Ricardo Guzman

Low-income countries are increasingly establishing intellectual property (IP) rights for plant varieties as a means to encourage innovation in crop technologies. Whether such policies spur agricultural development is unclear: stronger IP may expand the set of available varieties, but can also alter seed prices, reshape distribution networks, and crowd out informal seed markets. In this paper, I study a reform that strengthened plant breeder rights in Tanzania and trace its effects on seed markets and smallholder farms. Combining the universe of registered plant varieties with farm data, I use a shift-share design that leverages the staggered release of new varieties and agro-climatic variation in crop suitability. The policy raised adoption of improved seed broadly across the farm-size distribution and shifted seed sourcing toward formal market channels. But the downstream productivity gains diverged sharply: only the largest farms expanded cultivated area, intensified labour and pesticide use, and realised substantial increases in revenue and profits, while smaller farms adopted improved seed without observable gains in output. I provide suggestive evidence that the policy operates through two supply-side channels: the introduction of varieties with superior agronomic traits and the entry of input intermediaries into local markets. I rule out standard demand-side channels -- information, credit and liquidity constraints -- in explaining the rise in adoption. These results demonstrate how IP reform can lift supply-side constraints to adoption, transforming seed markets in the process.