PITA

Policy Influences on Technology for Agriculture: Chemicals, Biotechnology and Seeds

TSER Programme European Commission – DG XII

Project No. PL 97/1280 Contract No. SOE1-CT97-1068

Spain National Policy Report

Instituto de Desarrollo Regional: José Carlos Cuerda García-Junceda Alejandro García Hermenegildo Ana Goitia Charneco Esther Grávalos García

December, 1998

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Contents

List of Abbreviations .............................................................................................................4

Executive Summary...............................................................................................................6

1. Introduction ....................................................................................................................8

2. Science, Technology and Innovation Policies...............................................................10

2.1 Introduction ............................................................................................................10 2.2 Issues ......................................................................................................................10 2.3 Actors and processes ..............................................................................................11 2.4 Objectives and instruments.....................................................................................14 2.5 Interactions with the EU .........................................................................................20

3. Environmental Protection, Public Health and Biodiversity Policies.............................21

3.1 Issues ......................................................................................................................21 3.2 Actors and processes ..............................................................................................22 3.3 Objectives and instruments.....................................................................................25 3.4 Interactions with the EU .........................................................................................27

4. Farm Support and International Trade Policies............................................................29

4.1 Introduction ............................................................................................................29 4.2 Issues ......................................................................................................................29 4.3 Actors and process..................................................................................................32 4.4 Objectives and instruments.....................................................................................34 4.5 Conclusions ............................................................................................................39

5. Policy Interactions ........................................................................................................40

5.1 Introduction ............................................................................................................40 5.2 Increase of agricultural competitiveness.................................................................40 5.3 Environmental pressures and consumer concerns ..................................................40 5.4 Company strategies.................................................................................................41 5.5 Job implications......................................................................................................42

References............................................................................................................................43

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List of Abbreviations

AEPLA = Corporate Association for Plant Protection ANEP = National Agency for Evaluation and Prospective APA = Associations of Agriculture Producers ASAJA = Agricultural Association-Young Farmers ATRIA = Integrated Pest Treatment Groups in Agriculture ATYCA = Plan to Support Industrial Technology, Safety and Quality CAMA = Environmental Advisory Council CAP = Common Agriculture Policy CCAA = Autonomous Communities (regional governments) CCAE = Spanish Confederation of Agricultural Co-operatives CDTI = Centre for Industrial Technological Development CICYT = Science and Technology Interministry Commission CIS = Centre for Sociological Research COAG = Co-ordination of Spanish Farmer and Stockbreeder Organization CSIC = Higher Council of Scientific Research EAGGF = Guarantee Section for Occasional Interventions, and Guidance Section

for Structural Interventions of the CAP EU = European Union FTE = Full Time Equivalent FEGA = Spanish Agricultural Guarantee Fund GATT = General Agreement on Tariffs and Trade GDP = Gross Domestic Product GMOs = Genetically Modified Organisms IATA = Agrochemical and Food Technology Institute IESA = Institute of Advanced Social Studies INIA = Institute for Food and Agriculture Research and Technology INSPV = National Institute of Seeds and Nursery Plants IRNAS = Seville Institute of Natural Resources and Agrobiology MAPA = Agriculture, Fisheries and Food Ministry MD = Ministry of Defence MEC = Ministry of Education and Culture (since 1996) MIMAM = Ministry of Environment MINER = Ministry of Industry and Energy MSYC = Ministry of Health and Consumers NGO = Non-Governmental Organisation OCYT = Science and Technology Office OECD = Organisation for Economic Co-operation and Development OTRI = Results of Research Transfer Office OTT = Technology Transfer Office PER = Rural Employment Plan PN I+D = National Research and Development Plan PRCs = Public Research Centres R&D = Research and Development REASS = Special Agriculture Social Security Scheme SEUID = State Department of Universities, Research and Development

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SMEs = Small and Medium Enterprises SOC = Farm Workers Labour Union STI = Science, Technology and Innovation UGT = General Workers Union UPA = Small Farmers Union

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Executive Summary

1. In Spain we find the following national policies relevant to agrochemicals, biotechnol-ogy and seeds: (i) a significant market for seed and agrochemical industries; (ii) a relevantscientific community and a public support system for innovation that, despite being verynew, has all the elements required for its proper functioning; (iii) a public opinion that isnot yet sufficiently informed on these topics; and (iv) a slow, complex, and opaque deci-sion making system.

2. The sizeable growth of biotechnological research is due partly to a general increase inexpenditure in all fields, rather than to specific promotion in agriculture-related areas.However the expenditure, in terms of share of GDP, is still among the lowest in Europe, sothat investment by the Government and by companies should continue to increase.

3. The research area of integrated pest control or agrochemical replacement is still one ofthe least appreciated areas within Spanish research. Although national policy tries to pro-mote input reduction and a decrease of the use of wide spectrum pesticides, the number ofprojects approved in this research area is low.

4. The impact of public sector research on the agrochemical and biotechnological industryalthough growing, is still small. The transfer of information takes place only sporadicallyand mainly due to the initiative of research centres, with little effective support from theinstruments devised by the National Plan. National companies seem to prefer to co-operatewith public research centres, rather than multinational companies which in general prefer tocarry out research abroad. In July 1998, the government established the priorities for theNational Research and Development Plan (PN I+D) 2000-2004. The most relevant R&Dpriorities for PITA are as follows:• to strengthen basic research;• to increase the resources allocated to Biotechnology, Health and Pharmacy in order to

promote its development, the transfer of know-how and the establishment and promo-tion of technology centres and small and medium sized enterprises (SMEs);

• to promote the creation of corporate research and development (R&D) departments andto reinforce their technological innovation capacity;

• to increase international quotas and to support the construction of large technical-scientific facilities.

The target fields of the plan extend from basic research to technology transfer. The newNational Plan puts special emphasis on the participation of companies, higher qualifica-tions, growth of the industrial network and development of infrastructures.

5. The objectives of Spanish agriculture policy are to solve structural problems and toincrease agricultural competitiveness in international markets, so that it can confront thenew demands of the Common Agricultural Policy (CAP) reform and the General Agree-ment on Tariffs and Trade (GATT) or WTO agreements.

6. Agricultural policy is thus facing a contradiction: the need to improve and modernizefarming units in order to improve productivity and competitiveness of the sector. The 1992

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CAP reform has solved the problem by changing its productivity orientation (increasingproduction) to a production control system (by means of quotas). The effects of marketliberalisation on Spanish farming units will depend on: (i) improving competitiveness ofcompanies, by improving the quality of their production, diversifying it, and incorporatingtechnological innovations; (ii) institutional support to farm export activities; and (iii) pro-tecting domestic markets against third country imports that do not comply with technicaland legal requirements.

7. The most important farming-environmental problems in Spain are soil erosion (thisprocess affects 44% of the total national surface), the over-exploitation of groundwater andthe salination of coastal aquifers. All these problems are mainly generated by agriculture.There are further problems such as the pollution caused pesticides and especially by fertil-isers. The two main instruments the Spanish government is using to solve these problemsare the promotion of the integrated pest control systems and the redefinition of water poli-cies. This last item is controversial. The Agriculture, Fisheries and Food Ministry (MAPA)plans the extension and modernisation of irrigation farming within the National WaterPlan, but it has so far been impossible to achieve the necessary consensus for its approval(the most controversial issues are water transfers between basins and the establishment offees).

8. Society is starting to demand more environment friendly products and stricter healthcontrols. Over the last years, several studies have been conducted on the public awarenessof biotechnology in Spanish society, including several Eurobarometer reports. We canconclude from these studies that Spanish society supports biotechnology research to agreater extent than the European average (Eurobarometer 39.1). In terms of their attitudetowards consumption, Eurobarometer 46.1 indicates that just 28% of Spaniards support theconsumption of transgenic food. However, a different research study (Moreno, Lemkowand Lizón, 1992) indicates that almost 70% of the people interviewed agree with the appli-cation of genetic modification in order to obtain plant species resistant to herbicides. Theopinions of Spaniards about biotechnology in the survey conducted by the Centre for So-ciological Research (CIS) in March 1997 were contradictory. They accept it in some areas,while admitting that it might be dangerous. There is a great uncertainty and lack of confi-dence towards research carried out in this scientific field. More than 57% of people inter-viewed consider that biotechnology can be harmful for human health and 53% that it mightbe harmful for the environment.

9. The social group that is putting most pressure on the Spanish government and showsgreatest concern for the problems that biotechnology research might entail are the envi-ronmentalist organisations. AEDENAT has launched information campaigns and is lobby-ing policy makers about the potential dangers of genetically modified organisms (GMOs)and their impact on the environment. They are putting pressure on policy makers to stopresearch on GMOs, and to draft stricter regulations to ensure security in these areas. Theirmain demands are: a moratorium on intentional release of GMOs in order to assess poten-tial risks; application of the precautionary principle in genetic research; more transparentinformation on the research carried out; and allocation of more public resources to otherbio-science research lines, thus avoiding the concentration of resources on the field ofbiotechnology.

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1. Introduction

The application of biotechnology in Spain has followed the same pattern as in the US andEU countries, however process has been delayed. A research study by Albert, Candela &Vallejo (1994) estimated that the sectors in which modern biotechnology is a key technol-ogy account for some 15% of Spain’s GDP (Pharmaceutical, Diagnosis, Chemical, FoodFarming and Environmental Sectors). We can recognise two main groups within the Span-ish companies (some 100 altogether) using biotechnology in their production processes: (i)medium and large sized companies in the chemical, pharmaceutical and food industries,established prior to 1980 and incorporating biotechnology in the development of newproducts and processes as an additional activity to their main one; and (ii) SMEs workingin the areas of diagnosis, animal health, plants and environmental techniques, establishedafter 1980 whose main activity is biotechnology. Spanish companies with plant biotech-nology activity account for 23% of all biotechnology companies. They are mostly SMEsthat use in vitro cultivation and micro-propagation techniques to obtain seeds and plantswith improved characteristics. In addition, there is a strong presence of large transnationalcompany branches that supply the national seed market.

Some 20% of all biotechnology companies in Spain are part of multinational groups andsome 80% have a majority of domestic shareholders. Annual gross sales were some 14.600million pesetas in 1994. However, just four companies in the Pharmaceutical, Diagnosisand Chemical industries accounted for 13,000 million pesetas. Most companies have largeand medium sized R&D departments (more than 20 employees) and participate with publicSpanish institutions in R&D projects. We find the most innovative companies in the healthindustry (especially in diagnosis).

On the other hand, the national agrochemical market has had a positive evolution in recentyears. Total sales have increased by 40% between 1991 and 1997 (from 65,000 million to90,000 million pesetas, according to agrochemical producers). Just 35 companies control93% of the market, with a significant presence of foreign company branches. We foreseethat foreign companies will show a growing interest in the Spanish agrochemical market intheir product development strategies: (i) due to the positive evolution of this market; and(ii) because of the characteristics of the market itself, which shows higher diversificationthan other European markets and is therefore less sensitive to the evolution of the CAP,market fluctuations or climatic conditions.

Innovation in biotechnology, agrochemicals and seeds is particularly relevant for Spainwhere it has potential applications in important sectors of the economy, especially theagriculture and food industries. Therefore, since the 1980s the Spanish government hasbegun a series of scientific policy actions aimed at promoting the development of this newtechnology and its incorporation into companies.

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In this report we study the Spanish science and technology innovation (STI), agricultureand environmental policies that are currently being carried out and the main changes beingimplemented. Furthermore, we will analyse the positions and pressures exercised by thedifferent agents involved in innovation processes in biotechnology, seeds and agrochemi-cals.

As far as the policies are concerned, we will focus on the decisions made by the Spanishgovernment, which holds the powers on the policies under study. In Spain the decisionmaking process is unusual. There are 17 autonomous communities or regional governments(CCAA) in Spain which are empowered to design and implement a range of policies. Thepace of transfer of powers from the national government to the CCAA has been different ineach case, and the process is not finished yet. However, the Spanish Constitution allocatesto the central government exclusive powers on certain areas. The relevant ones for ourstudy are: commercial law, labour law and intellectual and industrial property law; foreigntrade, customs and tariffs; health and co-ordination of general health planning; legislation,organisation and allocation of water resources whenever water courses run through morethan one CCAA; and basic law on environmental protection. The central government isalso responsible for translating EU directives into Spanish Law. Those CCAA that holdpowers on that specific policy area will later incorporate them into their regional legalbodies.

Several co-ordination bodies between the central government and the CCAA have been setup in order to adopt joint decisions on each subject. For instance, regional governments areco-ordinated with central government to design R&D policies in the General Council ofScience and Technology, that is an advisory body of the Science and Technology Inter-ministry Commission (CICYT). However there are many conflicts arising in the decisionmaking process, which therefore ends up being slow and complex.

After analysing Spanish policy issues that may influence the development and use ofcleaner technology for agriculture, the second stage of the PITA project will study theinnovation processes in agrochemical, seed and biotechnology industries and researchinstitutes, and the impact on this process of the policies analysed in the first stage.

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2. Science, Technology and Innovation Policies

2.1 Introduction

Research in Spain has recently undergone strong development. Staff working in R&Damounted in 1985 to 63,109 employees (40,654 full time equivalents (FTE) and in 1995total staff had increased to 147,046 (79.987 FTE). Total number of researchers has in-creased from 40,848 (21,455 FTE) to 100,000 (47,342 FTE) over the same period (CICYT,1996). Total expenditure has grown in proportion. Over the 1988-1992 period, annualgrowth rates in total R&D expenditure have averaged 10%. However, since 1993 totalexpenditure as a percentage of GDP has remained fairly constant (OECD, 1996).

Despite these increases, Spain still has a relatively low number of researchers and financialresources devoted to R&D. Therefore, a greater effort will be required for its research andtechnology systems to become comparable to those of the most developed countries. In1994 total R&D expenditure in Spain accounted for 0.91% of its GDP, as compared to2.33% in Germany, 2.38% in France and 2.19 in the UK (OECD, 1996). It seems clear thatSpain’s R&D system will keep on growing in the future, but this growth must be a differ-ential one, requiring greater corporate investments in R&D.

An essential difference between technological innovation in Spain and in the EU lies in theorigin and destination of R&D expenditures. In Spain there is a government-to-companiesflow (public funding of corporate R&D is higher than the corporate funding to publicsector R&D). This is due mainly to the fact that the Spanish government is the main in-vestor in innovation. Spanish companies must make an effort in research activities in orderto achieve a level of competitiveness closer to that of other European countries and toincrease their international competitiveness1.

2.2 Issues

2.2.1 General STI issues

In general, in recent years Spanish scientific policy has attempted, on the one hand, toinfluence the activities of research teams by directing them to the research areas that seemmost promising, and on the other hand, to promote corporate research within Spain. Following the first stage in which Spanish scientific policy has focused on the promotionof basic research and the setting up of infrastructures, the Spanish government has recentlyoutlined its intention to modify its policy orientation to emphasise technological innova-tion. In July 1998, during the plenary meeting of the CICYT, Spain's Prime Minister, José

1 The concept of competitiveness is linked to the existence of open economies that compete for the control ofthe international markets and to the ability of companies within an industrial sector to conquer those markets.A company's competitiveness can be defined as its ability to increase its market share in the internationaltrade, or to maintain its share in a growing market. Product differentiation strategies and technological inno-vation are currently the tools most commonly used to improve competitiveness.

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María Aznar, pointed out that R&D was a strategic priority for his cabinet in order to im-prove competitiveness at international level (ImásD, June 1998).

This new emphasis has arisen after concluding that there several deficiencies in the Spanishscience-technology-industry system. Powers on R&D issues are scattered across severalgovernment levels (Ministries and CCAA). There is little participation by companies,especially SMEs, in public R&D programmes. There are deficiencies in the transfer ofresults from basic research to the industrial network. And finally, an important gap remainsbetween Spain's R&D effort (both public and private) and the average for developed coun-tries.

2.2.2 Biotechnology, agricultural and environmental issues

The main questions underlying the design and implementation of Spanish scientific policyin the field of biotechnology are: (i) the role of biotechnology as an instrument to improvethe international competitiveness of Spanish companies and to help in solving existingagricultural, health, industrial or environmental problems; (ii) the need to increase humanand financial resources devoted to biotechnology in order to prevent technological delay;and (iii) strengthening the transfer of research outcomes to the socio-economic environ-ment.

In the case of biotechnology applied to agriculture, current research policies focus on agro-nomic and forest species with a high socio-economic interest for Spain, especially fruit andvegetables.

The 1992 CAP reform led to a re-orientation of farm research policies in order to meet twoimportant and somewhat contradictory issues: to improve the competitiveness of Spanishagriculture in the international markets; and to protect the environment. Therefore, we candetect the following priorities in the design of agriculture research policy: reduction ofproduction costs, quality improvement, diversification of primary products, increase invalue-added of extensive dry and irrigation farming products, integrated production offruits, vegetables, edible and ornamental products, reduction of environmental impacts anddevelopment of rural areas.

The main question underlying the environmental research policy with regards to agricultureis the optimisation of the use of farming resources (water, fertilisers and phytosanitaryproducts). The main problems are the deterioration of water quality and the overuse ofaquifers, and desertification and loss of fertile soil.

2.3 Actors and processes

The main actors involved in Spanish scientific policy are public institutions, public re-search centres and public opinion. Public institutions are in charge of establishing objec-tives, instruments and working guidelines, in consultation with the scientific community. Scientific policy powers are scattered among ten ministries and each CCAA also drafts andimplements its own scientific policy. The following scheme shows the main agents relevantto PITA involved in the scientific policy of the Spanish government.

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Figure 1. Central government offices with police powers in R&D relevant for PITA.

The ‘Law for Promotion and General Co-ordination of Scientific and Technical Research’sets up a series of institutions to co-ordinate, assess and direct research in Spain. Amongthese institutions, the CICYT plays a major role since it is in charge of establishing theoverall objectives of research and co-ordinating this research. CICYT is chaired by thePresident of the Government and drafts the general guidelines of scientific policy and thePN I+D. The National Agency for Evaluation and Prospective (ANEP) operates underCICYT and is in charge of evaluating the scientific-technical quality of applications forresearch funding presented to the PN I+D.

An important step forward in the institutional support to research was the establishment ofthe Science and Technology Office (OCYT) under the Ministry of the Presidency in Febru-ary 1998. This office will be the support unit for planning, co-ordinating, monitoring andevaluating science and technology activities of the different ministry departments andpublic entities. It will also carry out all tasks necessary for the co-ordination with theCCAA, as well as the co-ordination and monitoring of international R&D programmes.The CIS is ascribed to the Ministry of the Presidency and its task is to study Spanish soci-ety, mainly by means of survey research. It is Spain's most important reference for publicopinion studies.

The CICYT has appointed the Centre for Industrial Technological Development (CDTI)(under the Ministry of Industry and Energy (MINER)) as its link with Spanish companies

MP

CICYT

OCYT ANEP

MEC

SEUID

MSYC

CIS CSIC Universities Health InstituteCarlos III

MINER

CDTI

National FoodCentre

NationalEnvironmentalHealth Centre

CentreNetwork:IESA, IRNAS,

MAPA

INIA

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to establish the most appropriate financial support mechanisms for the pre-competitiveresearch projects, labelled Co-ordinated Projects. The OTRI-OTT network (Results ofResearch Transfer Office and Technology Transfer Office) was established as an instru-ment to promote the involvement of companies in scientific tasks, to articulate the science-technology-industry system and to make the scientific environment more dynamic. Eachpublic research centre (PRC) has its corresponding OTRI.

Among the PRCs, the most important ones are the Higher Council of Scientific Research(CSIC), based in the State Department of Universities, Research and Development(SEUID) of the Ministry of Education and Culture (MEC), and the universities. They carryout most of the research, and also take part in the selection of scientific and technologicalobjectives in national and regional policies. They also collaborate in the counselling andmanagement of different aspects of the PN I+D. The CSIC has a research centre network,each member of which works on different issues (the Institute of Advanced Social Studies(IESA), Seville Institute of Natural Resources and Agrobiology (IRNAS), Agrochemicaland Food Technology Institute (IATA), etc.).

Another advisory institution of the PN I+D is the Institute for Food and Agriculture Re-search and Technology (INIA) which is also in charge of implementing the Sectoral Pro-gramme of the MAPA together with the Research Units of the CCAA. In November 1998the powers of INIA on R&D have been extended and it will now assume all powers of thecentral government on seeds and nursery plants.

The Health Institute Carlos III (ascribed to the Ministry of Health and Consumers (MSYC))manages the National Health Programme. It includes a research centre network, somemembers of which are relevant to PITA: The National Food Centre (in charge of sanitarycontrols of food) and the National Environmental Health Centre (in charge of sanitarycontrol and assessment of environmental risks).

Researchers generally agree with the policy objectives of the PN I+D. Their main concernsare the freeze on public expenditure on contracts, which leads to fewer training opportuni-ties for new researchers, and the low demand for trained researchers (especially for thoseholding a Ph.D.) in Spanish companies. Researchers are putting pressure in these areasthrough the CSIC and the universities. On the other hand, the scientific community hasvoiced its concern for the lack of a clear R&D policy project by the government.

Public opinion in Spain does not have access to much information on these issues. Most ofthe information available to citizens appears in the press where there is a lack of discussionof these issues. The COTEC Foundation issued a report in 1998 pointing to the lack ofinformation in the press on issues related to research and innovation.

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2.4 Objectives and instruments

2.4.1 STI policy

Since 1986 Spanish research policy was based on the Law for Promotion and General Co-ordination of Scientific and Technical Research, which attempts to correct the basic errorsof the Spanish science and technology system, moving towards a socio-economic objec-tive-based model that defined more precisely the priority lines in R&D work. It includedresource planning and co-ordination of work carried out by industry sectors, research cen-tres and universities.

This law addressed the design of public R&D promotion and co-ordination mechanismsand proposed reforms to the legal status of several public research institutions. The lawdefined a common working frame for the different public research centres and establishedthe PN I+D which articulated the research policy and national programmes for biotechnol-ogy, seeds and agrochemicals.

The third PN I+D (1996-1999) promotes, plans and co-ordinates technological research anddevelopment to improve the potential for co-operation between research teams and compa-nies, using the following instruments:• Promotion and planning instruments: R&D projects and special actions; scientific-

technical infrastructures; integrated projects; strategic mobilisation projects; traininginitiatives for research staff; setting up and/or reorientation of research teams.

• Co-ordination Instruments: sectorial co-ordination; co-ordination with the autonomouscommunities.

• Articulation Instruments: national programme for the promotion of the science-technology-industry system articulation.

• Financial Instruments: non-recoverable grants; reimbursable subsidies.

The Plan foresees four main guidelines for core actions: creation of infrastructures; qualifi-cation of new researchers; development of new research projects and fund allocation tocompanies and industrial development plans.

In May 1998, Fernando Aldana, director of the OCYT announced an increase in the na-tional R&D budget to 1% of GDP in 1999. This increase took place in October 1998, whenthe 1999 budget was approved, and increased the funds for public R&D by 46.8% com-pared to 1998. According to Fernando Aldana, the objective for future years is to bring thefigure to around 3% of the GDP (the average in the western European countries).

In July 1998 the government established the priorities for the 2000-2004 PN I+D. The mostrelevant ones for PITA being: to strengthen basic research; to increase the resources allo-cated to biotechnology, health and pharmaceuticals in order to promote the transfer ofknow-how and the establishment and promotion of technology centres and SMEs; to pro-mote the creation of corporate R&D departments and to reinforce their technological inno-vation capacity; to increase international quotas and to support the construction of largetechnical-scientific facilities. The target fields of the Plan run from basic research to tech-nology transfer. From the total allocated to R&D in the national budget, the amount allo-cated to the Ministry of Industry and Energy (MINER) and managed by the CDTI is the

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largest and is growing most rapidly, followed by the funds allocated to the MEC and theMinistry of Defence (MD).

Another important programme is the Plan to Support Industrial Technology, Safety andQuality (ATYCA) of the MINER, established to provide companies with incentives for theincorporation of new technologies. It was launched in January 1997 and co-ordinates andgroups all the support and subsidies provided by the MINER related to industrial technol-ogy, safety and quality to establish a reference point for all companies searching for supportfor their technological and industrial quality projects.

ATYCA expects to allocate subsidies amounting to 66,000 million pesetas to corporateprojects between 1997-1999. In this context, the Industrial Technology Promotion Planfocuses on the promotion of specific technologies, among them biotechnology, with hori-zontal activities to improve infrastructures, training and support systems for corporateinnovation.

The CDTI is in charge of managing this initiative, which finances four types of project:1. Consensus and Co-ordinated Projects: pre-competitive research projects that entail a

high technical risk and are carried out by companies in collaboration with public uni-versities and research centres (consensus programmes) or with technological centres(co-operative programmes). The CDTI finances, from national R&D funds, from 40-50% of the total cost of the projects through interest free loans.

2. Technological Development Projects: practical R&D projects entirely developed by acompany which can involve the creation or improvement of a product or productionprocess and which must have a medium or long term economic impact on the company.The CDTI finances from 40-50% of the project's total cost through low interest loans.(In EU Objective 1 regions there are also interest free loans available thanks to the co-financing by the European Research and Development Fund.

3. Technological Innovation Projects: projects aimed at active incorporation and adapta-tion of new technologies into a company rather than their development, usually entail-ing a sizeable change in the company's production system and structure. The CDTI fi-nances up to 25% of the project's total cost by means of low interest loans, or up to40% by means of bank loans subsidised by the CDTI.

4. Technological Promotion Projects: subsidies for the export of a novel technology de-veloped with the support of the CDTI, up to 70% of the total cost by means of interestfree loans.

2.4.2 Biotechnology research and development policy

Spanish scientific policy in biotechnology starts in 1984 when the Biotechnology Mobili-sation Plan was set up. This happens as biotechnology revealed itself as a field with a greatpotential within the Spanish scientific system. This Plan set up the foundations for thedevelopment and implementation of modern biotechnology in Spain and its main objec-tives were training of staff, financing research infrastructures and projects, establishing aprogramme to support companies and establishing a National Biotechnology Centre. Theplan followed a linear scheme that included all stages of the innovation process, from basicresearch to product marketing. At the same time, and in order to finance research projects,the following priority areas were established: basic biotechnological research; food and

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agriculture; human and animal health; industry; bio-degradation and pollution control; andfinally, legal and socio-economic aspects involved in biotechnology.

Since the first PN I+D (1988-1991), biotechnology has been considered by the Spanishgovernment as one of the priority research fields, and therefore both the number of projectsfunded and total expenditure have been increased (see figure 2). During the 1988-1991period, 165 projects were financed with a total budget of 1,982 million pesetas. The secondNational Plan (1992-1995) financed 238 projects accounting for 2,415 million pesetas(8.8% of the all projects funded by the second PN I+D).

Figure 2. Evolution of number and budget allocated to projects carried out underthe Biotechnology Programmes.

899

1982

2415

86 165238

0

500

1000

1500

2000

2500

3000

Nº Projects Total budget (Mptas.)

Biotechnology MobilizationPlan

1st National R&D Plan

2nd National R&D Plan

Source: CICYT, 1996.

The field of Agriculture and Food attracted most projects in the 1995 call of the NationalBiotechnology Programme. Biotechnology projects are also carried out under other Na-tional Programmes, such as Environment and Agriculture Sciences and the MAPA SectoralPlan. Figure 4 shows the funds allocated to the different objectives of the 1995 NationalBiotechnology Programme, and the projects relevant to PITA within the National Envi-ronment and Agriculture Science Programmes.

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Figure 3. Main Research Programmes, management institutions and funds allocated in the 1999 National Budget.

MINER

Research and Technological DevelopmentProgramme

Industrial Technology Promotion Programme (23.800 Mptas.)

Industrial and Technological Innovation PromotionProgramme

(29.800 Mptas.) CDTI

Technological Innovation Support Programme inseveral sectors (aerospace and naval industry)

(200.342 Mptas.)

Pre-competitive Consensused and Co-operativeProjects (4.000 Mptas)

Tecnological Development Projects (21.100 Mptas)

Tecnological Innovation Projects (4.700 Mptas)

ERDF Funds(3.500 Mptas)

MEC

Scientific Research Programme (59.746 Mptas)

General Knowledge Promotion Programme (8.630Mptas.)

Researcher Training, Improvement and MobilityProgramme (9.404 Mptas.)

III National R&D Plan (20.672 Mptas)

ERDF Funds(5.880 Mptas)

Technical Research Programme (21.641 Mptas)

CSIC (39.710 Mptas)

MAPA

INIA (5.521 M Ptas.)

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Figure 4. Distribution according to objectives within the 1995 National Biotechnology Programme.

Source: CICYT, 1996.

The National Biotechnology Programme (1996-1999) considers biotechnology as a strate-gic technology with a strong horizontal character. Due to the complex and competitivecharacter of biotechnology, the National Biotechnology Programme intends to increaseboth human and financial resources, and, in order to avoid a technological delay in thisfield, renders it necessary to continuously increase the funds allocated to establish R&Dcentres, equipment and means, and especially to train highly qualified staff. The national biotechnology plan is structured around four main areas: food farming; humanand animal health; biotechnological process engineering and environment. The programmegives more relevance to the objectives that pursue the improvement of new ‘biologic’ tools(procedures, methodologies and strategies). It intends to promote especially the area ofBiotechnological Process Engineering. The objectives focus on agronomic and forest spe-cies with a socio-economic interest for Spain, as well as for food farming products highlyrelevant for the companies operating in this country.

2.4.3 Agricultural research and development policy

This National Agricultural Research and Development Programme has its basis in thesocio-economic relevance of agriculture in Spain. The changes proposed by the CAP,which promotes a more competitive agriculture in the international markets, and a moreenvironment friendly against them, require a strong impulse in research, both in crop pro-tection and in genetic improvement of species. This programme gives a bonus to actionsaimed at reducing production costs, improving quality, diversifying primary products,reducing environmental impacts and developing rural areas. This National Programmedeals with the areas of agriculture, forestry, livestock breeding and aquaculture. Agricultureis the area with more weight, both because of the number of projects and because the fi-nancial resources allocated to them. In this area the most important projects have to do withgenetic improvement and crop protection, with a slight yearly increase in fund allocation.

There are three general objectives in the field of agriculture:

584

257,8 240,6

584,7

39,7

124 178,4 188,4

0

100

200

300

400

500

600

700

Agriculture and Food

Human& animal health

Industry Envi-ronment

Envi-ronment

Water Natural Agricul-ture

M.ptas

NP Biotechnology NP Environment NP Agriculture Science

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1. Application of genetics and molecular biology to plant improvement: a) improving thequality of vegetable products for food, stockbreeding, industrial and ornamental uses; b)improving and using their resistance to diseases and pests; c) improving their toleranceto non-biotic stresses, including low-input conditions.

2. Several objectives regarding plant protection products: a) aetiology, ecology and epide-miology of pathogens, plagues and weeds, aimed at risk assessment and prediction; b)cultural and biological methods for the control of diseases, plagues and weeds; c) opti-misation of the use of phytosanitary products: Application systems, resistance preven-tion and side effects. Selectivity in the use of herbicides; d) development of integratedcontrol programmes.

3. Management and preservation of soils: in this field the priority projects are the cross-disciplinary co-ordinated projects aimed at developing production systems that are com-patible with the preservation of scarce resources. These initiatives will be co-ordinatedwith the ones within the Environmental and Hydric Resources Programmes. Among thesub-objectives we must outline those related to nutrient dynamics and improvement ofefficiency in the use of fertilizers. Application of urban and agro-industrial waste asamendments.

The National Agriculture Research and Development Programme is complemented by theagriculture and Food R&D Sectorial Programme, which includes the working guidelines ofall public research centres depending from the MAPA and the Autonomic Communities.This programme is more application oriented, and its objectives are:• Improving the competitiveness and cost-effectiveness of agriculture and farming indus-

try by means of technological innovation, reduction of production costs and productiondiversification within the scope of a sustainable agriculture.

• Developing new technologies to improve the quality and safety of food products and todevelop new products

• Developing management and analysis procedures adapted to rural areas, taking intoaccount the impact on ecosystems and including preservation, restoration, and compati-ble use of nature and landscape.

• Carrying out market analysis and prospective.• Analysing research, development and technological change economics.

Additionally, the INIA manages the Phytogenetic Resource Preservation and Use Pro-gramme that we will be comment below. After analyzing these policies we can draw thefollowing conclusions. First, despite of the sizeable growth of biotechnological research,this growth is due partly to a general increase in the expenditures in all fields, rather than toa specific promotion task of this activity. However, the expenditures, in terms of share ofthe GDP are still among the lowest in Europe. Secondly, the research area of integratedpest control or agrochemical replacement is still one of the least appreciated areas withinSpanish research. Although national policy tries to promote input reduction and a decreaseof the use of wide scope pesticides, the number of projects approved in this research area isstill very small. And thirdly, the impact of research on the agrochemical and biotechnologi-cal industry although growing, is still limited. The transfer of information takes place onlyincidental and mainly due to the initiative of research centres. Without finding effectivesupport in the instruments devised by the National Plan. National companies seem to showa better disposition towards co-operating with public research centres than multinationalones that in general prefer to carry out research abroad.

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2.5 Interactions with the EU

Spanish policy on science and technology issues is complementary to the European one.Since Spain's entry into the EU, the R&D Framework Programme is the main reference fornational research policies. Thus, the 4th R&D Framework Programme of the EU empha-sizes the international dimension of projects, the mobility of human capital, and the dis-semination of knowledge among all agents within the European STI systems. By means ofthe PN I+D, the Spanish government intends to stimulate technological innovation, orient-ing it towards the improvement of its situation within the EU context.

The form of interaction that usually takes place is through different research programmesthat have been started between the European Union and Spain. Presently most of the na-tional programmes have a European equivalent, which deals with more general aspects andtransnational projects. The National Biotechnology Programme corresponds with theBIOTECH Programme of the 4th EU Framework Programme in its general principles, aswell as in its basic research areas. However, the National Biotechnology Programme fo-cuses more on providing solutions to specific problems in the Spanish STI system. TheFAIR Programme is the correspondent of the National Agriculture R&D Programme.

The Spanish government favours the participation of Spanish research teams in Europeanresearch programmes. The support focuses on the quick mobilisation of researchers torespond to the calls for the different programmes, building up of consortiums and draftingof proposals. The CICYT contributes to preparing and negotiating programmes, mobilisingSpanish research teams, defending proposals, and negotiating the corresponding contracts. The PN I+D has two main instruments to co-ordinate Spanish and European R&D policies:i) the OTRI-OTT2 established in 1989 that promotes and facilitates the participation ofpublic research centres in European projects; ii) the objective of the Spanish VALUE EULinkage Centre, managed by the General Secretary of the PN I+D and the CDTI, is todisseminate technology (by means of information activities) from EU programmes towardsSpanish productive sectors and from Spanish R&D teams towards European companies.

Finally, we should state that starting 1989 part of the ERDF funds were allocated to set upnew R&D infrastructures. Ever since, the CICYT has taken of the allocation of those fundsamong objective 1 and 2 regions. Within the framework of the ERDF funds, the CICYT isresponsible for designing and managing R&D Infrastructure Operation Programme forobjective 1 regions in collaboration with regional governments.

2 The PN I+D subsidizes the setting up of these offices by each research institution.

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3. Environmental Protection, Public Health and BiodiversityPolicies

3.1 Issues

There are two issues relevant for PITA in this area: The impact of agrochemicals used inagriculture on the environment and on human health, and the release of GMOs. However,we must point out that the most severe agro-environmental problems in Spain are soilerosion (which affects more than 44% of the national territory) and the overexploitation ofgroundwater and the salinisation of coastal aquifers (Izcara Palacios, 1997).

3.1.1 Plant Protection Products and Water Management

The main concern regarding the Plant Protection Products is water and soil pollution. Soilpollution is caused mainly by the excessive use of fertilizers and pesticides. There are twomain problems in the area of water management: Over-exploitation and pollution. Waterdemand in Spain has grown by 15% between 1985 and 1995 and agriculture is responsiblefor 80% of the total water demand. In the view of the MIMAM the excessive water demandis caused by water waste and the introduction of irrigation. According to them, 11% ofSpain's waterways suffer from high pollution and an additional 15% reaches medium pol-lution levels. The main cause of pollution is the excessive use of fertilizers, and to a lesserextend, pesticides.

Table 1. Plan Protection Products: Historical series of consumption by classes(million pesetas).

Year Insecticides & Acaricides Fumigants Fungicides Herbicides Miscellaneous Total 1988 19,100 2,670 15,430 16,940 6,830 60,970 1989 19,570 2,270 14,720 16,640 6,810 60,010 1990 20,490 2,440 13,920 19,910 6,200 62,960 1991 20,750 2,780 13,080 20,250 6,220 63,080 1992 20,850 2,500 12,450 18,100 6,050 59,950 1993 19,555 2,190 12,890 18,095 5,750 58,480 1994 23,140 2,525 14,175 20,900 6,200 66,940 1995 25,500 2,900 14,500 21,700 6,800 71,400 1996(P) 26,610 3,210 17,900 26,750 7,530 82,000 1997(A) 27,400 3,200 20,300 28,900 7,600 87,400

Source: MAPA, 1997

4.1.2 Biodiversity and GMOs

On December 1st 1998, Isabel Tocino, Minister of Environment presented the SpanishBiodiversity Strategy, which includes the policy objectives of the MIMAM in this area. It isa document that has been agreed upon with many stakeholders (governments, researchcentres, NGOs, etc.). It is not a binding document and it is a result of the compromisesassumed by the Spanish government in the Biological Diversity Agreement. Its main ob-

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jective is to contribute to the sustainable use of the enormous biological variety existing inSpain3.

In the area of agriculture genetic resources there are two main questions considered withinthis strategy: preservation and access.

Preservation Preservation, both in- and ex situ is rendered necessary to enable farming diversification.Such diversification increases crop resistance to pests and diseases and reduces pesticiderequirements. In the opinion of the MIMAM, the loss of agro-biodiversity has been causedmainly by the replacement of varieties adapted to the territory by other varieties with ahigher commercial interest. The MIMAM considers that in this area the main problem isthat the available genetic resources are underused due to the lack of information and com-munication among germ plasm banks, plant breeders and potential consumers.

Access to genetic resources There is a two-sided situation in Spain. On the one hand the country depends on othercountries in farming issues, since most of the seeds are of foreign origin, and on the otherhand it acts also as a donor. The Strategy includes a series of measures aimed at regulatingthe access to genetic resources. One of the most important ones is the establishment of aGenetic Resource Network.

According to MIMAM data, there are more than 200 centres in Spain working with GMOsin confinement and currently the high biological security facilities (10 at this moment) arebeing registered. Field research in this area has focused on obtaining new plant varietiesresistant against herbicides (27%) or against new pests (14%). In terms of crops tested, wecan point out at new varieties of corn (32%) and tomato (17%). Altogether more than 100tests have been conducted since 1993. These tests have taken place mainly in Andalucía(32%) and Castilla-León (16%). In this area the main concern of the MIMAM is biosafety.Therefore it defends an increase of biosafety projects and their incorporation into the Na-tional Biotechnology Plan within the National R&D Programme. Furthermore, it defends astrict application of the precaution principle and the case-by-case methodology.

3.2 Actors and processes

We must remember that the central government, by means of the Ministry of Environment,is the one that is empowered to draft the basic environmental legislation. The CCAA areempowered to develop this legislation more in depth, they can draft additional protectionmeasures and are in charge on managing all those questions for which local entities are notresponsible. The Sectorial Conference for Environment is the institution in charge of co-ordinating actions among the different regional governments. It is made up by the generaldirectors of environment of all CCAA.

The Central Government Administration is the one empowered to grant permits for themarketing of genetically modified organisms, and of products containing them. Equally,the Central Government Administration will be the one competent for authorizing the

3 Just as an example, 65% of the 179 types of habitats listed in Directive 92/43 are to be found in Spain.

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confined use and intentional release with research and development purposes or any otherpurpose different from marketing, whenever it entails a high risk. It is also responsible forcontrolling the scientific and technical research programmes to be conducted by institutionsor entities depending from it. The CCAA are competent for authorizing the confined useand intentional release of GMOs in all other cases as well as to carry out the surveillanceand control of authorized activities and of the organisms or products containing them oncethey are in the market. They are also empowered to sanction any violation of the regula-tions incurred in the performance of these activities.

The National Biosafety Commission and a Collective Body, both of them with representa-tives of several Ministries, are the competent bodies appointed by the Central GovernmentAdministration to carry out the tasks of control, surveillance and grant of permits for theconfined use, release and marketing of genetically modified organisms. The National Bio-safety Commission is made up of representatives of the Ministries of Environment; Health;Agriculture, Food and Fisheries; Education and Culture; Industry and Energy; Economyand Finances; and Domestic Affairs. Six representatives of expert institutions on the matterare also part of it. This Commission has an advisory character, and representatives ofAutonomic Communities willing to do so can also participate. Since 1992 some 80 inten-tional releases have been carried out, only five of them have been micro-organisms.

Regarding the marketing of GMOs, the National Biosafety Commission is the institution incharge of informing European Union authorities. The Collective Body of this Commissionis the one competent for granting the permits. This Collective Body is ascribed to the Min-istry of Environment and is made up of representatives of the Ministries of Environment;Health; Agriculture, Food and Fisheries; Education and Culture; and Industry and Energy.

The time periods for the assessment and study of potential risks and for granting permitsfor the confined use of genetically modified organisms are different in each AutonomousCommunity. A specific permit is only required when working at industrial scale withpathogens, in all other cases it is just enough to notify their confined use. The appropriateentities of each Autonomous Community are responsible for the supervision and authori-sation of intentional releases. However, since these entities have been only set up in twoCCAA (Aragón y Navarra), the Ministry of Environment is assessing now the proceedingson a provisional basis.

A series of controls on identification, agronomic value, and resistance to diseases are re-quired in order to market a genetically modified seed. The National Estimation Commis-sions for each species are the ones that issue the reports for each species, species group orcrop, required for their inclusion in the Market Variety Register. Each of these commis-sions is made up by representatives of the Ministry of Agriculture, Food and Fisheries;INIA; Administration involved in the marketing of final vegetable products; private obtain-ers; public obtainers; producers of multiplication material; farmers using seeds and seedbedplants; and the consumers of products obtained from those seeds participating in the mar-keting and manufacturing of them.

In the field of agrochemicals, the environmental policies aim at regulating the componentsof the different pesticides as well as environmental and human health protection measuresagainst substances that might be potentially harmful.

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Legislation on agrochemicals focuses on pesticides by means of two types of regulations,those regulating the manufacturing and marketing of phytosanitary products, and thoseestablishing maximum limits of phytosanitary residues and criteria for assessing them.

In the field of pesticides the policy powers are divided between MAPA and MSYC. Thecompetence on the use of pesticides in the environment and in the food industry is man-aged by the General Subdirectorate of Environmental Health, depending from MSYC’sDirectorate General of Public Health. The Phytosanitary Product Assessment Commission,made up by representatives of the Ministries of Agriculture; Health; Environment; andEducation and Culture; and ascribed to the Ministry of Agriculture, Food and Fisheries, isresponsible for the evaluation, authorization and incorporation into the Community List. In order to register a new pesticide the active ingredients of the new formulation must bepreviously officially approved and registered in the Official Pesticide Register of the Di-rectorate General of Public Health.

The social group that is putting more pressure on Spanish government and shows greatestconcern for the problems that biotechnological research might entail are the environmen-talist organizations, that totally oppose any kind of research that involves the use of geneti-cally modified organisms and their release into the environment. Different environmentalistorganizations of international scope are launching a series of campaigns in our countryagainst this type of research and against patents on living organisms. AEDENAT haslaunched information campaigns and is lobbying on policymakers. They are informingabout the potential dangers of GMOs and their impact on the environment. They are put-ting pressure on policymakers in order to prevent research on genetically modified organ-isms, and to draft stricter regulations to ensure security in these areas. Their main claims inresearch issues focus on the following: a moratorium of intentional release of GMOs inorder to assess potential risks; application of the precaution principle in genetic research;more transparent information in the research carried out; and allocation of more publicresources to other bio-science research lines, thus avoiding the concentration of resourceson the field of biotechnology.

Environmentalist groups demand a stricter public control on the biotechnological industryand transparency in the research, release and marketing of GMOs. The campaigns theyhave started against the release and marketing of GMOs are claiming for an assessment ofthe risks of biotechnology on human health and the environment and the requirement ofcivil liabilities to the industries responsible for ecological disasters caused by the release ofGMOs.

One of the main controversies arising in biotechnology lies in the definition of low- andhigh-risk organisms. According to Spanish law, the low or high risk of an organism isdefined by the danger shown by parental or receptor organisms. For the environmentalistNGOs, all GMOs entail a potential risk because of their increase in reproductive successand the unpredictability they entail.

Consumer and user unions focus their demands on products that are safer for human healthand on product labels. They are putting pressure on the government in order to exercise areally effective control on this type of organisms, and to have clear and mandatory labelson all consumer products.

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The trade unions' position embraces the two previous ones. Their demands range from amoratorium on the release of GMOs into the environment to the labelling of those prod-ucts.

AEDENAT defends the establishment of fees on the use of water, as part of their campaignto introduce eco-taxes. This organization considers that a global social debate on this issueis necessary. The MIMAM acknowledges the difficulties for the establishment of an eco-logical tax on water.

In agrochemicals there is a great debate between the need to protect the different crops andthe environmental danger they represent. Agrochemical manufacturers consider that thepressure exerted by public opinion and governments on environmental issues might lead toa market contraction over the next years. Their main claims focus on simplifying andspeeding up the complex red tape involved in the registering and authorising the sale ofphytosanitary products caused by the approval of Directive 91/414/EEC. Besides, they askfor an adaptation of the rules established by the directive above to the agricultural andclimate conditions in our country (in order to consider the great variety of crops that requirespecific phytosanitary treatments). On the other hand, they think that the criteria estab-lished by the Law 11/97 on Packing and Packing Waste are very demanding for the man-agement of phytosanitary product containers. In this matter they focus their action on thepractice of ‘triple rinsing’ and its acknowledgement by the government as a sufficientrequirement for the containers to be handled by means of an integrated treatment system.

Several environmentalist organizations (AEDENAT, Asociación Vida Sana, WWF Spain,etc.) have launched campaigns to raise public awareness on the problems that pesticidescan cause on human health and the environment. They intend to promote a social debate onthe way food is nowadays produced and on the reduction of pesticide use in agriculture.

The general idea is that, the drafting of environmental policies in Spain must be based onthe debate between the government and the different stakeholders: This is the purpose theEnvironment Advisory Council (CAMA) was created for. It includes experts, environmen-talist NGOs, consumer unions, etc, together with representatives of all Ministries withcompetence on environmental issues. This council was established in July 1994 to act asthe co-ordination mechanism for drafting and monitoring environmental policy and pro-posing measures aimed at improving the compliance with the international organizationregarding sustainable development. The problem is that some of these organizations(mainly environmentalist NGOs) have left the CAMA. It is just an advisory body whosedecisions are not binding for the Ministry of Environment.

At the present moment, the drafting process of new policies is determined to a great extendby the adaptation of European Union regulations and by Spain's signing of internationaltreaties, that are being adapted to the national situation.

3.3 Objectives and instruments

The Spanish environmental policy has the following objectives:• Promoting an environment aimed at rising citizens’ quality of life.

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• Supporting private initiative and have the whole society play a central role in the envi-ronmental policy by means of information, environmental education and the dialoguewith all interested social sectors and NGOs with a shared responsibility.

3.3.1 Water policy

The Water Policy rests on two basic pillars: a savings policy and a quality policy. Opti-mizing existing infrastructures in order to obtain the maximum performance and raisepublic awareness carries out the saving policy. Considering how essential water is for theSpanish agriculture and food system, and the maintenance of rural areas, the Ministry ofEnvironment and the Ministry of Agriculture, Food and Fisheries are reviewing the Na-tional Irrigation Plan. The priority actions included in this Plan are the consolidation andimprovement of existing irrigated lands, in order to: consolidate the Spanish agricultureand food system, promote water saving and increase the competitiveness of irrigationcrops. One of the main objectives of the irrigation transformation and improvement ofirrigated lands is to promote the potentials of agriculture in more competitive sectors. TheMinister of Agriculture Loyola de Palacio reported to Parliament on November 11th on theNational Irrigation Plan. This Plan intends to promote the modernisation of Spanish irriga-tion farming to cover one million hectares over the next ten years. Total investments areexpected to reach 750,000 million pesetas.

Another foreseen instrument that has not been ratified yet is the National Hydrologic Plan,which must be the cornerstone for the development of new infrastructure works capable ofguaranteeing the supply to population and the fulfilment of agriculture needs. It is foreseenthat all measures included in this Plan should rely on a consensus among all governmentlevels, sectors involved and the entire society by means of the Water Council.

The quality policy is included in the National Wastewater Sanitation and Purification Plan,which is the planning instrument for the water sanitation and purification infrastructuresSpain has to build until the year 2005.

3.3.2 Nature preservation policies

The Nature Preservation Policies is articulated in three main areas: Natural and ProtectedSpaces, Biodiversity and Forest policy.

The Biodiversity Policy is included within the Spanish Biodiversity Strategy. The mainobjectives are: Implementation of measures aimed at ex situ and in situ preservation and atthe sustainable use, the access to genetic resources and technology, including biotechnol-ogy, and the equitable distribution of the benefits produced by the use of resources. ThisStrategy is not binding and therefore just represents the general framework for the Spanishbiological diversity policy.

One of the objectives of the biodiversity policy is to preserve existing Phytogenetic Re-sources. For this purpose the Ministry of Agriculture established in 1993 the PhytogeneticResource Centre, depending from the INIA, which is the institution in charge of preservingcollections, keeping seed bases and documenting phytogenetic resources. Furthermore, itperforms all tasks related to the management of germoplasma stored, both base and activecollections, and whatever technical support or co-ordination tasks it is entrusted with.

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Together with the establishment of this centre, the Ministry of Agriculture approved thePhytogenetic Resource Preservation and Use Programme, with the Four-Year Action Plan1993-1996, which made the first specific call for allocation of subsidies for phytogeneticresource preservation and use action projects. This type of public call is done every yearand is open to non-profit entities responsible for germoplasma collections.

Within the National Biotechnology Programme and in its environmental area studies havebeen foreseen in order to improve the biosafety of processes involving the release of ge-netically modified organisms. There is a crop protection area within the National Agricul-ture Research and Development Plan which promotes the use of natural means for pestcontrol, the optimisation of the use of phytosanitary products, the development of inte-grated control systems, etc.

The main purpose of the environmental policy in biotechnology is to reduce the risks andprevent any harm to human health that could derive from such activities, and very espe-cially, to prevent any such risk or harm that that could have an impact on the differentelements and goods that build up the environment. Legal instruments have been devised inorder to meet these objectives. The confined use, release and marketing of geneticallymodified organisms was regulated by the Law 15/94 and the Executive Order 951/97 de-veloping the former one. These pieces of legislation are the transposition of directives219/90 and 220/90 and do not incorporate any significant modifications to them.

3.4 Interactions with the EU

The objectives of Spain's policy on environmental matters fully agree with the objectives ofEuropean environmental policy. However, as we mentioned above, the Spanish environ-mental policy adopts a horizontal approach (natural resources approach, which does notcover environmental problems with a global perspective), and therefore no priority produc-tive sectors are defined. This is not the case in the European environmental policy as de-fined in the 5th Environment Action Programme. This programme focuses a great part of itsobjectives on environmental protection in agriculture, since this has and generates by itselfa series of specific environmental problems that can be solved more effectively at Euro-pean level. The reduction of inputs in agriculture, especially pesticides and fertilizers isespecially relevant. In fact, one of the objectives for the year 2000 listed in the 5th Envi-ronmental Action Programme is to achieve a significant reduction of pesticide use per unitand to achieve that farmers use the Integrated Pest Control methods.

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Environmental problems in agriculture are not directly addressed by Spanish environmentalpolicy; they are addressed in the different sub-policies with little depth. However, theMinistry of Agriculture supports the establishment of organization such as the ATRIA(Integrated Treatment Groups in Agriculture), to promote integrated pest control actions.

In the field of biodiversity, the 5th Environmental Action Programme promotes the preser-vation of genetic resources, since they are an invaluable source for areas such as medicine,biology, agriculture and science in general. In this aspect, Spain is meeting this objectivewith the activation of several germ plasm banks and the Phytogenetic Resource Centre.Besides, it entered the European Cooperative Programme on Genetic Resources and Crops.

Finally, the 5th Environmental Action Programme emphasizes biotechnology associatedrisk and accident management. The Programme is concerned with the risks of biotechnol-ogy not only on human health but also on environment as a whole. It considers the possi-bility that the generalized use and release of new genetically modified organisms mightaffect the delicate natural balance or have impacts on evolution itself. Spanish environ-mental policy does not put as much importance on this aspect, and therefore does not ar-ticulate another instruments apart from legislation for its control. Nevertheless, Ministry ofEnvironment is responsible, at long last, of the biotechnology regulation.

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4. Farm Support and International Trade Policies

4.1 Introduction

The Spanish agriculture has a series of structural features that condition the design andeffectiveness of policies. One of the features is the duality in the Spanish farm structure.Together of traditional very small-sized units, there are other very large and highly capital-ised ones. As opposed to the small competitive and highly subsidized agriculture (semi-aridarea in the interior), we find a competitive agriculture (humid Spain and Mediterraneancoast) with products suffering great price oscillations and with hardly any subsidies (fruitsand vegetables in the Mediterranean coast). A second feature is the high dependence on factors external to the activity. That is due bothto the origin of the inputs and to the destination of the outputs. The farming production haslooked for support for its demand in foreign markets, trying to find in extra-early produc-tions, which are highly productive, the competitive advantages required to sustain its pro-duction growth. A growing percentage of the final production goes to exports. There is alsoa growing central role played by exports of Mediterranean products (olive, wine, fruits,vegetables, rice, cotton, tobacco and sheep) as compared to continental ones (cereals, sugarbeet, oil seeds, protein seeds milk and cattle meat). On the other hand, the oligopolisticcharacter of a great part of agriculture inputs (mainly agrochemicals) has determined steepprice climbs and an increase of import of these inputs. Furthermore the agriculture andfood industry is the final destination of more then 80% of Spanish agriculture. Besides themaintenance of income, policies oriented at promoting and developing the agriculturesector are changing to include a higher integration of agriculture and food-farming produc-tion. Another feature is the subsidy policies. Total subsidies to exploitations have grown from3.8% of total income of farming units in 1986 to 26.7% in 1994. However, this last figurefollows an unequal distribution, with a total share above 50% in some regions. A last feature is the low participation in value-added generation (food processing and finalconsumer).

4.2 Issues

The questions underlying the design of Spanish agriculture policy are the solution of thestructural problems and the increase of agriculture competitiveness in the internationalmarkets, so it can confront the new scenario set up by the CAP reform and the GATTagreements.

The objective of the CAP Reform of 1992 was to reduce the high costs of subsidies toproduction and of the stimuli for a constant production growth. The EAGGF budget wasgrowing without control at the same time as the agriculture surpluses, which is used tojustify the reform. The need to protect the environment has been added to his justification(farmers as nature preservers).

The agriculture policy is thus facing a contradiction: the need to improve and update farm-ing units in order to improve productivity and competitiveness of the sector, and impositionof restrictions to production levels. Therefore the 1992 CAP reform has solved the problem

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by changing its productivity orientation (increasing production) to a production controlsystem (by means of quotas).

The CAP reform has had the following impacts on Spanish agriculture. Firstly, the conti-nental (interior) products have been affected, but the Mediterranean ones not, so in generalthe above-mentioned duality between traditional and less competitive units; and modern,highly capitalised and very competitive units has been reinforced. This would be a merereflection of the above-mentioned contradictions: only certain productions would be fro-zen, stimulating the productivity increase of other ones in order to improve their competi-tive capacity. Only if this higher capacity finds markets that support production increasesemployment will not be affected. But this effect will be sure for the former productions. And secondly, the restructuring, capitalisation, concentration or adaptation processes offarming units now loose part of their incentives, therefore they would slow down. Obtain-ing a certain income will not depend any more from the production level obtained, butrather from the mere property of land, livestock or trees without any risk or property loss.On the other hand, the incentives to rent land are also lost. This will end up in subsidizedunderemployment in agriculture. This second feature is deepened by the above-mentionedcontradiction, since the productivity and competitiveness increasing processes required tomaintain production (and employment levels) in an open and highly competitive environ-ment are endangered. Once again, and going back to the first point, this will affect moretraditional farming areas (mainly continental agriculture) than those that have much to gainfrom improving the competitiveness of their products, even if they have to make this effortby themselves.

GATT Agreements However, one of the forces behind the last CAP reform can be found in the GATT Agree-ments and in the pressures exercised during the negotiations, especially by the USA andAustralia in order to liberalise the trade of farming products. The CAP reform establishedthe end of the incentives to production, and left as only instruments the support of pricesand the establishment of production quotas. The income sustaining policy will be per-formed from now on by means of indemnities in the way of fixed payments per hectare oranimal4.

The above-mentioned contradiction is not solved, because we are now facing a new one.The increasing opening of European markets as a consequence of the GATT Agreementsand the agreements between the EU and countries of the Mediterranean basin requires theneed to stimulate productivity increases such as to maintain the competitive capacity ofEuropean farming products. On the other hand, the reduction or freeze of production, evenif it does not entail an income drop, will intensify the process of excluding farmingworkforce, which will entail a rise in unemployment figures and a reduction of farmingactive population in areas where this is still important. Subsidising and looking for non-farming production alternatives (diversified rural development as opposed to just agricul-tural development) are the solutions proposed in order to maintain the population in therural areas.

4 This is the background behind the reform of subsides to the olive oil sub-sector that has caused such tre-mendous polemics. The key of the initial reform, aside of the problems of quota allocation among countries,was in the step from subsidies to production to subsidies per tree.

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Spain's incorporation into the European Union, together with the compromises assumed bythe Spanish government in the Uruguay Round of the GATT are the facts that build up thebasis for decision making in the area of foreign commercial policy in Spain.

The liberalisation of the goods and services markets will have significant impacts onSpanish economy for two main reasons: low exporting vocation of Spanish companies andthe trend to external imbalances. Due to these two reasons and despite of the fact thatmarketing opening will have a positive effect on exports, the global expected effect mightbe a greater trade deficit. However, over the last years the Spanish trade deficit is beingreduced: on the one hand because of the positive effects of market liberalisation and on theother hand because of the changes in Spanish trade specialisation, to the detriment of moretraditional sectors. In the last years, Spanish exports have experimented a significant in-crease.

Agriculture Agreement of the Uruguay Round The Agriculture Agreement of the Uruguay Round has meant that countries will have toassume three important compromises: control of subsidies to exports, transformation ofentry barriers into lower tariffs, and reduction of domestic subsidies to agriculture. Thisagreement will have significant consequences on Spanish foreign trade due to the signifi-cant share (11.6%) that food exports have, and mean a significant trade advantage as com-pared to others. The impacts of this agreement on Spanish agriculture can not be under-stood without taking into account the impacts of the CAP. Thus, the last reform of the CAPhas led to a reorientation of farming activities toward products not affected by the reforms,which have not been subsidised and are undergoing an increase in demand, such as the fruitand vegetable sector. Consequences of this reorientation may be a withdrawing from lesscost-effective crops, global increase in specialisation, increase in production efficiency and,eventually, an increase in pesticide and fertilizer use. The liberalisation of world marketswill mean for Spain an increase of exports, but also a possibly higher increase of imports,due to the pressure of Latin American, North African and Southeast Asian countries(Sumpsi, 1996).

Agreement on Sanitary and Phytosanitary Measures The main objective of the Agreement on Sanitary and Phytosanitary Measures (SPSAgreement) is to attain harmonisation between countries and equivalence of Sanitary andPhytosanitary regulations, so that countries do not use these regulations as entry barriers. Itis not clear yet the degree of effectiveness this agreement will achieve, due to the fact thatthe intervention margin of governments is quite big. The Spanish government follows therecommendations of the FAO on this subject, listed in the Codex. For Spanish agriculturethe harmonisation on the field of pesticides has entailed an increase of intra-communityexports. For the Spanish agrochemical industry it will mean an increase of competition byEuropean products and an increase in their imports. In the harmonisation process of legalregulation, the Corporate Association for Plant Protection (AEPLA) is exerting the highestpressure. This organisation claims for a stronger position of the Spanish government todefend national manufacturers, in order to prevent unfair competition and to adopt strictercriteria for the admission into the national registers of products coming from foreign coun-tries. At the same time, both this organisation and the farmer unions claim for a strict com-

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pliance with the regulations by reinforcing border controls5 of agriculture products comingfrom third countries.

Agreement on Trade Related Intellectual Property Rights Aspects The Agreement on Trade Related Intellectual Property Rights Aspects (TRIPS) has meant ahigher protection for technological innovations of companies all over the world. Thishigher protection of copyrights and patents will have positive effects for innovating coun-tries and will compensate partly at least, the reduction of agriculture production (Orts andSuárez, 1996). In the Spanish case companies will not be able to benefit from these effects,since they only rarely resource to patent protection systems. This is due on the one hand tohistoric reasons, such as the former weak and insufficient legal regulation of patents, andon the other hand, to the tradition of Spanish business owners, that tend to resource to theuse of licenses of foreign patents. Spanish companies register 15 times fewer patents inSpain than American ones in the United States, 10 times fewer than the German ones, 6times fewer than the British ones and 4 times fewer than the French ones (Sumpsi, 1996).

The main actions carried out by the Spanish government on trade policy matters point outto two directions: First, actions related to harmonisation of Spanish legal systems withthose of European countries and the compliance with the GATT agreements. And second,policies aimed at supporting exports in order to help Spanish companies to overcome theirexport weaknesses.

4.3 Actors and process

There are three great professional associations of national scope6 that defend the interestsof Spanish farmers. These are ASAJA (Agricultural Association-Young Farmers), COAG(Co-ordination of Spanish Farmer and Stockbreeder Organization) and UPA (Small Farm-ers Union). Furthermore, the influence of new stakeholders (environmentalists, consumers,industrials, etc.) on the public opinion and scientific community is increasingly significant.

ASAJA results from the merger of organization made up by extensive agriculture farmersof Andalucía, Extremadura and Castilla. Today it counts on a wide and heterogeneoussocial base (large companies of large landed estate origin together with modern familyunits). Internally it is structured in professional and regional organizations and sectorialassociations (rice, tobacco or cotton producers, resulting from the old branch unions).COAG is the co-ordination structure of regional or provincial organizations. It is a ratherdecentralised organization. This co-ordination structure was originally made up by smallfamily farmers, however, at the present moment, its social base has become more diversi-fied including also modern units. This makes it more difficult to adopt a common positionin face of the CAP reform. UPA is a federation of small farmers associated to the UGT(General Workers Union). It has a highly centralised structure, and the support provided bythe UGT gives it a more relevant role than the one it should have according to its socialbase, made up by farmers with small-sized units of a family character.

5 CCAA share powers in inspection and sanction of commercial exchanges. 6 There are two other organizations that can be important in regional areas (such as the Comisiones Llabregasin Galicia) and even at national level (such as the Iniciativas Rurales).

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Spanish agricultural professional organizations, as opposed to their equivalents in theremaining European Union countries, have a low membership, a low degree of participa-tion in the different agricultural associative structures (sectorial organizations, co-operatives, irrigator unions, etc.) and few available resources.

Their positions regarding the CAP reform are quite different. A first approach starts fromthe concept of the farming unit as an entrepreneurial project that intends to maximise cost-effectiveness of invested capital. According to this approach, agriculture is a productivesector like any other one, which must maintain the productivity criteria without replacingthem by others of a social, environmental or any other character. They do not oppose theapplication of measures aimed at promoting rural development on the basis of not justfarming activities, but they do not accept this being done in detriment to the subsidies toagricultural production. Thus, they do not accept the reduction of agricultural protection-ism, which causes price intervention to disappear in order to replace it by direct subsidies.According to this approach, it would be a question of avoiding competitiveness losses tooccur, since they would lead to losses in activity levels (and employment), aside of the factthat this would entail a loss of the social legitimacy of farmers in their role of entrepre-neurs. This business approach is defended especially by ASAJA but also by some of theCOAG unions (especially those made up by farmers with modern family units).

A second approach is marked by a plural and diversified perspective of the rural world. Thebusiness approach described above is rejected because it considers farmers as any otherbusinessmen without any further consideration. The small family-unit farmer is not consid-ered as a businessman trying to obtain the maximum return. He has in his unit his means oflife and working instrument, from which he obtains a kind of salary (something that couldbe matched to a free-lancer). Agriculture does not play just a productive role but also asocial one, as articulator of the rural world. Therefore this approach accepts the idea of parttime employment in agriculture, complemented by other activities, as opposed to thefarmer devoted to his ‘business’. They accept an orientation change in agricultural policyentailing subsidies to the farmers and not to the product7. This approach is defended byCOAG (especially by the unions of Andalucía and Extremadura), UPA (their leaders posi-tion) and Iniciativas Rurales.

There is another approach characterised by the strong rejection of the guiding principles ofthe CAP reform and the GATT agreement linked to environmentalist movements with theparticipation of some sectors of COAG (small farmers) and SOC (Farm Workers LabourUnion). They defend the return to reference prices and to national protectionism, at thesame time they defend the productive task of farmers, as their main idea.

On the field of effective actions, ASAJA has chosen to strengthen service provision to theirmembers, negotiate with industrial business unions and promote training actions. COAGand UPA on their side, promote contacts and co-operation with other rural non-farmingassociations in order to participate in the development of general rural development poli-cies. In both cases they promote the communication with the public powers responsible forthe drafting or implementation of agricultural policies. We cannot forget that there areother organizations that represent farmer interests, such as the sectorial agricultural pro-

7 However, they oppose the reform of the olive oil sector because these links subsidies to the number ofhectares owned, thus benefiting the larger units.

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ducer organization (some of the most significant ones are included in ASAJA); agriculturalproducer organizations linked to specific quality (selected breeds, etc.); organizations ofco-operatives (Spanish Confederation of Agricultural Co-operatives, CCAE8) and othereconomic associative entities and organizations at regional level with different goals. Theagricultural producer organizations of general scope, recognised by the MAPA (ASAJA,COAG and UPA) are therefore not the only ones representing farmers' interests, however,they are the most significant ones.

4.4 Objectives and instruments

Faced with these issues, the Spanish government has focused its actions on the followinggroups of agricultural policies. Due to the interdependency of Spanish and communityagricultural policies, we are going to study them together, emphasising the measuresadopted by the Spanish government in the development of community directives.

4.4.1 Income policy

This policy has changed with the CAP reform. Although the 1996-1997 campaign is thefirst one in which the reform has been fully applied, the intervention prices are being re-duced since the 93-94 campaign. The income losses are balanced with complementarysubsidies in the way of fixed amounts per hectare, according to each region's average pro-ductivity. The prices of agricultural inputs are also subject to intervention, like in the caseof the establishment of maximum prices for diesel fuel9.

Part of the subsidies aimed at maintaining farmers' income can be included among thesectorial and marketing policies. However, we can include here the subsidies for severelydisadvantaged areas (Areas with severe natural or other type limitations to productivity,such as mountain areas, areas close to natural parks, or areas that are undergoing depopula-tion processes). Agriculture taxes have also a special treatment, in addition to the SpecialAgriculture Social Security Scheme (REASS), the unemployment protection system fortemporary farm workers (this is where the Rural Employment Plan, PER, works), and theAgriculture Insurance System, together with other special subsidies and indemnities. Theyall build up the set of income policies.

These policies aim at guaranteeing a stable income to farmers within a context (CAP re-form) in which the subsidies to production are going to be partly substituted by directsubsidies. The funds will be redirected in order to strengthen the achievement of this ob-jective, with growing attention provided to the most disadvantaged areas and groups, notforgetting the complementary objective of preserving the environment. Most of the fundscome from the CAP and are subjects to its guidelines and priority objectives. They arechannelled by national (MAPA) or regional institutions according to their competence andin the way of different instruments (fiscal ones, financial ones, price intervention, andincreasingly in the way of direct transfer of funds).

8 Most of them are for marketing purposes, since the ones focusing on production (and the AgriculturalTransformation Societies) tend to join the agricultural producer organizations. 9 The maximum price system does not affect diesel fuel since June 1996.

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4.4.2 Agricultural marketing policies

These policies are closely related to some of the fundamental objectives of the CAP, suchas improvement of competitiveness and increase of farmers' income (by means of increas-ing the value-added of the final farming product). The Associations of Agriculture Produc-ers (APA) are promoted for this purpose. The following ones have been established: Or-ganization of Fruit and Vegetable Producers. Their tasks are the intervention in the marketsby means of retiring products to avoid price cuts (for this purpose they have an operationalfund that receives community support), planning of production, concentration of supply,application of techniques and waste management in an environment friendly way; Organi-zation of Banana Producers (only in the Canary Islands), Organization of Hop Producers;Organization of Cotton Producers; and Groupings and Unions of Producers (with a secto-rial character, they have a Special Reserve Fund). Special ones are the Associations of RawTobacco Producers, that have a special subsidy; and the Associations of Olive Oil Produc-ers whose task is to manage the subsidies to production (at least up to now). These Organi-zation of Producers and Associations of Producers receive support in the way of subsidies.

Inter-professional food farming organizations are promoted in order to vertebrate the food-farming sector. The Inter-professional Agreements in the Sugar sector, for example, regu-late the relationships between sugar beet producers and sugar industries.

A specific contractual scheme is applied to agricultural products in the way of predeter-mined contracts in the following cases: products for which a contract between producersand manufacturers is required in order to obtain certain EU subsidies; products aimed atimproving food farming quality; and products typical from certain areas whose marketingentails certain problems. A system of assistance has been assigned to this contractualscheme. This system consists of subsidies to interest rates in management loans, subsidiesto promotion campaigns and subsidies to working costs of the contract Monitoring Com-missions.

Market interventions are classified in sectorial support actions to grass crops, cereals, rice,fodder, sugar, cotton, linen and hemp, tobacco, hop, olive oil, wine for alcohol, fruits andvegetables, and banana, with intervention prices, and subsidies to production, marketing,consumption (olive oil), subsidies to the use of these products as inputs for their use ortransformation (for example, sugar in the chemical industry, olive oil in the tinning indus-try), storage, export, etc. Some of them are managed by the CCAA and co-ordinated by theSpanish Agricultural Guarantee Fund (FEGA), which provides the funds.

The community subsidies to agricultural trade, limited by the GATT agreements are furthertypical actions of agricultural policy, and they include export operations with restitution orsubsidies to the supply of farming products to the Canary Islands.

The funds that finance in Spain the application of the CAP come from the EAGGF (Guar-antee section for occasional interventions, and Guidance section for structural interven-tions). The member states appoint the Bodies (one or more) that will carry out the paymentof the interventions on behalf of the EAGGF. The Spanish Central Government allowsonly one paying Body per Autonomous Community. There are also paying entities of na-tional scope for the subsidies the government processes, settles and manages, such as theFEGA (Spanish Agricultural Guarantee Fund), the FROM (Organization and Regulation

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Fund for the Market of Fisheries and Marine Farming Products), and the Directorate Gen-eral of Rural Planning and Development itself.

4.4.3 Food policy

Firstly, food policy aims at the promotion of consumption (research on Spanish diet, andpromotion and publicity of domestic products; there is community funding and a specialDivision established by the Commission to promote farming products). Secondly, at de-fending and promoting food quality (development of national and community quality stan-dards; promotion of specific and origin denominations, of specificity denominations and ofecological agriculture10; and inspecting and performing quality controls in collaborationwith the CCAA11). And thirdly, food policy aims at promoting the food industry.

4.4.4 Food industry support policy

This policy aims at improving the transformation and marketing of agriculture and fishproducts (using bonuses on interest rates to the loans given to companies by banking enti-ties resulting from agreements with the Secretary General of Food to promote investmentsin priority areas). It also intends to provide direct services to the sector in order to improveand update its technological and managerial structures and its management systems (bymeans of Management and Technical Assistance Plans). It also intends to correctinterregional economic imbalances (By means of subsidies under the Law 50/1985 onRegional Incentives that promote corporate activities and focus on their placement in areaswith lower development levels12).

The community also foresees the existence of subsidies to the food industry that are man-aged by the MAPA, although the current trend is to delegate the management to theCC.AA. There are also more specific measures, such as subsidies for restructuring thesugar industry13 or subsidies to improve the olive oil production quality. It consists of aTechnical Assistance Plan for oil mills and training courses for oil mill masters.

4.4.5 Agricultural association policy

This includes the support to the Integrated Pest Treatment Groups in Agriculture (ATRIA),whose objective is fighting pests of different crops in an integrated, using new techniquesand making use of phytosanitary products in a more effective, rational and economic way,in order to improve plant production. All this should be achieved by subsidising the techni-cal staff hired by the ATRIA, phytosanitary products and machinery and the Organizationsand Associations of Agricultural Producers for Marketing.

10 Specific actions can be National Fairs, Food of Spain Awards, World Food Day and co-operation andcollaboration actions. 11 The Ministry of Agriculture, Food and Fisheries (MAPA) and the CC.AA. collaborate in these tasks. Thereis also a Table for co-operation among CC.AA. where the MAPA is also represented, that establishes yearlyobjectives, plans controls and information is exchanged, aside from monitoring cases affecting more than oneAutonomous Community. 12 These subsidies are co-financed by the EFDR. 13 These funds are allocated by the Spanish government and their objective is to adapt the structure of theSpanish sugar industry, adapting factory size and updating the technology of their facilities, machinery andequipment to reduce production costs, improve the quality of the final product and protect the environment.

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The promotion of agricultural associative integration to increase the income and productiveefficiency of farmers is also included. This should be achieved by means of a subsidy planfor agricultural co-operatives and agricultural transformation societies recognised undercommunity regulations as producer associations or organization integrating mainly farmers.This policy also includes the consolidation, merger or integration of agricultural associativeentities that join or form higher level ones. This is aimed at agricultural co-operatives andtransformation societies resulting from the merger of smaller sized ones. The last action ismanaged by the Directorate General of Rural Planning and Development and it aims at thesupport of co-operative promotion and training, the latter being the basis to the develop-ment of agricultural co-operatives. This policy also promotes and supports professionalassociations of the food farming sector with technical and organizational support, supply ofinformation, meetings between public institutions and professional associations of the foodfarming sector, subsidies for extension activities, subsidies to enable these entities to par-ticipate in the Institutions of the European Union and the Public Administration, and car-rying out projects of different specific actions, like surveys, studies, reports, and organiza-tion of conferences.

4.4.6 Sectorial supply policies

They include all the legal rules that regulate the different Common Market Organization,actions for the control and improvement of farming agricultural inputs and integrated andpreventive actions for the control of harmful agents for plants (Plant health). As far asagricultural inputs are concerned, the objectives of national policy on phytogenetic re-sources can be summarised in two great areas: To preserve the biodiversity of domesticphytogenetic resources, with a special reference to those suffering a severe genetic erosion;and to promote the use of high quality (officially controlled in terms of agronomic charac-teristics) seeds and seedbed plants, adapted to the different climate and soil conditions inSpain.

Regarding the first objective, the Ministry of Agriculture, Food and Fisheries drafted in1993 the Phytogenetic Resource Preservation and Use Programme. The main purpose ofthis programme is the preservation of native phytogenetic resources to prevent the loss oftheir genetic diversity so that they can be used in improvement programmes. The pro-gramme has a mobilising financing by means of the budget of the Food and Farming Re-search and Technology Institute (INIA) for collection, preservation, characterisation, as-sessment, documentation and other actions aimed at maintaining and using phytogeneticresources. The programme intends to promote phytogenetic resource preservation and usein the agriculture research centres depending from the CC.AA., the Phytogenetic ResourceCentre of the INIA and in those of public and non-profit private organization responsiblefor collections of plant germoplasma. Companies are not involved in this programme.

Regarding the second objective, there are subsidies, financed by the EAGGF, to multiply-ing farmers, collaborators of producer companies, to promote the production of certainseeds (rice, hemp and a great number of fodder and grass species). The MAPA grantssubsidies for the interests of credits for the purchase of certain high quality seeds, officiallycontrolled. There are also subsidies to seedbed plant producer organization for investmentsand work such as to enable the disposal of the adequate base and parental material havingthe necessary identity, variety pureness and health conditions, and to promote the use of

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this material. In addition to these subsidies, there are also courses organised and financedfor further training and specialisation in seed and seedbed plant technology.

There are also specific actions tending to give incentives to the production of officiallycontrolled plant material. Some modifications have been introduced in the Technical Rulesof Seed Certification Control, in order to facilitate the entry into the market of small sizedproducer companies (in light of the disappearance of some large companies) that require alegal channel to incorporate their products.

The Commercial Variety Register is the control mechanism for seed quality. The inclusionin this register of new varieties with an economic interest enables the marketing of thismaterial in all of the European Union. This register provides information on studies on newcommercial and protected varieties. It has a computerised index and monthly and quarterlyissues. In order to carry out quality control, it conducts laboratory and field tests for theevaluation of varieties. It has also established collaboration agreements with public andprivate institutions and universities, in order to count on the newest techniques and makeavailable resources profitable.

Regarding plant health, MAPA established an integrated pest control promotion pro-gramme through the Integrated Pest Treatment Groups in Agriculture (ATRIA). One of theobjectives is the promotion of the ATRIA. Subsidies are granted to them to assume the taskof carrying out the phytosanitary treatments by means of granting subsidies. These aremanaged and processed by the CCAA with policy powers in the area of plant health, whichare also empowered to establish the conditions and technical requirements depending onthe type of crops included.

Within the objective of the integrated fight against harmful agents for plants promoted bythe ATRIA, a new action entailed the employment of specialised technicians and the pur-chase of phytosanitary products with a high potential for its application. Subsidies, co-financed by the EU were granted for both action lines.

Other actions in plant health are the control of plant defence means and the phytosanitaryinspection. Both aim a controlling their use, both by limiting the amounts used and byfavouring their proper use in order to obtain higher cost-effectiveness in agriculture. TheOfficial Register of Phytosanitary Products is in charge of authorising the use of phyto-sanitary products and to participate in the community review of old active substances andevaluation of new active substances according to the Directive 91/414/EEC. By means ofthe information on plant product residues, it will be possible to meet the maximum residuelimits (LMR) required to justify the authorisation of phytosanitary products in the differentcrops. Harmonised programmes for the surveillance, marketing and use of phytosanitaryproducts have been established in collaboration with the CCAA. Regarding health inspec-tion, at the present moment the Phytosanitary Inspection services are being connected tothe computer networks of the National Harbours. Aside of the opening of markets in thirdcountries to Spanish plants and plant productions, the international activities maintainedwith other countries and international organizations included: attendance to internationalmeetings, international relations in Spain and bilateral agreements (with the USA, Mexico,Switzerland etc.).

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4.5 Conclusions

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5. Policy Interactions

5.1 Introduction

After reviewing the policies that might influence the technological innovation processes ofbiotechnology, seed and agrochemical companies, we will try to outline the main trendsoriginated by the interactions among them, as well as the potential implications of thesetrends for these companies' innovation strategies, for employment and for biodiversity. Inthe second stage of the PITA project we will analyse the impact of these policies on com-panies and PSREs cleaner innovation strategies and how they are confronting these newissues.

5.2 Increase of agricultural competitiveness

Both the new CAP reform and the last GATT agreements will force Spanish farming unitsto increase their competitiveness in the international markets. Competitiveness will beaffected by the reduction of production costs, but also by the ability to satisfy an increas-ingly specific demand. Both issues can arise simultaneously. In the face of market liberali-sation and reduction of production subsidies, farmers can react by reducing their produc-tion costs in order to maintain their income level. Production costs can be reduced by usingcheaper agricultural inputs. This reaction could increase negative impacts of intensivefarming on the environment and would be a negative interaction with the objectives ofagricultural policy of reducing agricultural inputs and achieve a more sustainable agricul-ture.

The second option entails, on the one hand, the change from low productive agriculturalsystems to more productive ones, and, on the other hand, the incorporation of technologicalinnovations and product diversification. In Spain the change of agricultural systems canproduce an overexploitation of some natural resources, like water. A controversial issue isarising in water policies. The MAPA has presented an Irrigation Plan that includes theconsolidation and improvement of Spanish irrigation farming. However one of the mostsevere environmental problems caused by agriculture is the over exploitation of waterresources.

Initially, product diversification and incorporation of technological innovations has a posi-tive impact on biodiversity. Agro-environmental subsidies from CAP can encourage theincorporation of cleaner technological innovations. In this case, one of the agriculturalproducers’ options will be to demand higher quality seeds adapted to local specializedconditions, thus enabling a reduction of the use of other inputs.

5.3 Environmental pressures and consumer concerns

Over the last years, Spanish public opinion has become increasingly aware of environ-mental issues. Environmentalist organizations and consumers pressures have increased andsociety is putting more attention on these issues.

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Several environmentalist organizations have launched campaigns against the use of pesti-cides, in favour of organic farming and against the use of GMOs. Consumers are starting todemand from the government more information on these issues and asking for lower levelsof pesticides residues in fresh food.

The government, as was said before, is increasingly incorporating environmental issuesinto the design of its policies. Agricultural policy emphasizes on the reduction of agricul-ture's environmental impacts and the protection of biodiversity. Both agricultural researchpolicy and agricultural inputs improvement policy, promote the development and use ofhigher quality (in terms of agronomic characteristics) and more environmental friendlyfarming inputs.

However, the adoption of more environment friendly farming practices meets competitive-ness difficulties mentioned before and some gaps between environmental and agriculturalpolicy. Agricultural policy favours a reorientation of agricultural production to more com-petitive products that will have a higher environmental impact unless integrated measuresare taken. However, the environmental policy lacks this integrated approach.

The opposition of some groups to accept technological innovations with environmentalimpacts unknown, like GMOs, is increasingly strong, and the MIMAM awareness on bio-safety is increasing too. Although the Spanish research policy includes the research on theimpacts of agriculture on the environment, it does not do the same with the biosafety as-pects related to the GMOs release into the environment. Therefore, the MIMAN is requir-ing the introduction of a biosafety research programme within the National R&D Pro-gramme.

5.4 Company strategies

Market pressures and trends in all these policies can affect to biotechnology, agrochemicaland seed companies in different ways and provoke a change in their strategies for the nextyears. They will be specially affected by trends in intensive farming.

If in intensive farming is produced a trend towards a reduction of production costs, agro-chemicals companies would be hardly affected. On the other hand, if intensive farminggoes for technological innovation, it will increase its demand for agricultural inputs meetthe new consumer demands, including the environmental ones. This will mean that therewill be incentives for innovation in more specific products with less environmental impactsand for the diversification of seed producing companies' research lines, both in their objec-tives and in the species under study. The combined effect of both policies will produce ahigher degree of complementation between the research lines of seed and agrochemicalcompanies, which will reinforce the concentration process that has taken place over the lastyears.

Another trends in policies and in consumer concerns will affect agrochemicals companiesstrategies. Lower legal levels of pesticides residues in fresh agricultural products willstimulate innovation in agrochemicals more easy to eliminate and less harmful for healthand environment. But another issue to take into account is that many pesticides are cur-rently under review and there is a great degree of uncertainty. This can reduce the incen-

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tives for companies to undertake new research studies on products that damage less theenvironment.

The role to be played by the large biotechnology and seed companies will be very impor-tant by the ability to satisfy an increasingly specific demand. However, there will be alsoopportunities for small and middle sized companies to develop innovations for specificlocal problems, although biotechnological innovation in Europe could be delayed bygreater consumers and environmentalist opposition and the strengthening of biosafetyrequirements by European and national authorities.

5.5 Job implications

Job creation is mentioned as a basic need in describing the general context on which thesepolicies intend to intervene. Agriculture remains as the main economic support in largeareas of Spain, and it represents the direct or indirect means of life of an important part ofthe Spanish population. Thus, the main objective of MAPA is to slow down and stop theloss of jobs, especially in rural areas of continental Spain.

In 1996, the Spanish farming active population was 1,243,000 people, and 223,000 wereunemployed (MAPA, 1997). The reduction of population employed in agriculture has beenvery large in the last years (in 1984 the active population in agriculture was 2,073,000, with210,000 unemployed). Technical innovations applied to agriculture, which have reducedcosts, have caused productions to increase and prices to fall. The evolution of demand cannot keep up with the pace of productivity increase, so that production does not grow at arate enough to guarantee maintenance of employment levels. Job creation is mentioned as afundamental reason in the agriculture structural reforms policy, but it is never related toinnovation processes in agricultural inputs.

The food industry had an active population of 445,000 workers and 67,000 of them wereunemployed in 1996 (MAPA, 1997). The occupied population has remained fairly constantsince 1984. Over the last years, a significant part of the Spanish food industry has under-gone an important modernisation and restructuring process. The impacts on employment ofthis process can be very different.

The research policy is aimed at increasing the number of researchers in public researchcentres. The National Science-Technology-Industry System Articulation Promotion Pro-gramme within the PN I+D indicates that the specific objective is to increase human re-sources with technological capacity in companies. The subsidies co-finance working con-tracts.

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Interviews

J.L. Muriel Representative of the Directorate General of AgricultureResearch and Training, Regional Ministry of Agricultureand Fisheries.

A.A. Martínez Spanish Representative in the Biotechnology Committeeof the IV Frame Programme of the European Union, presi-dent of the Spanish Biotechnology Society (SEBIOT),member of the CICYT, Directorate General of Researchand Development, Ministry of Education and Science.

A.M. Muñoz Professor of the High Technical School of Agriculture andForestry Engineering School, University of Córdoba.

E. Montalban Gómez SEMINIS VEGETABLES. E. Rivera Subdirectorate General of Innovation and Technology

Infrastructures, Ministry of Industry and Energy. J. Cuartero Research Professor of the Experimental Station ‘La May-

ora’. J. Olivares Research Professor of the Experimental Station ‘El

Zaidín’. J.L. Peiró Abril Agriculture Engineer from RAMIRO ARNEDO, S.A. L. Sanz Researcher of the Institute of Advanced Social Studies,

IESA. V. Torres Representative of the National Institute of Agriculture and

Food Research and Technology, Biotechnology and ge-netic Improvement Department.