Tree Focuses Debate on Control of Resources : Environment: Third World nations contend they should be compensated for protecting natural materials, which First World converts to products and profits.

For centuries, India’s peasant farmers have used the bark, oil and gum of the neem tree to make pesticides to protect their crops.

Today, the tree regarded by many Hindus as sacred is the focus of an international dispute over who should control--and profit from--the planet’s biological resources.

Developed countries have long relied on resources like the neem to develop medicines and insecticides.

But unlike natural resources such as petroleum, genetic materials found in plants have long been considered a common heritage available to other nations for free.

The products they help create, however, come back with a price tag.

That disparity often pits industrial countries against Third World nations, and the issue was one of the focal points at the 1992 Earth Summit in Rio de Janeiro.

“Whereas nickel found in Canada is the property of Canada and iron found in the United States is American, an equally valuable resource--genetic diversity--is not acknowledged to be the property of the countries in which it is found,” said Suman Sahai, who heads the Gene Campaign, an activist group in India.

Around the world, the richest pockets of natural biodiversity are found in some of the poorest countries. Canadian wheat varieties contain disease-resistant genes from 14 developing countries. American cucumbers rely on genes from Korea, Burma and India.

The poor nations say they should be compensated for their role as the source of genetic materials, or at least receive the products developed from those resources at low cost.

On Sept. 14, a coalition of 200 organizations from 35 nations filed a petition with the U.S. Patent Office seeking to invalidate a 1992 patent held by W.R. Grace & Co. for a natural neem-based pesticide.

The coalition, the Foundation on Economic Trends, contends the pesticide is insufficiently novel because Indians have been making neem pesticides for generations.

“This is intellectual and biological piracy,” the group said in a statement.

Grace says its patent is legitimate because it is not for the neem extract itself but only for a method of preserving it.

“The Grace patent in no way restricts or limits the use of neem products by the Indian people. Grace holds no patent in India, and does not intend to seek a patent there,” Chuck Suits, a spokesman for the company, said in a telephone interview.

Grace, which is based in Boca Raton, Fla., has a factory in Bangalore that employs the patented process to produce a natural pesticide. It is sold in the United States and the Middle East under the trade name Neemix and Grace says it also has applied for patents in Europe.

The neem dispute could spark arguments over other genetic materials and even cause some nations to reconsider their commitment to U.S.-style patent laws adopted under the rules of the World Trade Organization.

Tension already is developing between India and the United States because U.S. legislators have not ratified an agreement reached at the 1992 Earth Summit.

The summit’s Biodiversity Convention obliges industrial countries that use the genetic resources of poor nations to share the research, profits and technology for new drugs or food developed from them.

The other side says the Third World already benefits from the new plant varieties and medicines developed by the scientists of industrial nations.

“It is in the interest of developing countries to intensify efforts in the application of modern science rather than preventing others from doing what they are not doing themselves,” said S. Anand Kumar, a professor at the State University of New York at Albany.

Ashish Kothari, a professor at the Indian Institute of Public Administration, agreed India benefited from the Western-developed plants of the “green revolution.” But he said the agricultural companies are now concentrating on specialized hybrid plants while Indian farmers need plants they can grow and reproduce themselves.

And new medicines have helped India, but they are expensive, he added.

“If the Western scientists and multinationals really want to help developing countries such as India, they should share their knowledge and shouldn’t patent material derived from the genetic resources which these countries possess,” Kothari said.

The industrialization and heavy development of the wealthy nations has reduced the biological diversity of those countries, leading them to rely on the genetic resources of the Third World.