ROYALTIES

You have an obligation, and we need it to reconcile payments.

• Reconciling Payments
  As a royalty collector, we do not have information on all grain sales made by growers. We don’t know if all sales have been through a grain trader that auto deducts. The Harvest Declaration is required to reconcile payments and ensure royalty is paid on all eligible tonnes harvested.

• Grower Obligation
  Most current varieties associated with open pollinated crops (such as wheat & barley) are protected by plant breeders rights (PBR). i.e. the breeders have been granted PBR prior to releasing the variety. Most plant breeders or licensed royalty collectors utilise an industry standard variety license which outlines the terms on which growers are permitted to use their varieties. One of these terms is providing information relating to harvested crop. National Grower Register (NGR) has been commissioned to do this on behalf of most plant breeders to minimise the forms that are needed to be completed. At the end of the harvest declaration period run by NGR, the royalty collectors pursue non returned declarations.

Grain Levies paid to the Grains Research and Development Corporation (GRDC) are focussed in many areas such as agronomy, environmental challenges and pre breeding (trait development). But the GRDC does not breed or develop new varieties. In relation to pre breeding activities, GRDC funds are channeled through research organisations such as our Universities , Departments of Ag, or CSIRO. Once a trait has been developed, plant breeders such as LongReach Plant Breeders take up material from the researcher containing the desired traits and introduce them to elite germplasm (suited to region, high yield, disease tolerance and grain quality). This process takes approximately 10 years to ensure a high quality product for Australian growers. EPR’s are required to fund this stage of the germplasm development value chain.

No one likes paying bills, however here are some points we think make this a very fair system.

• Seed is an input cost to your business like any other, however, with end point royalties , you pay after harvest, usually when you sell your grain or your payments have been reconciled.

• EPRs are charged on a production basis, rather than a set fee. Accordingly, the quantum of EPR you pay is relative to your yield. You pay less in a poor year. Nothing harvested: nothing paid.

• By aligning EPRs to crop performance, when varieties are superior quality and high yield, both growers and plant breeders benefit.

• The majority of the value created by higher yield varieties goes back to growers who benefit directly from increased production.

• If the EPR value capture model for Open Pollination plant breeding in Australia fails, the financial returns to plant breeders will be insufficient for plant breeders to develop new high yield, superior quality varieties for growers. What is the likelihood of Government investing to the same level if we are unable to make this model work?

1: We can manage the genetics but not the environment: As breeding organisations, we develop varieties that have the genetic capability to deliver on yield, disease tolerance and grain quality in specific regions. We try to make these varieties as robust as possible, however, in Australia’s environment, we all know there are extremes that can bring us undone. Ultimately, the final result is a function of Genetics x Environment (GxE). Our promise is that genetically, our material can deliver a result given a suitable environment.

2: Our pricing is already low: As a % of cost / ha relative to crop revenue, EPR (your seed input cost going to the breeder) is approximately 1%.

1: Compliance has slipped significantly in the Eastern States. For the 2021 harvest, compliance has fallen to 46% in Qld and 74% in NSW. Without full compliance, LRPB will not be able to operate in these regions, and will be under pressure to focus resources in other states.

2: Audits are common place in other Ag industries to ensure compliance such as the fruit industry and cotton. It is now clear that there needs to be checks in place to ensure this value capture model is protected in broadacre cropping.

LRPB will be sending out a form for growers to check and update information going back to the 2020 crop season. We realise it can be difficult to reconcile payments and are keen to help where we can. Please contact info@longreachpb.com.au for more information.

Audits will commence in November 2023. We know that harvest and planting are critical periods, and planning will attempt to minimise audit activity during these critical periods. Audits will be planned as an ongoing process and will become “business as usual” to ensure compliance.

We know it can be difficult to track varieties at harvest. As a rule of thumb, we would hope declaration accuracy is within a range of +/- 5% of the actual harvest volumes.