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Seed royalty consultation needs farmer engagement

KAP president Bill Campbell says farmers need to pay attention because the outcome will affect their bottom lines

Farmers need to get involved in the cereal seed royalty debate, says Bill Campbell.

“This does affect our livelihoods down the road and for future generations so we have to get engaged,” the president of the Keystone Agricultural Producers (KAP) said in an interview following the first of four consultation meetings on the issue held in Winnipeg Nov. 16.

Farmers growing cereals and pulses covered by plant breeders’ rights legislation pay a royalty when they buy certified seed. But because farmers grow mainly farm-saved cereal seed there isn’t enough revenue to attract private companies to engage in variety development.

After two years of discussions initiated by the Grains Roundtable, two options have emerged to get more money from farmers — end point royalties and trailing contracts.

Why it matters: Farmers are the ones who will pay higher costs in the future.

At its advisory council meeting in Portage la Prairie Nov. 12, KAP district representatives voted 26 to 16 to refer a resolution to endorse trailing contracts to KAP’s grain and oilseeds committee for study.

Trailing contracts would see farmers pay seed companies a per-tonne, or per-acre payment for the seed saved for planting.

The other proposal — end point royalties — would be collected when farmers sold cereals.

Farmers have a bit of time to develop a position. The federal government has not made a decision and wants input, Carla St. Croix, director of Agriculture and Agri-Food Canada’s (AAFC), Innovation and Growth Policy Division, told the 75 or so participants at the first consultation meeting.

If royalty regulations are changed it won’t be until 2020. Meanwhile, in addition to three more consultation meetings in Ottawa (Nov. 30), Saskatoon (Dec. 4) and Edmonton (Dec. 6), federal government officials will speak at Ag Days in Brandon and at CropConnect in Winnipeg later this winter.

Citizens can also submit views online and federal officials are willing to meet with farm groups too.

Farmers speaking at the consultation meeting generally fell into three camps:

  • Opposed to paying more royalties. They said farmers are well served by publicly funded cereal variety development.
  • Not necessarily opposed to farmers contributing more, but wary of signing a blank cheque that might benefit seed company shareholders more than farmers.
  • Support for more royalty collection on cereal seed. Advocates pointed to the success of canola, a crop where farmers rarely plant saved seed.

How much farmers will pay depends on the type of royalty and the fee. One of AAFC’s scenarios put a trailing contract royalty for farm-saved seed at between 50 cents and $1 an acre.

Campbell attended the consultation with an open mind.

“This is potentially a volatile issue with regards to taking a stance,” he said in an interview Nov. 12.

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 balanced 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.”

He left the consultation with the same view and a lot more questions.

“I wish there were 4,700 producers here today in this forum so we could inform them,” Campbell said.

During KAP’s meeting Nov. 12 Wawanesa farmer Simon Ellis, representing the Manitoba Seed Growers Association, said he prefers the trail contract over an end point royalty.

“There would be less administration, he said.

But several other KAP delegates weren’t so sure.

David Rourke.
photo: Allan Dawson

“I guess I am hesitant to suggest one is better than another when there might be a third option,” said Minto farmer David Rourke. “Just because there are only two on the table it doesn’t mean that’s what we should support.”

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

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

Butch Harder.
photo: Allan Dawson

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

Dauphin farmer Don Dewar countered since there are only two options KAP needs to pick one.

KAP delegates continued to express concerns while debating a resolution calling on KAP’s grain and oilseeds committee to analyze the ‘Seed Synergy’ report.

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

“We’re already going to face a carbon tax,” he said. “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, 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. 16 meeting, Harder said.

“There’s something at work here and we better learn from that,” he said. “When you go to that meeting Friday (Nov. 16) 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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