Ottawa is getting a mixed message from farm groups about a tax credit for the purchase of certified seed.
During a recent appearance before the House of Commons finance committee, Grain Growers of Canada urged the government to implement the credit.
As proposed by the Canadian Seed Trade Association in 2008, farmers would be able to claim 155 percent of the cost of certified seed as an expense for income tax purposes.
For example, farmers paying $8 a bushel for seed would receive deductions of $12.40 on their tax return.
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Governments would forego the collection of more than $175 million in taxes if certified seed use reached 100 percent.
GGC officials told the committee such a program would boost private investment in cereal research and generate hundreds of millions of dollars in additional revenue for agriculture and the economy in general.
Currently, 18 percent of wheat seed planted is certified, and 30 percent of all grains and oilseeds.
“Without farmers buying seed on a regular basis, there is no incentive to invest dollars in research to develop new varieties,” GGC said in its brief to the committee.
Dissenting opinion
Another farm organization is providing a different message to federal finance minister Jim Flaherty.
The National Farmers Union has written to the minister in the past expressing “unequivocal opposition” to the idea.
“It is nothing more than an attempt to use the tax system to subsidize seed companies,” NFU spokesperson Terry Boehm said in the letter sent last winter, adding seed companies want to use certified seed to make farmers dependent on them over the long term.
That letter said it’s no coincidence that the most expensive crop seeds are those in which certified seed use is the highest: canola, corn and soybeans.
In an interview last week, Boehm reiterated that position, saying the NFU will resist the tax credit proposal.
He said he’s confident that reflects the view of most producers.
“I’m quite certain Canadian farmers don’t want to go down the road to certified seed,” he said, adding work done by publicly funded breeders and producer-funded groups like the Western Grains Research Foundation has served farmers well.
Negative impact
The financial impact of certified seed on farmers is negative, he said.
In the case of canola, over the course of a decade the price of certified seed has risen to $5 to $6 per pound from $1 per lb., while various rules and regulations have effectively prevented farmers from saving and re-using their own canola as seed.
Boehm said it would be better for the government to invest the potential tax loss associated with the tax credit into public plant breeding programs, with the proviso that any resulting new varieties be freely available to farmers to plant and re-use seed.
