This article appeared in the Winter 2013 issue of Pulse Crop News.

Ron Pidskalny

Declining public research investment and very recent budget cuts across the federal public service, specifically in agriculture, have underscored the need for an industry-wide plan to maintain and enhance pulse breeding in Canada in order to remain competitive against other cropping options. Currently, the Canadian pulse industry relies heavily upon publically generated varieties, predominantly those developed at Agriculture and Agri-Food Canada (AAFC) and the Crop Development Centre (CDC). Very few private pulse varieties are available in Canada. Fewer varieties mean less choice for growers and point towards a general long-term decline for the Canadian pulse industry.

In Canada, discussions regarding the future of crop research funding in Canada has focussed on the role of public plant breeders as public sector funding declines and as the level of participation in plant breeding research declines. One question may sum up the debate: Should the public sector be involved in crop breeding where variety development is feasible and profitable?

Debates over the roles of the public and private sector in plant breeding go back at least a decade, starting with a global move towards the privatization of a number of national plant breeding programs. Discussions centred on finding a balance between the public and the private sector. Many felt that maintaining public research programs at public expense had to provide a tangible public benefit and should not compete directly with the private sector. Those leading the discussion recognized that public sector plant breeders could provide benefits to society that would not be within the mandate of the private sector.

That said, many recognize a need to maintain a balance between public and private sector plant breeding operations. Producers are concerned that any shift in balance towards the private sector could create situations in which they lose their voice in crop development decisions, small acreage crops become neglected, and the level of collaboration and sharing of IP among researchers declines. Public-Private Partnerships (PPP) provide a model for exploring a balance between the interest of the public and the private sector.

Issues in the Pulse Sector

Alberta Pulse Growers commissioned a report about Public-Private Partnerships called Impediments to Private Sector Investments in Canadian Pulse Breeding, which tracked over $85 million in investments in pulse crop breeding over 10 years from 17 major funders of pulse breeding research in Western Canada. The report included an overview of Canadian pulse breeding capacity, the cost of pulse variety development in Canada, means of protecting intellectual property rights for plant breeders in Canada, and an examination of existing value capture systems for varieties and traits in nations against which Canadian producers compete.

The report showed a number of issues in the pulse sector. Some public sector Canadian plant breeders run programs that have been running with marginally sufficient or inadequate funding for years. Program funding for public sector plant breeders has not only dropped substantially for decades, inflation has reduced the spending power of plant breeders by almost 150 percent over 30 years, suggesting that inflation reduces the output of plant breeding programs by over three percent annually.

Not only is research funding for the public sector declining, so is research capacity as the public sector downsizes and rationalizes its research programs and as senior scientists retire. In addition, the industry is consolidating, and the field of genomics will soon have tremendous impact on the development of new technologies for agricultural crops, especially in the area of stress tolerance.

Alberta Pulse Growers, Manitoba Pulse Growers, and Saskatchewan Pulse Growers have worked hard to increase pulse acres since 1980. Western Canadian producers seeded 282,000 ac of dry beans (white and coloured), 180,000 ac of chickpeas, 2.6 million ac of lentils, and 3.5 million ac of dry peas in 2012. However, corn, soybean, and wheat production in the U.S. and canola production in Canada illustrate how technological advancements in some crops can have a significant impact on alternative cropping choices.

Private breeding successes in other crops

In other crops, private sector plant breeders have introduced a number of newer, high value traits with development costs of up to $100 million per trait. Resistance to Corn Root Worm was one of the first high value traits introduced, with a total investment in excess of $300 million, which was an enormous sum relative to what would have been available in a public sector research budget.

Companies made the decision to develop and commercialize CRW resistant corn in anticipation of a good return on their investments. This created a situation in which acres seeded to CRW-resistant corn exceeded the area previously treated with CRW insecticides. As corn acres increased in response to demand from bioethanol producers, net benefits of the CRW-resistant technology to farmers and to the developer were double the initial expectations. Investments could be justified based on the high levels of protection afforded varietal traits in the corn market. The trait premium not only provided good returns to the plant breeders, the companies priced the trait below the actual value to the average farmer.

In comparison with corn breeders, wheat breeders in the US are less able to protect their IP. In areas where farmers have traditionally saved seed, this has been a particularly serious impediment to investment in wheat breeding. Where wheat breeders have protected IP, they must take unilateral action to enforce their rights – and the potential cost of legal action, combined with the possibility of negative publicity, seems to have discouraged many wheat breeders from doing so. The shift in acreage of corn and wheat may reflect the issue of IP protection; the area sown to wheat in the US has dropped 30 percent since the 1980s, although some of this reduction may be attributed to the competitiveness of high-yielding corn varieties in spite of the high price of seed corn.

As abiotic stress tolerance is added to new varieties, however, gross margin and contribution margin at the farm gate could rise in crops such as wheat and canola. Water Use Efficiency (WUE) may soon reach the field in varieties with tolerance to temperature extremes, tolerance to drought stress, and tolerance to salinity. Some nations are ahead of Canada in bringing these traits to the field. Australian plant breeders commercialized a WUE wheat variety in 2004 and expect to bring Nitrogen Use Efficiency (NUE) in wheat and barley to market within three years. WUE is in development as part of a public-private partnership in wheat in the US and NUE is in development in canola in Canada.

These varieties have improved environmental stability, which also reduces on-farm risk and lowers the cost of risk management programs. In addition, this gives nations against which Canadian producers must compete the capacity to produce a greater range of commodities at a lower price. Assuming that these technologies eventually reach Canadian producers, barley, canola, and wheat may become more desirable crops as farmers realize higher gross margins and contribution margins. This, then, leads to the question: where does this leave pulse crops as rotational options in Western Canada if they become less profitable to grow relative to other rotational crops?

Advances in wheat genetics technology, the development of private sector wheat breeding programs in Canada, declining funding and support for publicly supported pulse breeding in Canada, and the cost of new genetic traits and technologies suggest that pulse crop contribution and gross margins may not keep pace with alternative crops at the farm gate. Producers are seeing more lucrative opportunities in crops other than pulses and are shifting acres to those crops with higher contribution and gross margins. If pulse margins fail to keep pace with those of other crops, pulse acres may decline.

Gains in pulse productivity realized over the past 30 years could decline without the infusion of innovative technological advances.

Investment in plant breeding critical

Capturing the potential value of new traits may require higher levels of investment in plant breeding. Abiotic stress traits could take up to 15 years to move from gene discovery to commercial seed sales. The cost of development could range from $5 million to over $100 million.

Assuming that investments in pulse breeding continues at its present level of about $2.1 million annually per pulse crop, a trait valued at $5 million could be introduced to a single pulse crop within three years – but only if the all of the investment in that crop went towards that single trait. A $100 million trait would come around for a single pulse crop once every 47 years. One option for bringing more investment to pulse breeding is to encourage the private sector to invest in Canada; however, this may not be the only option.

Currently, the private sector is looking for opportunities to create value in traditionally public sector crops. At the same time, producers are looking for more investment in public plant breeding programs. In many cases, public plant breeding institutions lack of access to new technology and funding levels are declining. This has led to a number of cases in which the public and private sector have entered into collaborative plant breeding arrangements.

In one of the first partnerships, University of California Berkeley and Novartis Agricultural Discovery Institute entered into an agreement in which Novartis gave U of C Berkeley $25M over five years for agricultural genomics research. In return, U of C Berkley gave Novartis access to its DNA databases and some of its proprietary genetic technology. U of C Berkley retained patent rights and earned royalties from its discoveries while Novartis had the first right to license inventions from the Department of Plant and Microbial Biology. If producers choose to do so, they have the opportunity to enter into a wide range of relationships with the private sector in order to procure access to new pulse technologies and traits.

Adaptable, flexible, and enabling environment

Existing seed policies and the slow pace of change continue to constrain the seed industry. Canadian producers have endured Canadian Seed Sector Review process that has taken place for over a decade, in addition to dealing with a wide range of other seed sector issues. A key requirement for both public and private sector plant breeders is an adaptable, flexible, and enabling regulatory environment.

When motivated, the private sector has proven that it can bring considerable resources to breeding programs relative to the public sector. As such, Western Canada’s pulse growers are studying opportunities for a PPP in pulse breeding for the benefit of Western Canadian pulse growers over the next five to six months.

As the global agricultural sector changes and evolves rapidly, commercial frames of opportunity often open and close very quickly. Some argue that the country’s seed regulatory system continues to be outdated and has left Canada’s agricultural sector at risk. Policies are in need of modernization and must support entrepreneurial innovation.