Illegal and unlicensed are never good words to hear in the wheat industry and, in the end, you usually get what you pay for or have to pay millions for your indiscretions. Dustin Kelley knows the ramifications of selling illegal seed wheat. A federal court in Kansas recently awarded Oklahoma Genetics, Inc., $3.1 million in damages because Kelley intentionally infringed upon the Gallagher wheat variety, which was developed at Oklahoma State University. This decision was the largest Plant Variety Protection Act judgment in the United States.
The PVPA gives breeders the rights to their intellectual property and up to 25 years of exclusive rights to newly developed plant varieties.
“The sale of seed wheat is governed by both state and federal seed law,” said Mark Hodges, executive director of Oklahoma Genetics, Inc. “State law is the source of many of the labeling laws, while federal law governs the intellectual property protection. The PVPA provides patent-like protection for novel varieties of plants.”
Contrary to what some might believe, the purpose of seed laws is to protect the farmer. They give the producer an idea of what to expect from the seed they buy and the royalty they pay is invested into research to develop better varieties for the future.
“The farmer gets a high-quality product with the best attributes such as increased yields, drought tolerance, disease resistance and quality characteristics end-users seek,” Hodges said.
On the flip-side, the seed developer or owner of the variety gets remuneration for their hard work and investment in research and development of plant varieties.
The Gallagher variety is protected under the PVPA, and that is the law that formed the basis of the lawsuit against Dustin Kelley. Hodges says plants can also be protected under the federal Patent Act. He says one major difference between PVPA protection and patent protection is producers can save and replant PVPA-protected seed, but patented seed usually cannot be saved and replanted.
Know what you are buying
However, in either case it is illegal for one producer to sell protected seed to another producer. Additionally, buyers need to be cognizant of what they are purchasing and always obtain proper documentation for their seed.
“If it’s certified seed and they’ve got the documentation, which usually means a blue label, then they should be okay,” explained Daryl Strouts, executive director of the Kansas Wheat Alliance. “Certified seed in that regard is safe, but farmers really need to get that documentation that comes along with it. A lot of people say it’s certified, but it’s not really certified.”
Hodges says there are several factors that influence the price of certified seed wheat. Those include the prevailing cash price at the elevator, demand and the attributes of the variety.
“Hypothetically, today the average price of certified wheat seed might be $9 to $11 per bushel,” Hodges estimated. “The market price for wheat grain might be $4 per bushel and Illegal seed might be priced at $7 per bushel. In that scenario, the buyer is happy to pay $7 for seed that may be only one generation removed from being fresh new seed and save, on average, $3 per bushel from the price of legal certified seed. The seller net gains $3 a bushel over the price of what he would have received from a grain elevator. That’s an extra $3,000 a semi-load.”
It is easy to see why a producer could be tempted to buy illegal seed and pad their bottom line, but the after effects produce negative repercussions.
“There’s not a lot of good reasons to buy illegal seed, it just costs too much to do it the wrong way,” Strouts said.
Hodges says illegal sale of seed is not common among producers and seed dealers, but due to the self-replicating nature of seed and the fact that some varieties can be multiplied on an exponential basis, even one or two rogue operators can quickly cause problems for the legitimate seed dealers in the area.
Everyone is a victim
“The local seed dealer who is following the law and selling seed legally is often the one most damaged when a black market in the area is steering customers away,” Hodges said.
Strouts says the local seed dealers want to see farmers be successful and make good decisions and buying illegal seed hurts the wheat industry and local seed dealers who rely on that income.
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“The local dealers really care about their community,” Strouts added. “They are the people sponsoring the high school football game and advertising in the local paper.”
Strouts went on to describe the regret a producer can experience from buying illegal seed wheat.
“In the short run, the person buying the illegal seed incurs a lot of damage,” he said. “They have no idea what they’re really getting and it might not even be the variety they wanted. It could be full of weed seed, it might not germinate and I’ve seen any number of case where farmers were more than disappointed.”
Strouts says in the long-term, every farmer loses when seed is sold illegally because when farmers buy illicit seed, or even if they just save their own seed, they are not contributing back to the development of new varieties to stay competitive with other crops.
“One of the criticisms we’ve heard over the last 10 or 15 years is farmers aren’t planting as many acres of wheat because it just isn’t as competitive,” Strouts explained. “The bottom line is there just hasn’t been the investment in wheat like there has in crops like corn and soybeans. Consequently, (other crops) have become better values and that’s just a result of the increased investment that comes from buying legal seed every year.”
Hodges says public universities like OSU depend less on taxpayer funding and more on private royalty revenue to fund continued research and development of new varieties. He says everyone wins when the law is followed.
“With the world’s growing population and other environmental pressures on today’s varieties, it is vital that we have resources to develop new and better varieties that can yield even more grain per acre and withstand drought and other adverse conditions while delivering quality demanded by the customer,” he said.
Hodges and Strouts both agree, every time a legal bag of seed is bought, agriculture, farmers, seed dealers and the hungry population benefit.
“If farmers—especially wheat farmers—want to see their situation improve, they need to be prepared to invest in their future. Not just for yourself, but for your children and for your farm,” Strouts said.
Illegal seed sales can be reported to [email protected] or 1-877-482-5907. Producers can check the USDA Plant Variety Database to find the status of a variety if they have and concerns.
Lacey Newlin can be reached at [email protected].
