Cereal seed royalty gets thumbs down at consultations

Government is asking farmers what they think about seed royalties — and the answer is ‘not much’

The two proposed seed royalty models have come with many questions from producers.
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The idea of charging royalties on cereal seed didn’t go over well with many Alberta farmers who attended a federal government consultation on proposed royalties.

“The overarching thing is that control would be imposed and that would be my concern,” Trochu farmer Kevin Niemi said in an interview. “A royalty is like a seed tax that is coming in after the fact. There would be administration and monitoring, and that is control.”

“This is not correct what is happening here. This is legal theft of our seed,” Peter Eggers, an organic producer from La Glace, also said in an interview. “It is only about extraction from the land and money out of my pocket and someone else’s pocket.”

The consultation was the last of four conducted by Agriculture and Agri-Food Canada and the Canadian Food Inspection Agency to get feedback on the idea of royalties, and two proposals for collecting them. The goal, attendees were told, is to make cereal breeding more attractive for the private sector.

Among the 100 people attending the meeting at an airport hotel earlier this month were producers, seed growers, commercial seed growers, seed sellers, and representatives from producer associations.

They heard about the two royalty systems — end point royalties and trailing contracts — that emerged after two years of fact-finding and deliberations by members of a federally appointed Grains Roundtable.

Niemi was upset that he was unable to find any information about the seed royalty review on the website of the Alberta Wheat Commission.

“The seed industry has been able to lobby and go after the regulator,” said Niemi. “Here we are with the regulator and the most affected are the last to know. It’s a power grab.”

Alberta Wheat general manager Tom Steve sat on the roundtable.

He said the goal was to find ways that would encourage investment into wheat breeding. Certified seed only accounts for 20 per cent of seeded acreage and the rest is planted with saved seed, which provides no return for the developers of those varieties.

Tom Steve. photo: Supplied

“At that rate of seed use, the system doesn’t generate enough royalties to earn a return on investment for breeding institutions,” said Steve. “We do have some outside limited private investment on wheat breeding, but it is small.”

The vast majority of varieties are bred by university and federal government scientists, with tax dollars and producer checkoffs providing the funding.

“The question over time is whether there is a mechanism to increase the level of outsider investment to take the pressure off the public purse, and producers for that matter, and create more opportunities by having breeding companies compete with the universities and Agriculture Canada,” said Steve.

The two proposed royalty models come with many questions, and there hasn’t been enough work done to assuage farmers’ concerns, he admitted.

“If I have one criticism about the process, it’s that the economic analysis on the models hasn’t been done,” he said. “We don’t have answers specific to how an end point royalty system would work or how a trailing royalty around farm-saved seed would work. There’s a lot of practicality on what the rate would be. Would it be on some varieties? How would it be enforced? None of these questions are answered.”

The whole issue is “an emotional topic,” he added.

During the afternoon session in which attendees had gathered at tables to discuss the proposals, Eggers said he took the mike and asked the farmers in the room who was against the proposed changes.

“I put them on the spot — they put their hands up,” he said, adding everyone at his table was in agreement and there were only a couple of farmers in the room who didn’t.

Eggers said he is willing to pay a higher price for good seed, but he is against an involuntary checkoff system where he doesn’t know how his money will be spent.

“We had the right to save seed and that has been everybody’s right for thousands of years. And now we could lose it,” he said.

Steve said that reaction is “understandable.”

“In our view, the sector needs to do a better job of explaining to the farmer what the value proposition is every year,” he said. “If you’re paying for that seed every year, or you’re paying a royalty after the first use of it, you need to see the value — you need to see a higher value or a higher yield or a higher disease resistance.

“And that hasn’t been well established in the minds of the farmer. They’re accustomed to the current system and they haven’t seen a variety come along where they would like to pay that extra dollar for.”

Alberta Wheat has not taken a position on a preferred model, but was to discuss it at its AGM this month and at future meetings.

“There will be multiple opportunities for discussion on this — no decisions have been made,” said Steve. “Some of the (negative) reaction around this was the perception that this was cut and dried.”

About the author


Alexis Kienlen

Alexis Kienlen lives in Edmonton and has been writing for Alberta Farmer since 2008. Originally from Saskatoon, Alexis is also the author of two collections of poetry, a biography, and a novel called "Mad Cow."



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