Monsanto nixes separate fee for canola technology use

Genuity Roundup Ready seed | The fee will be included in the bag price, enabling growers to compare prices and calculate costs per acre

Monsanto Canada is getting rid of one of its most despised products.

Starting next year, farmers will no longer be required to sign a technology use agreement (TUA) when they buy a bag of Genuity Roundup Ready canola seed.

TUAs have been around since the company first introduced genetically modified canola in 1996. It was how growers paid for the technology contained in the seed. The initial cost was $15 per acre.

Farmers liked the seed but hated signing the agreements stipulating the terms and conditions for using the seed.

“Growers told us the TUA was an irritant for them. They didn’t like it,” said Monsanto Canada spokesperson Trish Jordan.

Farmers still need to sign a one-time technology stewardship agreement before they can buy Genuity Roundup Ready canola, but they will no longer be required to pay a separate technology fee.

The technology fee will be included in the final price on a bag of seed, which is the model used by Monsanto’s competitors and by Mon-santo itself with other crops that it sells, such as soybeans, corn and wheat.

“Farmers told us they want simplicity and convenience when it comes to purchasing seed and technology,” said Jesse Hamonic of canola trait marketing with Monsanto Canada.

“The old process required separate invoicing for technology, and this was administratively cumbersome for our retail customers. Our decision to move to seamless in-the-bag pricing will make the process easier for all involved.”

Todd Hames, president of the Canadian Canola Growers Association, said it is a welcome and long overdue move by Monsanto.

“We’re going to have a total price that’s going to be more easily understood by the producer as to what his seed is costing him,” he said.

One of the biggest grower benefits is that it will make it easier to compare the different systems on the market and to calculate per acre seeding costs.

Another is that it will simplify the accounting process.

Hames said retailers would often bill the TUA costs long after they had charged growers for the seed. Farmers would forget about the TUA costs until the bill arrived in the mail.

“I know on my farm, it’s a little confusing at times,” he said.

Hames said grower resentment over signing TUAs has subsided over the years, so he doesn’t anticipate mass celebrations over the demise of the document.

Farmers still have to sign a technology agreement, just not every year. And they are still paying for the technology, just not separately.

However, he thinks it’s a better pricing system. He likened it to the airlines being forced to include taxes in their price quotes. It’s easier for customers to understand what they’re paying.

Jordan said the transition to the new pricing system comes as Monsanto prepares to introduce its next generation of Roundup Ready canola in 2014.

“It just seemed like the timing was right for us,” she said.

Pricing the technology separate from the seed could have proved problematic down the road when the company introduces some of its stacked trait products, such as the project it is working on with Bayer CropScience to create a canola that contains both the Roundup Ready and Liberty Link traits.

“This model has the potential to have less confusion when we go to multiple traits in canola offered by different companies,” said Jordan.

Monsanto licenses its Roundup Ready technology to 11 licensees, such as Brett-Young Seeds, Canterra, Cargill, Dow, SeCan and Viterra.

Those companies will have their own “in-the-bag” price, just like Monsanto will have for its Dekalb brand seed varieties.

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