What Should Farmer Involvement in Wheat & Barley Variety Development Look Like?

Wheat and barley grower organizations from across Western Canada are trying to figure out how to move forward with farmer involvement in variety development.

The transitional Western Canadian wheat and barley check-offs implemented by the federal government with the end of the Canadian Wheat Board’s monopoly in 2012 are set to expire in 2017. The majority of the proceeds from these levies go to the Western Grains Research Foundation, which funds varietal development and other research work on behalf of producers.

At the same time, Agriculture and Agri-Food Canada will likely not be increasing its investment in variety development and the implementation of new plant breeders’ rights last year has opened the door to the collection of end-point royalties.

In light of these circumstances, eight provincial grower groups from across Western Canada, facilitated by WGRF, formed the Wheat and Barley Variety Development Working Group and hired JRG Consulting to analyze potential funding scenarios.

“They wanted us to look at business models for how producers could be involved variety development,” explains John Groenewegen, principle with JRG Consulting in this interview.

John Groenewegen discussed the variety development funding report at CropSphere in Saskatoon earlier this month.

Five scenarios:

The report, which stresses the value of increased public, producer and private investment, outlines five scenarios for farmer involvement in wheat and barley variety development (read the entire document here):

1.) Current Approach with More Coordination and Information Sharing

This option would not involve the creation of any new institutions and would allow provincial groups to independently choose how levy funds are invested, possibly through the Western Grains Research Foundation. Without an end-point royalty (EPR) system, a key risk with this model is that sufficient private sector funding may be hard to attract, notes the report.

2.) Eight Provincial Commissions Involved in Variety Development Research Programs

Similar to the first option, this would build on current industry structure and processes, but could lead to increased administration costs and duplication.

“Each of the provincial commissions would have more autonomy, but there’d be a loose network between commissions as required,” explains Groenewegen.

3.) One Non-Profit Producer Body: Wheat and Barley West (WBW)

This model would see the provincial organizations form a centralized body or joint venture coordinates research contracts and partnerships on variety development. The report notes “WBW” would more easily enter into partnerships with public sector institutions and private sector seed companies. This organization could also collect and re-invest royalties and license fees.

The authors of the report suggest this centralized approach would be more appropriate than the first two options due to “lower administration costs, avoidance of potential duplication and redundancies, allowing for larger onetime investments, and enabling more producer influence and leadership.”

The report also notes a potential risk with this model: “some governance issues may arise if certain groups representing specific classes or wheat and barley become dominant, which may lead to dissention.”

4.) Australia North: Separate Partnerships for Pre-Breeding and Breeding/Finishing

Modeled after variety development in Australia, this option would see a producer body and Agriculture and Agri-Food Canada enter into a partnership for all pre-breeding activities to form the “Wheat and Barley Variety Development Corporation,” for example. AAFC’s breeding assets and staff would become part of WBVD, co-funded by producer levies and the federal government. This entity could then partner with universities and/or private companies, with EPRs serving as a potential revenue stream (the report goes into much more detail.)

5.) Producer Ownership in a Cereal Breeding Company

The fifth and final option would see producers holding ownership shares in a prairie-wide cereal breeding company, with equity based on levy contributions. This company would have its own staff and breeding program, but could enter into partnerships with AAFC, the Crop Development Centre or private companies. The report’s authors note this could put variety development at public institutions at risk. Without EPRs, it would require a higher levy and this company would also be directly competing against private seed companies.

So which option is best?

WBVD Working Group Members:

  • Alberta Barley Commission
  • Alberta Wheat Commission
  • British Columbia Grain Producers
  • Manitoba Wheat & Barley Growers
  • Saskatchewan Barley Dev’t Commission
  • Saskatchewan Wheat Dev’t Commission
  • Saskatchewan Winter Cereals Dev’t
  • Winter Cereals Manitoba

In the medium-term, Groenewegen’s report says the third option — one non-profit producer body — is likely more appropriate than the creation of a producer owned seed company. They point out this “WBW” model would be flexible in leaving the door open to transition into the Australia North or prairie-wide seed company models.

The report also notes producers will also have to decide whether they support a move toward end-point royalty collection. EPRs would provide additional revenue and likely draw increased private investment, but producers will likely want to be assured they can maintain influence in EPR-funded breeding programs.

“The working group is now going forward having a further discussion and dialogue within the commissions and with producers on which model they would recommend on a go-forward basis,” he says.

What happens next?

Groenewegen says he expects a decision will need to be made in the next year-and-a-half, as the post-CWB check-offs will end on August 1, 2017. He was in Saskatoon at CropSphere and will be at CropConnect in Winnipeg on February 11 to present the findings of JGR’s report.

Subscribe to the latest news and commentary from RealAg here

Wake up with RealAgriculture

Subscribe to our daily newsletters to keep you up-to-date with our latest coverage every morning.

Wake up with RealAgriculture