Brown bags are OK for lunch, but they are not appreciated by the certified seed industry.
Seed growers’ costs are rising from regulations and royalties on new varieties. Increasingly, they are being rejected by farmers who turn to their own bins for lower cost seed or who buy “brown bag” common seed.
“We have to show (farmers) value. And we show them value in an improved variety that they buy from us as pedigreed seed. But if they buy the same seed from someone who is not a pedigreed seed grower … they don’t have the costs we have,” said Barry Reisner, a seed grower from Limerick, Sask.
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“The only cost common seed has is the cleaning. There is no regulatory cost, no royalty costs.”
The annual meeting of the Saskatchewan Seed Growers Association Jan. 7 in Saskatoon heard several recommendations about how the industry could improve its competitive position, including boosting its advertising budget and increasing enforcement of seed laws.
But because the heads of two crop breeding programs were on hand, discussion focused on how breeders release their new varieties and how royalties are set.
Gordon Dorrell, head of Agriculture Canada’s research branch and Gordon Rowland, head of the Crop Development Centre at the University of Saskatchewan, both said that as governments reduce or redirect research funding, royalties are becoming more important.
Since plant breeders rights were implemented in Canada a few years ago, breeders have been able to register ownership of their new varieties and sell the rights to companies for distribution.
Rowland said CDC’s core budget of $1.6 million, supplied by the Saskatchewan government, mainly covers salaries. A further $3.5 million comes from such sources as contracts with companies involved in breeding, grants, breeder seed sales and royalties.
This money helps to cover operations and without it, the centre would be unable to buy new technology or replace worn equipment, he said,
“Governments will no longer fund the full operating costs of public institutions and therefore royalties or some form of financial compensation are going to be needed by institutions such as the Crop Development Centre,” he said.
But the charges might endanger the seed industry, which provides the genetic uniformity in seed that helps Canada’s reputation for quality, Reisner said.
“We are having problems extracting the royalties now being demanded,” he said. Competition among certified seed growers has always kept profits tight, but competition from common seed makes it almost impossible to deal with royalties, he said.
But Dorrell said breeders are not the problem.
“It’s not our business to make maximum profit,” he said. Public breeders don’t just consider royalty levels when choosing a distribution company. “We’d rather see more bags of seed out at a better price.”
Garry Meier, a seed producer from Ridgedale, Sask., said the problem is not so much the royalty that breeders get, but exclusive control.
A company that buys the right to distribute a new variety can charge seed producers whatever the market will bear.
“This year we are hearing of a lot of unhappy farmers talking about the price of Barrie wheat seed,” he said, noting most of the cost is associated with exclusivity, not royalties.
Pay for exclusive rights
But exclusive control is what distributors pay for, said Roland.
“Exclusivity to varieties will continue to be given to companies or organizations and so I say to seed growers, if you wish to receive varieties in a general release fashion, you will have to pay for some of the development costs.”
Meier said that is what the Saskatchewan Pulse Crop Development Board has done by agreeing to a long-term funding arrangement with the CDC.
In exchange for the support, the board will decide who distributes new pulse varieties and, in the case of widely adapted varieties, they will be made generally available.
