It’s early in the winter farm meeting season but already seed royalties are promising to be one of the year’s evergreen topics.
That’s hardly surprising, after all, seed is a fundamental building block for any grain farm. It’s also something that’s seen a lot of changes over the past few decades.
Most of the crops that reliably pay the bills are now hybridized, meaning the seed no longer reproduces true, requiring farmers to buy seed season after season.
Those prices have steadily moved upwards too, as seen in the list prices. One local seed company’s 2017 price list featured a number of canola hybrids and suggested prices ranging from just under $13 a pound to $17 a pound, for example. At three pounds an acre that’s between $39 and $51 an acre in seed costs alone.
It’s been enough to spark more than a little complaining about the outrageous price of seed, yet every winter farmers continue to line up to book it. They’re doing so because even at these prices they still see value in this proposition.
Now the federal government is turning its attention to open-pollinated cereals crops. It wants to come up with a system that better rewards seed developers in some way for creating new varieties.
There are some distinctions between the two proposals on the table, but in the end both would require farmers to keep paying a royalty in some form for subsequent seasons, rather than freely saving their seed as they’ve been allowed to for centuries.
Predictably it’s a controversial topic. Nobody likes to pay more for something, and there are more than a few skeptics who wonder if the changes will actually provide the benefits they’re supposed to.
Those are fair questions, and they should be answered. But opponents of the changes also need to acknowledge that even in doing nothing, there could be serious risks to the cereals sector.
If nothing else, this whole discussion demonstrates how people can look at the same set of facts and draw completely different conclusions.
Both sides see just how elusive profitability can be when growing cereals. Opponents of the changes point out that it’s a sector that can’t be expected to bear higher costs. Proponents of the shift point out that the lack of profits is symptomatic of a dearth of research investments that’s seen the crop lag.
Cereals breeding is a compounding thing, and the investments in research need to keep pace with our global competition and ensure Canada’s productivity grows at the same rate. If that doesn’t happen our competitors will inexorably pull away from us, slowly at first, then more quickly as each subsequent season passes.
So far the answer for Canada has been public breeding, and there the nation’s public servants have performed admirably. Western Canadian wheat yield gains due to improved varieties, on average, increased 0.7 per cent a year between 1991 and 2012, according to figures from AAFC. That’s just a bit higher than the global average.
In no small part that was funded through producer checkoff dollars, administered by the Western Grains Research Foundation.
What’s uncertain now is whether or not that track record can continue, especially in light of growing interest — and investment — by the private sector in developing new cereals varieties.
Bayer put US$1.9 billion on the table a few years back as part of a long-term plan to create new wheat varieties.
Here in Canada it’s putting $24 million into wheat development, including a breeding station at Pike Lake, Sask.
Regardless the changes, there should certainly be a continuing role for public researchers in the new cereals model. Here we could probably benefit from looking at the European model.
There, public researchers focus on higher-risk, long-term targets and developing things like new breeding techniques. That both supports the private sector while also supplying farmers with new innovations.
As our Allan Dawson reported last winter, in Germany major companies such as Bayer, Syngenta and Limagrain are working with the public sector through a body known as proWeizen, to develop an efficient hybrid wheat-breeding platform.
It’s the largest pre-competitive wheat project ever conducted in Germany, according to participants.
As the sector has this discussion about seed royalties, it needs to remember that how the system will be structured could well prove to be the most important piece of the puzzle.
Innovation isn’t limited to just scientific breakthroughs in the lab and field plot. It can also refer to how the research system is itself organized.
Taking the time to get the system right will result in a more optimal flow of those scientific innovations out to the field.
That’s a benefit everyone could share.