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Editorial: Seed royalty proposal no slam dunk

At first the discussion around seed royalties seemed largely a foregone conclusion.

At question wasn’t if royalties would be collected on cereals crops to fund varietal research. Rather, the debate centred around how they’d be collected, with two models discussed under the supervision of the federal government.

The options presented to farmers were a trailing royalty or end point royalties. Under the first option farmers pay a royalty when the buy seed, but also would sign a contract agreeing to pay a royalty in subsequent years on any saved seed. An end point royalty would be collected when the crop was sold and would be collected as a non-refundable levy.

Both models share one similar core trait — they are a mechanism to transfer funds from crop growers to variety developers with few strings attached. There’s no oversight mechanism built into either to ensure all, most or even any of the funds are sunk into further research and development.

At first, the opposition to the proposals was muted and limited to the list of ‘usual suspects,’ including the National Farmer’s Union, that was one of the earliest groups to register its opposition.

Cam Goff, a vice-president with that organization, wrote in January of an “… ongoing campaign by elements of Canada’s seed industry to push for regulations to allow them to seize control of our seed network and eliminate farmers’ historic co-operation and sovereignty over their use of seed. This campaign by corporate seed industry lobby groups has been titled ‘Seed Synergy’ and is being supported by Agriculture and Agri-Food Canada (AAFC) to the tune of nearly $500,000 in Growing Forward 2 money.”

While that might seem slightly conspiratorially minded, it should be noted that the Seed Synergy Collaboration Project itself notes on its website that the group “… consists of six major national seed industry organizations: the Canadian Seed Growers’ Association (CSGA), the Canadian Seed Trade Association (CSTA), the Canadian Seed Institute (CSI), the Commercial Seed Analysts Association of Canada (CSAAC), the Canadian Plant Technology Agency (CPTA) and CropLife Canada.”

While that’s definitely a good representation of the seed sector, it isn’t necessarily representative of the crops sector as a whole. On this point, the NFU’s concerns are at least partially upheld. There is a bit of a whiff of the lobbyist writing the legislation to this approach.

Where the proposal has started to run into real trouble, however, is in the broadening and deepening opposition to the two models under discussion. At public meetings grain growers have fretted that they’ll simply offer seed companies a “blank cheque” with no guarantee of what they will receive in return.

No doubt those worries have translated into push-back onto their various commodity groups, culminating in a January 14 press release from the western Canadian cereal commissions including the barley, oat and wheat commissions of all three Prairie provinces and the Prairie Oat Growers Association.

In it they called “… for major changes in the Government of Canada’s current consultation process on value creation. In a letter to federal Agriculture Minister Lawrence MacAulay, the commissions say the likelihood of an industry-wide agreement on either of the proposed models is low and are asking for more consultation including consideration of other options.”

They also took issue with the characterization of the proposal as having been approved by the AAFC Grains Roundtable, noting “… the GRT has not approved these two models and had requested that AAFC conduct an economic analysis of the two options prior to any farmer consultations. To date, this analysis has not been done making it impossible for producers to make an informed decision on a path forward.”

They went on to chide the government saying the feds need to “… put the time and due diligence into this issue to ensure the results are in the best interests of producers.”

The opposition to the proposal got further fuel when the Alberta Federation of Agriculture (AFA) suggested a third path that would build a farmer-breeder partnership. The concept gained even higher priority when noted agriculture economist Richard Gray endorsed the concept.

The latest reaction to the proposal comes from the annual meeting of the Keystone Agricultural Producers.

As Co-operator reporter Allan Dawson reports, delegates there endorsed neither official proposal. Instead, they passed a resolution for KAP to lobby for a system similar to the AFA model.

The need to find new models for funding variety research has been on the table for a long time. The proposals presented may not be the final solution, but they’ve been helpful in getting the discussion focused on the core issues.

About the author

Editor

Gord Gilmour is Editor of the Manitoba Co-operator.

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