Input industry weighs in on seed royalty review

Bayer says a new pricing system is needed, while Syngenta wants whatever is selected to be sustainable for everyone

Syngenta Canada president Trevor Heck isn’t choosing a route for collecting seed royalty rates, but says the federal government needs to “move forward on some type of value capture model.”

“Right now, you know, if we don’t have that within the seed industry, it’s going to be very difficult to be able to get the level of private engagement and innovation that’s required to really move the crops forward,” he said.

Agriculture Canada began work in 2018 on exploring changes to the country’s seed pricing regime. Two options were originally put forward: end-point royalties would be collected on all commercial sales of royalty-eligible seed varieties, or trailing-royalty contracts allowing farmers to replant farm-saved seed for a pre-determined fee would be put in place.

Producer groups showed reluctance to both options and the federal government has since made little comment publicly about the direction the file is taking, while federally led online consultations scheduled for the spring of 2019 never occurred.

There is some expectation an announcement will be made in early March, but the federal government has made no public commitments. Officials within Agriculture Canada say they are “listening to stakeholders” to determine “next steps.”

Heck said the model selected by the federal government needs to be “sustainable for everyone going forward” and well-vetted by industry stakeholders.

Al Driver, president and chief executive officer of Bayer CropScience Canada, said a new regime has been a long time coming.

“Allowing breeders to recapture some value to continue bringing new technology traits and improve genetics to Canadian agriculture is a good investment,” he said. “We would support a royalty system, a capture mechanism for that seed. And it is particularly important in crops where you don’t have a hybrid, or you can save seed.”

Driver suggested a royalty system is a great solution that can be affordable for growers while also continuing to ensure breed innovation and high performing products are produced for the Canadian market.

“When we look at the next decade, we need to put systems in place that will continue to remain and keep us competitive global,” he said, adding he would have thought something could have been put in place for 2020.

He said he believes growers have “warmed up to the idea” as long as fees are reasonable.

Grain Growers of Canada has outlined four guiding principles to be used as the process moves forward. It is not recommending either of the two options originally put forward by the federal government but is attempting to engage stakeholders on the issue in order to get the ball rolling and “keep the discussion going”, according to chair Jeff Nielsen.

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