9 February 2000
Seed royalty cuts to tempt growers
By FWi staff
SEED royalty rates for some cereals are being slashed, and others will remain unchanged next autumn, as breeders try to halt a slump in certified seed sales.
Lower grain prices and cost pressures mean growers are increasingly home-saving and using reduced seed rates.
Companies hope to persuade home-savers to buy more certified seed, as they say royalties paid on home-saved seed are inadequate to fund plant breeding programmes.
CPB Twyford, which is leading the way with cuts, predicts the move could save growers more than 200,000 in 2000/2001.
C2 royalties charged on key winter wheats Aardvark, Equinox and Malacca will fall 5/t, a drop of 9.2%.
“Continued introduction of new improved varieties is essential to maintain income for farmers,” said CPB Twyford managing director Theo Labuda.
“This depends upon successful and viable plant-breeding operations funded primarily by royalty income.”
But the lower royalty rate on home-saved seed alone is not enough to sustain breeding investment, notes Mr Labuda.
While other leading companies have not announced precise royalties, none expects to raise them.
It seems likely that other rates will stay much the same as last season which, allowing for inflation, will reduce growers costs slightly.
Monsanto/PBIC, which had an average wheat royalty of 47/t last year, does not anticipate any reductions.
Area director David Taylor said: “Across the board cuts would cripple us, but there will certainly be no increases.”
How far rates must drop to tempt growers to buy more certified seed is unclear, says Nickersons Frank Curtis.
Cutting royalties low enough to entice back home-savers could be an expensive experiment, he warned.
Advanta declined to reveal rates but said company restructuring had already produced savings of 8-9%.
Elsom said increases on commercial varieties have never been more than inflation.
Figures issued last year revealed that UK growers are paying up to twice as much royalty to plant breeders as their Continental counterparts.