End Point Royalties (EPR’s) have been introduced in Australia to reflect the shift from a public funded breeding system to a private system with a number of key organizations. In the long term, it is likely that private organizations will fund all breeding programs and thus EPRs will play the major role in supporting these programs. EPRs help to create a path to market for new varieties and technologies, which will lead to long term productivity gains for Australian farmers.
In 2007, a number of plant breeding organizations who collect their return on investment by breeding varieties with an End Point Royalty associated, formed a group called the EPR Steering Committee. The major goal of the committee continues to be the development of a system to collect EPRs that is effective and efficient for both growers and the grains industry.
Support from growers and industry has been vital to the development of the EPR industry collection system, whereby the grain traders play a role in the collection of royalties. Grain traders participating in the collection system either deduct the royalty amount from the grower’s grain payment and remit the royalty directly to the variety owner; or compile reports on grain purchases, which assist the variety owner to correctly invoice the grower for any outstanding royalties owing.
The number of grain traders who are participating in this system has dramatically increased since the development of the system and continues to grow into the future as industry and growers demand greater efficiency and simplicity of the royalty collection mechanism. A full list of the current* participating grain traders can be found in the Participants section.
Compliance with the End Point Royalty Industry Collection System
Grower compliance with the End Point Royalty collection system is vital to ensure quality new varieties continue to be introduced into the Australian grains market resulting in long term productivity gains. There are a number of consequences to the grains industry if compliance with EPR regulations are not maintained, including;
- Lower than expected returns to plant breeders
- Less resources for plant breeders to develop new varieties
- Fewer breeding organizations and thus less competition
- Effects on productivity to farmers with fewer quality varieties being commercialized
Variety Owners and Royalty Managers use a number of different sources to monitor EPR compliance at present, however ultimately rely on the farmer to maintain the integrity of the collection system. Sources used by variety owners include;
- Harvest Declaration Forms
Farmers who have purchased a variety with an EPR will be asked to complete a Harvest Declaration form to assist Royalty Managers with reconciliation processes. This is usually completed between February and May following the cropping season. A number of Royalty Managers are working together to minimize paperwork for growers by capturing variety production information on a single form.
- Bulk Handler Reports
A number of Bulk Handlers are providing Royalty Managers with a report showing sales for a relevant variety. This report may be used to invoice growers in the case where EPRs have not been automatically deducted by the grain trader
- Grain Trader Reports
As outlined above, the majority of the major grain traders operating in the Australian grains industry are collecting EPRs on behalf of the relevant Royalty Manager. A full list of participants can be found in the Participants section. Participating grain traders provide regular reports to Royalty Managers to assist with the reconciliation processes. A number of grain traders who are not collecting EPRs on the Royalty Manager’s behalf are providing data reports on their grain purchases. These reports may be used by Royalty Managers to invoice growers.
Compliance with EPR systems is vital to assure the future of the Australian grains industry through the funding of new varieties and long term productivity gains.