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KAP has no position on proposed seed royalty options yet

Delegates raise concerns about higher seed costs ahead of the first consultation meeting in Winnipeg Friday

The Keystone Agricultural Producers (KAP) is still working out its position on a proposal for seed companies to collect more royalties from farmers on cereal seed, which proponents say will aid farmers by encouraging more variety development.

Meanwhile, the first of the federal government’s four consultation meetings on the proposal is being held at the Delta Hotel In Winnipeg Nov. 16.

“By the time we (KAP) have a decision the policy will be made,” Dauphin farmer Don Dewar said at KAP’s advisory council meeting here Nov. 12 while resolutions on royalties and plant breeders’ rights were debated.

KAP president Bill Campbell said in an interview later he will attend the meeting with an open mind and gather information KAP members can use to form a position.

KAP president Bill Campbell.
photo: Allan Dawson

“This is potentially a volatile issue with regards to taking a stance,” he said.

Traditionally farmers have saved and planted their own seed, Campbell said. But developing improved varieties clearly benefits farmers too, he added.

“So we really have to take a balance approach to this and once again be balanced and sustainable,” Campbell said. “We continually see the erosion of the bottom line in agriculture where everybody takes a bit of us and pretty soon there’s not much meat left on the bone. So we need to be able to address some of these issues so farmers can stay in business.”

After two years of discussions initiated by the Grains Roundtable two seed ‘value creation’ options have emerged — end point royalties and trailing contracts.

If a new royalty is adopted it would only apply to cereal varieties covered under UPOV’91 — updated plant breeders’ rights ratified by Canada in February 2015.

While farmers could still save cereal seed for their own use, it would no longer be free, undermining the value of saving it.

Some farmers also worry to boost revenue seed companies might deregister old varieties forcing farmers to buy seed covered by UPOV’91.

Lowe Farm farmer Butch Harder said KAP needs to take a stand and oppose the proposed royalty options.
photo: Allan Dawson

In a 26 to 16 vote, a resolution for KAP to endorse trailing contracts, which would see farmers paying seed companies a per tonne, or per acre payment for the cereal seed saved for planting, was referred to KAP’s grain and oilseeds committee for study.

Dewar, who moved the resolution, stressed Ottawa is consulting on just two options and the status quo isn’t one of them.

The other — an end point royalty farmers would pay whenever they sold cereals crops — would require grain companies to collect the fees, said Wawanesa farmer Simon Ellis, representing the Manitoba Seed Growers Association.

“Ultimately I think the trailing royalty is best for farmers, myself included…,” Ellis said before the resolution was referred to committee. “It would be the most effective way to do it. There would be less administration.”

But several other KAP delegates weren’t so sure.

“I guess I am hesitant to suggest one is better than another when there might be a third option,” said Minto farmer David Rourke, who has been involved in plant breeding through the Western Feed Grain Development Co-op. “Just because there are only two on the table it doesn’t mean that’s what we should support it.”

Somerset farmer Gerry Demare agreed, pointing out KAP does not have a policy on the proposal.

“I don’t think we can support this (resolution) in any fashion,” he said.

The two options would help big seed companies, according to Lowe Farm farmer Butch Harder.

“What we have is like being on death row. Do you want lethal injection or a rope?” he said, sparking laughter among delegates.

Dewar countered saying there are just two options and KAP needs pick one when it attends the consultation meeting Nov. 16.

Although only two options are being discussed, it doesn’t mean one of them will be implemented, Anthony Parker, the Canadian Food Inspection Agency’s Commissioner for Plant Breeders’ Rights, said in an email Nov. 1.

“Only after the comprehensive consultations have been concluded, and all views heard, will the government then decide whether or not to pursue regulatory amendments,” he wrote.

KAP delegates continued to express concerns about the royalty options when debating a resolution calling on KAP’s grain and oilseeds committee to analyze the ‘Seed Synergy’ report and provide information and recommendations to the advisory council when it meets in February.

Foxwarren farmer and seed grower George Graham said the proposed royalty changes will cost farmers a lot of money.

“The initial numbers on the UPOV’91 varieties is $20 million (of annual revenue on cereal seed), but that will grow as those (new) varieties come on stream,” he said. “Fifty million (dollars) has been mentioned — sometimes a hundred million. That’s our money. That’s a lot of dough. And we’re already going to face a carbon tax. How much more can we take?”

Rourke said he struggles to see how plant breeders will find much more value in cereal varieties. It’s unlikely they will be hybridized or genetically modified through recombinant DNA, he said.

“Again, the public (cereal breeding) system has served us well,” Rourke said.

The royalty proposal is equivalent to setting up technical use agreements for cereals and forcing farmers to buy new seed every year costing farmers more money, said Stonewall farmer Nick Mathieson, who was representing the Manitoba Flax Growers Association.

“When you go buy a brand new car you’re not paying on year two, year three, year four for the rights to drive that car,” he said. “You’ve already paid for it when you bought the car.

Farmers aren’t stupid. If the product is better down the road (they will buy it.)

“Let us have the choice. That’s just my opinion.”

Based on the KAP delegates’ comments, KAP should reject the two proposed royalty options when it attends the Nov. 156 meeting, harder said.

“There’s something at work here and we better learn from that,” he said. “When you go to that meeting Friday don’t say there are only two choices.

“Let’s stick to our guns. This is a big deal. Again we need to be tougher sometimes than what we are. Sometimes we need to march. Sometimes we need to pound our fist on the table and say ‘this is what we want and there is no other option.’”

About the author

Reporter

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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