The federal government is poised to sign on to an international treaty that will see farmers pay seed royalties when they sell their crop.
Agriculture Minister Gerry Ritz said last week the decision to adopt UPOV ’91 by Aug. 1, 2014 will provide plant breeders with a better return on investment and encourage more private-sector investment into developing new crop varieties.
“We will have it this winter during the winter session (of Parliament),” Agriculture Minister Gerry Ritz told the Canadian Seed Trade Association’s semi-annual meeting in Winnipeg Nov. 13. “We’re looking at time frames in the parliamentary calendar and that’s the best date we have so far working with the House Leader’s office to get it on the agenda after we come back from Christmas break,” he said triggering applause.
“That still gives us opportunity and time to get it in place for the next crop year.”
UPOV ’91 is the acronym for the International Union for the Protection of New Varieties of Plants, which was struck in 1991. Previous Canadian governments failed to pass legislation enacting UPOV ’91 in 1992 and 1998.
The pros and cons of UPOV ’91 have been hotly debated in meeting rooms and hallways as the grain sector seeks ways to encourage more private company research, especially in cereals.
UPOV ’91 paves the way to so-called, “end-point royalties,” collected when farmers sell their grain.
Some farmers say paying a royalty based on what they produce, instead of the seed they buy, reduces their risk. If they harvest a poor crop, they pay less with an end-point royalty, whereas now they pay up front when they buy seed or herbicides linked to the seed.
However, critics fear UPOV ’91 could prevent farmers from saving seed, resulting in higher production costs.
Ritz told reporters the same people who oppose UPOV ’91 also criticize Ottawa for not spending enough on varietal research. “You can’t have one without the other in my estimation,” he said.
“The biggest howl would be farmers can’t save seed. Well, they can’t save seed now if they sign a contract. It would be the same situation under UPOV ’91. There’s still the ability to save seed. If you sign a contract you have to honour the contract.”
“… at the end of the day, we have to put that (UPOV ’91) in place if we’re going to draw investment here in new seed varieties.”
UPOV ’91 allows farmers to save seed if the government authorizes it, National Farmers Union president Terry Boehm said in an interview Nov. 15. But it also gives plant breeders the right to control their varieties through the entire production, processing and retail chain.
“We’re going to fight this,” Boehm said. “This is just a big sell-out to the biggest corporations in the world.
“The Canadian Seed Trade Association would prefer total control over seed and Ritz is essentially facilitating this through UPOV ’91. It makes it possible for a cascading (royalty) rate.”
CSTA president Peter Entz said Ritz’s decision on UPOV ’91 “is very significant.” UPOV ’91 “is very farmer friendly,” added Entz, who is also Richardson International’s assistant vice-president of seed and traits.
The association has also been facilitating industry discussions on ways for variety developers to get a better return on their investments, including changes to Canada’s variety registration system.
Who should pay?
Most everyone agrees more investment is needed, especially wheat. But views vary on who should pay.
The NFU says the federal government should, as it traditionally has. According to Boehm private company research is inefficient. He said one study shows only 10 per cent of company earnings from seed sales goes back into research, whereas publicly funded research has a 12:1 return.
Don Dewar, interim chair of the proposed Manitoba Wheat and Barley Association, said Ottawa has been cutting research. Meanwhile, farmers in countries such as Australia, have been spending more.
“If we really want to increase investment we need to have a way for the developers to get a reward for their work,” he said. “And one of the things in UPOV ’91 allows them to do that. But you could do it with a contract too.”
But if farmers invest more because of UPOV ’91 they should also discuss the merits of owning all or part of the resulting varieties, Dewar said.
“Do we want the canola system or do we want the farmers to own part of the system?” he said.
“If we’re going to end up paying this $3 or $5 a tonne between levies and royalties, do we want to have some say in what comes out of that or do we just want to feed somebody else? It’s not that farmer-owned will be cheaper seed, but you’re going to provide some competition and have some input on what you get.”
UPOV ’91 allows farmers to save seed, Dewar said. “It’s just that you have to keep paying for the technology every time you use it.”
The Keystone Agricultural Producers (KAP) doesn’t have a position on UPOV ’91, said president Doug Chorney. An end-point royalty makes sense so long as it isn’t too expensive, he said.