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Value Creation

Investment is Critical to Success!

Value Creation is being discussed at virtually every producer gathering spot in Western Canada these days and while it is getting a lot of air time and discussion, the fundamental concept is quite straight forward. As with any sector that relies on Intellectual Property to add value for the customer and benefit from their original investment, the seed industry needs a mechanism in place to ensure both of those are in place now and in the future.

Protecting Innovation

Whether protected under a Technology Use Agreement or under Plant Breeder’s Rights legislation there are rules about the use and resale protected seed varieties. When the CPTA receives a request to determine if an infringement has occurred, we take numerous steps to find out if this has happened.

As the seed industry delivers innovative new varieties that will help producers be more competitive in the global marketplace, CPTA will continue to monitor the marketplace for infringements on behalf of its members. This monitoring, as always, is balanced with efforts to coach for compliance and educate to inform.

The CPTA has agreements with several service providers that allow CPTA members to access fee-for-service components for additional activities such as warning letters, secret shopper calls, case management or performance of legal actions.

Protecting innovation is why the Canadian Plant Technology Association (CPTA) exists.

Digging Deeper

The industry is working together to share information on value creation and address questions as they arise. Below are some more in-depth Q&A resources CPTA has compiled. For more information visit seedvaluecreation.ca.

The agriculture value chain has identified that there is a need for increased investment in improved seed genetics – specifically in cereals – to help Canadian producers remain competitive globally. To create this increased value, we need more investment in plant breeding. Variety development research for several crops in Canada is under-resourced. Plant breeding and seed innovation is accelerating globally, and Canada must act now to remain competitive. For example, cereal research in Canada lags behind other global competitors by $0.87-5.18 per acre. 

Agriculture and Agri-Food Canada and the Canadian Food Inspection Agency are conducting engagement sessions to discuss the pros and cons of two proposed value creation models for cereals variety development in Canada: 

  1. an option of an end-point royalty (EPR) payable on all harvested grain from farm saved seed of UPOV 91 protected varieties option; and 
  2. a contract/trailing royalty option.

The Seed Synergy partners, of which CPTA is a member, support this process and have chosen to support the contract royalty option be implemented as a Seed Variety Use Agreement (SVUA). Under an SVUA, producers will pay the plant breeder a Seed Variety Use Fee (SVUF) every year on any grain they divert for seed use of that variety. Producers will have a choice on seed varieties they use. 

SVUA is an agreement (contract) between a producer who purchases Certified seed of a UPOV 91 protected variety and the breeder who developed it. If a producer decides to divert some grain for seed use, they will be invoiced an SVUA for use of the genetics. The steps in the process will be:

  1. Producer chooses to buy Certified seed of a variety that is PBR 91protected.
  2. Producer signs the SVUA at time of purchase.
  3. Producer declares each year whether any harvested grain was diverted for seed use.
  4. The quantity of seed planted is verified using a verifier or a simple online process.
  5. The SVUF will be invoiced to the producer every year that grain is diverted for the protected variety and used for seed.

No. This proposed new system will only apply to varieties protected by Plant Breeders’ Rights under UPOV 91 (PBR ’91). Producers will still have a choice (Farmer’s Privilege) to divert grain for seed use/save seed for older registered varieties without having to pay a royalty. 

Yes, plant breeders will have a choice on whether to use this proposed system. Participating plant breeders (or seed distributors who represent a plant breeder) will set the SVUF for each variety they release under PBR ‘91. The SVUF will be based on variety performance
(the value it creates) but it will be completely up to each plant breeder or seed distributor to determine what (if any) fee their variety will have.

There is a lot of misinformation surrounding value creation out there. Some of these big myths include:

  • The claim that ALL seed will be subject to royalties. This is not the case. It will only be PBR ’91 varieties that are affected.
  • The claim that the Farmer’s Privilege (the right to save seed/divert grain for seed use) will be lost. It won’t be. A farmer’s right to save seed/divert grain for seed use is entrenched in Canadian law.
  • The claim that our current system is fine and doesn’t need changing. This is not so, we need to change. For example, Canadian wheat exports are down while global wheat exports increase. We need new varieties to stay competitive.
  • The claim that only big corporations will benefit from this. Not true. All breeders will benefit — large, small, public and private.

Increased plant breeding investment will have a ripple effect throughout the agricultural value chain by meeting the demands of export markets. Canada would be viewed as a global investment destination of choice, which would drive further investments and progress.