Government must step up and commit more money to cereal research or find ways to attract funds from private investors, say scientists seed growers and seed industry analysts.
Experts from a variety of organizations say investment in wheat, once the undisputed king of Canadian agricultural crops, has been eroding for years.
They also say that wheat acreage will continue to decline unless steps are taken to ensure that growers have access to more innovative cereal varieties that result in greater producer returns.
Canada’s wheat acreage has been declining steadily over the past decade or more.
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In Saskatchewan, wheat acreage was pegged at nearly 18 million acres in 1983.
Twenty five years later, acreage had declined to about 7.6 million acres.
“The emphasis on public breeding programs is a particular problem when it comes to cereals, especially wheat,” said Dale Adolphe, executive director of the Canadian Seed Growers Association.
Agriculture Canada hasn’t shown a strong commitment to varietal funding for wheat research in the last 10 years. Though private sector seed breeding programs have made major contributions to new genetics in canola, soybeans and corn, the same can’t be said about new varieties of wheat and other grains.
Most of the advances in cereal breeding have come from the public sector – through government research facilities or university labs like the Crop Development Centre at the University of Saskatchewan.
But stakeholders in the industry are becoming concerned that public programs may not be doing enough to keep Canada at the forefront of international wheat markets.
“The Maritime provinces are probably the worst off,” said Adolphe.
“Things aren’t as bad in the West, but even here, some key people have retired who haven’t been replaced. (Agriculture Canada) has definitely reduced their funding for genetic research in cereals, though fortunately, there’s still a fair amount of work being done at the universities.
“Barely 15 percent of the seed farmers use is certified, so there isn’t enough of a profit margin for private breeding programs to be interested.
“When you look at corn, where essentially all of the crop is grown from certified seed, or canola, where 85 or 90 percent of the crop is from certified seed, you can see why we need public breeding programs if we’re going to see any innovation and improvement in wheat.”
At an industry meeting in November, Adolphe said there was discussion of new mechanisms to encourage the commercial seed industry to boost spending on cereal breeding programs.
One such mechanism is a system of tax credits for farmers who use certified seed.
“Collectively, farmers are in a tough situation. They need a system that encourages innovation, but they can’t afford to pay for it. A tax credit might spur them to use more certified seed, if they can do it without increasing their input costs.”
Stephen Fox, a scientist with Agriculture Canada’s Cereal Research Centre in Winnipeg, said tax credits might help encourage private investment in cereal breeding, but he doesn’t think it would increase the market for certified wheat seed significantly.
He would also prefer not to see royalties or levies on the purchase price of publicly bred seed varieties.
“I’d rather see any additional fees added to the crop on the end use or delivery of the grain,” Fox said.
“This way, farmers would only pay a fee if they get a significant increase in yield from a new variety and they won’t feel hard done by if there’s no improvement on their fields.
“And we’d have to improve varietal IP (intellectual property) protection programs. There’s no strategy for that now, but I think we could devise a workable system if we decide it’s needed.”
Fox also said government funding might improve if there were clearer signals from the industry that wheat breeding programs are needed.
“We just don’t sell enough seed for the government to think it’s worth the investment,” Fox said.
“But it’s probably shortsighted for the government to only use signals from the seed markets. There’s a lot of wheat grown in Canada and a lot of people making money from the crop, not just the farmers.”
Richard Gray, a professor of agricultural economics at the University of Saskatchewan, said that the return on investment in the seed industry is excellent, especially if you compare wheat to other major crops.
In a study that examined rates of return on crop research in Canada, Gray found that from the wheat checkoff alone, every dollar invested in research generated $4.40 worth of increased yields for Western Canadian wheat growers.
That estimate did not take into account profits made in the value-added sectors of the industry.
Ron DePauw, senior wheat breeder with Agriculture Canada’s Semiarid Prairie Agricultural Research Centre in Swift Current, Sask., said research on wheat pays huge dividends.
“Compared to canola, pulses, in fact, most other crops, research on cereal genetics is grossly under-invested,” he said.
“The rate of return on research in canola is also about four to one, but the total level of investment is much, much higher.”
DePauw feels many private sector members of the industry would like to contribute to public breeding programs, but government regulations don’t allow that.
“We’ve lost the ability to partner with industry,” he said.
“SeCan, the WGRF (Western Grains Research Foundation) and (Agriculture Canada) need to work together to move the industry forward.
“And we need to invest in more staff and facilities for research. Wheat exports alone bring in $3 to $5 billion a year, and if we look at the value- added markets, wheat adds $7 to $9 billion to the economy annually.”
Rob Hannam, president of Synthesis Agri-Food Consulting in Guelph, Ont., agreed that the role of science in advancing agriculture and agricultural production is essential.
“Not only is agricultural research important to our farmers, to help them earn a profitable, sustainable living, it’s also critical for society as a whole,” Hannam said.
“Thanks to advances in plant science, the production of world food calories has doubled since 1960 and per-capita food supplies in the developing world have increased by 25 percent.”
If Canada’s grain industry is to be successful, it needs a combination of public and private investment in research, Hannam added.
“It’s a numbers game. The more people we have working on different aspects of breeding programs, the more likely we are to advance. Competition, even in research, is healthy.”
Hannam says if gains in yields and agronomics are weighed against the small royalties paid to the breeders, the growers would still come out ahead. But he also cautions that money collected from royalties and other fees must go back to the breeding programs.
Some industry experts attribute at least part of the current underinvestment problem to changes in government bookkeeping practices.
When Plant Breeders Rights (PBR) legislation was passed in 1989, Agriculture Canada management negotiated an agreement with the treasury board and the WGRF that royalties on wheat cultivars would be returned to research centres and the specific programs that generated the funds.
This money could then be used to augment further work on genetic enhancement.
In fact, many producers agreed to PBR legislation only on the understanding that royalties would be used to augment base funding for the breeding programs and not as a substitution for regular funds.
Industry insiders said this policy was adhered to, in varying degrees, until about 2004.
“Since then, we’re not entirely sure where the royalty dollars have been going,” said Lanette Kuchenski, executive director of the WGRF.
“We just know they’re not coming back to the breeding programs the way they were supposed to.”
That’s not the only place that public investment dollars are being lost, Kuchenski added.
“Under the old Matching Investment Initiatives (MII) program, wheat and barley check-off funds and the money from the A-Base budget (regular funding) were both matched dollar for dollar by the treasury board,” she said.
“We’re not exactly sure how much we’ll be getting from the new Growing Forward program, which has replaced both MII and A-Base, but I know it’s going to be less.”
Since 1981, the WGRF has provided approximately $700,000 per year to crop research from its endowment fund.
The principal of the endowment fund – a $9 million sum transferred from the discontinued Prairie Farm Assistance Act – is invested and the interest is used to finance crop research.
To date, the fund has provided about $19 million in funding for more than 200 projects.
On average, the WGRF invests $3 to $4 million each year in wheat and barley breeding research in partnership with public programs at Agriculture Canada research centres and Crop Development Centres in Saskatoon, Winnipeg, Edmonton, and Lacombe, Alta.
Member farmers help decide on specific breeding objectives to ensure research remains on track with industry needs and trends.
Kuchenski said it’s regrettable that government doesn’t value investment in breeding research as much as members of the industry do.
“Fewer than 10 percent of wheat and barley growers choose to opt out of the check-off program because they know how critical research is to their livelihood and to the country as a whole,” she said.
Canada’s system of collecting check-off dollars and funding plant breeding efforts is tied to the future of the Canadian Wheat Board.
“I think it’s important to remember the check-off funds that are so important to grain research are only paid out on the final payments from the wheat board,” said Jim Downey, research and development manager for SeCan.
“If we lose the final payment or the wheat board, we have no obvious alternative to collect this critical source of funding for the public breeding programs.”
Downey said Canada needs to create a new model to fund plant-breeding efforts.
“Canada’s different than the U.S. We have a stronger commitment to the public good, as in our health programs and in the fact that our farmers are willing to fund research efforts even if they don’t get any immediate benefit themselves.
“But we also need to recognize that plant breeding is a long-term endeavour. It takes at least 10 years to get a new variety developed and to increase the seed so it’s commercially available to farmers.”
Federal and provincial governments need to view investments in plant breeding in the same way they view investments in the basic infrastructure, he added.
“There’s an enormous return on investment from plant breeding research,” he said.
Downey cited a recent study conducted by Hartley Furtan, a professor of agricultural economics at the University of Saskatchewan, which found a 31 percent net annual rate of return on public funds invested in cereal breeding at the Crop Development Centre after adjustments for inflation.
“He (Furtan) believes strongly that there’s no other investment in agriculture that even comes close to the return on investment from funding public plant breeding.”
Downey also said that currently, “it seems like the more money the growers put into the research programs, the more money the government takes out.
“I’d like to see 20-year government funding programs as a way to ensure the long-term sustainability of a healthy and viable seed industry in Canada, and to have us go back to a system where money from the check-off programs was incremental to the government commitment.”
