15 March 2002

Breeders defensive as royalty rises slammed

By Andrew Shirley

INFLATION-BUSTING price hikes in cereal seed royalty rates charged by some members of the British Society of Plant Breeders have been condemned by farmers and seed merchants.

Although many arable farmers made a loss last year, the royalties payable on the 10 most popular wheat varieties – accounting for 87% of certified seed – have risen by an average of 4.7% (see table), according to one merchant who wished to remain anonymous.

He said the average 2% rise being claimed by breeders was misleading because it included older, less popular varieties whose royalty rate had stayed the same or increased only marginally.

Milling wheats have seen the biggest hikes. Hereward is up by almost 8%, while growers choosing Malacca will be hit by a 13% rise in royalties, adding over £6/t to the cost of seed.

"To put Hereward up by that much is ridiculous," said the merchant. He reckoned plant breeders had cottoned on to the fact that low forward prices for feed wheat might tempt more producers to opt for bread-making varieties and had adjusted the royalties to take advantage.

"I know that the whole industry including breeders is under pressure, but they are not helping themselves by sticking up royalty rates, especially when forward grain prices are so low."

But breeders strongly refute the allegations. "We have invested more than £300m in cereals over the past three years," said Geoff Hall, cereals marketing manager at Monsanto, whose varieties Hereward, Option and Napier saw some of the biggest rises. "These are high-value varieties for farmers and the increases reflect that."

Andrew Newby, commercial manager at CPB Twford, the breeder of Malacca, also defended the increase. "A few years ago we actually reduced the royalties but saw no advantage. The rise is simply a readjustment and we feel the price is in line with other competitive varieties."

Tim Piper, a Kent farmer with about 1214ha (3000 acres), was not convinced. "I do not see how they can justify these increases. Farmers will simply start to home-save more seed. The breeders are cutting off their noses to spite their faces."

A large East Sussex producer said farmers did not need any more costs, and reckoned some breeders were simply trying to claw back money pumped into developing controversial genetically modified varieties.

A spokeswoman for the BSPB refused to comment, saying that it was not policy to discuss its members royalty rates. &#42


Variety Breeder Royalty %

(£/t) rise

Malacca CPB 56.50 13.00

Napier Monsanto 57.00 6.50

Hereward Monsanto 47.50 7.95

Option Monsanto 58.50 6.36

Claire Nickersons 52.00 4.00

Equinox CPB 49.44 3.00

Consort Monsanto 53.50 2.88

Xi19 Advanta 57.30 2.32

Tanker Elsons 49.60 1.22

Savannah Advanta 56.00 0.90