BIPO Ltd is pioneering a new approach to royalties, whereby royalty is collected directly from the grower on an area sown basis as opposed to a charge on the cost of seed. The Royalty Area Collection (RAC) scheme introduces new concepts and its adoption of a unified royalty rate for certified and farm saved seed. This aims to deliver commercial fairness to both grower and breeder, based on the fact that the genetic benefit remains the same regardless if the crop is grown from certified or farm saved seed.
Our research reveals that the primary reason a grower uses a variety is because it has demonstrated a proven benefit to the grower. These benefits are directly related to the unique genetics of that variety.
The RAC approach is endeavouring to place a transparent value on the benefits of these genetics. Growers can better appreciate the added value being delivered through the improved genetics, enabling them to make their commercial judgement on how they value that variety on their farm, under their own management and conditions.
Royalty is the method by which breeders gain a return for their investment in plant breeding. It rewards their innovation of producing an improved variety. By using a unified rate all growers pay equally for using these genetics improvements regardless of the source of seed. Thus with the variety being proven on the farm the grower can evaluate the delivered benefits against the declared royalty per hectare.
Where growers enter into an RAC agreement Breeders want to ensure that the growers can optimise their returns with the variety and may issue updates on crop management. In this way we hope that there will be a more dynamic relationship between ourselves, the breeders and our customers.
Plant breeding is a long term investment with high risks of market failure and returns are based on the rewards from successful varieties. It is our view that such returns for investment need to be fair, transparent and equitable with a better relationship between reward and the added benefits being delivered through improved varieties and genetics.