Grain Producers SA recently received correspondence raising a number of concerns from Australian Crop Breeders, the peak body representing organisations that generate new varieties for Australian field crop farmers.
ACB outlined the uncertainty about the future of plant breeding in Australia if growers continue to not adhere to the end point royalty system.
We know South Australia's compliance rate is higher than some other states but there's also concern about complacency and misdeclaration.
For the past 20 years, end point royalties have provided a funding mechanism to help individual breeding companies develop new grain varieties.
One of the major challenges is that because of the process, many grain producers may not realise they haven't paid their EPR obligation properly and can receive a bill some months/years later.
The 1994 amendments to Plant Breeder's Rights Act formed the basis by which the variety owner could licence their intellectual property to grain growers in exchange for the payment of an EPR.
The PBR protects the breeder's intellectual property within a commercialisation process.
The EPR is the way grower pays for the licencing rights when producing and harvesting a variety. An amount is paid per tonne of harvested grain volume delivered to market or used on-farm (such as for stock feed).
The EPR compliance rate for wheat in SA over the last five years has been 89 per cent.
As ACB chair Tress Walmsley said in regards to the SA compliance figures:
"This is great and shows it is clearly possible for growers to do the right thing."
"With the vast majority of grain in South Australia and Western Australia being sold to exporters, EPRs are auto deducted, leading to higher compliance rates.
"In states where there is a much higher sale of grain for domestic use, compliance rates are below 75 per cent and in some regions below 50 per cent. This leads to growers disproportionately funding varietal development."
Breeding is critical to the future of the grain industry in SA and Australia, so I understand why ACB has put additional collection mechanisms in place such as random audits.
"From growers not clearly understanding their obligations, misunderstanding on where and how it is collected, through to individuals that are deliberately misdeclaring or not at all," Tress said.
"We know there are challenges in how the declaration process operates across the sector and are working with growers, farmer groups, traders and others to find ways to improve this experience.
"The disparity between states and regions, however, cannot continue. Having said that, the EPR is a contractual obligation that growers must comply with. Breeders of the new varieties licence their developed intellectual property to grain growers in exchange for the payment of EPRs.
"It is apparent across our members that some growers are not declaring their EPR obligation accurately or at all.
"This is generally done to avoid paying the applicable EPR back to the breeder that developed the variety, which is not always the same as the company the seed was purchased from.
"Essentially, these growers are receiving the benefit of varietal improvement but leaving their neighbours to pay for it. It is why we are formalising the checks and balances in place to ensure everyone meets their obligation."
As we know, it takes around up to 10 years to develop a new variety with desirable traits for Australian conditions.
Tress says that without greater adherence to EPR rules, "breeders may need to make tough investment decisions that would mean some varieties are not taken forward for commercialisation.
She goes on to say: "We are at the stage where, in regions where compliance is dismally low, breeding companies are considering whether they can continue to develop varieties for these areas if compliance doesn't improve.
"In the United States, for example, the funding model is quite different and has contributed to a looming issue as breeding scientists are starting to retire and there hasn't been sufficient investment in breeding outside select (often University) programs. It's a major risk to their national cropping sector."
The worst thing we could do as an industry sector is take a backward step on breeding new varieties, as the grain sector battles with sustainability and climate challenges.
