Failing to fund crop genetics today could limit farm productivity and profitability tomorrow, as momentum builds behind new value capture tools.

Innovation is undeniably important to Canadian agriculture. To remain competitive, farmers need access to a constant source of innovation through improved crop genetics.

Understandably, this is perhaps the number one priority for Seeds Canada and our members.

With this at the top of the agenda, Seeds Canada hosted a meeting of more than 70 stakeholders including members of the seed industry, farmers, government, public and private scientists, and experienced experts, following the annual meeting of the Prairie Grains Development Committee in Banff, Alta. earlier this month.

There is widespread agreement that the Canadian variety development system is in a delicate/precarious position. Current policies do not encourage optimal investment, and with cuts to public breeding capacity, the weaknesses in our policy environment become even more glaring.

Industry leaders identified the issue years ago and, with widespread input, came to a uniquely Canadian solution, the Variety Use Agreement (VUA). Launched in 2020, it allows investors in variety development to see a return on investment with each use of the genetics and makes enforcing their intellectual property rights more efficient.

Value capture proven to drive investment

When public funding crises drove the introduction of systems to capture royalties on all use of seed in Europe and Australia, Dr. Jason Reinheimer, Head of Cereals and Pulses Research for Limagrain, witnessed a surge of private investment and a shift of public sector research from commercial to pre-competitive, which allowed for genetic gains to increase.

In Australia, yield gains achieved from the transition to semi-dwarf varieties grew further with increased investment, going from 0.41% gain in yield per year to 1.74%, he says. While Canadian wheat yield gains are healthy in comparison to Australia’s starting point, the message is clear: more investment means more innovation and more gains.

How we landed on the VUA

This challenge isn’t new to Canada, explains Todd Hyra, Secan’s Western Canada business manager, adding the dangers of over-reliance on the public system and lack of a formal value capture system was clear to those active in variety development decades ago. He recalls the seed sector worked hard to explore global funding options and create a made-in-Canada model to address challenges. A trailing royalty model had clear advantages over an end-point royalty model, he says.

A long-term investment in improved genetics

From a farm perspective, Dustin Klym of Condie Genetics warns failure to invest today will have grave results for tomorrow. If genetics are a key component of a productive crop, investment — or lack thereof — in genetics should be seen as a means to increase potential revenue rather than an opportunity to reduce expenses, he adds.

The longer the value chain puts off adopting a value creation model, the more damage we are doing to our long-term profitability. The “value” of the system benefits both public and private developers and everyone in between and even some beyond the seed sector. We must recognize that greater investment in innovation leads to better outcomes for our entire value chain — especially farmers.

After a rocky start, the seed industry is investing time and money into getting the VUA platform right. This tool recognizes our unique situation with opportunity for continued improvement that is capable of increasing investment in variety development immediately. With 29 varieties in the platform across several crop types, uptake is increasing and momentum is building.

Waiting any longer to incentivize investment may leave us without critical components of Canada’s future variety development system.