Trailing seed royalties are the future

Remember way back when Plant Breeders’ Rights were updated in Canada. The promise from industry and from the Conservative federal government of the day was that seed companies would now receive better protection for their new varieties, but farmers would still have the ability to save their own seed. It was called farmer’s privilege.

On many newer varieties, farmers are not allowed to sell or even give seed to other producers. Many farmers still bend or break the rules, sometimes because they just don’t know and other times because they are unlikely to be reprimanded.

Some farm organizations, most notably the National Farmers Union were wary of the Plant Breeder’s Rights update saying it was a slippery slope that would have farmers paying for their seed over and over again. The NFU was right. Their prediction is slowly coming true.

The evolution, however, is necessary and important if we want new crop varieties. There’s no free lunch and the money to attract plant breeding investment has to come from somewhere.

The biggest sign of change was the recent announcement of an agreement between Sask Pulse Growers, Alberta Pulse Growers and the University of Saskatchewan’s Crop Development Centre for lentil and faba bean breeding.

Some upfront funding is being provided by the two grower organizations, but the Crop Development Centre will have Variety Use Agreements on the new varieties developed meaning farmers will have to pay a trailing royalty on farm saved seed.

Traditionally, Sask Pulse Growers paid the Crop Development Centre for the development of royalty free varieties. Over many years, this kickstarted lentils, peas and chickpeas in Western Canada. That agreement ended a number of years ago and a new agreement could not be forged.

SPG turned to private partners like Limagrain for variety development. The concept of trailing royalties was thoroughly debated at a SPG annual meeting a couple years ago and producers voted by a narrow margin to accept the principle. Finally, a new agreement has been reached with the Crop Development Centre.

On canola, where hybrid varieties dominate and producers are used to buying their seed every year, the economic model is quite simple. Companies compete for the massive amount farmers spend each year. The cost per acre for canola seed is huge, but producers pay it because canola is often the most profitable crop to grow.

On most other crops, farm saved seed dominates. Producers will buy certified seed of a new variety to access the improved traits, but they’ll typically stick with the same variety for many years meaning no additional money for whoever developed the seed.

This all worked when varieties came out of public institutions funded by taxpayers. Some observers long for the good old days when government funding carried the ball. Those days are over.

Despite cutbacks, Agriculture and Agri-Food Canada still invests in crop breeding work. As well, the Crop Development Centre receives critical core funding from the Saskatchewan government. But government funding will never again be adequate to provide the varietal improvement needed to keep producers competitive in world markets.

Trailing royalties are already applied in some cases and they will gradually become more common. If you save your own seed, there will be a reporting system requiring a payment per acre. Popular varieties will be rewarded and the companies will have money to continue development.

If a farmer feels the benefits aren’t worth the cost, older varieties without trailing royalties will still be available.