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Cereal royalty discussions dominate CropConnect AGMs

There’s increasing agreement among farmers to invest more in variety development, but how?

There’s still no consensus among western grain farmers on how they can contribute more money to boost cereal variety development, but Fred Greig says there’s progress on the contentious issue.

Fred Greig. photo: Allan Dawson

“I think there’s a will to move along the path and to protect our interests and protect our rights and do it right,” the Reston farmer, seed grower and chair of the Manitoba Wheat and Barley Growers Association (MWBGA), said in an interview Feb. 14, after the association’s annual meeting held during CropConnect in Winnipeg.

“If they could just tell us what the number is — how much money they think they need to have — then we’ll figure out a way to make it equitable.”

Seven other commodity groups held their annual meetings Feb. 13 and 14 during CropConnect, and royalties were discussed at three of them.

The federal government started consulting farmers in November on two models — an end point royalty and a trailing royalty. The former would be collected on grain when sold; the latter would be remitted by farmers on farm-saved seed through a per-tonne or per-acre payment. Federal officials say the cost could be $1.50 to $3 a tonne or per acre.

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Either option developed by Canada’s seed industry would see farmers pay more to plant breeders who in turn would reward farmers with better varieties keeping them competitive, according to federal officials.

The MWBGA, along with the wheat and barley commissions in Saskatchewan and Alberta and Prairie Oat Growers Association, issued a new release last month saying reaching a consensus on either option was unlikely. However, they also said consultations should continue.

Since then, the MWBGA issued five principles it wants adopted in connection to any royalty plan (see at bottom).

“One thing we can agree on is we need public wheat and barley breeding in Western Canada,” Greig told the MWBGA annual meeting.

Most of Canada’s cereal crops have been publicly developed by Agriculture and Agri-Food Canada (AAFC). But reports say AAFC is spending less on variety development, he said.

While MWBGA doesn’t have a position, Greig said he personally wants a system that encourages public and private variety development. If a multinational company has a hot new variety, Greig said he’d pay for it if he believed it made economic sense.

But he insisted if farmers invest more, the federal government must stop cutting back its contribution and continue producing new varieties.

“We’re going to do a lot of work here so if you can at least commit to freezing funding, or meeting us halfway, I think it would be a lot easier to sell to producers (on contributing more),” Greig said later.

Bill Uruski. photo: Allan Dawson

Fisher Branch farmer and one-time provincial minister of agriculture Bill Uruski tried to help shape the MWBGA’s position by moving a resolution. It called on the MWBGA to develop options that would put farmers in charge of their own research dollars in collaboration with the federal government, to ensure all farmer variety development funds, less administration costs, went to that purpose.

“The two proposals mean one thing,” he said. “We pay and have no say.”

Uruski said he won’t be farming much longer but he hoped is son and grandson — fifth- and sixth-generation farmers — would be.

Dauphin farmer Ernie Sirski said the resolution was confusing and moved to table it. That motion passed 21 to 17, ending debate.

The Manitoba Seed Growers Association (MSGA) passed three royalty-related resolutions, including one supporting a trailing royalty, at its annual meeting Feb. 13.

Of the 19 seed growers in attendance, 11 voted for the resolution, five were against and one abstained.

Lowe Farm seed grower Butch Harder opposed the resolution calling it a “seed tax,” and said farmers have no idea how much they’ll pay.

MacGregor seed grower Lorne Hulme also opposed the resolution saying he feared it could hurt smaller seed companies.

However, Brent Derkatch of Canadian seed firm Canterra Seeds, said his company supports trailing royalties.

Kenton seed grower Robert Stevenson opposed the resolution arguing a trailing royalty doesn’t give farmers control over how their money is used. He suggested exploring the Saskatchewan Pulse Growers’ model. (It funds the Crop Development Centre directly to develop new pulse crops, which the association commercializes.)

Grosse Isle seed grower Rick Rutherford supported the resolution saying a trailing royalty would encourage the world’s best genetics to come to Canada through multinational companies. Farmers will regret a system that collects their research money and ties them to one breeding institution, he said.

Manitou seed grower Daniel Sanders agreed.

“If we don’t use the trailing royalties we might not get access to that (foreign genetics),” he said.

Trailing royalties are simpler to administer than end point royalties, which grain companies have not agreed to collect, Oak River seed grower Eric McLean said.

“I think there is more to gain than to lose,” he said.

While there’s talk of a third option involving farmers collecting and controlling royalties or levies, it falls outside plant breeders’ rights regulation, McLean said.

However, that may not be the case. The regulations are quite flexible, Plant Breeders’ Rights Commissioner Anthony Parker said in an interview Feb. 20. Canada could set up an Australian model where farmers, private companies and/or the government form companies to develop new varieties funded through an end point royalty, he said. The partnerships fall outside the breeders’ rights legislation, he added.

Domain seed grower Tom Greaves, who moved the resolution, said a trailing royalty is needed so farmers invest in future variety development.

“Don’t kid yourself,” he said. “If we don’t go down this road the companies are going to do this anyway.”

Seed growers also passed resolutions in support of a royalty model that improves the sustainability of producers and the Canadian seed certification system and to make the royalty system transparent and ensure royalties generated from publicly funded breeding go back to breeding programs.

“We have to remember we no longer plow with a horse and… plant Red Fife wheat,” MSGA president Andrew Ayre said as the meeting ended. “It’s time to go forward.”

WBGA’s royalty principles

(1) Agriculture and Agri-Food Canada (AAFC) must continue its role in variety development from upstream research to finishing of varieties.
(2) Royalty revenue generated cannot replace or erode federal or provincial funding for public plant-breeding programs, but instead add/increase government financial support.
(3) Royalty revenue must support public breeding programs by directly returning collected royalties to the breeding programs and not into general revenue of government.
(4) If Manitoba Wheat and Barley Growers Association continues to be a funder of variety development in partnership with AAFC or other partners (public or private), total royalty collected and distribution of royalties must be reported to ensure transparency and to determine effectiveness of royalty collection in creating value.
(5) Any value creation model or mechanism must protect the producer’s right to save their own seed.

About the author


Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.



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