Biotechnology Responding to Product
Seminar Paper Development Needs: 
Funding and Prioritizing
Biotechnology Research
at EMBRAPA
M.C.C. Valadares
D.C. Monte-Neshich
October 1996
ISNAR Biotechnology Service BS
Seminar Papers reflect the views of the Copyright © 2001 by the International Service for National
authors and not necessarily those of ISNAR. Agricultural Research, The Netherlands. All rights reserved.
They are not official ISNAR publications. ISNAR encourages the fair use of this material.
Proper citation is requested.
Responding to Product Development Needs: 
Funding and Prioritizing Biotechnology 
Research at EMBRAPA
Maria Cleria Cordeiro Valadares and Damares Castro Monte-Neshich
Introduction first phase, PADCT invested US$ 172
Biotechnology is vital for the modernization million, of which US$ 72 million came from
and development of Brazilian agriculture and international loans and US$ 100 million from
industry, in order for the nation to continue to the Brazilian government. This money was
maintain its competitiveness in an increasingly used to support over 2,700 projects. The
aggressive world market. In a climate of finite second phase of PADCT started in 1991, and
investment, priorities for biotechnology must will finish at the end of 1996. The budget for
be adapted to national strengths and resources. this phase is US$ 290 million, with about US$
The benefits of agricultural biotechnology to a 40 million being allocated to the biotechno-
country that is developing quickly but which logy subprogram.
retains a large, often impoverished, agrarian In the past, the main priority of biotech-
population are obvious in terms of improve- nology was centered on education, particu-
ments in yield, nutritive value and crop relia- larly, post-graduate training for scientists in
bility. The other sectors of biotechnology are Brazil and abroad. Therefore, less attention
also vital to a country that is rich in biological was paid to determining priorities for science
resources still largely untapped. In order to and technology, research and development,
fully realize these benefits investment should and market growth. However, new approaches
be directed to strategic areas. to the subject, as well as the effects in the
EMBRAPA, as the largest State agricul- reduction of research funds, and the approval
tural research and development organization of biosafety and patent laws, have led institu-
in Brazil, holds a major share of the responsi- tions to pay more attention to prioritization
bility for setting priorities and directing invest- and competitiveness. Financial programs like
ment within its biotechnology agenda in the PADCT have established a simple method of
context of national agricultural and industrial dividing resources, where half is allocated to
objectives. The purpose of this paper is to set basic research projects and the other half goes
out the mechanisms whereby EMBRAPA towards the encouragement of cooperative
develops its priorities and policies for biotech- efforts among private companies and research
nology within the context of national financial institutes. This policy is very successful in
investment and national agricultural and directing development into new products,
industrial objectives. whose potential is discussed below. In the
long-term, this policy should allow increased
Priorities for Agricultural Biotechnology collaboration and improved efficiency in self-
in Brazil financing research programs.
Since 1984, the government has recognized
the importance of biotechnological products Encouraging Biotechnology Enterprise in
and processes, and the Ministry of Science and Brazil
Technology has implemented a National Pro- The Brazilian market for biotechnology-based
gram for Scientific and Technological Deve- products and services was estimated at US$
lopment (PADCT). This Program, which 17,082 million in 1990, which will increase to
concluded its first phase in 1991, was aimed at US$ 31,703 million in the year 2000. Agricul-
training scientists at post-graduate level, deve- tural and related agroindustries accounted for
loping laboratory infrastructure and establis- 24.3% of this figure in 1990, and this will be
hing mechanisms for interaction between uni- 29.5% in the year 2000. The rest of the mar-
versities, institutes and industries. During the ket is absorbed by research and development
129
centers, pharmaceuticals, public health, bio- International Cooperation Center on Agricul-
mass production, minerals, oils and biosen- tural Research for Development (CIRAD), the
sors. Since 1980, a total of 79 biotechnology- US Department of Agriculture (USDA), and
related companies and research institutes have the International Center for Tropical Agricul-
been established in Brazil. The majority star- ture (CIAT). Recently, research projects have
ted to operate in the period between 1981 and been negotiated with the participation of pri-
1992, and of these, 36 enterprises are geared vate groups that pay for research or establish
to basic biotechnological processes and pro- cooperation to address specific scientific pro-
ducts. For Craveiro and Guedes (1996), the blems in return for a share in royalties. These
creation of Biobras in the 1970s was a land- mechanisms encourage the development of
mark in Brazil’s biotechnological develop- strong research collaborations, focused on spe-
ment. cific subjects such as the development of mole-
A number of Brazilian industries lack cular marker technology, pre-breeding lines,
capital and rely on outside financial support to plant disease resistance, and pest and weed
develop new products. Until recently, private control, as well as animal genetics, breeding
companies competed with public research and reproduction. 
bodies for funding, but with the establishment
of cooperative programs, direct collaboration Potential for New Product Development 
now takes place. These collaborative efforts are Brazil’s rich biodiversity offers Brazilian agri-
expected to grow after the recent approval of culture great potential for the development of
the patent law by the Brazilian Congress. One new products with improved or novel proper-
such example of collaborative research is the ties. Many genes from exotic and wild plant
development of genome studies in citrus, species, micro-organisms and animals, which
using biochemical and molecular markers, contain important proteins, toxins or substan-
which involved a university and a private ces with pharmacological properties have not
juice-producing company. Another example is yet been isolated or cloned and their products
the development of molecular marker techno- have not yet been exploited. Biodiversity
logy and genetic mapping in Eucalyptus, an exploration and the use of molecular techni-
association between EMBRAPA/CENAR- ques contribute to product development as in
GEN and a cellulose-producing company. the production of plants resistant to pests and
These associations are essential for increasing diseases and to adverse environmental condi-
the competitiveness of Brazilian products and tions; micro-organisms expressing heterolo-
exploiting new markets. The outcome of such gous proteins, which are important for the
collaboration is expected to be a reduced pharmaceutical and food industries; and, dise-
dependency on expensive imports, and the ase-resistant animals. These natural gene reser-
creation of new job opportunities. voirs in Brazil are still largely untapped,
Agricultural product research is also mainly due to a lack of trained researchers in
being conducted by EMBRAPA in direct this field, and the sheer size of such underta-
collaboration with universities and private king.
companies. EMBRAPA, through CENAR- Techniques such as the use of molecular
GEN (the National Research Center on Bio- markers for taxonomic studies have been used
technology and Genetic Resources), has esta- recently in the study of cultivated plants and
blished cooperative linkages with many trees of commercial interest, with the aim of
national and international companies. Other improving breeding programs. In animal rese-
important cooperative agreements have been arch, molecular techniques show potential for
established with institutes and foundations application in the isolation of genes related to
like the Rockefeller Foundation, the Pasteur disease resistance, and for the development of
Institute, the French National Institute for new vaccines and diagnostic tools. There seem
Agricultural Research (INRA), the French to be great potential for animal vaccination
130
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T r a n s f e r
using genes instead of proteins. These new nal genetic resources, as they influence the
developments are currently receiving much potential development of new products.
attention. Strong linkages between the productive sector
Micro-organisms are important in many and the research community should be encou-
biotechnological processes, including food raged to fully develop new market opportuni-
production, plant protection and growth, ties. The Brazilian political approach to the
industrial enzyme production and the biologi- integration of applied and basic research pro-
cal control of pests and plant disease. In Brazil, vides a new strategy for revitalizing production
there is broad microbial biodiversity and most processes. The financial, policy and priority-
of the Amazonian and Savannah microflora setting implications of these new develop-
remains totally untapped. Isolating micro- ments will be examined in the following sec-
organisms and screening for specific active tions. 
substances are critical activities for the deve-
lopment of new medical and agricultural pro- Biotechnology Investment in Brazil
ducts. The global average investment in scientific
Biological control methods have rea- and technological research is about US$
ched the stage where many of these techniques 100,000 per annum per scientist in the acade-
are now applied successfully in the field. In mic world and twice as much in industry
recent years, biocontrol products have gained (ABRABI, Brazilian Association for Biotech-
wider market acceptability and share, as they nology). The national budget for biotechno-
are ecologically less invasive, and have good logy research and development is projected to
protective characteristics. Bacillus thuringien- be US$ 2 billion per year by the year 2000,
sis is the most widely used agent and is effecti- with Federal and State agencies contributing
ve against many insect species. The number of US$ 1.3 billion and the rest coming from
biocontrol products is increasing, and fungi, industrial commitments. However, the situa-
bacteria, protozoa, nematodes and viruses are tion is not yet completely resolved, with the
now available to control insect pests and disea- government releasing only US$ 150 million
se in soybean, bean, maize and many other by 1996, which is insufficient to support the
important crops. In Brazil, a number of new 4,000 scientists currently conducting research
species and pathotypes are being isolated and (Table 1). Private companies are beginning to
studied. Effective control of weeds, grasshop- cooperate in research projects, probably as a
pers, white flies, lepidoptera and mosquitoes result of government tax incentives and other
using biocontrol agents is now becoming a benefits. Nevertheless, the system is not yet
reality in Brazil. A new bacteria-based mosqui- able to facilitate all the necessary interactions;
to control product is in the process of being and the incentives offered so far have not
patented; two different species of fungi are attracted those industries which continue to
being tested with important species of weeds, import technologies, rather than adapt to Bra-
and other species of fungi are being field-tes- zilian conditions. 
ted for grasshopper and white fly control. In According to Craveiro and Guedes
addition, CENARGEN holds an important (1996), PADCT has supported a total of 16
collection of entomopathogenic fungi which projects in biotechnology, 21 in chemistry and
may be used in the future to address new pest chemical engineering, 25 in instrumentation,
problems. Collections of this kind should be 18 in new materials and 24 in geology and
regarded as an important genetic resource-base mineral technology. According to the 1995
for the future development of new agents and PADCT report, the program could not be suc-
products. cessfully concluded due to insufficient govern-
Trained researchers, funding programs ment funds (see Table 2). By the end of 1996,
and laboratory infrastructure should also be program expenditures are expected to reach
part of cooperative projects to develop natio- US$ 300 million to support about 1700 pro-
131
jects. Much effort has gone into negotiating have been formed, which represent local poli-
the next phase of this program which is expec- tical and business interests, evaluating
ted to cost a total of US$ 600 million, inclu- demands and priorities. The national board
ding support for partnerships between the aca- coordinates demands and priorities and pro-
demic and industrial sectors. Projects poses the allocation of financial resources.
approved by the biotechnology component of EMBRAPA’s Board of Directors allocates
the PADCT program have concentrated on funds to programs and approves annual wor-
agricultural research, which makes up 14 of king plans. Project proposals, selection and
the 16 projects in this area. These projects management are directly under the responsibi-
involve private companies working in coopera- lity the different research centers’ in-house
tion with universities and research institutes. technical committees and appointed national
committees.
Biotechnology at EMBRAPA: Priority EM B R A P A is currently reassessing its
Setting, Funding Sources and priorities in biotechnology. This plan is aimed at
Infrastructure Development rev i e wing major problems related to Bra z i l i a n 
ag r i c u l t u r e, and exploring the potential of
Priority Setting applied and basic res e a r ch to address specific
In the last five years, EMBRAPA has imple- pr oblems and generate new products. Based on
mented a new planning and administration the experiences of New Zealand and Mex i c o , 
system, aimed at improving productivity. In EM B R A P A has established a working grou p 
this connection, its Program for Development that is responsible for the organization of mee-
of Basic Research in Biotechnology has been tings and brain-storming sessions with specia-
reorganized and established as an important lists. In these meetings, participants identify and
instrument for redefining market-led policies define priorities and experts prep a r e rev i e w
for the development of biotechnology at papers on specific issues. Each subject is exami-
EMBRAPA and in the National Agricultural ned from various angles: science and technology,
Research System (NARS). This provides res e a r ch and development, and market poten-
impetus for Brazilian agricultural research, tial. What is initially discussed in these rev i e ws 
with the intention of improving cooperation ar e strategies to address problems, including the
between various scientific institutions and the use of basic and applied res e a r ch, and the poten-
private sector. tial short- and long-term market impact of the
The new EMBRAPA planning system results. Available technology, copyright poten-
has established a methodology for analyzing tial, licensing and acquisition arrangements are
and identifying the needs and demands of the also considered. Fin a l l y , consideration is given to
productive sector. Regional agricultural boards en v i r onmental protection and biosafety.
Table 1. Financial support for biotechnology research programs in Brazil
Source Period Budget
(US$ millons)
EMBRAPA 1994-1996 4.36
PADCT 1991-1996 40.00
RHAE 1993-1996 2.70
(Human Resources for 
Strategic Areas)
Companies 1991* 16.70
Institutes/Foundations 1991* 28.32
* Values correspond to the estimated annual budget
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T r a n s f e r
An integrated program (BIOEX) has tutes and universities, applying for support
been negotiated by the National Brazilian from PADCT or any other available financial
Research Council (CNPq), and is aimed at program. EMBRAPA has therefore encoura-
supporting the international competitiveness ged its researchers to link with, and obtain
of Brazilian agriculture. The program is based financial support from private companies
in the development of intermediary and strate- focusing on new markets and products,
gic biotechnological products, processes and aiming at improving competitiveness and effi-
services. It is hoped that this will increase the cacy. Despite the restricted biotechnology
consolidation of Brazilian agribusiness. The budget (about US$ 1.7 million for 1997),
program is composed of horizontally and ver- EMBRAPA has, in recent years, attempted to
tically integrated subprograms. The vertical increase research funds. From 1994 to date,
subprogram gives priority to the exportation the budget for the biotechnology program has
of products mainly derived from fruit culture, increased by 22.5% (excluding salaries and
sugar cane, soybean and agroforestry. The infrastructure). Projects included in the pro-
horizontal subprogram is grounded in basic gram are generally supported by outside finan-
and applied research in micropropagation, cial sources to cover the costs of consumables
biological inocula and biocontrol products. and, sometimes, training. From 1994 to
March 1996, CENARGEN/EMBRAPA
Funding Sources applied for grants from national and interna-
EMBRAPA’s allocated research budget is tional financial institutions. These financial
insufficient to cover the full project costs. In proposals totaled approximately US$ 12
recent years, due to reduced government fun- million of which US$ 5 million was approved
ding for agricultural development, EMBRAPA and US$ 2 million already released to resear-
has had to compete for funds with other insti- chers. Some projects are still in the analysis
Table 2. EMBRAPA/CENARGEN budget for biotechnology res e a r ch program sponsored by 
national and international institutions, 1994-1996
Institutions Budget (US$)
Requested Approved Released
Ministry of Agriculture 640 000 640 000 -
Foundation for Research Support in the 5 998 370 1 746 175 855 683 
Federal District (FAPDF)
PADCT 2 756 585 1 455 125 1 074 797
Brazil Bank Foundation (FBB) 128 336 1 554 988 -
National Foundation for the Environment (FNMA) 314 461 - -
Brazil-Argentina Biotechnology Center (CBAB) 70 000 43 500 -
International Center for Genetic Engineering and 90 000 60 000 -
Biotechnology (ICGEB)
Japan International Cooperation Agency (JICA) 130 000 - -
World Bank 6 000 000 - -
European Commission 70 000 70 000 -
International Bank for Reconstruction 840 000 840 000 -
and Development (CFC/BIRD)
TOTAL 11 637 752 4 870 350 1 973 981
Source: EMBRAPA
133
stage and are expected to be approved by gies, and soil biology and phytopathology.
December of 1996. Among the NARS conducting biotechnology
The creation of foundations to sponsor research in 1988, 21 were EMBRAPA diffe-
research and researchers is proving to be a rent departments, 13 were State companies,
good alternative in funding biotechnology five were universities and one a foundation.
projects. These foundations are generally EMBRAPA invested US$ 150,000 in these
based in large capital cities and are supported projects in 1985, increasing to US$ 500,000
by government, foreign and private sources. in 1987.
During the period between 1993 and
Infrastructure Development 1996, CNPq, in association with CENAR-
The new approaches to the development of GE N / E M B R A P A, funded a total of 154 scho-
new biotechnology products, processes and larships via the RHAE program. The prog r a m 
services have given rise to the need for more budget of US$ 2.7 million contributed to the
investment in infrastructure. EMBRAPA, with publication of 73 scientific articles in national
the financial support of the World Bank and and international journals, 38 conferen c e 
the Interamerican Development Bank (IDB), papers, nine technical visits, 21 seminars, 41
has built new biotechnology laboratories at national and eight international scientific
CENARGEN, costing about US$ 3.8 million, visits, 16 M.Sc. and 5 international Ph.D. the-
excluding equipment. Total equipment costs ses, and six training/specialization courses. The
in the past ten years are estimated at about RHAE program also facilitated interaction bet-
US$ 40 million. This new laboratory complex ween EMBRAPA and 125 national and inter-
is designed to accommodate a group of resear- national res e a r ch institutes. Of the 154 RHAE
chers whose mission is to develop techniques pr ogram trainees, EMBRAPA employed about
and methodologies for use in biotechnology 20%; 15% wer e appointed as lecturers in their
product development. Other EMBRAPA original states/towns, 25% started M.Sc. and
Centers, such as those involved in soybean, Ph.D. programs in Brazilian universities, and
maize and sorghum, cassava and fruit culture, 5% are preparing their Ph.D. abroad. Arou n d 
soil microbiology, and grape and wine produc- 20% of the students are preparing for postgra-
tion, among others, are also building biotech- duate studies and the others have changed care-
nology laboratories for the manipulation of er s . 
bioengineered organisms and products. EM B R A P A’s biotechnology prog r a m 
focuses on basic res e a r ch to improve understan-
EMBRAPA’s Biotechnology Program as a ding of the fundamental biological proc e s s e s 
Response to New Priorities and to generate information to support the
Biotechnology as a research interest started at de v elopment of new market-oriented prod u c t s , 
EMBRAPA in 1981, with the foundation of pr ocesses and services. As a result of this appro-
the Plant Genetic Engineering Laboratory at ach, the program has reduced the total number
CENARGEN. The first five years were dedi- of projects, but promoted greater cooperation
cated to training people in techniques such as among institutes and companies. The objecti-
protein and gene isolation, characterization ves of the program include biotechnology deve-
and sequencing, DNA synthesis and gene clo- lopment for use in agricultural and forest pro-
ning, as well as plant transformation and gene duction systems, molecular biology, human
expression. In 1988, an audit of biotechno- nutrition and for native and exotic microo r g a -
logy-related research projects identified a total nisms. These objectives are important in orde r 
of 155 projects carried out by Brazilian NARS, to make modern agriculture and forest prod u c -
including national and State institutions and tion competitive, sustainable and of high qua-
universities. The projects were concerned with li t y , and to develop and promote cooperation
animal health, molecular and cellular biology, and the transfer of knowledge and technology
food processing and fermentation technolo- be t w een national and international institutions.
134
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T r a n s f e r
The program runs 26 projects focusing will contribute to further EMBRAPA’s achie-
in the major areas of plant, animal, micro- vements and biotechnology development in
organism research and biological control. Brazil.
Plant research projects are aimed at developing In general, successful biotechnology
methods for micropropagation, regeneration, development in Brazil will depend on the
transformation and gene expression. Specific following:
projects study factors involved in resistance to • EMBRAPA, as the main actor in the agricul-
storage pests, reserve regulations, albuminoid tural research system, plays a clear role in
gene expression in transgenic plants, resistance complementing other organizations in deve-
to the golden mosaic virus in legumes, and loping biotechnology research activities to
transgenic potato with multivirus resistance. support new market-oriented products, ser-
One of the technologies developed by vices and processes, by doing basic and stra-
EMBRAPA, which has made a major contri- tegic research in biotechnology.
bution to agriculture, is the use of Bradyrhizo- • EMBRAPA is developing a priority-setting
bium bacteria in soybean seeds, which reduced method and a system to implement it.
production costs by US$ 1.5 billion/year. • The Brazilian government is playing a key
Other examples are the biocontrol measures role in promoting interactions between
developed for soybean caterpillar using a bacu- public and private organizations regarding
lovirus which contributed to environmental biotechnology activities by facilitating fun-
protection and savings of US$ 114 million a ding arrangements.
year, and a carrot variety which has captured
80% of the local Brazilian market. References
Carvalho, A.P. 1996. Biotechnology in Brazil.
Conclusions Paper presented at the Brazil-India Seminar,
Biotechnology is changing the concept of agri- Round Table Discussion on Strategic Perspec-
culture in Brazil. The potential for exploring tive in Brazil-India Relations: The Biotechno-
new markets, increasing agricultural producti- logy Sector, Brasilia, 12 January 1996.
vity and the social benefits of improved nutri-
tion is stimulating research and investment in Craveiro, A.M. and T.M. Guedes. 1996.
biotechnology. Identifying demands and prio- Infraestrutura Científica e Tecnológica. Infra-
rities in this area is extremely important for estrutura tecnológica: Perfil das Empresas Bra-
the next decade, as it will contribute to impro- sileiras de Biotecnologia. Workshop Biodiver-
ved use of current and future resources. sidad: Perspectivas e Oportunidades
EMBRAPA, in cooperation with CNPq, the Tecnológicas, Campinas, 29 April-1 May
Ministry of Science and Technology and rese- 1996.
arch organizations, is one of the leaders in this
effort to modernize and invigorate Brazilian Raman, K.V. 1996. Development support
agriculture, industry and society. Collabora- project for agricultural technology in Brazil,
tions with international organizations are also PRODETAB. EMBRAPA Consultant Report,
important in this process, as this contributes May 1996.
to the development of new products and also
minimizes wasted investment in the develop-
ment of technologies already available elsew-
here. 
In the next five to ten years, EMBRAPA
expects to develop and release many new pro-
ducts adapted to Brazil's geographical diversity
and diverse agricultural needs. Priority setting
and existing systems to develop these products
135