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NFU rejects proposed cereal seed royalties

It says the seed industry wants more money from farmers with no guarantees it will make farmers better off

Farmers pay royalties on certified seed, but the seed industry says it’s an insufficient amount because farmers sow such a high percentage of farm-saved seed.

Proposals for new royalties on cereal seed, if adopted, will extract more money from Canadian farmers without guaranteeing they’ll benefit, according to Terry Boehm.

He is chair of the National Farmers Union’s (NFU) seeds committee and a former NFU president.

“This is the end-game,” Boehm, who farms bear Colonsay, Sask., told reporters during a telephone news conference in Saskatoon Nov. 22. “I think we can be quite clear and quite blunt about that.”

Why it matters: The seed industry says the money will be used to develop new varieties making farmers better off. The NFU says that isn’t guaranteed.

After years of discussions, and two years of study, the seed industry is proposing Canada implement one of two options to collect more money from farmers growing cereal crops.

The industry prefers a trailing contract, saying it is simpler and cheaper to administer. It would oblige farmers to pay a royalty on farm-saved seed.

The other option is an end point royalty collected when farmers sell cereal crops.

The money would go to the organizations that developed the varieties. The industry says that will attract foreign seed-breeding companies to invest in Canadian varietal development and reward Canada’s public and private breeding institutions, resulting in farmers getting better varieties and being better off.

But Boehm said there is no guarantee breeders will get the money or that it will be used in Canada.

“There are no guarantees, there are no concrete numbers suggested on where the royalty numbers will be, how much will be reinvested, what will be developed and what kind of varieties will be developed, and what kind of end uses they will have,” he said.

“We can open up the potential for farmers and seed breeding in Canada through a number of initiatives. We do not have to go to restricting farmers, essentially saying to the Syngentas and Monsantos of the world that we are stupid enough to just give you money to maybe do something or maybe not.” (Earlier this year Bayer purchased Monsanto.)

Farmers pay royalties when they buy certified seed, but the seed industry says it’s insufficient because farmers sow such a high percentage of farm-saved seed. That’s currently legal, although under UPOV ’91, the plant breeders’ rights regulations Canada adopted Feb. 27, 2015, it’s only a ‘privilege’ and one plant breeders can legally restrict.

“In terms of varietal development farmers have stepped to the plate and are paying,” through checkoffs collected by commodity groups, Boehm said.

The groups invest the money with breeders, providing oversight and accountability on behalf of farmers.

“Their investment is significant and it has created new varieties and benefits for farmers without the restrictions,” he added. “We think these mechanisms are perfectly functional and that public breeding has served us well.”

However, Lorne Hadley, executive director of the Canadian Plant Technology Agency, told an interprovincial meeting of Canadian seed growers in Winnipeg Nov. 21 that royalties on publicly developed varieties often fall short of the development cost.

The NFU also worries the monitoring and auditing of royalty collection will be intrusive.

Under the proposed trailing contract system farmers would report how much saved seed they sowed and remit the royalty owed, Hadley said. To keep administration costs down, farmers will supply the name of a local person — an agronomist or input retailer — to verify what they report is reasonable, he said.

Although there’s a lot of discussion about the two options, depending on which is implemented and how, it could drive farmers away from saving seed, some industry official say. When farmers buy certified seed they pay a royalty up front, so either way works for breeders.

Boehm suspects the slightly longer-term goal is to push farmers to purchase certified seed for every planting.

“In the consultant’s report (on the two options)… they are proposing that once ‘we’ eliminate enough of the UPOV ’78 varieties, which do not have the restriction on farm-saved seed as significantly as UPOV ’91, that ‘we’ would shift to varietal contracts that require no farm-saved seed — so (seed) purchases on an annual basis.”

That should be good for seed growers, but Boehm said they currently don’t produce in enough certified seed to meet that potential demand. Presumably they could eventually, but Boehm warned if seed companies gain more control, seed growers will eventually be unnecessary and at best be growing seed for companies under contract. (That’s currently the canola seed model.)

What the seed industry proposes is not unexpected, Boehm said. The NFU predicted it. That’s why it opposed Canada’s ratification of UPOV ’78 in 1990 and successfully delayed UPOV ’91 until 2015, he said.

“Indeed the NFU has been engaged in a multi-decades long fight against these initiatives,” Boehm said. “And with every move the seed sector has made the arguments have always been the same.

“With each of these legislative regulatory changes farmers are losing the most important piece of the food system — the control of the seed. And so are consumers.”

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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