+ RMA Rural Municipalities
of Alberta

Resolution 37-05F

Royalty Payment on Self-Grown Cereal Seed

January 1, 2005
Expiry Date:
December 1, 2008
Active Status:
Vote Results:

WHEREAS a special committee has unofficially been established to review the issue of royalty check-offs on grain used for seed by the producer or grower of that seed;AND WHEREAS any royalty check-off payment similar to the system presently used in the canola industry would cause the cereal grain producer to cover the entire burden of paying the royalty costs of the seed;AND WHEREAS with the price of cereal grains being very low and input costs at an all time high, it may be timely to pass the research costs on to a broader spectrum of those who benefit directly from the improvements gained through research ;AND WHEREAS should the producer be required to pay for the entire check-off he shoulders the entire risk at the front-end.AND WHEREAS this same check-off system is currently being used in the canola industry which has resulted in a significantly higher price for seed, however, has not directly related to a higher return to the producer;AND WHEREAS product research does not always improve the return to the producer and, in fact, the benefit accrues to the consumer.

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties voice its concern and opposition to any method of royalty check-off similar to the canola industry where the producer covers the entire burden of all of the royalty costs;AND FURTHER BE IT RESOLVED that the cereal grain producer be given a tax credit for costs paid out in respect of the use of pedigree seed in his seed production operation.

Member Background:

While there has not officially been a public consultation committee established, a committee has been struck to review the idea of placing limitations and check-offs on farmers who use their own cereal seed for reproduction. This group has met on more than one occasion to discuss the possibility of implementing a royalty payment system for cereal crop producers who use their own seed. Currently farmers are able to use their own seed at no additional cost. It appears that the intent of the check-off system is to provide more cash flow to research and development. In essence, the producer will be forced to pay a royalty on his own seed. It is suggested that the funds raised would be used for research and development, however, there already is a fee paid by producers for research and development.This check-off system has already been done with canola where the amount of benefit that has flowed back to the farmer is questionable. The problem that faces the grain production industry is that the costs of the checkoffs cannot be passed on to the consumer. Using the results coming out of the canola experience, for example, the following is a cost breakdown when the producer uses his own seed:-price per bushel $6.00 = $.60 per acre -seed treatment $1.00 per lb. for Gaucho or $2.20 per lb. for Helix -$1.17 for bagging & cleaning-final price $2.87 to $3.97 per lb. for producer to use his own seedIf Company purchased seed is used, it ranges from $4.25 to 6.00 per lb. One company is charging an additional $15.00 per acre plus the sale of their weed chemical and seed dressing over and above the cost of the seed. This causes the cost of seed to be one of the major input costs in this area of agriculture. The danger with this type of system is that all the risk is front ended and paid only by the producer. Grain production costs continue to escalate due to increased costs in fuel, natural gas, power, farm equipment, fertilizer (which has risen to $820 per tonne), etc. Facing open-ended increases in seed costs is not beneficial to the producer.The costs of pedigree seed have risen to their all time highs and the use of pedigree seed by producers has dropped off significantly due to these extremely high costs. Farmers are now buying smaller amounts of seed and reproducing it themselves for a more cost efficient product. While there is a group of individuals who have been tasked to look into the feasibility of a royalty payment by self seed-producers, there is not an official group gleaning input from the producers. Farmers are being left out of a public process to investigate the efficiency or fairness that such a check-off system would implement. Questions need to be asked whether this check-off system will add further detriment to the agriculture industry and further impede Canadian cereal producers ability to remain competitive with international producers when establishing cost of production.


Alberta Agriculture, Food and Rural Development (AAFRD) submitted a recommendation to amend the Plant Breeders Rights Act to explicitly give producers the right to save and use their own seed. AAFRD advised that the issue of tax credits for using pedigree seed is worthy of further exploration. The Canadian Seed Growers Association and FarmPure Seed have been looking at various alternatives for a tax credit on the use of pedigree seed. AAFRD was involved in these discussions and would support further development of viable alternatives, which could then be presented to Alberta Finance for further discussion. The current ministry responsible for this issue is Alberta Agriculture and Rural Development.At the September 2007 meeting with the Minister of Agriculture, the AAMDC asked the minister to update the Association on recommended amendments to the Plant Breeders Act as well as research by the Canadian Seed Growers Association and FarmPure Seed on tax credits for pedigree seed. The Association will continue to monitor this situation and provide updates when they are available.

Provincial Ministries:
Agriculture and Rural Development
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