Canadian farmers say no to ‘blank cheque’ on seed royalties

Date:12-04-2018

Farmers say they understand research costs money, they just want to know that’s where their dollars will go. Photo: payphoto/iStock/Getty Images

Some farmers are willing to pay more in royalties to encourage cereal crop breeding — but they don’t want to sign a blank cheque.

“We’re not really clear on how much money this is going to generate for plant breeders and the industry as a whole, and there are a lot of concerns that it’s going to be a cash grab from producers,” Starbuck farmer Chuck Fossay told federal government officials at the first cereal royalty consultation meeting Nov. 16 in Winnipeg. The meeting heard from several farmers they’re especially concerned about the role of private companies under the proposed new rules.

A slide shown by federal officials noted the government would have little say in how private companies spend royalties collected from farmers. Benito farmer John Sandborn said that means a company could spend 30 per cent of the money on breeding and transfer the rest to stockholders.

Federal legislation allows for some oversight, but for competitive reasons companies don’t reveal spending on research and development, Canada’s Plant Breeders’ Rights Commissioner Anthony Parker told the meeting.

“You have to appreciate you can’t control where the money goes, but if you don’t continuously invest in R&D, and have new varieties, you run the risk of perishing and you’re not going to be in that market any longer,” he said.

Arborg farmer Eric Fridfinnson also called for oversight.

“There needs to be some sort of accountability process here so we don’t simply sign a cheque here and pay more and not necessarily get the results that we want,” he said. “I think as we pay there should be an ongoing accountability process that involves producers.

“At the end of the day how much will go for research and how much will just go for advertising… ”

Keystone Agricultural Producers president Bill Campbell made the same point.

“I am not against research, but I am against no options for farmers with regards to where we are at with canola breeding and accountability,” he said. “I want the best varieties that work for me, but I want accountability from that seed company too.

“I am not opposed to investing in something that will make me money, but I am opposed to having money taken off my cheque that is not productive and results in no gains for me as a producer.”

Stonewall farmer Bill Matheson said he understands the need for research and is willing to pay for it.

“But we don’t want to pay until we hurt,” he added. “And that’s a problem. The suppliers will take us right to the point of breaking… and then they back it off a little bit so we stay in the game.

“We wouldn’t want to see cereals in the same cost scenario as canola, beans and corn where you’re talking $60 or $70 an acre cost.”

Some say farmers who buy certified seed every year are paying for those who don’t, he said.

“Well you can buy a truck every year if you want, but that doesn’t mean I didn’t pay for my own truck,” he said.

Matheson produces and sells F1 heifers — hybrids that earn a premium price.

And he pays a premium price when he buys certified seed.

“But I don’t go to that man next year (who bought my heifer) and say, ‘you owe me a piece of that calf’ — a lingering royalty.”

Some Canadian seed growers attending an interprovincial meeting in Winnipeg Nov. 20 and 21 also said they wanted to be sure royalties in fact are used for plant breeding. Lorne Hadley, executive director of the Canadian Plant Technology Agency, told that meeting seed companies control how the royalty money they collect is used.

The proposed royalties could also result in farmers asking for checkoff refunds on wheat and other crops, Fridfinnson warned.

“There’s a certain level of fatigue over paying these fees,” he said. “All of the (commodity) commissions are refundable memberships (checkoffs) and some say they prefer someone else pay for their new technology and lobbying efforts and all the rest of it and asking for their money back. I would be concerned adding an end use (royalty) would encourage people to do more of that.”