PHOTO: FARM & FOOD CARE
BREEDER RIGHTS ▶▶▶
Royalties might be key to growing investment in cereals
BY MATT MCINTOSH C
ereals like wheat and barley are very important crops to Canada’s agricul- ture sector, but private-sector invest- ment remains low in comparison to
the higher value alternatives of corn, soybeans, and canola. Indeed, according to Agriculture and Agri-Food Canada (AAFC) – Canada’s fed- eral food and agriculture ministry – only 8% of total private sector investments are committed to research and variety development in cereals. Instead, breeding projects for major cereal crops are funded primarily through tax dollars and producer contributions through industry associations. Consequently, advances in the sector are comparatively slow in coming.
Two investment barriers After consultations with the Grains Round- table – a group comprised of industry repre- sentatives and policy makers focused on Can- ada’s grains sector – AAFC and the federal food safety ministry identified two factors currently limiting private-sector investment. The first “obstacle” is the ability of farmers to save seed from year to year through the so called “ farmers’ privilege.” The second problem is the declining profitability and acreage of cereals.
The Canadian government is considering strategies to add value to its cereals sector. These strategies will edit plant breeder rights to encourage more private investment. Many of the country’s farm organisations have yet to decide whether or not they support the move.
Possible strategies Two strategies to address these barriers have been proposed by AAFC, both of which focus on establishing more concrete rules around contract royalties for new cereal varieties. Strategy One: End-Point Royalties • A royalty payable on all harvested material (i.e., grain) that is collected where grain is sold/delivered, such as grain elevators.
Strategy Two: Royalty Collection enabled via Contracts • This option allows for contracts where pro- ducers agree to conditions of use for farm saved seed, like those existing for corn or soybeans. As of December 2018, the Canadian Seed Growers Association (CSGA) and Canadian Seed Trade Association (CSTA) – both national seed industry groups – as well as CropLife Canada – the association representing manufacturers, developers, and distributors of pesticides and crops created with biotechnology – have
Deliberations continue
Crosby Devitt, vice president of strategic de- velopment for Grain Farmers of Ontario (GFO) – the producer organisation representing corn, soybean, wheat, and barley growers in Canada’s most populace province – says his organisation has been discussing this issue for some time and continues to be open to options that will support cereal growers. He also reiterates that many producer groups, like GFO, are already investing in cereal devel- opment. But the level of investment doesn’t match what the private sector can do.
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“If we invest more in cereals, the more we get out of it in the end. It’s a numbers game. We’re always in support of new innovation,” says Devitt. “GFO doesn’t have a position on either proposal at this point. We’re holding consultations with delegates during a policy day to try and formulate a position.” Many other producer associations, both na- tional and provincial in scope, also continue to deliberate the merits of both value propos- als, as well as the status quo.
announced their support for the second strate- gy. Other groups such as the National Farmers’ Union do not support either. As consultations between government, farmers, and other in- dustry professionals continue, however, still more have yet to take a formal position. Dave Carey, executive director of CSTA, says the need to develop better cereal varieties and increase the competitiveness of Canada’s cereal sector was flagged as an issue over a decade ago. The End Point Royalties option, he says, would in- volve elevator operators determining which va- riety a farmer is delivering, what the royalty payment for those bushels might be, and pro- cessing the transaction. This is not ideal, he says, because the option is inherently more complex, and elevator operators do not want to act as the middle man for royalty transactions.
More practical Royalties established through upfront contracts for registered cereal varieties – like those
Farmers’ privilege reduces the availability of private funding for cereals research. The de- clining profitability and acreage of cereals is another negative development.
▶ FUTURE FARMING | 22 February 2019
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