World Food Policy WFP Volume 4, No. 2, Spring 2018 | Page 27

The Role of Multinational Corporations in the Supply of
Agricultural Production Technology to China & India
as local firms (Personal communication
with John Deere in Beijing 2017). In
other industries explicit restrictions re-
main. For example, foreign investment
in the seed industry can only be done
through joint ventures with a Chinese
company that own at least 51% of the
company.
firm, Metahelix. In China, the biotech
company Dabeinong was able to higher
scientists who had been laid off by a big
Syngenta biotech lab in Beijing.
3. Policies and the Impact
of MNC activity on input
industry structure, research
and tech transfer
A policy in both countries that
provides incentives for both foreign
and local companies to invest in re-
search and innovation is government
investments in public sector research
and universities. According to Pardey
et al 2011 Chinese government agencies
spend more than the US on agricultural
research and India is third after China
and the US.
B
oth countries have tried to use
policies on FDI and imports to
support the upgrading of local
industry (Table 1). In the 1960s these
policies took the form of protecting lo-
cal infant industries by restrictions on
FDI and imports of agricultural tech-
nology. Policies gradually shifted their
focus to policies and regulations to
provide incentives for foreign firms to
transfer technology and management
techniques through joint ventures and
selling technology to local firms. These
two types of policies were combined
into FDI policies that would not allow
foreign firms to enter Indian or Chinese
markets unless they agreed to transfer
technology and research capacity to lo-
cal firms. These “Technology transfer
for market access” policies were elimi-
nated in India after 1990 but continue
in China (Holmes et al 2015). At pres-
ent under Prime Minister Modi’s “Make
in India” program foreign investment is
encouraged, and agribusiness is empha-
sized as a good area to invest in. China
officially eliminated most restrictions
on FDI after joining WTO in 2000. In-
terviews with executives from foreign
agricultural machinery firms in China
confirmed that they can operate under
the same set of policies and regulations
Restrictions on imports of ag-
ricultural inputs continue to be a con-
straint to technology transfer and inno-
vation. Since both countries are large
countries, most foreign companies
would eventually want to produce their
products in China or India, but many
would prefer to test the market with
imported technology before they make
major investments in production tech-
nology. Some would also prefer to pro-
duce key components of their technol-
ogies in their home country to reduce
the loss of control over key intellectual
property.
Intellectual property rights poli-
cies are similar in these countries. The
Indian system started in the colonial
period. In 1972 agricultural inputs and
medicines were excluded from product
patent protection. In 2005 patent pro-
tection for agricultural inputs and med-
icines were restored. The Chinese pat-
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