Mungbeans move to end point royalty system

Mungbeans move to end point royalty system

Mungbeans – an important summer pulse crop in Queensland and New South Wales – will move to an end point royalty (EPR) system this year to better support continued varietal improvement and more effectively share production risks with growers.

The current seed point royalty (SPR) system will finish on June 30 with EPR collection starting from October 1.

EPRs are a fee charged to growers and paid to both breeders and commercialisation partners. EPRs provide vital financial support and feedback to breeders to help ensure the development of new varieties that meet the needs of growers and their end user customers.

The co-owners of varieties bred by the National Mungbean Improvement Program (NMIP), the Grains Research and Development Corporation (GRDC) and the Queensland Department of Agriculture and Fisheries (DAF) in conjunction with their commercial partner the Australian Mungbean Association (AMA) have made the decision to move from a seed point royalty (SPR) to an EPR system.

All current NMIP varieties are impacted by this change including Celera II-AU, Crystal, Jade-AU, Opal-AU, Onyx-AU and Satin II.

GRDC Commercialisation Manager – North, Chris Murphy, said the SPR system collected royalties when a grower purchased seed of a new variety and amounted to an upfront contractual relationship.

“By comparison, the EPR system is a contractual relationship based on variety performance and crop yield,” Mr Murphy said.

“In the past with a SPR growers paid regardless of how their mungbean crop performed, under the EPR system they pay based on yield which is far fairer and effectively shares the production risk between growers, breeders and commercial partners.”

DAF Director for Crop Improvement Rex Williams agreed, explaining that historically mungbeans had been viewed as a challenging crop by growers so the shift to an EPR system more effectively shared both the risks and the benefits of new varieties.

“The EPR system provides a better value-capture mechanism, which will ultimately deliver benefits to growers, the licensee, industry and co-owners,” Dr Williams said.

“Paying royalties based on yield, as opposed to seed, improves feedback to breeders ensuring a greater focus on investment in the development of new varieties that deliver yield benefits for growers.”

Australian Mungbean Association President Dale Reeves said mungbean plantings had been significant this season so importantly the transition period would allow growers time to effectively shift from the SPR to the EPR system.

“There has been a large crop planted this season and we may also see a large harvest that could carry into July and beyond, so the four month transition period should allow growers to adjust to the change,” Mr Reeves said.

The EPR system is well established for most crop varieties in Australia and is payable while the variety is covered by Plant Breeders Rights (PBR).

“The first EPR variety was released in 1996. Since then the market share of EPR varieties has grown steadily and now represents more than 95 per cent of Australia’s total cereal and pulse grain production,” Mr Murphy said.

The EPR for all mungbean varieties from the NMIP and covered by PBR will be $8 per tonne. This will be based on clean graded grain.

EPR rates are set by the variety owners and are determined by research and development costs, market forces and the value of the variety to the Australian grains sector.

The collection of EPRs involves two main systems: a) automatic deduction of EPRs by grain traders buying from a grower; or b) royalty managers directly invoicing growers for EPRs.

Most grain traders support automatic deductions and do this after grain purchased directly from a grower has been correctly identified on grain receival documents.

Royalty managers will directly invoice growers for EPR payments in situations where growers sell to businesses that do not automatically deduct EPRs from their grain payments. Invoices will be based on the information provided by growers in their annual EPR Harvest Declaration Form.
Growers concerned about their royalty obligations during the transition period should consult with their seed supplier.

Key points:

  • All NMIP mungbean varieties will move to an EPR system from October 1, 2021.
  • The majority of grain varieties grown in Australia now have an EPR.
  • Updated information on EPRs and their collection can be found at www.varietycentral.com.au.
  • Growers who utilise a variety with an EPR will be asked to complete a Grower Harvest Declaration Form at the conclusion of the cropping season (usually sent in February).
  • Cross-industry cooperation to ensure EPR compliance is vital to the ongoing resourcing and success of plant breeding activities.
  • The Australian EPR system supports breeding investments required to deliver growers more productive and profitable varieties.

Source: GRDC

Image courtesy of GRDC