Performance dividend to boost cereal efforts

12 July 2002

Performance dividend to boost cereal efforts

A RADICALLY new way to boost UK cereal yields and better reward everyone involved has been launched by breeder CPB Twyford.

The key to the companys Variety & Grain Performance Plan, a joint venture between seed supplier, farmer and grain marketer, is a contract deducting a 5.5% performance dividend from grain sales.

The dividend is distributed between breeder and the schemes seed and grain partners, says CPBT sales manager Andrew Newby.

Growers get royalty-free seed at cost and breeder backing on variety choice and management, plus marketing assistance. Untreated C2 cereal seed is likely to cost about £155/t.

Only if the industry draws on the skills of all links in the production chain can agricultures new challenges be met, says Mr Newby. "This can be achieved by adopting a fair and transparent system that provides profits related to performance for all parties."

To break even on the new deal, all other things being equal, growers need to lift output by an average of just 163kg/ha or achieve an equivalent value hike, he calculates.

That should be easy given early access to improved varieties and specific husbandry guidelines and agronomy packages, he says. "Its tiny."

So-called end-point royalty schemes have long been considered by breeders, says managing director John Blackman. "Now we have one and we believe we have the variety portfolio to make it happen."

In dispensing with royalties and expanding its husbandry guidance through demonstration strip trials and seminars, the company is taking a risk, he acknowledges. "We could see our income deferred by up to 18 months. Its clearly a cost.

"But we have to get the message across that yield is important."

Partners in the CPBT pilot scheme, which closes at the end of the month, are Grainfarmers, SCATS Agriproducts and Bury St Edmunds-based GBSeeds.

&#8226 Stressing the importance of increased output to maintain profit, Paul Rix of Deloitte and Touche says the average wheat yield of 8.53t/ha on the firms client farms in 2001 produced a profit of just £8000 on each 100ha. "But we regularly see farms with 10t/ha averages and 12t looks achievable." At that level the profit on the same area would have been £28,000. &#42

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