Royalty Area Collection (RAC)

Royalty Area Collection System explained

Senova, together with several other UK companies, is pioneering a new approach to royalties, whereby royalty is collected directly from the grower on an area sown basis as opposed to a charge on the cost of seed. This Royalty Area Collection (RAC) scheme introduces new concepts and its adoption of a unified royalty rate for certified and farm saved seed is aimed at delivering commercial fairness to both grower and breeder, based on the fact that the genetic benefit remains the same regardless if the crop is grown from certified or farm saved seed.

Our research reveals that the primary reason a grower uses farm saved seed of a variety is because it has demonstrated a proven benefit to the grower.These benefits are directly related to the unique genetics of that variety.The RAC approach is endeavouring to place a transparent value on those benefits, so that growers will better appreciate the added value being delivered through the improved genetics, enabling them to make their commercial judgement on how they value that variety on their farm, under their management and conditions. Senova are of the opinion that there will be a long term benefit if the cost of genetics is shown as a direct input cost in the same way as fertilizer or herbicides.

Royalty is often regarded as an imposed tax rather than rewarding the innovation of an improved variety. In this regard the rate of the unified royalty being applied by Senova will be lower than that of certified. This means, of course, that the rate paid on farm saved seed usage will be higher, but with the variety being proven on the farm the grower can evaluate the delivered benefits against the declared royalty per hectare.

Where growers enter into an RAC agreement Senova want to ensure that the growers can optimise their returns with the variety and will issue timely crop and husbandry updates on crop management. In this way we hope that there will be a more dynamic relationship between ourselves and our customers.
Of course the adoption of an RAC approach by Senova is a commercial decision, where we are faced with escalating development costs in a minor market where seed rates are reducing and where we need better management our intellectual property.

Plant breeding is a long term investment with high risks of market failure and returns are based on the rewards from successful varieties. It is our view that such returns for investment need to be fair, transparent and equitable with a better relationship between reward and the added benefits being delivered through improved varieties and genetics.