Seed deserves royal treatment

Seed royalty – an entirely different business aspect to the agriculture industry that many aren’t aware of, despite the fact that the business of genetically engineered seed is of extreme importance.

The International Seed Federation (ISF) states it best – Seed is the basis of agriculture.

“Apart from its traditional role of being one of the major contributors to sustainable food production, the seed industry is now also at the forefront of developing technological innovations and alternative uses for plants as renewable sources of bio-energy, bio-materials and plants that will provide food and feed of increased nutritional and even medicinal value to humans and animals.”

Engineered seed is responsible for producing crop varieties that are disease, drought, pest and chemical resistant to make farming less of a financial risk for the producer and more dependable for the consumer.

Seed royalties protect the intellectual property of plant breeders and vary among countries.

As stated by the British Society of Plant Breeders:

“Developing varieties is an expensive business, requiring major upfront investment in people, technology and facilities. Research and development takes place throughout many years.

“The ongoing process of crop improvement is funded through a system of intellectual property similar to the protection offered via copyright on books, CDs and DVDs.

Plant breeders are awarded a form of intellectual property, known as Plant Breeders’ Rights, on each new variety. Licensing the use of this intellectual property allows royalties to be collected when a protected variety is produced and sold as certified seed, or when it is used as farm-saved seed.”

With most royalty mechanisms, the collection on most crops are collected at the point of the seed sale, while the end-point royalty is applied on the grain produced from the purchased seed.

To determine the effectiveness of the global seed-royalty process by country, ISF is studying the processes used by multiple countries.

Collection systems used around the globe
  • Patents for transgenics (a subset of GMOs)
  • Plant Variety Protection to protect the use of the variety, however does not protect the genes of the variety
  • Contract law
  • Biological properties—for example, in a hybrid—will only provide a collection benefit in the first generation of the hybrid
  • Trade secrets—keeping it secret from everyone; if you apply for a patent you have to publish your research. The breeder can then license the technology to others with a contract to use the technology, but not disclose the patent information
Seed protection varies according to the technical, legal and socio-economic status of a country.

“Some legislation in Europe allows the breeder to directly contact the farmer who is saving seed and those farmers are required to pay for doing that and it works in Europe,” said Frank Curtis, chairman of the ISF Royalties Working Group and vice president of Limagrain Cereal Seeds in a Seed World story.

“However, that is not possible in countries such as Canada, where plant breeders’ rights are based on older legislation.”

Poland is another example of how countries royalty collection mechanisms vary.

“In Poland, if you farm less than a certain size, for example, 10 hectares, you are therefore exempt from paying royalties,” said Curtis.

ISF organized countries in rank from best to worst seed-royalty collection systems:

  1. Sweden
  2. Denmark
  3. United Kingdom
  4. Ireland
  5. Finland
A complete report summary of ISF’s research will be available near the end of 2011. It will be interesting if America’s seed-royalty collection system alters based from this research.

Do you agree with established seed-royalty systems? Are better collection systems available? Is it fair for the farmer?

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