SEPTEMBER 2018 GERMINATION.CA 19 Darcy Pawlik, North America head of the Syngenta Cereals Portfolio and vice-chair of the Canadian Seed Trade Association’s intellectual property committee, explains the concept of using trailing royalties to capture value. On the Origins of Value Creation “It was born out of the premise that we don’t have enough investment going back into wheat, pulses, and other varietal crops. We looked around the world and saw that Canada was falling behind other countries. There’s no question that from a genetic gain and plant perfor- mance standpoint we’ve done great, but when we see new technologies being applied to corn and soybeans and more technified crops, we want to ensure the same attention is afforded to crops that don’t have the luxury of hybridization or traits for the value capture to be created and companies and other groups doing the breeding to be remunerated for it.” On why Value Creation Betters the Industry “The IP Committee’s decision to support a trailing royalty (TR) will give rise to a policy change that will enable companies and other groups undertaking breeding activi- ties in these crops. A return of funds going into those programs will promote better agronomics, pathology and of course yields. It’s an altruistic process that will enable the industry to create value and allow a mechanism for that value to be captured by those breeding groups regardless of who they are. CSTA has always wanted to take a position it could stand behind and build upon what the details of that system would look like, so taking the step of supporting a trailing royalty sets the platform for us to build upon.” On how a Trailing Royalty (TR) Works “A TR is based on the idea of today’s contracts. Few com- panies currently exercise contract law in varieties where you can’t save seed or have to buy it regularly. A TR basi- cally says to the farmer that if you use this seed next year or the year after, they have to remunerate the breeder a royalty to provide an annual flow of funds back to the breeding organization.” On the Timeline for Implementation What we’ve seen in the Canadian context is public con- sultation allows for everyone to make their voice heard. We want to have an appreciation for the feelings of each piece of the value chain, what their pain points are but also where they see the potential of this. It will take some time, but will follow the trajectory of the Canadian Food Inspection Agency undertaking consultations prob- ably later this year. We’re looking at around 2020 for the implementation of this, so you’ll have industry-wide dialogue over the next number of months as the Seed Synergy project continues. It will be healthy for the indus- try in the end. Darcy Pawlik, North America head of the Syngenta Cereals Portfolio and vice-chair of the Canadian Seed Trade Association’s intellectual property committee.