Seed royalty meetings to start next week

Ottawa is gathering feedback into a proposal to charge royalties on farm-saved seed every time it is used to grow a crop

The federal government has released the dates and locations of consultation meetings where the controversial issue of farm-saved seed royalties will be discussed.

The first of three provincial meetings on the Prairies will be held Nov. 16 at the Delta Hotel in Winnipeg.

Subsequent meetings will be held:

  • Nov. 30 at Ottawa’s Hilton Garden Inn
  • Dec. 4 at the Saskatoon Inn and Conference Centre
  • Dec. 6 at the Renaissance Edmonton Airport Hotel

The meetings are part of a federal consultation process aimed at gathering feedback on a plan to collect royalties or user fees on farm-saved seed — harvested seed that is used by farmers to plant crops in subsequent production years.

Seating may be limited, so interested parties are encouraged to pre-register.

For decades, the use of farm-saved seed from crops such as wheat, barley and oats has allowed commercial grain growers to control production costs by replanting seed that was harvested in previous years.

Under the farmer privilege, farmers can retain and replant farm-saved seed year after year, as long as they consider the practice economically advantageous and provided there are no contracts prohibiting it.

In the past few years, a coalition of seed industry groups known as Seed Synergy has been promoting the idea of collecting royalties each time farm-saved seed is used to plant a crop.

In theory, the trailing royalties could be applied to all new UPOV-91 compliant seed varieties that are protected under Canadian plant breeders rights legislation. UPOV-91 varieties include all PBR protected varieties that were registered in Canada after February 2015.

Details of royalty rates that would be charged in Western Canada have yet to be determined, but it is assumed that royalties of one cent per pound could eventually generate revenues of more than $20 million per year for plant breeding.

The actual revenue generated depends on a number of factors, including royalty rates, seeded acreage, seeding rates and how much market share is held by UPOV-91 seed varieties.

Additional front-end royalties in the range of three cents per pound could also be collected when prairie farmers renew their certified seed supplies.

Assuming UPOV-91 varieties will eventually account for 100 percent of the cereal grain crops produced on the Prairies, total annual royalty revenues collected on cereals alone could be as high as $50 million per year or more across the West.

Based on provincial crop insurance data, roughly 19 percent of insured prairie oat acres seeded in 2017 were seeded with UPOV-91 seed varieties, compared to 1.5 percent of insured barley acres, 7.2 percent of durum acres and 8.9 percent of non-durum wheat acres.

Similar royalties could also be applied to other crops including peas and lentils.

Farm groups say the introduction of farm saved seed royalties would represent a fundamental change in the way cereal breeding programs are funded in Canada.

For farmers themselves, it could also represent a significant increase in annual production costs.

Ian Boxall, a commercial grain farmer from Tisdale, Sask., said collecting royalties on farm-saved seed has the potential to be one of the most divisive issues discussed by farmers over the past decade, on par with water drainage and the elimination of the Canadian Wheat Board.

“This will be a tough issue,” said Boxall, who also serves as vice-president of the Agricultural Producers Association of Saskatchewan.

“There will be some people who believe this is absolutely necessary and there will be some who will be completely against it.”

Boxall said he is encouraged by the fact that a public consultation is being held, but he encouraged government to move slowly and ensure that farmers are given ample opportunities to express their views and concerns.

“I just hope that they give enough time to get all the appropriate opinions in place and to make sure that farmers’ voices are heard,” Boxall said.

“The seed industry has had quite a bit of time to develop these concepts. Now it’s time for us, the customers and the farmers, to have our input.”

Boxall said there is little tolerance for a new royalty collection model that increases up-front production costs with no guarantee of increased returns.

Saskatchewan Wheat Development Commission general manager Harvey Brooks said it will be critical that farm-saved seed royalties result in higher returns for primary producers.

Brooks also expressed concerns about the timelines of the consultation process, suggesting more time will be needed to ensure that farmers are adequately informed before any decisions are made.

“I would say the average producer is not well aware of what’s being discussed,” said Brooks.

SaskWheat is among the groups insisting that more time will be needed to educate growers and ensure they understand all implications of the complex and potentially costly topic.

SaskWheat would like to see “a dialogue with actual producers themselves, demonstrating a value proposition,” Brooks said.

“If they (farmers) are being asked to pay more … they’re going to want to know what’s in it for them.”

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