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Kansas Wheat Alliance to Begin Royalty Collection

Penny-per-pound royalty will be put into research fund.

Bill Spiegel, Editor, Kansas Farmer

May 28, 2008

3 Min Read

The newly-formed Kansas Wheat Alliance will begin collecting royalties for several Kansas State University-released wheat varieties in 2009, which will require anyone producing the wheat varieties Jagger, Overley, Fuller, RonL, and Danby for sale as seed to complete a license agreement with the KWA.

"These varieties are still plant variety protected, which means farmers can plant their own seed," says Daryl Strouts, executive director of the Kansas Crop Improvement Association and interim director of the Kansas Wheat Alliance. "The difference is that these varieties have new owners. They are licensed to the Kansas Wheat Alliance, which issues a sub-license to seed producers."

This change in the variety marketing system will also include a royalty on each sale, beginning in 2009. Kansas State University Research and Extension has signed a material transfer agreement with Kansas State University Research Foundation for these varieties, and an agreement was subsequently signed with KWA to develop a marketing plan for them.

Anyone who wants to sell these varieties must pay $100 per variety. However, to encourage farmers to sign licensing agreements, a discount program is in place: signup prior to July 1 nets producers a 50% discount per variety; before Aug. 1, there is a 25% discount, Strouts says.

Beginning in 2009, the KWA will collect a one-cent per pound royalty, or 60 cents per bushel. Of the varieties mentioned above, Jagger is the exception to this schedule; the venerable wheat variety will have a one-half cent per pound royalty. All royalties will be paid on the first sale of seed. Several K-State varieties have no royalty attached, Strouts says.

All money will be collected by the Kansas Wheat Alliance, where it will be further distributed amongst KSURF, the Ag Experiment Station and the wheat breeder. The KWA's share should be about 60% of the total revenue.

"Our goal is to for most of this money to go back to variety development," Strouts says. "The idea is that this will be an alternate source of funding for wheat variety research."

An alternative source of funding is important, Strouts says, because K-State wheat breeders are receiving less money each year for new variety research. With a cash infusion of about $500,000 per year from the KWA, farmers will continue to receive new varieties from the K-State breeding program, and private wheat breeders will gain access to elite lines of wheat germplasm to develop new commercial wheat varieties. More money should equate to more people working on variety research and ultimately, varieties with high-yields and desirable agronomic traits.

"Long-term, we'll hopefully see biotech innovations in wheat," Strouts says.

K-State is the last of the area land-grant universities to develop a royalty program for wheat. Colorado, Nebraska and Oklahoma land-grant institutions already have programs in place that have a similar goal: returning money back to the breeding programs.

Strouts says that farmers may balk at paying a royalty, especially because public varieties have been "free" for years. But the KWA approach is no different than that of private wheat companies and overall, makes the industry stronger, Strouts says.

About the Author(s)

Bill Spiegel

Editor, Kansas Farmer

Frank Holdmeyer has more than 40 years of experience with Farm Progress serving as editor of Wallaces Farmer, Farm Progress Show manager and Executive Editor for eleven Midwest Farm Progress publications.

Frank grew up on a livestock farm in east central Missouri. He was active in FFA in high school and received a BS in Agricultural Journalism from the University of Missouri.

Throughout his career his has been an active supporter of 4-H and FFA programs in Iowa and Master Farmer Award programs in several states.

He and his wife Trish live in rural Jasper County Iowa.

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