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Seed royalty costs discussed at Ag Days

Wheat deregistration as an anti-competitive tool is on regulators’ radar

There’s more word on just how big the bill could be under proposed new royalty models intended to fund variety development.

A slide presented at Ag Days Jan. 23 showed a range of $1 a tonne or $1.30 an acre to $3 a tonne or $3.90 an acre.

A farmer who grows 300 acres of wheat could pay up to $1,287 in royalties if 100 per cent of the varieties seeded are covered under UPOV ’91 — stronger plant breeders’ rights regulations adopted in Canada Feb. 27, 2015.

A farmer who planted 3,300 acres could pay $12,870.

Not only are some farmers unhappy about the prospect of paying more for seed, they worry seed companies could keep hiking the royalty.

The federal government hears the concerns, Anthony Parker, Canada’s Plant Breeders’ Rights commissioner said while speaking at Ag Days. One tool to ensure royalties are working properly and farmers aren’t overcharged might be the Plant Breeders’ Rights Advisory Council, he said.

The council, appointed by the minister of agriculture, must include breeders, seed company officials, seed growers and farmers.

Parker also addressed concerns that varieties not covered by royalties would be deregistered, limiting farmers’ choices to grow non-royalty varieties.

There are 463 registered wheats in Canada, he said. Only 13 varieties, or 2.8 per cent of those covered by breeders’ rights, have been deregistered, he said.

Canada’s seed rules will soon be updated and if necessary regulations can be added to ensure deregistrations are justified, he added. There are times deregistration is necessary, for example, to avoid harming markets, Parker said.

It currently takes three years to deregister a variety, said Carla St. Croix, Agriculture and Agri-Food Canada’s director of the Innovation and Growth Policy Division. That means all currently registered wheats will be available until at least 2021.

The government hasn’t said if, or when, any new royalty model will be implemented. But if one is, it will only apply to varieties covered under UPOV ’91, which took effect in 2015. Seed company officials say as a result farmers will have access to many wheats that aren’t affected by the new royalty.

Still, some farmers are worried. At Ag Days Somerset farmer Gerry Demare asked the Canadian Grain Commission (CGC) to slow down the transfer of wheats currently in the premier Canada Western Red Spring Wheat (CWRS) class to the new Canadian Northern Hard Red (CNHR) class. Wheats in the CNHR class generally earn less per bushel, he said and if the new royalties apply to new CWRS wheats, farmers will have fewer planting choices if they want to avoid the royalty.

CGC chief commissioner Patti Miller said the reclassification process was complete.

When Demare asked if AAC Brandon was being transferred, Miller said again the process was complete.

AAC Brandon, the most insured CWRS wheat grown across Western Canada last year, is in no danger of moving, Todd Hyra, SeCan’s western business manager, said in an email Jan. 31.

“I have a letter from CGC that states AAC Brandon is CWRS and will remain CWRS and there are no further varieties undergoing reclassification,” he wrote.

The CGC reviewed AAC Brandon a number of years ago, along with other CWRS wheats to be sure they met the new, higher-quality class standards.

Last year AAC Brandon, a SeCan variety developed by Agriculture and Agri-Food Canada, was grown on 4.1 million insured acres in Western Canada. It accounted for 36 per cent of insured CWRS acres.

The next most popular insured CWRS wheat was Elie — grown on 778,521 insured acres, making up seven per cent of plantings.

Almost a decade ago Canadian wheat customers started complaining about lower gluten strength. That prompted a review of the CWRS and Canada Prairie Spring (CPS) classes’ quality standards, their subsequent revision and the creation of the CNHR class.

After industry consultations the CGC announced in 2015 that effective Aug. 1, 2018, 25 CWRS and four in CPS wheats, would move to the CNHR class.

Most were grown on very few acres in Manitoba in 2017, crop insurance data shows.

In April 2018 the CGC announced five CWRS wheats — AAC Redwater, AC Domain, Muchmore, Vesper and 5605 HR CL — would move to CNHR in 2021.

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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