The Economic Impact of Exchanging Breeding Material: Assessing Winter Wheat Production in Germany

Abstract

Climate change impacts imply that the stabilization and improvement of agricultural production systems using technological innovations has become vital. Improvements in plant breeding are integral to such innovations. In the context of German crop breeding programs, the economic impact of exchanging genetic material has yet to be determined. To this end, we analyze in this impact assessment the economic effects on German winter wheat production that are attributable to exchanging parental material amongst breeders in the breeding process. This exchange is supported by the breeders’ exemption, which is an integral part of the German plant variety protection legislation. It ensures that breeders can freely use licensed varieties created by other breeders for their own breeding activities and aims to speed up the development of improved varieties. For our analysis, we created a unique data set that combines variety-specific grain yield, adoption, and pedigree information of 133 winter wheat varieties. We determined the parental pedigree of each variety to see if a variety was created by interbreeding varieties that are internal or external to its specific breeder. Our study is the first that analyzes the economic impact of exchanging genetic material in German breeding programs. We found that more than 90 % of the tested varieties were bred with exchanged parental material, whereby the majority had two external parents. Also, these varieties were planted on an 8.5 times larger area than the varieties that were bred with two internal parents. Due to lower adoption, these only contributed 11 % to the overall winter wheat production in Germany, even though they yielded more. We used an economic surplus model to measure the benefits of exchanging parental breeding material on German winter wheat production. This resulted in an overall estimated economic surplus of 19.2 to 22.0 billion EUR from production year 1972 to 2018. This implies tremendous returns to using the breeder’s exemption, which, from an economic perspective, is almost cost-free for the breeder. We conclude that the exchange of breeding material contributes to improving Germany’s agricultural production and fosters the development of climate-resilient production systems and global food security.