Royalties

There has been some speculation that  Massif Alliance has been double dipping when it comes to seed royalties by charging a Plant Breeders Rights Royalty    at seed sale and then imposing a production royalty on the area sown.                

 

THIS IS DEFINATELY NOT TRUE.                                                                                .
What Massif Alliance has tried to do.Is design the cheapest and simplest system to get a royalty for the Plant Breeder. Please read our actual proposal.     

 

Introducing new varieties;

Over the years farmers had the advantage of strong public breeding system which allowed them to source new varieties at little or no cost. In the late 1990’s State Governments started to withdraw funding. Then funds for plant breeding had to be found from other sources. About the same time Plant Breeders Rights was introduced but it was not able to make up the funding deficit as farmers only purchased a small amount of seed and bulked it up. To overcome the funding problem and to encourage both public and private breeding the grain industry introduced a system called End Point Royalties. (EPR)

 

Cultural change;

Because Australian farmers and the local seed industry had been used to the system of bulking up seed and selling it in any way they wished. The Australian farming community got a record for pinching new varieties. The result was many overseas groups particularly in the USA won’t allow new seed lines to come this country. For some reason it is believed that this is worse in WA and even some companies in the Eastern States are reluctant to promote new lines in this state. 

 

Sourcing lines;

 

To get the line into this country we had to guarantee to the breeder the integrity of the Australian farming and seed industries. This is why we are trying to be as upfront as possible while having the least complicated system for the farmers to pay royalties. Because of this Massif Alliance were offered 8 lines of grazing oats by an American breeder. These lines have just finished going through Quarantine.

 

New forage line;

 

With EPR, there is funding available for breeding cereals for grain production. There is not a lot to encourage breeding for fodder lines. For the animal industries to increase productivity over the next decade a lot emphasis will put on feeding regimes and the industry will need access to new lines for both pasture and fodder production.  

 

EPR Contracts;

 

End Point Royalties (EPR) come in many forms most of which is based on taxing the grower for production from the variety. They are based not only on the delivered grain but also on the amount of grain you keep on farm for animal feed and in some cases this includes seed. So in these cases the grower has to make a declaration and then pay an extra payment.

 

Farmer acceptance of end point royalties is a contract with the breeder.  There are also all sorts of contracts. From the growers signing a complicated legal declaration to one where, when the farmer opens the bag of seed the contract conditions have been accepted.

MA role;

Massif Alliance does not see it’s self as sellers of seed. We are using our expertise to make new lines available to the farming community and in particular for the animal production industries. 

 

Most end point royalties for cereals are based on production of grain or fodder for use both on and off the farm with in most cases collected at the first point of sale.With a versatile forage cereals like Forerunner.The process is too onerous to collect the royalty and on the grower to justify the production for the various uses included grazing that this crop can be used for.

 

To overcome this Massif Alliance will use an Area Based Royalty which is based on a rate per of $7.00 per hectare sown.For growers who keep there own seed

  1. For that reason we trust the integrity of our farmer customers to tell us if they used farm saved seed for sowing.

  2. The area based royalty which was introduced in New South Wales a few years ago,has advantages over the usual end point royalty.

  3. The grower can use the crop production for any purpose and is not required to justify it. 

  4. Most research based on forage cereals demonstrates the need for higher seeding rates.Massif Alliance would like to encourage this.This area based royalty allows the grower to use these high rates without a cost penalty.

  5. The growers will also not be penalized if the use of modern technology increases per/ha productivity.Which is the case in most end point royalties based on production.

  6. Does not Involve the purchasing agent at first point sale having to collection the Royalties and involvement in recording processes.

  7. Unlike Most other EPR where seed purchased in autumn will have the Royalty imposed on their production by December that year.

  8. With Area Based Royalty seed purchased in autumn will only attract the royalty if the grower keeps seed for next years crop and even then, the royalty would not have to paid until July the following year. 
    Comparable rates;

 

It needs to be emphasised, the area based royalty is only for farmers who keep their own seed.

At 100 kg to the ha seeding rate. The Plant Breeders Rights royalty for purchased seed and area based royalty are the same.

 For the farmer who buy new seed every year there is no further obligation as the Plant Breeders royalty is included in the price. 

So it is hard to justify a person retains their own seed not contributing. In the grain industry EPR is now common practice for every new line that is released. An example is the lines which the Grains Research and Development Corporation (GRDC) has an involvement.
To get funds to Breed and introduce new hay crops the Australian Hay Exporters have been paying a voluntary levy. Then an End Points royalty of $1.10 per is levy for growers is imposed on the production of both hay and grain. From this year the EPR will double to $2.20.

 

Over the years farmers had the advantage of strong public breeding system which allowed them to source new varieties at little or no cost. In the late 1990’s State Governments started to withdraw funding. Then funds for plant breeding had to be found from other sources. About the same time Plant Breeders Rights was introduced but it was not able to make up the funding deficit as farmers only purchased a small amount of seed and bulked it up. To overcome the funding problem and to encourage both public and private breeding the grain industry introduced a system called End Point Royalties. (EPR)

 

Cultural change;

Because Australian farmers and the local seed industry had been used to the system of bulking up seed and selling it in any way they wished. The Australian farming community got a record for pinching new varieties. The result was many overseas groups particularly in the USA won’t allow new seed lines to come this country. For some reason it is believed that this is worse in WA and even some companies in the Eastern States are reluctant to promote new lines in this state. 

 

Sourcing lines;

To get the line into this country we had to guarantee to the breeder the integrity of the Australian farming and seed industries. This is why we are trying to be as upfront as possible while having the least complicated system for the farmers to pay royalties. Because of this Massif Alliance were offered 8 lines of grazing oats by an American breeder. These lines have just finished going through Quarantine.

 

New forage line;

With EPR, there is funding available for breeding cereals for grain production. There is not a lot to encourage breeding for fodder lines. For the animal industries to increase productivity over the next decade a lot emphasis will put on feeding regimes and the industry will need access to new lines for both pasture and fodder production.  

 

EPR Contracts;

End Point Royalties (EPR) come in many forms most of which is based on taxing the grower for production from the variety. They are based not only on the delivered grain but also on the amount of grain you keep on farm for animal feed and in some cases this includes seed. So in these cases the grower has to make a declaration and then pay an extra payment.

 

Farmer acceptance of end point royalties is a contract with the breeder.  There are also all sorts of contracts. From the growers signing a complicated legal declaration to one where, when the farmer opens the bag of seed the contract conditions have been accepted.

MA role;

Massif Alliance does not see it’s self as sellers of seed. We are using our expertise to make new lines available to the farming community and in particular for the animal production industries. 

 

Most end point royalties for cereals are based on production of grain or fodder for use both on and off the farm with in most cases collected at the first point of sale.With a versatile forage cereals like Forerunner.The process is too onerous to collect the royalty and on the grower to justify the production for the various uses included grazing that this crop can be used for.

 

To overcome this Massif Alliance will use an Area Based Royalty which is based on a rate per of $7.00 per hectare sown.For growers who keep there own seed

  1. For that reason we trust the integrity of our farmer customers to tell us if they used farm saved seed for sowing.

  2. The area based royalty which was introduced in New South Wales a few years ago,has advantages over the usual end point royalty.

  3. The grower can use the crop production for any purpose and is not required to justify it. 

  4. Most research based on forage cereals demonstrates the need for higher seeding rates.Massif Alliance would like to encourage this.This area based royalty allows the grower to use these high rates without a cost penalty.

  5. The growers will also not be penalized if the use of modern technology increases per/ha productivity.Which is the case in most end point royalties based on production.

  6. Does not Involve the purchasing agent at first point sale having to collection the Royalties and involvement in recording processes.

  7. Unlike Most other EPR where seed purchased in autumn will have the Royalty imposed on their production by December that year.

  8. With Area Based Royalty seed purchased in autumn will only attract the royalty if the grower keeps seed for next years crop and even then, the royalty would not have to paid until July the following year. 
    Comparable rates;

 

It needs to be emphasised, the area based royalty is only for farmers who keep their own seed.

At 100 kg to the ha seeding rate. The Plant Breeders Rights royalty for purchased seed and area based royalty are the same.

 For the farmer who buy new seed every year there is no further obligation as the Plant Breeders royalty is included in the price. 

So it is hard to justify a person retains their own seed not contributing. In the grain industry EPR is now common practice for every new line that is released. An example is the lines which the Grains Research and Development Corporation (GRDC) has an involvement.
To get funds to Breed and introduce new hay crops the Australian Hay Exporters have been paying a voluntary levy. Then an End Points royalty of $1.10 per is levy for growers is imposed on the production of both hay and grain. From this year the EPR will double to $2.20.

Our process is the fairest for the end uses of this crop. It requires a minimum amount of records and will only extend to a small amount of growers.


The next few years in the animal production industry is going to be an exciting one. To maximise productivity what the stock graze and the type of supplementary feeding, will become a major issue. 


Those involved in Massif Alliance are looking forward to being part of this. Through assisting customers to increase productivity.