Originally published January 18, 2024 on Western Producer
By Sean Pratt
Debate becomes heated as farmers question funding agreement with Limagrain that includes variety use agreements
SASKATOON — A resolution that would have undermined Saskatchewan Pulse Growers’ new breeding agreement with Limagrain was narrowly defeated at the organization’s annual general meeting.
It called for pulse varieties funded by SaskPulse levy payers to have no variety use agreements (VUAs).
The resolution submitted by the National Farmers Union received a 47 percent yes vote, with the other 53 percent in attendance voting against the motion.
If approved, it would have put SPG in an awkward position because it flies in the face of the agreement the organization signed with Limagrain in 2022.
The vote followed a vigorous 40-minute debate where the SaskPulse board repeatedly came under attack for inking that deal.
The resolution was moved by Delisle farmer Lyndon Stoll, who said VUAs impose a dollar per acre payment for every year a variety is saved for seeding with no cap on how high they can go.
Stoll noted that the new partnership with Limagrain uses check-off dollars to fund the development of new varieties that will then be sold exclusively under those VUA contracts.
“It’s not an investment if we give up control of the product. Simply put, a VUA represents a loss to growers’ seed control,” he said.
“We know what happened with canola seed prices after technology use agreements came in and stopped farmers from using farm saved seed.”
Stoll said four seed companies already control slightly less than 60 percent of the seed market. Limagrain, which is a large French co-operative, is the fifth largest company.
SPG executive director Carl Potts said the organization needed a new breeding partner after the University of Saskatchewan’s Crop Development Centre terminated its 20-year partnership with the group in 2020.
The board felt grower investment was needed to attract seed companies and recognized that the royalty model was the way of the future.
SPG was able to include a clause in the Limagrain agreement stipulating that a portion of those royalties would flow back to the grower group to be reinvested in research.
Potts also noted that all the existing varieties developed in conjunction with the CDC over the past 20 year will remain royalty free.
“Farmers can continue to grow these varieties. There’s no concern about deregulation of these varieties over time,” he said.
A similar agreement is currently being negotiated with the CDC.
“We feel that this model really is needed to encourage that investment in pulse variety development,” said Potts.
Terry Boehm, a farmer from Saskatoon and former president of the NFU, said the Limagrain agreement sets a “dangerous precedent for the control of seed.”
“It’s incredibly short-sighted of the pulse grower board to go down this path when there are so many other ways to do research,” he said.
Boehm said Limagrain is one of the more aggressive companies at enforcing intellectual property rights.
He said the pulse levy generates large amounts of money that can be used to create its own breeding program.
“We are completely capable of coming up with other arrangements without paying twice.”
Boehm also hinted that the debate is far from over, noting that SPG director elections are a vehicle for change.
“I can assure you that there will be a different slate of directors running,” he said.
Gerrid Gust, a grower from Davidson and former vice-chair of SPG, said the notion that the organization should develop its own breeding program is absurd.
“For Sask Pulse Growers to do this completely on our own, it would be almost impossible,” he said.
“It’s really expensive to have a breeding program. This is not a couple-million-dollar operation.”
Ian McCreary, a farmer from Bladworth, Sask., and former Canadian Wheat Board director, said SPG could have negotiated a deal with CDC similar to what exists for wheat, which doesn’t involve VUAs.
“It’s a terrible path you’re on.”
Stewart Wells, a grower from Swift Current and another past president of the NFU, said there must be a better way forward.
“This is a bad idea to have a mandatory checkoff and trailing royalties on new seed development,” he said.
Cory Loessin, a farmer from Radisson and outgoing SPG board member, said comparing wheat to pulses is apples and oranges.
Pulses may be a big deal in Saskatchewan, but they are tiny crops in the global breeding arena.
“There is just no big amount of money going to come in and start breeding some of these relatively small crops,” he said.
“Breeding companies are reluctant to invest without an incentive to do so.”
Another disincentive for investment is that pulses are not hybrids where growers need new seed every year, he said.
Shaun Dyrland, a farmer from Kyle, Sask., and current SPG director, said there was no lineup of seed companies knocking down SPG’s door following the termination of the CDC arrangement.
“We put forward the requests for proposals and we had no interest that didn’t involve a royalty of some kind and more often a VUA,” he said.
Richard Gray, a professor with the U of S’s College of Agriculture and Bioresources, said SPG has not been transparent enough about the Limagrain deal regarding the royalties flowing back to the organization.
“There has been no mention of what that share is going to be and that matters concretely,” he said.
Jason Hennes, a farmer from Eatonia, said the debate over VUAs will be irrelevant if farmers do not get new varieties resistant to aphanomyces in the near future.
He said there will soon be no pulses grown in west-central Saskatchewan.
Brad White, a grower from Gull Lake, said it was irresponsible of SPG’s board to “blatantly open the doors” to VUAs.
“To be taking my producer check-off dollars and allowing that to fund a private company’s variety development is just insane,” he said.
“You guys have to just put this back to bed.”
Brad Blackwell, a grower from Dinsmore and current SPG board member, said all the fear mongering about Limagrain is unfounded because SPG has a seat at its breeding table.
“When it comes to commercialization, we’re 50 percent of the vote,” he said.
“It’s nice as a farmer to be able to have that voice.”
Potts said pulses are falling behind other Canadian crops on yield performance, and internationally they are facing stiff competition from Russia and other countries.
He noted that the previous royalty-free environment made it difficult for other seed companies to enter the market and there needed to be some enticement to get companies addressing those problems.
He added that Limagrain will soon be facing competition from varieties developed through a new deal with CDC, as well as from the existing royalty-free varieties developed under the old deal.
Stoll had the last word on the debate. He said growers may have “choice,” but history in the canola industry shows they will eventually be left with only expensive VUA varieties.