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 Main subject - sept/oct 2006
continuation: Latin America organizes itself to fortify seed business in the region
Obstacles to seed business
It seems that there is a consensus in relation to the seed trade obstacles, which can be quoted as:
1. the indiscriminate use of farm saved seeds, in which the same farmer with over 1,000 ha can store seeds for his own use - in this way, we highlight that only countries of the EU and Bolivia have restrictions to farm saved seeds, limiting the area;
2. piracy, in which unlicensed seed of a protected cultivar are commercialize - it is estimated that a high percentage of the seed marketed in the region come from piracy;
3. biosafety policy, very slow in some countries, such as Brazil, that has only two GM materials for commercial cultivation;
4. agriculture crisis due to exchange policy in some countries, water stress, high production cost and trade factors;
5. systemic illegality;
6. lacking future vision, disregarding the whole rings of the production chain. They are essential to competitiveness; and
7. poor inspection, even that in some crops such as cotton for crop year 2005/06 in Brazil there has been an inspection equivalent to 18.97% of the total cultivated area. In the first half of 2006 it performed 171 inspection actions, being 130 in areas of commercial crops of cotton and maize.
Royalties and the technological fee
It is incontestable the need for investment on the development of varieties, as well as the need for having a suitable response from the investment, and for that, society has created a protection system, for those that create and develop something. There are environments that can be considered as poorly protected, as those ones provided by UPOV's convention of 1978, and the ones taken are strongly protected, such as UPOV's in 1991.
The UPOV's convention of 1978, in which the countries of the region have joined, the breeder authorization is required to produce seeds for commercial purposes; offer to sales and marketing. In UPOV's convention of1991, however, the breeder authorization is needed for: producing or multiplying seeds; conditioning with sales multiplication purposes; sales, exports, imports, and storage.
The charging of royalties for a protected cultivar is something around 5% over the seed value, nevertheless in most countries only part of the seeds sold collect such royalty, varying among countries. Some can collect nearly 100%, while others collect less than 10%. Such variation has several causes, so we will highlight four successful cases:
1.Wheat seeds in France - In that country a great agreement was settled among the rings of wheat productive chain, involving breeders, seed producers, retailers, and mills. There is an organ which is in charge of allocating resources according to the ratio of certified seed sold from each of the breeding programs. In the past four years, an average of €14.5 million were collected, in which € 7.7 million were given back to the users of certified seeds and € 6.8 were paid to breeders;
2. The system of royalties' collection on Paraguayan soy beans RR - The country cultivates over two million hectares, from which 70% are GM. The system involves the RR event owner, breeding programs, seed producers, farmers, and an auditing company. Resources are shared among the event owner (65%), breeders, seed producers association, auditing company, and a research fund. A breeding company that participates in the Paraguayan seed business received dividends referent 2005 in an amount over US$ 200,000.00;
3. Technological Value in Uruguay - The country cultivates over 300,000 ha with soybeans and for royalties' collection Urupov (obtainers association) has created a program called Technological Value, consisting of an agreement between companies and the farmer based on technology availability. The strength of the system relies on the visit to farmers, that reaches 90% over the total. In 2005, royalties collected reached over US$ 600,000.00 to be shared with obtainers. Such system is providing a constant supply of new cultivars and an increase on the seed usage tax;
4. OriLeg System in Brazil - The country cultivates around one million ha with cotton, with a 20% rate of seed usage, causing two big problems: the first one generated by ceasing the introduction of new and better cultivars, and the second one relates to fiber quality. With such a vision, OriLeg program has been arranged, meaning legal seed. That program involves farmers, associations, traders, exporters, agents, spinning industry, banks, and fomenting agencies. It is in its first year of function and it has already been able to revert the sharp decrease of the seed use ratio. The strength of the program is in involving all rings of the cotton chain.
Challenges to the regional seed market
It can be considered that the seed market among Latinamerican countries can be improved and, in that sense, there is a consensus as to the following challenges:
1. Getting reciprocity in the regional market;
2. Increasing production of seeds for export purposes from those species that present both quality and competitiveness;
3. Increasing the rate of use of certified seeds; and
4. Eliminating seeds contraband.
In order to be successful in those challenges, some strategies can be implemented, such as:
1. Improving the inspection of seeds production and trade;
2. Implanting the certification process by third parties, so that production is controlled;
3. Regional harmonization of the seed certification process;
4. Regional harmonization of registration and cultivars protection;
5. Internalization, application and recognition of harmonized rules by the countries affected (Mercosul, etc...); and
6. Implementation of a single registration of cultivars protection in order to face the problem of seed piracy.
Such strategies are not difficult to be implemented, including that the countries member of Mercosul have already constituted a Seed Committee that can start discussing the matter.
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