Busting the Myths about Plant Breeders' RightsPosted in: Global Ag By Tracy Tjaden March 20 2015
News is swirling about Bill C-18 and UPOV-91, the amendments to Canada’s plant breeders’ rights that became law February 27. What does it mean for growers? We peel back the layers to examine the enhanced rights of breeders and the changes affecting farmers — and bust some of the myths surrounding the new legislation.
The Canadian government passed new legislation in recent weeks which industry insiders say will pave the way for greater investment in seed research and development in Canada, while ensuring growers have access to the latest varieties.
Bill C-18, dubbed the Agricultural Growth Act, passed in the House of Commons last fall and came into force on February 27. It will, among other things, amend the Plant Breeders’ Rights Act and bring Canada in compliance with UPOV-91, a convention created by the International Union for the Protection of New Varieties that sets out the criteria for intellectual property rights for plant breeding.
Some farmer groups, notably the National Farmers Union, have taken aim at the new law, which they say gives all the power to the big multinational seed developers on the backs of farmers. However, industry experts say the updated plant breeders’ rights legislation will be good news for growers.
“We’re going to see new varieties introduced this year in Canada as a result, and this is all conditional on having our plant breeders’ rights up to speed with the rest of the world,” says Patty Townsend, CEO of the Canadian Seed Trade Association. “We’re also going to see more varieties developed in Canada, for Canada. Without the promise that they could protect their property this would have been much more difficult.”
Perhaps an even bigger impact of the new legislation will be on the smaller Canadian seed companies that do the licensing, multiplication and distribution of new varieties.
“These companies want to find varieties being used in, say, Europe and then reach an agreement to bring them to Canada to test them and see if they’re suitable here,” says Townsend. “They weren’t able to do that before.”
Rod Merryweather, the CEO of FP Genetics, echoes this sentiment.
“This new legislation is very good for the seed industry; it’s a win-win for everybody,” he says. “In the end, it will produce higher quality grain that our customers want and everyone in the value chain shares in that.”
Darcy Pawlik, Syngenta’s cereal seed lead in North America, says UPOV-91 allows the company to bring its germplasm from all over the world to Canada, and have it protected.
“It just gives us a lot more freedom to operate with our genetics in Canada,” he says. “When a company like ours looks at where and how it’s going to invest limited resources, having a pro-science-based regulatory system is important.”
In light of the new legislation, Pawlik says Syngenta will ramp up its partnerships with Canada’s public-sector seed developers, including federal bodies, universities and provincial agriculture extension offices.
Brent Collins, director of cereals marketing with Bayer, says the new plant breeders’ rights were a significant factor in the company’s decision to ramp up investment in wheat breeding in Canada (for details see Follow the Money).
“It would have been a much more difficult road to travel if not for UPOV-91,” says Collins. “From a private breeding company’s perspective, Bayer made it very clear that one of the important elements for us to include Canada would be that we would be able to have a higher degree of confidence in our ability to protect our germplasm and traits.”
Also, Canterra Seeds has signed an exclusive license agreement with the French seed giant Group Limagrain for the commercialization of advanced wheat varieties for Western Canada, and that’s just a sampling.
Merryweather says he believes the certified seed business will grow, “mostly because we’re investing more money in new varieties, which ultimately deliver the farmer more value.”
Certified Seed Ramps Up
To back its assertion that certified seed produces higher yields, FP Genetics, which is owned by 150 farmer shareholders, is offering a profit guarantee on its certified seed.
“We know our new wheat variety will deliver eight to 15 percent higher yield. I believe the seed industry has been poor at demonstrating the value of certified seed and new varieties in the past — so, this is what we’re doing to try to show farmers they’ll make more money.”
Merryweather says he isn’t competing against other certified seed sellers, as much as farm-saved seed — and, of course, the illegal brown-bagged seed.
According to Lorne Hadley, executive director of the Canadian Plant Technology Agency, 20 to 24 percent of wheat grown in Western Canada is certified seed, 50 to 60 percent is farm-saved seed and the remainder is illegal seed (known as ‘brown bagging’), grown by a farmer who didn’t pay the breeder for the right to sell the seed. Certified seed costs about $14 a bushel or $28 an acre, compared to farm-saved seed that that costs farmers about $10 an acre, says Merryweather.
At the CPTA, whose members are plant breeders, Hadley is busy educating growers on the new rules. The agency also runs a monitoring program to uncover potential violations.
“If they don’t remove the ads or stop selling the seed, we manage the enforcement,” Hadley explains, which typically sees the plant breeder file a civil lawsuit against the illegal seller. “Most of these are settled out of court, and involves them admitting their total sales, paying damages and signing a contract saying they will never do it again.”
Hadley says 85 to 90 percent of his conversations on the subject are with farmers who didn’t know the rules, or weren’t aware that the variety in question was protected.
“At the end of the day, if you are a producer who buys certified seed and doesn’t ever sell common seed or trade it with neighbours, there’s no impact.”
Under the new rules, plant breeders will be allowed to do a one-year test of a new variety before applying for protection under PBR. “They can now market-test which varieties are most successful,” Hadley says. “That’s the kind of international standard that will now be the same as what other countries are offering.”
However, not all growers are applauding the new rules.
Ann Slater, vice president of policy with the National Farmers Union, says the NFU isn’t convinced UPOV-91 will result in more new crop varieties for Canadian farmers.
“We would question whether this is really about private breeders developing varieties that are specific to us — or about making it more profitable to bring in varieties they’ve already developed for elsewhere,” says Slater, a vegetable farmer in southwestern Ontario. “We all know Canada is a small market and what works in one region may not work in another, making it an even smaller market. This may lead to new varieties here that were developed for larger markets; some will work, others won’t.”
MYTH 1: Farmers can’t save seed to plant the next year.
They can. Using farm-saved seed of a protected variety on your own farm is and will continue to be legal.
However, selling your farm-saved seed is illegal and remains so under the new rules.
Also, plant breeders’ rights have been expanded. Previously, breeders had authority to intervene if a farmer saved the seed and then sold it to another farmer (also known as ‘brown bagging’). Now, their authority extends to the production, reproduction, export, import, stocking and cleaning of their seed for the purpose of sale.
Under the new bill, if a breeder can prove their proprietary seed was sold and they did not have the ability to exercise their right (collect their royalty), they can take the case to civil court and attempt to get compensation and/or stake a claim on the seed and the crop it produced.
“The breeder has to gather evidence and then prove their case under civil law,” says Townsend. “So it’s up to the breeder to prove their rights have been breached — but now they have the authority over more places where they can find this evidence.”
As long as growers are using farm-saved seed on their own farm, they’re fine. If they make a decision to stock it and clean it for the purpose of selling it, they’ve breached plant breeders’ rights.
Townsend says she assumes they’ll continue with current monitoring methods, such as tracking down newspaper and online ads promoting certain varieties for sale. And other players in the seed chain may begin to crack down in order to protect their own interests.
“I think seed cleaners may start requiring farmers to sign declarations to show this is legitimate seed, that they’re growing it themselves,” says Townsend. “So, if you are thinking of breaking the law, there are now more places where you would be off-side.”
The other change under the new legislation gives breeders the right to seek compensation on any grain they can prove was grown from illegal seed.
The buyer will now bear responsibility for growing illegal seed (under the old rules only the seller was held accountable).
“Now, when a farmer purchases seed, they also have some responsibility to know that they are buying legitimately produced seed,” says Jeff Reid, Ottawa-based general manager of SeCan.
MYTH 2: Seed prices will go up.
This goes against normal supply-demand economics.
If breeders’ rights are protected, they’ll more likely spend more time and money in the Canadian marketplace, developing more seed varieties. More competition usually leads to lower prices, not higher prices.
Hadley’s take? “Seed prices won’t go up if the variety doesn’t have value.”
However, there could be an upward shift because public institutions will no longer be able to bear the cost of producing new cereal varieties in Canada.
“Because we had largely publicly-funded plant breeding for wheat and cereals, farmers are not paying the full cost for plant breeding,” he notes. “Even if there was no plant breeders rights, public breeders would have to put up the price of seed either way. They can’t afford to put out low-royalty varieties anymore.”
In this sense, the competitive landscape will change, says Hadley. Currently, the majority of new varieties come out of federal ag agencies or Canadian universities. With UPOV-91 in place, that could change. “There are international wheat breeding organizations that have never been in Canada, and now they’re interested in trying their varieties here,” says Hadley.
MYTH 3: This legislation, especially thanks to its clause on end-point royalties, is going to benefit the big global seed developers on the backs of Canadian farmers.
First, according to Townsend, 50 percent of the crop varieties protected under PBR are developed by public breeders, including the federal government, universities and provincial governments. So, it is not just the multinational global seed developers that will benefit from PBR.
Second, she explains that the only place breeders can collect royalties is on their seed. However, if they didn’t get that opportunity for some reason, they could potentially seek compensation on harvested grain. (This is the case in Australia, for example, where farmers pay royalties based on the crop grown, rather than the seed planted.)
“But it’s not automatic and it requires a different set of agreements we haven’t even reached,” says Hadley. “We’d need a made-in-Canada solution.”
At the end of the day, Hadley says UPOV-91 is about setting up the framework to attract new varieties to Canada.
“This is about Canada’s agricultural competitiveness,” he says. “Right now our competitors have better genetic material for their environments than we have for ours.”
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