Growers fear they might be paying over the odds when signing up to a contract-based seed royalty scheme to grow certain varieties of oats, peas and beans.

The Breeders’ Intellectual Property Office (BIPO), which administers the Royalty Area Collection (RAC) scheme, was established last autumn to take administrative charge of it.

The RAC scheme was adopted by Senova, Wherry & Sons, and Dalton Seeds to fund breeding programmes for minor crops, allowing growers to benefit from genetic advances in varieties.

“It was established to try to address the issue of continued evasion and inequitable payback to the breeder where farm-saved seed is used, particularly with small, specialist crops grown on contract,” says one BIPO director, Chris Green.

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The key difference to the current British Society of Plant Breeders‘ system is that the royalty is paid separately from the seed and is invoiced directly to the farm business, based on a fixed sum per hectare planted. This is payable on certified seed and home-saved seed whenever the variety is being grown on farm.

“The whole purpose of the RAC scheme is to detach the cost element from seed and put a value to the genetics,” adds Mr Green.

Under the existing BSPB scheme growers need only pay around half the certified royalty rate to use farm-saved seed. But with the RAC scheme, the home-saved and certified seed royalties are the same.

“The genetics are the same, regardless of whether the seed is certified or farm-saved, so the royalty should be the same,” he argues.

One grower among several raising concerns about the scheme is Staffordshire farmer David Lane, who farms 525ha near Lichfield, cropping potatoes, wheat, barley, oilseed rape, oats and beans.

In autumn, he planted 37ha of new high-yielding winter oat variety Balado, marketed by Senova.

At the time of planting in October, his seed merchant told him he must pay £9.25/ha in royalties, but no contract had been received before the planting of the crop. Mr Lane then received a letter from BIPO asking him to declare the area planted of any varieties grown under their control.

When Mr Lane received the contract he was asked to sign an agreement to pay the full royalty rate on all future plantings of the variety, regardless of whether grown from merchant supplied or farm-saved seed.

But he is concerned that the implications of signing up to the contract-based system are not fully clear.

“There is no transparency about how future royalty rates will be set out.”

However, in response, Mr Green highlights that this variety is 8% higher yielding than the popular variety, Gerald, which is not covered by the RAC scheme, thus offering the benefits of newer genetics.

“We are not trying to rip the market off. In my view the present system is not sustainable.”

The NFU believes there are implications for BIPO operating outside the existing scheme agreed between farming unions and the BSPB, where traditional royalty levies are included in the price of certified seed at the time of sale to the grower.

Guy Gagen, the NFU’s chief arable adviser, urges growers to think carefully before signing any contract with BIPO. “Signing up to grow a variety under a BIPO agreement means you will not be covered by official UK and EU legislation,” he says.