11 February 2000

Sales revival is aim as royalty rates slashed

By Andrew Blake

SEED royalty rates for some cereals are being slashed and others will stay unchanged next autumn. Breeders hope the move will reverse the on-going slump in certified seed sales.

CPB Twyford is leading the way. C2 royalties charged on its key winter wheats Aardvark, Equinox and Malacca will fall £5/t, a 9.2% royalty cut. Managing director Theo Labuda estimates the move could save growers more than £200,000 in 2000/2001.

"Continued introduction of new improved varieties is essential to maintain income for farmers," says Mr Labuda. "This depends upon successful and viable plant breeding operations funded primarily by royalty income."

Lower grain prices and cost pressures mean growers are increasingly home-saving and using reduced seed rates. But the lower royalty rate on home-saved seed alone is not enough to sustain breeding investment, he notes.

Other leading companies have not announced precise royalties, but none expects to raise them. The most likely outcome is that rates will stay much as last season, which allowing for inflation will shave growers costs slightly.

Monsanto/PBIC, whose average C2 wheat royalty was £47/t last year, does not anticipate any reductions, says area director David Taylor. "Across the board cuts would cripple us, but there will certainly be no increases."

Indeed just how far rates need to drop for growers to buy more certified seed is unclear, says Nickersons Frank Curtis. Cutting royalties low enough to tempt home-savers back to certified could be an expensive experiment, he suggests.

Bram van der Have for Advanta declined to reveal rates, but said restructuring within the company had already produced an 8-9% saving.

Increases on Elsoms commercial varieties have never been more than inflation, notes managing director Anthony Keeling.

SEED ROYALTIES

&#8226 CPB Twyford rates cut.

&#8226 Encouraging certified use.

&#8226 Cash needed for breeding work.

&#8226 Other firms mainly unchanged.

SEED ROYALTIES

&#8226 CPB Twyford rates cut.

&#8226 Encouraging certified use.

&#8226 Cash needed for breeding work.

&#8226 Other firms mainly unchanged.