Seed royalty benefits questioned

Suspicions ran high when farmers met with government officials last week over potential changes that could see the collection of farm-saved seed royalties.

Producers at the Edmonton meeting Dec. 6 raised numerous concerns, fearing a royalty scheme for farm-saved seed would have little, if any, benefits to an industry that already faces tight margins.

“We’re only at the tip of the iceberg,” said John McBain, who farms near Cremona, Alta., following the meeting. “It’s like opening Pandora’s box. It’s going to affect lots of different things.”

Agriculture Canada and the Canadian Food Inspection Agency are consulting producers to get feedback on potentially implementing royalties for farm-saved seed. It would apply only to new varieties that came after UPOV-91, new plant breeders’ rights legislation that came into effect in 2015.

One model would see growers pay end-point royalties when they deliver and sell grain. The other is a trailing royalty. Farmers would sign a contract, paying an ongoing and annual royalty to plant breeders for the use of farm-saved seed.

Government officials argue the royalties could help bolster the profitability and competitiveness of Canadian wheat because more funds would go into breeding.

“We want to help the sector stay on the cutting edge and be more innovative,” said Carla St. Croix of Ag Canada’s strategic policy branch.

“It’s about competitiveness and sustainability. We want it to be profitable, as well.”

Despite the market potential, however, many producers at the Edmonton meeting were skeptical.

Many said they don’t want wheat breeding to turn into the canola industry, where only major companies control a handful of varieties.

They also fear many wheat varieties could become deregistered, essentially forcing them to grow newer varieties that require them to pay farm-saved seed royalties.

“I think it’s essential farmers here and around the globe have access anytime to his or her own seed,” said Leo Meyer, who farms near Woking, Alta.

“We put significant value on it. We are often exposed to changing weather, climate and markets, but having the ability to draw back to your own seed is quite often for many farmers an exercise of survival.”

Officials in the room suggested this wouldn’t turn into the canola industry because Ag Canada would still play a large role in research.

A desirable outcome would be a competitive breeding market that maintains a public-sector presence, said Anthony Parker, commissioner of the plant breeders’ rights office at the CFIA.

Along with public institutions, he said, such a plan would include small family run breeding co-operatives and multinational companies.

“Producers would have choice and be able to speak with their money in terms of who they want to source their genetics from,” he said.

Parker said it’s unlikely public institutions would de-register existing varieties.

Meanwhile, McBain wondered what value farmers would get from paying more in royalties. More yield is fine, he said, but is that really going to ensure profitability?

“We have to look at what the consumer wants,” he said, adding that they might not want varieties that are genome edited through CRISPR technology.

Seed growers also had questions about the proposals. Many said they needed clarity on what role they would play. They are the ones usually getting contracts signed, situated between the producer and the company.

“We want more details because we want to get this right, and it has to work for everyone in the system,” said Tracy Niemela, co-vice-president of Alberta Seed Growers.

As well, organic producers have a stake in this.

Heather Kerschbaumer, an organic farmer near Fairview, Alta., said organic producers tend to keep and clean seeds as well as seed at a higher rates to avoid weeds. If there is little research going into organic crop development, she wonders how organic producers will benefit.

“They would pay for it like everyone else, but they might not necessarily get the same benefit,” she said.

Many crop commissions and grower organizations are still analyzing the issue and need more answers.

“The onus will be on the breeding institutions to articulate what the advantages are and what the value is for producers,” said Tom Steve, general manager of the Alberta wheat and barley commissions, which haven’t taken a position on the issue.

“It can’t simply be an added cost. Margins are tight in cereals.”

Ag Canada and the CFIA plan to continue with consultations into early next year. Next spring, a final session in Ottawa is expected to seek final endorsements of the models presented.

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