Interest in farmer-saved peanut seed on increase

With the monumental changes in the federal government's peanut program, there appears to be a renewed interest in farmer-saved peanut seed, perhaps driven by a perception of increased profits.

But at least two factors should be considered in this issue, and those are profitability and legality, says Tom Stadsklev, manager of Florida Foundation Seed Producers, Inc.,

“It is expensive to maintain good germination and genetic purity for the peanut seed that American peanut producers have come to expect for profitable production,” says Stadsklev. “Certified peanut seed production always has required special provisions, including certification rules and higher standards in terms of calcium, field harvest, drying, grading and storage. Special handling during shelling, treating, bagging and transportation also are needed.”

There are two legal issues, he says: The Plant Variety Protection Act (PVPA) enacted in December of 1970 and amended in 1994, and the use of United States Utility Patents in the protection of intellectual property.

The Plant Variety Protection Act or PVP provides legal intellectual property rights protection to developers of new varieties of plants that are sexually reproduced (by seed) or are tuber-propagated. Bacteria and fungi are excluded, says Stadsklev.

“The USDA administers the PVP, and the term of protection is 20 years for most crops,” he says. “The owner of a U.S.-protected variety has exclusive rights to multiply and market the seed of that variety.”

All current varieties of peanuts grown in the United States have PVP protection, are in the application process or are covered by a U.S. Utility Patent, explains Stadsklev.

“The only exception I know of is Florunner. Without explicit consent from the owner, a person is prohibited from selling, marketing, offering, delivering, consigning, exchanging or exposing the variety for sale. In addition, a person is prohibited from soliciting an offer to buy the variety or transfer or possess it in any way.

“It's also illegal to import or export the variety, sexually multiply it, use the variety in producing — as distinguished from developing — a hybrid, or condition the variety for the purpose of propagation. The word ‘condition’ is important here because that also would involve the shelling and bagging of peanut seed in the prohibited area of seed use.”

Of the current peanut varieties covered under the PVP Act, most all are licensed for certified peanut seed production with peanut seed production companies by the owner of the varieties, notes Stadsklev.

These license agreements may be either an exclusive or non-exclusive license agreement, and the owner of a protected variety may bring civil action against any person who infringes on his or her rights, he continues. The owner of the protected variety must bring suit in such cases. USDA will not take such action.

There are two exemptions, says Stadsklev, to the protections provided by PVP: a research exemption to allow the use for breeding to develop a new variety, and a farmer's exemption to allow the saving of seed for the sole purpose of replanting the farmer's land.

“The peanut farmer must be the grower of his own seed that he keeps for his own planting use. All of the earlier prohibitions apply without the explicit consent of the variety owner for seed grown, saved and not used by the farmer.

“A very important consideration here is that a farmer cannot save seed to plant more acres than the acres from which the saved seed were produced. For example, a farmer grew 100 acres of peanuts in 2001, and he saved seed from the 2001 production. In 2002, he cannot plant more than 100 acres from the seed he saved from the 2001 production.”

An important issue in licensing peanut varieties, says Stadsklev, is that most current peanut varieties already are under licensing agreements with peanut seed providers, and these varieties can be grown (handled) ONLY as a class of Certified Seed.

Peanut seed, as with most agricultural seed today, has a royalty cost per pound payable to the owner of the variety, he says. The best way to maintain accounting, germination and genetic purity standards is through licensing and certification, he adds.

All University of Florida-Florida Agricultural Experiment Station-released peanut varieties require a license agreement, which includes seed production as a class of certified seed. “I believe this also is the requirement of other peanut varieties from both private and public peanut breeding programs.

“The variety owner may be disallowed from granting additional license agreements by a previous license granted, and it may not be to the license owner's advantage to license individual farm seed growers.”

Another method of plant variety protection is the United States Utility Patent issued by the U.S. Patent and Trademark Office, says Stadsklev. There is no farmer exemption, he adds, of a variety covered by a U.S. utility patent.

The only legal provision for peanut seed production of varieties covered by U.S. Utility Patent(s) is through licensing agreements with the patent owner. The University of Florida Research Foundation is the owner of three utility patents covering “high oleic” acid peanuts.

All producers or marketers of high oleic peanut seed must sign a license agreement with the University of Florida Research Foundation to be a legal producer/provider of high oleic peanut seed.

“This extensive license does require a royalty fee — 2.6 cents — on each pound of peanut seed sold. This license covers the intellectual property rights of the owners. A second license agreement must be reached with the developer of the peanut cultivars, with an additional seed royalty included in the second license.”

Many growers want to know about the profitability of saving their own seed, says Stadsklev. “What will be the price of certified seed from the seed dealer you've used for many years compared to the cost of farmer-saved seed?”

The major suppliers of certified peanut seed have been the peanut shelling companies, he says. “I've spoken with some of these shellers about farmer-saved seed. The shellers are fully aware of the implications of the new peanut program, in terms of farmer-saved seed. What I'm hearing from them is the possibility of a significant price reduction for next year's seed supply. Of course, this is speculation. But as a grower, I'd give this due consideration before making extensive plans for saving my own seed.”

Genetic purity is much more significant in today's peanut industry, says Stadsklev. Seed size, maturity date and oil chemistry all are major considerations in planting, shelling and peanut product use.

“We should know all of our options when considering farmer-saved seed. Know your real costs in terms of production, shelling, treating and storage. Viable seed germination and genetic purity are imperative to profitability.

“In addition, know your legal obligations. Keep in mind that a legal entanglement could quickly evaporate any profits from saving your own seed and may take additional dollars from your farming operation. Seek counsel from others before making plans as a grower to save your own peanut planting seed or review the manual, ‘USDA, Plant Variety Protection Act and Regulations and Rules of Practice’ (revised March 2001).”

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