and other species, free from diseases that were present in the parent plants, has become a reality in Paraguay, through the use of the technique of plant tissue culture. Using this technique, the IAN increased productivity by 30% to 75% in commercial crops of strawberries, bananas, pineapples, citrus and sugarcane.

The targets set for producing high quality seedlings for 2000 (parent and foundation grade) include producing seedlings for the following crops: one pineapple variety, two banana varieties, seven strawberry varieties, two sugarcane varieties, one orchid variety, and one potato variety.

These species are distributed to associated farmers in various departments of the country through joint work with state and extension agencies and/or NGOs dedicated to private technical service. The seedlings produced in the biotechnology laboratory are parent, foundation and certified grades, providing the basic material for multiplication in nurseries of seeds of other categories, allowing high quality production intended for planting. In addition, production of seedlings of roses, chrysanthemums and virus-free citrus buds is fully underway.

Experiments to adjust the methods of in vitro propagation and conservation of cassava (Manihot esculenta), papaya (Carica papaya), peach (Prunus sp.) and Stevia rebaudiana are also underway.

Research infrastructure and human resources (ALVAREZ, 2000)

Nationally, Paraguay does not have a program that coordinates activities related to agricultural biotechnology. The country has only four laboratories associated with agricultural biotechnology activities: two belong to the National University of Asunción (UNA) [Unidversidad Nacional de Asunción] and two belong to the Directorate of Agricultural Research (DIA) of the Ministry of Agriculture and Livestock (MAG).

The laboratory of the Faculty of Agricultural Sciences (FCA) of UNA and the National Agronomical Institute (IAN) of DIA/MAG basically work with tissue culture and micropropagation of plants. The laboratory of the Directorate of Postgraduate Research and International Relations (DIPRI) [Dirección de Investigación de Posgrado y Relaciones Internacionales] of UNA and the lab of the Regional Center for Agricultural Research of DIA/MAG work in the area of molecular biology. Its main activities are:

  1. Directorate of Postgraduate Research and International Relations (DIPRI/UNA), in San Lorenzo: molecular marker techniques in genetic analysis of Rhizobium japonicum strains.
  2. Regional Center for Agricultural Research (CRIA/DIA/MAG), in Capitán Miranda: genetic improvement assisted by molecular markers, for selection of genetic materials resistant to soybean cyst nematode (Heterodera glycines). Molecular characterization (fingerprinting) of soybean varieties.
  3. Faculty of Agricultural Sciences (FCA/UNA), in San Lorenzo: micropropagation of plants – citrus, orchids – and diagnosis of pathogens.
  4. National Agronomical Institute (IAN/DIA/MAG): micropropagation of strawberries, bananas, pineapples, orchids, roses, sugarcane, citrus, chrysanthemum, cassava, Stevia rebaudiana, potatoes, ferns, African violet, diagnosis of pathogens and in vitro conservation of germplasm.

DIA was created in 1984 with support from the Agency for International Development (AID) of the United States. The first biotechnology laboratory in Paraguay was created at IAN in Caacupé, Cordillera, with the following objectives:

The IAN has four university researchers specialized in the area of tissue culture. It basically works with micropropagation of fruit, ornamental and agricultural species. In the area of molecular biology, it has had access to training making it possible to work in this area, specifically with molecular markers applied to plant breeding.

Policies, incentives and financing

IAN began operating in 1985, with technical and financial support from the International Cooperation Agency of Japan (JICA), until 1987. In 1988, the Laboratory received support from the International Atomic Energy Agency (IAEA), on a plant breeding project. Since then, the Laboratory has worked with financial support from Paraguay’s MAG.

In 1995, IAN received a grant from the International Agency for Technical Cooperation of the Republic of Korea (KOICA) for equipment and training of national experts. It also receives support from the government of Taiwan, for equipment, reagents, glassware and materials for the construction of a greenhouse.

The International Potato Center (CIP), the International Center for Tropical Agriculture (CIAT) and the Tropical Agriculture Research and Education Center (CATIE) have contributed technical assistance in the area of biotechnology, providing experts and/or training of national technicians at these institutions.

Since 1993, within the framework of the Biotechnology Subprogram of the Cooperative Program for the Development of Agricultural Technology in the Southern Cone (PROCISUR), [Programa Cooperativo para el Desarrollo Tecnológico Agropecuario del Cono Sur],13 the laboratory has participated in conferences, seminars, and in-service training courses, thus increasing the critical capacity of national experts. The PROCISUR Project called Development of Regional Capacity to Produce High Quality Plant Health Genetics contributed to optimizing existing installed capacity and also training technicians assigned to the project.

In 1997, General Science and Technology Law No. 1,028 was enacted, (PARAGUAY, 1996), which created the National Council of Science and Technology (CONACYT) [Consejo Nacional de Ciencia y Tecnología]. The Law created the National Fund for Science and Technology (FONACYT) [Fondo Nacional de Ciencia y Tecnología] as a financing instrument, and granted CONACYT the power to manage its resources. The Law provides incentives for financial companies to shift financial resources to the Fund, deductible from income tax, and establishes tax exceptions for importing equipment for scientific and technological research.

The Proposal for a National Policy on Science and Technology, prepared by CONACYT in October 2001, contains a chapter on biotechnology (PARAGUAY, 2001). It suggests further development of research in priority areas, including plant and animal breeding, and proposes the adoption and development of science and technology – in the areas of molecular biology, cellular and genetic engineering – to strengthen the capacity of generating products and processes, increasing the country’s competitiveness in international markets while conserving and enhancing genetic resources, bioavailability of nutrients and bioinformatics. It also proposes developing and strengthening a system for assessing risks and opportunities in the application of new techniques of biotechnology processes and products.

Public perception

Paraguay has been declared free of genetically modified production, and seeks to occupy a niche in the of GMO-free soybean market. The country is working on a certification system for non-GMO soybeans. A new goal is for this country to be included in the list of countries free of transgenic products for consumption, including imported food. The proposal is from Paraguay’s Rural Network of Private Organizations for Development [Red Rural de Organizaciones Privadas de Desarrollo] and Network of Environmental Organizations [Red de Organizaciones Ambientalistas].

This issue is open to debate and there are conflicting positions between the different social sectors. The Inter-American Agriculture and Democracy Network rejects the introduction of GMOs in agriculture, while agricultural producers want to rely on these productive resources. In a recent seminar14, the representative from Paraguay, Luís Cubillas Ramos, complained: “I suspect that we are doomed to technological backwardness,” as he made an extensive presentation of the situation in his country, and drew attention to trials being performed with about a dozen varieties of soybeans, with the expectation of commercial sale starting in 2002.

Strengths, weaknesses and prospects

Paraguay’s Soybean Producers Association (APS)15 called for a parliamentary debate on the planting of oleaginous seeds of transgenic origin for commercial purposes. Currently, there is a decree that prohibits the domestic commercial planting of genetically modified products. Producers, however, argue that the prohibition by the Ministry of Agriculture and Livestock lacks technical and scientific foundations and are demanding an open debate on the subject to enable them to compete with producers of soybeans in the First World, such as Canada, the US and Europe. The petition from the guild of soy producers in Paraguay, signed by Olaf von Brandenstein, vice president of the organization, emphasizes that “the ban on growing genetically modified soy lacks all scientific and technical grounds, since it has been clearly demonstrated worldwide and by different scientific sectors, that transgenic soy has no negative consequence.”

Chapter 4
Biotechnology in Uruguay

The biotechnology industry and its products

The biotechnology industry in Uruguay started to be developed in the 1980s, driven by a public sector program. Its impetus came from the convergence of a core of basic scientists at the Clemente Estable Institute of Biological Research (IIBCE) [Instituto de Investigaciónes Biológicas Clemente Estable], various schools of the University of the Republic (UR) [Universidad de la República] and several private entrepreneurs. A National Biotechnology Committee composed of public and private representatives was created, and the Uruguayan Association of Biotechnology Companies (AUDEBIO) [Asociación Uruguaya de Empresas de Biotecnología] was established. In the 1990s, the Committee was dissolved and equipment was scattered, thus losing a good opportunity for developing a cutting-edge biotechnology, with the ability to maintain control over innovation. AUDEBIO continued to function, but was unable to have an impact on government decisions. Currently, a relaunch of the organization is being planned, encouraged by the favorable climate for biotechnology noted in Uruguay.

The main private companies that carry out activities related to biotechnology are: Laboratorios Lage S.A.; Enzur and Calister in the area of inoculants; Laboratorio Santa Elena in the area of vaccines; Semillera Santa Rosa in the area of micropropagated plant varieties; Paso Alto S.A., Otegui Hnos. S.A., Forestal Oriental, Fundo Forestal and Biosur Ltda. in micropropagation of forest species; and Laboratorios Castellanos and Genia S.A. in the field of human health. The wine industry is also undergoing a process of modernization, with the incorporation of micropropagated varieties and selection of yeasts and ferments, with the greatest exponent being the company Vinos Finos Juan Carrau S.A.

Laboratorios Lage S.A. develops research with microorganisms promoting root growth in cereal grasses (wheat, barley, corn, etc.), incorporation of microorganisms (ectomycorrhizae) into pine and eucalyptus trees, and incorporation of inoculants (lactic acid bacteria) into cereal silage. The company’s production is oriented to the world market, due to the low adoption rate of innovations by Uruguayan agribusiness. Laboratorios Lage S.A. has no connection to R&D institutions in the public sector, and also has not received support from public programs for promotion and development. Other companies in this field, such as Enzur, are prominent in the production of enzymes while also developing a line of inoculants. This same type of activity is conducted by Calister, although with lower production volume.

In the field of human health, Laboratorio Genia16 is dedicated to genomic diagnostic services for viral infectious agents, inherited diseases and DNA paternity testing. They have a branch in Porto Alegre which primarily performs paternity studies. The company operates adopts well-known technologies and works exclusively as a provider of services. It also has a series of projects for developing and producing diagnostic kits17. In the company’s area of coverage, other private offerings are developed by the molecular biology laboratory of the Asociación Española de Socorros Mutuos, and Laboratorio Martínez Prado. Laboratorio Castellanos is also prominent in the field of human health, developing research on the production of reagents for syphilis, latex based reagents for the diagnosis of pregnancy, blood proteins, c-reactive factor and toxoplasmosis, as well as reagent for diagnosis of Chagas disease. The diagnostic services companies develop almost exclusively in the local market. The only exception is Genia S.A.

Laboratorio Santa Elena conducts activities in the field of biotechnology applied to animal health. This company was the protagonist of one of the biggest frustrations in biotechnology in the country. In 1987, Santa Elena got an IDB loan of US$ 2 million for the development of the laboratory, the purchase of new equipment and the construction of 1,000 m² of production area, which was to have the latest equipment for vaccine production. Uruguay was declared a country free of foot-and-mouth disease (FMD) with vaccination in 1993, when problems began to emerge for the production of vaccines since the law prohibits the manipulation of the virus by virtue of having been declared “free of foot-and-mouth disease.” For this reason, the company stopped producing vaccines and their P3 laboratory was deactivated in response to strong opposition expressed by the academic community in the country.

Currently, Laboratorio Santa Elena is overcoming these difficulties, thanks to changes, in the public sector, in laws which had negative repercussions on the development of production of biological materials18. Two lines of work are being followed: the production of biological materials and the manufacture of injectable drugs. The company exports serums and vaccines to several Latin American markets and develops an important line of manufacturing for third parties, with a volume exceeding 30% of revenues. Laboratorio Santa Elena has some projects of great interest, linked to public sector R&D, but also develops a vaccine for a virus that affects domestic animals, in collaboration with the Sciences School at the University of the Republic (UR), and develops, with the National Institute of Agricultural Research (INIA) [Instituto Nacional de Investigación Agropecuaria], a recombinant vaccine against foot-and-mouth disease (FMD). R&D activities occupy between 10% and 20% of the staff’s working time and over 30% of the directors’ time.

Semillera Santa Rosa develops and commercializes technologies and services in the field of micropropagation of plant varieties, especially pears, which are exported to several European countries. Laboratorio SESAR, from the Horticultural Research Center of Semillera, is dedicated to tissue culture, somaclonal variation and induced mutagenesis. Its main line of research is cereal grains, but it is also dedicated to other crops such as strawberries and legumes. The company’s main activity in the local environment is the use of scientific and technological resources for the production of post-grafts for growers participating in the Farm Reconversion Program [Programa de Reconversión de la Granja]19. The company has collaborative projects for aromatic herbs with the School of Chemistry at the University of the Republic (UR), and for flavoring, sanitation and cloning of wine strains, with the Turin Plant Virology Center [Centro de Fitovirología de Turín]20. In this sector of activity, there are companies that work with potatoes – family businesses such as Ponce and Fernández – and successful innovations in forestry are starting to be produced, where large companies have developed their own research laboratories.

There are also productive opportunities in bioengeineering, mainly involving research carried out with contributions from engineering and medicine, which have made it possible to equip intensive treatment centers, set up as prototypes and tested in hospitals. However, productive and commercial output are lacking. The Agricultural Research Institute [Instituto de Investigaciones Agrícolas] has proposed packages to promote biotechnology sales. The National Institute of Agricultural Research (INIA) [Instituto Nacional de Investigación Agropecuaria] also produces technological packages for specific needs. Vinos Finos Juan Carrau S.A. conducts research on the isolation of strains which help in fermentation. It has a joint program with the company Santa Rosa S.A. for the micropropagation of wine strains.

The main products of biotechnology companies in Uruguay are intended for the international market. Semillera Santa Rosa does research in collaboration with foreign public and private entities and exports all of the technology and services from its micropropagation laboratory, mainly to Italy and other European countries. Its main products are fruits (especially pears) and legumes. In the domestic market, it produces post-grafts for pears, apples, peaches and nectarines, contributing 800,000 larger plantlets and 1,500,000 smaller plantlets, all channeled to the Farm Reconversion Program.

In the field of plant production, Lage S.A. produces and commercializes a high quality inoculant which is considered world-class. The use of this product has not achieved acceptance in the Uruguayan market, so the company is using only 25% of installed capacity. Lage and other companies are exporting to Brazil, with a total amount of US$ 300,00021. Other products from this company, such as inoculants based on azospirillum for the production of cereal grains, have not been embraced by the local market, encouraging their export to Italy, where it is combined it with other products before the final product is exported to Cuba and Mexico. Plantlet substrates with trichoderma fungi are in the experimental stage. Approximately 85% of the company’s production is for export, in small volumes to the markets of Argentina, Paraguay and Bolivia.

Santa Elena produces a significant number of products, including: 2 million vaccines against brucellosis, 2 million doses of tuberculin, 1 million doses of vaccine against leptospirosis and 4 million against botulism. It produces and exports bovine sera free of foot-and-mouth disease (FMD) for vaccine laboratories in Brazil and Argentinian and oil-based vaccine adjuvants. The vaccines are intended mainly for the markets of Brazil, Colombia, Venezuela and Ecuador, with different strategies and forms of association22. They also produce vaccines and other value-added products with for international laboratories, which sell them to African and Asian countries.

The country has authorized commercial cultivation of transgenic RR soybeans, resistant to the herbicide Roundup, although soybean cultivation occupies a small area and is geographically concentrated in sectors along the border between Argentina and Uruguay. Between 80% and 90% of the cultivated area is occupied by RR soybeans. A study and evaluation are underway for a transgenic corn variety that contains a protein produced by Bacillus thuringiensis which is toxic to crop pests.

Policies, incentives and financing

The National Council on Innovation, Science and Technology (CONICYT) [Consejo Nacional de Innovación, Ciencia y Tecnología] developed the CONICYT/IDB Scientific-Technological Development Program, which allocated US$ 50 million to fund nearly 200 research projects at public and private institutions, 167 of them academic and 25 of them within the Financing for Technological Innovation subprogram (FINTEC) [Financiamiento para la Innovación Tecnológica] – to support the productive sector – the latter with the amount of approximately US$ 17 million. More than US$ 4 million has been invested in training human resources, financing institutional training programs, which include doctoral, post-doctoral, and master’s studies at local and international institutions, and invitations to foreign teachers.

For the preceding components, priority areas were defined, including biotechnology. Regarding the infrastructure works, the program financed the construction of the School of Sciences building and its scientific equipment, and the remodeling and expansion of the Clemente Estable Institute of Biological Research (IIBCE) [Instituto de Investigaciónes Biológicas Clemente Estable], with a total investment of US$ 15 million. Currently, 25 technological innovation projects are being developed, totaling more than US$ 2 million. Among these projects, 4 correspond to biotechnology initiatives, in the amount of US$ 329,450. The IIBCE is carrying out a total of 15 projects with total value of US$ 1,112,000.

The country is applying the Technological Development Program II (PDT-II), funded by a technology loan from the Inter-American Development Bank (IDB). Its goal is to mobilize the innovation potential of the country to strengthen its competitiveness in production, especially small and medium sized businesses (PyMEs). The total program amount is US$ 41.7 million, divided into three subprograms: Support for Innovation and Improved Business Competitiveness (US$ 25.7 million); Scientific and Technological Development (US$ 12 million) and Institutional Strengthening (US$ 4 million). The Innovation Subprogram finances the following business technology innovation projects: Business Partnerships, Participation of Experts in Business, Technology Consultancy, Promotion of Management Units and Technology Transfer, and Promotion of Business Incubators. Of the funds, 62% goes towards supporting small and medium sized businesses (PyMEs).

In Uruguay, there is a venture capital fund for technology-based companies. Other projects may be channeled through the National Corporation for Development (CND) [Corporación Nacional para el Desarrollo], which finances, using public funds, venture projects of established companies23. Some investors are negotiating with MIF authorities at the IDB, to create the first venture capital fund for technology-based companies oriented towards business incubator projects. However, cases have been recorded where technology-based companies have been financed by angel investors. These are small initiatives, aimed at the creation of providers of services to larger companies. In October 2000, the Endeavor foundation held a meeting with potential investors, and the Milenium 21 organization held its first event – First Tuesday Montevideo – which was attended by approximately 600 people. The purpose of these informal meetings was to create a professional work environment, to stimulate industry growth.

In 1986, the National Biotechnology Committee was created, composed of the following institutions: the Ministries of Education and Culture, of Foreign Affairs, of Public Health, and of Livestock, Agriculture and Fisheries; the University of the Republic (UR); the Clemente Estable Institute of Biological Research (IIBCE), the National Council on Innovation, Science and Technology (CONICYT) [Consejo Nacional de Innovación, Ciencia y Tecnología] and private companies. In 1987, the government passed a Law for the Promotion of Research and Development Activities in Business, with emphasis on biotechnology. However, these initiatives have expired and have not been replaced by new national policies.

The incentive system for science, technology and innovation is historically based on a “spontaneous model,” lacking institutional coordination mechanisms or explicit policies. The Directorate of Science and Technology (DCT) [Dirección de Ciencia y Tecnología] of the Ministry of Education and Culture (MEC) [Ministerio de Educación y Cultura] has operated on the basis of ad hoc science & technology (S&T) policy formulation, to further strengthen the ability to generate scientific-technological innovations and boost capacity utilization in solving national problems, especially those related to the productive sectors. The CONICYT/IDB Project and its later editions determined that, in practice, this organization should become a tacit conduit of S&T policy and the main source for promoting S&T. Recently, the creation of the National Outlook Observation Committee [Observatorio Nacional de Prospectiva] created a new space for elaborating public policies on science and technology (S&T). This Committee has selected three initial fields of interest for the country: energy, transportation and biotechnology24.

In the agricultural field, the Fund for the Promotion of Agricultural Technology (FTPA) [Fondo de Promoción de Tecnología Agropecuaria] was established by Article 18 of Law No. 16,065. It is meant to finance technological research projects relating to the agricultural sector, carried out by other institutions or persons outside the Institute, primarily in response to issues raised by the National Programs of the National Institute of Agricultural Research (INIA) [Instituto Nacional de Investigación Agropecuaria] and satisfying the needs to complement their own plans. This fund comprises 10% of the budget resources of INIA, voluntary contributions made by producers or by other institutions and overseas funds. In this same context, there is the Farm Reconversion Program [Programa de Reconversión de la Granja], which has had a good impact on the development of biotechnology applied to the fruit and vegetables sector.

Research infrastructure and human resources

The main centers of research in the area of biological sciences are certain schools at the University of the Republic (UR), and the Clemente Estable Institute of Biological Research (IIBCE) [Instituto de Investigaciónes Biológicas Clemente Estable]. In recent years, biotechnology has been developed in agriculture, through micropropagation techniques, improved strains for inoculants and use of genetic markers for selection of plant varieties by polymerase chain reaction (PCR) and restriction fragment length polymorphism (RFLP) (e.g., citrus).

The Chemical Engineering Institute of the School of Engineering at UR conducts research on organic manures. It has developed a formulation consisting of insecticides, hormones, and mineral fixers produced by fermentation of solid substrates. It also works with mycoherbicides made with fermented fungi on solid substrates and with rennin, a fungal enzyme for the production of cheese.

The Plant Biotechnology Laboratory of the School of Agronomy at UR conducts research on embryogenesis of citrus and eucalyptus trees, and on the development and application of biotechnology for genetic improvement of barley for beer production. Their primary biological techniques are electrophoresis and tissue culture. In collaboration with the Plant Protection Directorate [Dirección de Sanidad Vegetal] of the Ministry of Livestock, Agriculture and Fisheries (MGAP) [Ministerio de Ganadería, Agricultura y Pesca], they have developed a kit for serological diagnosis of diseases caused by viruses in citrus and have scheduled production of virus-free citrus buds.

In the School of Chemistry and Pharmacy at UR, the Immunology sector conducts research for the production of diagnostic kits for: toxoplasmosis, echinococcosis (hydatid disease), pregnancy, c-reactive proteins and rheumatoid factor, as well as streptomycin detection. The Biochemistry sector is researching ways to obtain a cloned strain for industrial uses and for utilization of milk whey. The Laboratory of Basic Oncology of the School of Medicine at UR is studying the production of monoclonal antibodies to characterize tumor-associated antigens and the development of antibodies that identify glycoproteins associated with breast cancer and normal breast tissue.

The School of Sciences at UR created the first Masters program in Biotechnology, by public and private initiative, with teachers from various UR Schools. The curriculum includes a dissertation on topics of interest to students and businesses. To date, 15 students have entered this program, which explores work issues in areas of wastewater treatment, oenology, recombinant proteins for medical use, etc. The School works on the development of therapeutic molecules by recombinant techniques, is connected to domestic industry and supports the installation of molecular biology services in assistance centers.

The Clemente Estable Institute of Biological Research (IIBCE) plays a dynamic role in the development of biotechnology. It works in human and animal health, producing sera and vaccines. The IIBCE has extensive national and international recognition and is considered a “regional center of excellence” by the OAS and UNESCO. Its research areas are life sciences and neurosciences. It also works on developing and applying biotechnology techniques to the study of the human genome, in order to detect the presence of tumors. Its Molecular Biology Division investigates the defense mechanisms of plants using molecular probes, hybridization and PCR. Some research lines deal with diagnosing and identifying viruses and pathogens of citrus crops, and improving resistance and stress tolerance in potatoes.

In Uruguay, significant genetic improvement activity is developed in the public sphere, heavily complemented by research performed by private companies that commercially develop the varieties. The Biotechnology Laboratory of the National Institute of Agricultural Research (INIA) [Instituto Nacional de Investigación Agropecuaria], which reports to the President’s office, and which is located at the Experimental INIA Station in Las Brujas, has developed technologies based on two main areas: cellular biology of plants and molecular biology, both applied to genetic improvement. Its R&D activity has generated the following results: super-elite grade plant stock; clones of selected plants; basic material for breeding programs; identification of varieties, breedstock and genes of interest for production; quick selection of optimal genotypes and diagnosis of pathogens. Its relationship with the private sector promotes the formation of public-private joint ventures aimed at developing technological innovations and creating new opportunities for investment and development.

The country has some resources in the area of veterinary biotechnology at the Directorate of Veterinary Laboratories (DILAVE) [Dirección de Laboratorios Veterinarios], of the Ministry of Livestock, Agriculture and Fisheries (MGAP) [Ministerio de Ganadería, Agricultura y Pesca]. Due to a bureaucratic administrative error, this laboratory was not transferred to the National Institute of Agricultural Research (INIA). For this reason, INIA lacks jurisdiction over the veterinary area and DILAVE’s budget has no funds for research and development.

Until 1990, the School of Medicine at UR and the Clemente Estable Institute of Biological Research (IIBCE) concentrated almost 60% of researchers in biological sciences, especially in the human health sector, particularly at the School of Human Physiology Research. There was a dramatic increase in human resources, with the launch of the Program for Development of Basic Sciences (PEDECIBA) [Programa de Desarrollo de las Ciencias Básicas]. Its initiatives include the creation, in 1992, of the School of Sciences at the UR, which includes the areas of Biology, Physics, Chemistry and Mathematics, and financing for master’s degrees, doctorates and post-doctorates, locally and internationally, with an investment of over US$ 4 million, and with the participation of 204 postgraduates. The field of biotechnology received 8.5% of the total amount invested.

Currently, the most well-established specialties are: immunology, microbiology, molecular biology, tissue culture, genetic engineering, neurobiology, veterinary medicine and micropropagation. Other important areas include immunochemistry, especially in diagnostic applications in human health (Chagas disease) and animal health (echinococcosis, or hydatid disease) and agriculture (Xanthomonas campestris), and the development of DNA hybridization techniques for the diagnosis of infectious diseases. In the School of Engineering, chemical engineers are trained to work in fermentation processes, production and isolation of enzymes and biotransformations applied to bioreactors for wastewater purification.

There are no general statistics on biotechnologists, but it is possible to provide some relevant figures25. The Clemente Estable Institute of Biological Research (IIBCE) has 86 researchers and 31 doctoral and masters students. Its Molecular Biology Division has two professionals and three postgraduate specialists. There are 6 specialists devoted to research at the INIA – Las Brujas, plus two graduate students. The Laboratory of Plant Biotechnology, in the School of Agronomy at the UR has five professionals and one postgraduate.

Public perception

The debate in the country about the application of biotechnology to the agrifood field is recent26. The holding of the 17th Pan American Seed Seminar and the launch of the World Forum on Biotechnology and Seed Marketing were the scenarios chosen by various parties to launch controversy over GMOs. Parallel to this event, a meeting of trade unionists, students, organic farmers, NGOs and consumers demanded a public debate about the appropriateness of using GMOs and warned of the potential harm to Uruguay’s human health and international trade27.

The mobilization was organized by the institutions: Friends of the Earth networks, Genetic Resources Action International (GRAIN), the Pesticide and Alternatives Action Network of Latin America (RAP-AL) [Red de Acción en Plaguicidas y sus Alternativas de América Latina] and the International Union of Food Workers (IUF). The organization Southern Cone Free of Transgenics [Cono Sur Libre de Transgénicos] created the slogan “Yes to life. Yes to diversity. Yes to people. No to genetically modified crops. No to globalization of transnational corporations. No to the commodification of life.” The Uruguayan Center for Appropriate Technologies (CEUTA) [Centro Uruguayo de Tecnologias Apropiadas] demanded a moratorium on the release of commercial crops and labelling of transgenic products and demanded that GMOs remain restricted to laboratories and research sites.

The position of the National Association of Seed Producers (ANAPROSE) [Asociación Nacional de Productores de Semillas] in favor of transgenics is clear. According to the Association, Uruguay shares Argentina’s interests in relation to GMOs. Uruguay has actually already been producing transgenic products for three years, mainly transgenic soybean resistant to glyphosate, a herbicide that controls weeds, making it possible to cultivate this legume free of invasive plants.

The country is aligned with the precepts of the Cartagena Protocol on Biosafety. It is a member of the Miami Group, along with the United States, Canada, Argentina, Australia and Chile, which supports respect for biosafety of the environment, without, however, allowing biosafety to be used as a barrier to international trade. The Miami Group seeks to exclude from the Cartagena Protocol processed food products and products derived from genetically modified organisms, and to restrict the application of the treaty to GMOs intended only for intentional release in the importing country. It does not agree with labelling and argues that the Protocol should not affect the rights and obligations derived from other international agreements, especially those of the World Trade Organization.

Strengths, weaknesses and prospects

Despite its small geographical area, Uruguay has many good researchers in several areas of biological sciences. Biomedical knowledge predominates, primarily in the diagnostic sector. There is strong knowledge in immunology and immunochemistry: researchers have a good understanding of the scientific and technical fundamentals and a mastery of techniques for developing products. There is also strong activity in medicine, which can lead to a greater development of research conducted in reproduction and neurobiology. Knowledge of plant molecular genetics and biochemical engineering has been strengthened, while consolidating some work in genetics, microbiology, new process technologies, and production of milk and dairy products. Research is usually conducted by small groups with just a few investigators, lacking critical mass for industrial projects.

In the agricultural area, the country has some potential advantages that could be further leveraged. One of these strengths is the seed industry, whose size seems to exceed the dimensions of the country. This potential could certainly be harnessed to increase the export of seeds, which at present is low. The country has a regulatory framework with potential for improvement, and a set of scientific experts composed of the best technicians from the Ministries of Livestock, Agriculture and Fisheries (MGAP), Public Health and the Environment. The regulatory structure has advanced in recent years, although some issues persist which impede the application and dissemination of knowledge.

The country has made a strong investment in the development of basic science, funded using credit issued by the IDB during the 1980s. It is estimated that this investment has produced a qualitative leap in the development of basic skills. The catalysts of this process28 feel that they are facing a historic opportunity, with the responsibility to demonstrate that the investment made during the past few years will have a positive and significant impact on the social and economic development of Uruguay. The stated goal is to achieve a sharp break with the country’s traditional lines of economic development, focusing on innovation in new fields, in particular biotechnology29.