All you need to know about Plant Breeders Rights and the End Point Royalty system.
Plant Breeders Rights (PBR)
Plant Breeders Rights (PBR) relates to legislation covered in the Plant Breeders Rights Act (1994), and is a type of copyright which protects the plant breeder's intellectual property rights, which in this case is new and uniquely different plant varieties. PBR provides the legal mechanism by which a breeder can license a variety to a grower and impose an End Point Royalty, which in turn can recover the costs of breeding and allow re-investment into future variety development.
End Point Royalty (EPR)
An End Point Royalty (EPR) is a fee paid on every tonne of grain produced (and sold as grain) by growers for each particular variety. The EPR amount is set by the variety owner (breeder) when the variety is released, and may vary between varieties.
Variety License Agreement
AGT's Variety License Agreement outlines the terms and conditions of sale of AGT varieties to growers, and the resulting EPR obligations. With every sale of seed of an AGT variety, a Variety License Agreement must be provided to the grower by the retailer. If seed is accessed through Seed Sharing™ then an AGT Seed Sharing™ License Agreement must be completed and returned to AGT.
Download the AGT Variety License Agreement
- 2017 AGT Variety License(pdf) 411 KB
PBR and EPR - Frequently Asked Questions
Wheat breeding in Australia is now 100% funded by EPR's. Barley breeding in Australia will soon be 100% funded by EPR's while canola breeding is funded through either royalties on seed sales or EPR's. Breeding of some of the minor crops including oats, peas, lupins, chickpeas, faba beans and lentils is through a combination of public investment (State Government, Universities and GRDC) and EPR's.
AGT's success depends on its ability to receive EPR's. To receive EPR's AGT must meet the current and future needs of Australian growers and their markets, and therefore AGT’s primary focus is delivering value to growers.
PBR protection of a variety allows the breeder/owner of the variety to place restrictions on what the grower, and others in the supply chain, can do with the protected variety.
At the point of seed purchase of a PBR protected variety the grower typically enters into a contract with the breeder/owner of the variety.
The contract may be a signed document or simply a contract printed on the bag of seed. In the latter case, the grower enters into a contract with the breeder/owner automatically when they agree to purchase the seed.
The contract between the grower and breeder/owner may place restrictions on what the grower can do with the grain produced from the seed when planted as a crop.
Growers should be aware of what these restrictions are, as they may differ greatly between varieties and breeders/owners.
The PBR legislation allows the variety breeder/owner to prevent growers from selling seed to other growers, or in fact the grain to any other parties including traders or end-users, and these conditions should be checked carefully before purchasing seed.
The PBR legislation, however, also clearly allows for a grower who has purchased seed of a PBR protected variety to save seed on-farm for use in the sowing/planting of the following year’s crop (“farmer saved seed”).
PBR protected varieties may also be used on farm for the planting of a crop by either partner in a bona fide share-cropping situation.
Seed of a PBR protected variety may be sown by both parties under a bona fide share cropping arrangement.
For most varieties, other than those where the breeder/owner has clearly indicated that the grower is permitted to sell as seed, the seed remains the property of the breeder/owner and application to transfer the variety license and therefore seed of the variety to the new farm owner would need to be made. If the transfer is approved then the vendor has no further claim on the seed.
No - seed merchants are bound by the same restrictions as individual farmers and cannot offer for sale, sell, advertise, import or export seed of PBR protected varieties without the consent of the breeder or agent.
The EPR represents a performance based equitable return to the breeder/owner for successful crop breeding. Breeding a new cultivar is expensive, taking from eight to twelve years and estimated to cost at least two million dollars per variety.
EPR, as opposed to a seed royalty, shares the risk between the breeder and the grower. In order to fully fund breeding in the absence of an EPR system, a very large seed royalty would need to be paid by the grower.
In the seed royalty model, the grower carries all the risk, however with the EPR system the risk is shared between the grower and the variety breeder. For instance, if the grower has a failed crop, the breeder receives no royalty.
EPR also provides an incentive to companies and individuals to invest in plant breeding and value add to the grains industry by producing superior varieties that raise productivity (higher yield), price (improved quality), or protect loss in productivity (disease resistance and stress tolerance), therefore improving the profitability of cropping.
The EPR will be payable for the life of the variety in the market place, while ownership of a variety is protected under the Plant Breeders Rights Act (1994) for up to a maximum of 20 years.
Yes (by most grain buyers/traders).
In an effort to help improve the efficiency and effectiveness of EPR collection in Australia, AGT has entered into agreements with Australia's major grain buyers/traders for the collection of EPR on our behalf.
These grain buyers/traders are contracted by AGT to deduct the EPR (GST inclusive) from each grain purchase transaction of an AGT variety, and remit this amount to AGT.
Grain buyers/traders will issue a tax invoice on behalf of AGT to each grower from whom it retains EPR amounts.
Growers still have the obligation to pay direct to AGT the royalties owing on any crop produced and not sold through buyers/traders who automatically deduct royalties, and are required to fill out a royalty notice (Harvest Declaration) from which an invoice will be raised to ensure all EPR liabilities are cleared.
In the event that a grower using an AGT variety does not wish to sell through an auto deducting buyer/trader and has not been issued with a royalty notice or Harvest Declaration, that grower should contact AGT and request a notice so as not to infringe both the Grower License Agreement and the PBR legislation, and thereby mitigate against the potential risk of prosecution.
Most varieties are developed with the aim of improving yield, quality, or resistance to a specific disease. From time to time a breeder may produce a variety that offers growers a lower risk of downgrading through improved pre-harvest sprouting tolerance or improved resistance to blackpoint. However, the breeder can make no assurance that the variety will not be downgraded due to seasonal and/or site specific factors out of its control.
The EPR is due on tonnes produced and is fully independent of the quality grade or payment received by growers for the grain. For example, the EPR paid to the breeder does not increase when global and/or local demand and supply situations result in high grain prices paid to growers.
AGT does not require growers to pay a royalty on seed saved for planting.
Some breeders/owners may insist that growers pay a royalty on farmer saved seed, while others do not.
Yes - the royalty is payable on total tonnes harvested (with the exception of farmer saved seed for planting), not only the tonnes sold to grain buyer/traders.
This will depend on the terms of the contractual agreement between the grower and variety breeder/owner. Unless a breeder/owner has clearly indicated that seed of their variety can be sold to a neighbour (or other grower), then such action would be a breach of the Plant Breeders Rights Act (1994).
Fines for such a breach are approximately $55,000 for an individual and $275,000 for a company.
Some AGT varieties are eligible to be traded between farmers as part of the licensed Seed Sharing™ initiative.
Yes - you can sell your harvested grain to another grower for uses other than planting. The grain involved in such a sale is subject to EPR's and must be reported on your annual Harvest Declaration.
AGT's breeding efforts are not funded by GRDC through the levy. The GRDC levy funds breeding of a number of minor crops other than wheat, as well as research which covers a wide range of areas including farming systems, storage pests, and pre-breeding (parental germplasm development and breeding tools).
AGT's plant breeding is 100% funded through EPR's.
The gross farm gate value is variable and difficult to calculate, and will vary depending on the method of selling, classification or segregation of grain, and on the organisation to which the grain is sold. The flat rate minimises the administrative costs associated with the collection of EPR and therefore the total cost to growers.
Note: Answers provided to the questions presented above are of a general nature and may be altered by specific circumstances. If in doubt, legal advice should be sought and/or further information sought from the Plant Breeders Rights office, c/o Intellectual Property Australia (www.ipaustralia.gov.au).