ACCC proposes to authorise plant breeders' collective bargaining arrangements

15 May 2014

The Australian Competition and Consumer Commission has issued a draft determination proposing to allow royalty managers for plant breeders to collectively negotiate with the grain buyers they engage to collect royalties on their behalf.

The proposed authorisation allows Seedvise, as an agent for royalty managers, to enter into collective negotiations with individual grain buyers.

Under the Plant Breeders’ Rights Act 1994, plant breeders are able to register their grain varieties to protect the intellectual property associated with variety research and development.

Plant breeders typically distribute their variety to grain farmers on the condition the farmer pays the plant breeder a royalty on each tonne of the variety the farmer harvests, i.e. an end point royalty (EPR).  Royalty managers are appointed by plant breeders to monitor and collect their EPRs.

Grain buying companies can collect EPRs but are under no obligation to do so and will only participate if royalty managers can provide them with sufficient incentive.

“Collective negotiation by Seedvise will allow grain buyers to deal with multiple royalty managers on the same terms, greatly reducing the grain buyers’ administrative cost of participating in EPR collection,” ACCC Commissioner Dr Jill Walker said.

“The authorisation will improve the efficiency and effectiveness of the EPR system by reducing costs for royalty managers and farmers, increasing EPR collection rates, and allowing plant breeders to focus more resources on breeding new and more productive varieties.” 

The ACCC is proposing to grant authorisation for five years.

Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.  Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment. 

Further information about the application for authorisation and the granting of interim authorisation is available at the authorisation register

Release number: 
NR 110/14
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