National | Opinion

Op Ed – Farmers Beware the Variety Use Agreement

By David Gehl and Cathy Holtslander

The eagerly awaited annual seed guides have arrived bringing farmers reliable information on which to base this year’s variety choices. These publications have a long history of providing objective, unbiased, science-based information. Data in the seed guides predict the agronomic performance, crop quality, and disease reactions expected from the crops in farmers’ fields. The seed guides also present information regarding the varieties’ intellectual property status. While often overlooked when choosing a new variety, this information should be considered — especially now that some varieties are being sold with a Variety Use Agreement (VUA). The VUA is a pilot project of the industry group, Seeds Canada, where some companies make specific new varieties available only under a contract requiring the farmer to pay the company a fee every time they use the variety for farm-saved seed.

Farmers should be aware of the history of the VUA and what it means for their right to use farm saved seed.

Prior to February 27, 2015, Canada operated under the UPOV 78 Plant Breeders Rights (PBR) framework, which does not restrict farmers’ use of farm-saved seed for planting subsequent crops. Since the government amended Canada’s Plant Breeders Rights Act on February 27, 2015, new varieties have been released under the UPOV 91 PBR framework. UPOV 91 gives plant breeders sweeping rights over seed, but includes the farmers’ privilege entitling farmers to reproduce, condition, and store varieties for use as seed on their own farms without further royalty payment.

Under UPOV 91, royalties to the PBR holder can be collected only once per sale, generally when the initial seed is sold, but if that is not possible, the law permits companies to collect a royalty on the harvested crop instead. Farmers probably remember the 2019 consultations where they were asked whether they wanted the farmers’ privilege eliminated, and to instead pay mandatory “end point royalties” on their entire crop or to have “trailing contracts” that would require them to pay a royalty on their farm-saved seed. The answer was a resounding “No!”

Despite farmers’ clear answer, Seeds Canada is now test-driving a voluntary trailing contract system with their VUA project. Farmers who participate sign a contract where they agree to pay the company whenever they use farm-saved seed of the variety. The VUA allows the seed company to collect revenue from these farmers every year after their initial purchase of the variety. When Parliament was debating the UPOV 91 PBR Act amendments, farmers fought hard to protect the ability to freely use farm-saved seed. Farmers who agree to VUAs are apparently willing to surrender this principle.

Comparing the intellectual property (IP) status of cereal listings in the current seed guide with previous years shows a trend towards more royalty-generating varieties. In 2015, the Saskatchewan Seed Guide listed 193 cereal crop varieties: 21% (41) with no PBR and 79% (152) with UPOV 78. None had restrictions on producers’ ability to save and plant the seed on their farms. In the 2022 Saskatchewan Seed Guide 15.2% (30 varieties) have no PBR, 20.8% (41) have UPOV 78, and 61.4% (121) have UPOV 91 PBR — and 5 (2.5%) of these are listed as having a Variety Use Agreement (VUA), which can only be accessed by farmers who sign a contract agreeing to pay the company an annual fee in order to use their own farm saved seed to sow future crops.

The Saskatchewan Seed Guide 2022 contains an explanation of PBRs, including a description of VUAs. It states that the purchaser of a VUA variety commits to pay the variety owner an annual “Variety Use Fee” every time that they grow farm-saved seed from that variety, incorrectly claiming this fee is a “royalty”. This restriction on the use of farm-saved seed appears to be an attempt to use commercial contracts to supersede the farmers’ privilege provisions under UPOV 91. Indeed, Canada’s PBR Act includes clauses that allow regulations to be passed to remove or restrict farmers’ privilege. So, the VUA pilot project may also be intended to normalize paying companies for farm saved seed in order to make it easier  for Seeds Canada to convince the federal government to introduce regulatory changes that would make royalty payments on farm saved seed mandatory on all UPOV 91 varieties. Even without regulatory change, if, as proposed by Seeds Canada, VUAs are widely applied when new varieties are released, there will be a massive transfer of wealth from farmers to seed companies. Farmers clearly have a choice. It’s time for Canadian farmers to vote with your feet and reject the VUA varieties!

David Gehl is a seed grower and retired civil servant. He was Head of the Agriculture and Agri-Food Canada Seed Increase Unit at Indian Head, Sask. for twenty-five years. Currently, he represents the NFU on the Variety Registration Task Team, a part of the CFIA’s Seed Regulatory Modernization process.

Cathy Holtslander is the Director of Research and Policy at the National Farmers Union. She provides research support to advance NFU policy recommendations and, in collaboration with NFU members, analyses and critiques existing agriculture and related policies.

Translation supported by the Government of Canada