2010 Grower Licence Agreement

With every sale of an AGT variety, a Grower Licence Agreement must be given to the customer at the point of sale.  The Grower Licence Agreement outlines our terms and conditions of sale and End Point Royalty obligations.

Grower Licence 2010 part 1

Grower Licence 2010 part 2

About Plant Breeders Rights (PBR) and End Point Royalties (EPR)

Frequently Asked Questions

What is PBR?

PBR provides the legal rights and therefore opportunity for a breeder or variety owner to recover the costs of breeding a new variety through royalties.

PBR is a type of copyright which protects the plant breeder’s intellectual property rights or ‘invention’.

In most cases the ‘invention’ is a new and uniquely different plant variety.

While PBR legislation has been adopted in most developed countries for some time, it was not until 1994 that the Plant Breeders Rights Act (1994) was first enacted in Australia.

How is plant breeding in Australia funded?

Until very recent times the major funder of plant breeding in Australia was the Grains Research and Development Corporation (GRDC).

In 1999, as an important part of an initiative to re-focus and re-position Australia’s wheat breeding efforts in a rapidly changing, highly competitive global economy, the GRDC announced it would not continue to fund wheat breeding beyond 2005.

It was expected that wheat breeding could attract external investment and become self-funded through royalties. As a result, AGT was established in 2002 by its shareholder agencies to ensure Australian growers could continue to benefit from improvements in productivity and quality which is necessary to ensure the short and long term future of the Australian wheat industry.

AGTs future success will therefore rely on its ability to deliver to the Australian wheat producers high quality, high yielding varieties that suit their agronomic environment. In return for this AGT will collect an End Point royalty that will be used for further wheat breeding

What does PBR mean to an individual grower?

PBR protection of a variety allows the breeder/owner of the variety to place restrictions on what the grower can do with the protected variety.

At the point of PBR protected variety seed purchase, the grower will usually enter 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 later 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.

However, the PBR legislation 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.

Can I use PBR varieties in a share cropping situation?

Seed of PBR protected varieties may be sown by both parties under a bona fide share cropping arrangement.

Can I sell the seed of a PBR protected variety with the sale of the farm?

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 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.

Can I sell my seed to a seed merchant?

No – seed merchants are bound by the same restrictions as individual farmers
and cannot offer for sale, sell, advertise, import or export PBR protected varieties
without the consent of the breeder or agent.

What is an End Point Royalty (EPR) and why have it?

An EPR is a royalty paid on every* tonne of grain produced by growers from that variety. It is a royalty collection method used by variety breeder/owners that under the PBR Act can fund ongoing research and the breeding of new improved varieties.

*Some variety Breeders/Owners do not charge a royalty on grain produced and saved as seed for future planting. Please refer to your Grower Licence Agreement for more details.

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 12 years and estimated to cost approximately one million dollars per variety.

EPR, as opposed to a seed royalty, spreads 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 payed by the grower.

In the seed royalty model the grower would take all the risk, whereas with the EPR system the risk is spread between the grower and the breeder/owner. 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 rural industry by producing superior varieties that raise productivity (higher yield) or price (improved quality) or protect loss in productivity (disease resistance and stress tolerance) and therefore profitability of cropping.

How long will an EPR be payable on a variety?

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.

Is the royalty deducted from my grower payment by a marketer?

Yes by some marketers.

In an effort to help standardise the collection of EPR in Australia, AGT Seeds has entered into agreements with AWB, ABB and CBH for the collection of EPR on our behalf.

For crop sold through AWB, ABB and/or CBH that has an EPR obligation to AGT Seeds, AWB, ABB and/or CBH will retain from purchase monies otherwise payable to the grower an amount equal to the EPR (GST inclusive) payable to AGT Seeds.

AWB, ABB and/or CBH will issue a tax invoice on behalf of AGT Seeds to each grower from whom it retains EPR amounts.

Growers still have the obligation to pay direct to AGT Seeds the Royalties owing on any crop produced and not sold through AWB, ABB and/or CBH and are required to fill out their royalty notices and return, along with any outstanding royalty payments, to AGT Seeds by March 31 each year.

In the event that an AGT Seeds variety grower does not wish to sell through AWB, ABB or CBH and has not been issued with a royalty notice, that grower should contact AGT Seeds and request a notice so as not to infringe the PBR legislation and risk the potential of prosecution.

Why should I pay the royalty when my grain was downgraded to feed due to blackpoint, pre-harvest sprouting, or other dockage?

The breeder has developed the variety for higher yield or better quality or resistance to a specific disease and can make no assurance that the variety will not be downgraded due to environmental conditions.

The royalty is due on tonnes produced and is fully independent of the quality grade, classification or payment received for the grain.

Do I have to pay the royalty on harvested grain I have kept as seed for sowing next year?

Some breeders/owners may insist growers pay a royalty on farmer saved seed while others do not.

For grain produced from AGT varieties grown during the 2006/07 cropping season a royalty is payable on seed saved for sowing in the following year.

Do I still pay the royalties if I feed my harvested grain to my own livestock/animals?

Yes – the royalty is payable on total tonnes harvested (some owners make exception on farmer saved seed), not only tonnes delivered to a warehouse or grain buyer.

Can I sell my harvested grain for use as seed to my neighbour?

For most varieties the answer is no.

This will depend on the terms of the contractual agreement between grower and variety breeder/owner. Unless a breeder/owner has clearly indicated that seed of their variety can be sold to a neighbour then such action would be a breach of the PBR Act.

Fines for such a breach are approximately $55,000 for an individual and $275,000 for a company.

Can I sell my harvested grain for other uses (i.e. Stockfeed)?

Yes you can sell your harvested grain to your neighbour for uses other than planting it as seed for the production of more grain. Such a sale is still subject to EPRs and must be reported on your annual return to AGT.

I contribute enough money to research through the GRDC levy. Why should I pay the royalty?

AGT wheat breeding is not funded by GRDC through the levy. The GRDC levy funds breeding of crops other than wheat and research on a wide range of areas including farming systems and pre-breeding (parental germplasm development and breeding tools) and does not fund AGT’s wheat breeding.

AGT’s wheat breeding is funded primarily through EPR.

Why is the EPR a dollar per tonne amount rather than a percentage of gross farm gate value?

The gross farm 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.