What is an EPR?
EPR’s are applied to new varieties to reward breeders for innovation and effort. They differ from traditional seed royalties, which are collected at the point of seed sale as part of the seed cost. Instead, EPRs are calculated on the grain produced by the licensed grower.
EPRs comprise mostly of a breeder royalty and, if applicable, a collection fee and a management fee to commercialise and market the variety. The breeder royalty is the majority of the total royalty payable by the grower. EPRs are the fairest and most effective way of attracting investment into the development of improved crops.
What are the benefits of the EPR system?
Traditional seed royalties increased the initial purchase price of the sowing seed - a cost to the grower, even if the crop failed. The advantage of EPRs is that it is calculated only on what the grower actually produces. The up-front cost to the grower (as in a seed royalty) is removed and the breeder's return is dependent on the performance of the crop.
Royalties based on production rather than seed purchase are considered the most equitable means of ensuring continued investment in plant breeding.
EPRs is a user pays system that enables the grower to produce the variety and contribute proportionately based on its success rather than increasing seed costs.
Newly bred varieties producing higher yields will increase the breeder's reward due to the increased return received by the grower. Conversely, poor seasonal conditions or lower yielding varieties will reduce the royalty received by the breeder due to lower grower returns. The breeder and the grower share the risk.
EPRs and the Grower
Growers are responsible for the payment of the EPRs according to the the terms and conditions of the licence agreement. These include:
- The grower must pay the royalty on every tonne of harvested grain whether sold or retained on farm, except for seed saved for sowing purposes. EPR also applies to each successive crop produced from the grower saved seed. Grain that is consumed on farm for stockfeed is also EPR applicable.
- EPR may be deducted from grower payments by Accredited Grain Marketers and paid to the Breeder's agent OR the agent may invoice the grower directly (according to the information provided on the grower declaration) if grain is sold to non-accredited marketers or consumed on farm as stockfeed.
- Grower declarations, grain delivery information and contract auditing are all used to ensure appropriate EPRs are being collected. Growers are responsible for retaining records regarding the tonnage of EPR grain either sold or retained. As a condition of the licence agreement growers are required to complete and return annually a ‘production declaration notice'.
- EPR is payable on each year's production for the commercial life of the PBR variety (up to a maximum of 20 years).
- It is an offence to ‘mis-declare' varieties in order to avoid payment of EPRs at point of delivery or when completing a production declaration notice. A person who infringes PBR may face both civil and criminal proceedings for infringement.