New Zealand - Royalty fees are about to be enforced on farmers harvesting seed from protected wheat, barley and other crop varieties and saving it for future re-sowing

New Zealand Plant Breeding & Research Association

A new scheme will be launched this year to begin collecting royalties from farmers who harvest seed from protected varieties and save it for re-sowing.

The scheme’s introduction was endorsed late last year by Federated Farmers Arable following lengthy consultation with the Plant Breeding & Research Association (PBRA), the organisation representing proprietary seed companies.

Farmers pay a royalty fee when seed from a proprietary cultivar is bought for its first sowing, so collecting royalties when harvested seed is saved by farmers for re-sowing is a logical next step.

PBRA general manager Thomas Chin says the scheme is built on provisions within the Plant Varieties Rights Act 2022 to ensure fairer returns to plant breeders who collectively invest millions of dollars each year in the development of new, improved cultivars to help make farming businesses more profitable.

He says a new cultivar typically costs more than $1m to develop and can take up to a decade to reach the retail market.

The finer details of the new scheme are still in development but it will initially cover any protected wheat and barley seed saved by farmers and used in the 2024 production year, before its scope widens to include other cereals, forage and pasture seed options.

The PBRA will establish a Farm Saved Seed Royalties Collection Agency to manage the scheme and collect royalty payments from farmers on behalf of the companies who hold the rights to the protected cultivars.

The Agency will create an annual list of protected cultivars and set modest royalty fees for each one in consultation with the seed breeding companies. Farmers will be sent an online form each December to make a voluntary declaration on the weight of seed from any protected cultivars they save for re-sowing.

Based on that declaration, farmers will receive an invoice for the royalty fees which are collected and passed on to the company which holds the rights. Farmers not using any farm-saved seed will be expected to make a nil declaration.

Chin says the royalty income from farm-saved seed will incentivise the development of better cultivar options for New Zealand farmers and is not an attempt to stop them saving and re-planting their own seed.

“We are only talking about farmers who use farm-saved seed from protected varieties paying a royalty to the owner of the rights. Farmers can continue to freely use common varieties without paying royalties.”

Gaining support for the scheme late last year from Federated Farmers Arable was a major step forward, he says.

“Federated Farmers Arable agree that seed breeders should be fairly compensated for the development of new cultivars and they know that farmers will be the primary recipients of any improved options that come through the breeding programmes.”

Cropmark chief executive Glen Jarvis says receiving royalty fees on farm-saved, protected seed will help seed breeders meet the costs of sourcing new genetic material and creating cultivars that will help farmers to cope better with existing and new challenges.

“Whether they are after disease tolerance, more production, better quality or lower greenhouse gas emissions, farmers are expecting more and more from seed breeders. Getting a workable collection scheme in place for farm-saved seed is a good outcome for farming and the country,” Jarvis says.

Royalty collection schemes for farm-saved seed are common in many other countries, including Australia where its system has been in place for more than 25 years.

Factoids

FBI ISSUES WARNING AGAINST USING DRONES MANUFACTURED IN CHINA

Feb. 15, 2024

Source: Federal Bureau of Investigation

Chinese-manufactured unmanned aircraft systems (UAS), more commonly referred to as drones, continue to pose a significant risk to critical infrastructure and U.S. national security. While any UAS could have vulnerabilities that enable data theft or facilitate network compromises, the People's Republic of China (PRC) has enacted laws that provide the government with expanded legal grounds for accessing and controlling data held by firms in China.

The use of Chinese-manufactured UAS requires careful consideration and potential mitigation to reduce risk to networks and sensitive information. The Cybersecurity and Infrastructure Security Agency (CISA) and the Federal Bureau of Investigation (FBI) encourage U.S. critical infrastructure owners and operators to procure UAS that follow secure-bydesign principles, including those manufactured by U.S. companies.

CISA and FBI further recommend following principles and implementing cybersecurity recommendations listed in this guidance to any organization procuring and operating UAS.

THREAT

The White House's 2023 National Cybersecurity Strategy and the Annual Threat Assessment from the Office of the Director of National Intelligence both recognize the PRC as the most advanced, active, and persistent cyber threat to the United States. Their analysis describes how the PRC expanded cyber operations to challenge the global order and U.S. interests. Central to this strategy is the acquisition and collection of data - which the PRC views as a strategic resource and growing arena of geopolitical competition.

Since 2015, the PRC has passed or updated comprehensive national security, cybersecurity, and data privacy laws and regulations, expanding their oversight of domestic and foreign companies operating within China.

One of these laws, the PRC's 2017 National Intelligence Law, compels Chinese companies to cooperate with state intelligence services, including providing access to data collected within China and around the world. This includes prominent Chinese-owned UAS manufacturers that the Department of Defense has identified as "Chinese military companies" operating within the United States.

The 2021 Data Security Law expands the PRC's access to and control of companies and data within China and imposes strict penalties on China-based businesses for non-compliance. The data collected by such companies is essential to the PRC's Military-Civil Fusion strategy, which seeks to gain a strategic advantage over the United States by facilitating access to advanced technologies and expertise.

The 2021 Cyber Vulnerability Reporting Law requires Chinese-based companies to disclose cyber vulnerabilities found in their systems or software to PRC authorities prior to any public disclosure or sharing overseas. This may provide PRC authorities the opportunity to exploit system flaws before cyber vulnerabilities are publicly known.

The use of Chinese-manufactured UAS in critical infrastructure operations risks exposing sensitive information to PRC authorities, jeopardizing U.S. national security, economic security, and public health and safety.

To read the entire report click here.

Highlights from 2022 Ag Census Report

By Ryan Hanrahan, University of Illinois' FarmDoc project

"In 2022, U.S. farms and ranches produced $543.1 billion in agricultural products, up from $388.5 billion in 2017," the report said. "Crop and livestock commodities each accounted for approximately half of the total, with crops accounting for 52% of the value. In 2022, the value of crop sales exceeded livestock sales."

"The largest farms (sales of $5 million or more) accounted for fewer than 1% of all farms but 42% of all sales," the report said. "Farms with sales of $50,000 or less accounted for 74% of farms and 2% of sales."

"As in 2017, California was the largest provider of agricultural products, with sales of $59 billion, 11% of the U.S. total," the report said. "The top nine U.S. counties are in California, and the top county, Fresno, had larger agriculture sales than 23 individual states."

The top 10 states for production in 2022 were, in order: California, Iowa, Texas, Nebraska, Minnesota, Illinois, Kansas, North Carolina, Indiana and Wisconsin.

"Cattle and calves was the top ranked commodity, with $89.4 billion in sales," the report said. "Texas was the top state in cattle and calves sales, accounting for 17% of the U.S. total. The top five commodities accounted for $363 billion in sales, 67% of U.S. total agriculture sales."

The top 5 commodities were, in order: cattle and calves, corn, poultry and eggs, soybeans, and milk.

"In 2022, 3.4 million producers operated 1.9 million farms covering 880.1 million acres that generated food, fuel and fiber for Americans and people around the world," the report said. "The number of producers did not significantly change, while the number of farms decreased 6.9% (from 2.04 million to 1.90 million) since 2017 when the last ag census was conducted."

"While the number of producers between the ages of 35-64 declined 9%, the number of producers 65 and over increased 12%, continuing the trend of an aging producer population," the report said. "The number of young producers, those under 35, also increased slightly."

Those increases mean the average age of U.S. producers is now "58.1 years, up 0.6 years from 2017."

Female producers continued to account for 36% of the total number of U.S. producers, the same percentage as recorded in the 2017 Census.

"Male producers had higher rates of involvement in land use and/or crop, livestock, and marketing decisions than female producers," the report said. "Female producers were most involved in day-to-day, record keeping and financial management decisions."

For ethnicity and race, "3.2 million producers are white, 95% of the U.S. total," the report said. The second largest group, Hispanic, accounts for 3% of the total.

Beginning producers

"Beginning farmers have 10 or fewer years of farming experience," the report said. "New and beginning producers increased in both the number of producers and share of all producers. Slightly over 1 million of the 3.4 million producers in 2022 were beginning farmers. Their average age was 47.1, and their farms were smaller than average in both acres and sales."

The top 10 states, by percent of beginning producers in the state, in 2022 were: Rhode Island (41.4%), Alaska (38.7%), Maine (35.9%), Colorado (35.6%), New Hampshire (35.3%), Hawaii (35.2%), Georgia (34.4%), Idaho (34.1%), Nevada (33.9%) and Florida (33.9%).

AG SEC'Y VILSACK COMMENTS ON FALLING AG ECONOMY

Feb. 14, 2024

Feed & Grain reports:

The U.S. Department of Agriculture's (USDA) Economic Research Service has released its annual Farm Sector Income Forecast report for 2024, leading to a statement from Agriculture Secretary Tom Vilsack.

The report forecasts a decrease in farm cash receipts by $21.2 billion (4.2 percent) from 2023, totaling $485.5 billion in 2024. This decline is primarily due to lower crop receipts, which are expected to decrease by $16.7 billion (6.3 percent) to $245.7 billion, following reduced earnings from corn and soybeans. Animal and animal product receipts are also projected to decrease by $4.6 billion (1.9 percent) to $239.8 billion in 2024, with notable declines in receipts from eggs, turkeys, cattle/calves, and milk.

Direct government farm payments are forecast at $10.2 billion for 2024, a decrease of $1.9 billion (15.9 percent) from 2023. This decline largely results from reduced supplemental and ad hoc disaster assistance. These payments exclude USDA loans and insurance indemnity payments made by the Federal Crop Insurance Corporation (FCIC).

On the expenditure side, total production expenses, including operator dwellings, are expected to increase by $16.7 billion (3.8 percent) from 2023, reaching $455.1 billion in 2024. The most significant rises are anticipated in livestock/poultry purchases and labor expenses, while spending on fuels and oils is expected to decline.

Despite these challenges, farm sector equity is projected to grow by 4.7 percent, adding $166.2 billion from 2023 to reach $3.74 trillion in 2024. This increase is largely attributed to expected rises in the value of farm real estate assets. Farm sector assets are also forecast to grow by 4.7 percent to $4.28 trillion. However, farm sector debt is anticipated to rise by 5.2 percent to $547.6 billion, leading to a slight worsening in the debt-to-asset ratio from 12.73 percent in 2023 to 12.78 percent in 2024. Furthermore, working capital is forecast to fall by 16.6 percent in 2024 compared to 2023.

Secretary Vilsack's statement emphasized the critical importance of USDA's ongoing efforts in supporting the sector, especially in light of these financial forecasts. He reiterated the USDA's commitment to fostering prosperity for producers and communities, highlighting the transformative investments made through the American Rescue Plan and Inflation Reduction Act to create new markets and income opportunities for family farmers. The USDA's focus remains on enhancing economic resiliency, promoting robust price competition, increasing farmers' earnings, and ensuring the viability of farming and rural communities.

USDA REPORTS TECHNOLOGY--NOT INCREASED INPUTS--IS DRIVING AG PRODUCTIVITY GROWTH

Source: USDA

Technological developments in agriculture have enabled continued output growth without requiring much additional inputs. Innovations in animal and crop genetics, chemicals, equipment, and farm organization have made it possible for total agricultural output to nearly triple between 1948 and 2021.

During that period, the amount of inputs used in farming declined slightly over time, meaning that the growth in agricultural output over the long term has depended on increases in total factor productivity (TFP). TFP measures the amount of agricultural output produced from the combined inputs (land, labor, capital, and intermediate inputs) employed in farm production. Therefore, growth in TFP indicates positive changes in the efficiency with which inputs are transformed into outputs. It can also be seen as an indicator of technical change.

In the short term, total output growth and estimated TFP growth can be affected by random events, such as adverse weather. In the most recent TFP calculation period spanning 2020-21, agricultural output grew, which was due entirely to TFP growth, even as the amount of inputs used in farming fell.