MEDIT W 1/99
BREEDING AND REGISTRATION COSTS
OF MEDITERRANENAN CEREAL VARIETIES: THE SPANISH CASE
JUAN ANTONIO CANAS - RAFAEL MANUEL FRESNO (*)
T
he seed sector has
been approached
most of the times
from a phytotechnical
and genetic point of view.
Here in this paper we propose to focus on that sector from an economical angle.
The lack of such kind of
approach is specially notorious in Southern Europe.
Although genetic improvement and innovation are
qUite important, their costs
should not be set aside.
These costs are studied in
this paper, distinguishing
the various phases that a
variety goes through: breeding, registration and production. The costs that are
dealt with in this paper are
those of breeding and registration.
trial surface (0.44 Ha.) by
the average yield of the region (5000 kg/Ha.), and alThis article deals with the cost of placing a new variety of cereal (Du- so, by the estimated price
rum Wheat, Bread Wheat, Barley, .. .) in the market for a seed company.
Firstly, we consider breeding costs: all companies carry out different tri- of harvest (26 Ptas. or US $
als to test new varieties, which constitutes a network of trials. A variety 0.17/kg) This quantity must
is tested from 5 to 7 years. Once, based on the trials results, the compa- be increased in a 50% (30%
ny decides which varieties wants to market, it is necessary to register the
variety: this implies some registration costs. Finally, when the variety has for loss of harvest and 20°/&
been registered, it must be multiplied. In order to do so, the seed cOryl- as premium).
pany is aided by several farmers. This implies other costs that are going The next cost has to do
to be treated in further articles.
with sowing: preparation
of the seed, tractor driver,
labourer and sowing drill.
RESUME
The cost of sowing this triNous trailons dans cet article le cout pour une enterprise de semences de al is estimated in 61200
situer au marche une variete nouvelle de cereal (bIe dur, bIe tendre,
orge, .. .). On a considere d'abord les couts de selection: toutes les enter- Ptas ($ 397.4). When the
prises realisent de difjerents essais afin d'eprouver les varietes nouvelles, sowing is finished, the
ce qui devient un reseau d'essais. Une variete est testee pendant 5 cl 7 identification of each sown
ans.
Apres que la compagnie, compte tenu des resultats des essais, ail decide variety is essential, as well
sur les varietes a commercialiser, ilfaut deposer la variete, ce qui suppose as the number of replicades couts de registre.
tions (each trial has usually
Finaiement, on doil mulliplier la variete. Pour ainsi faire I'enterprise de
3
or 4). That is why some
semences doit faire recours cl plusieurs agriculteurs, ce qui comporte de
sticks
placed on each plot
couts ajoutes, questiOns cl trailer dans un article posterieur.
for identification are necessary. We include among
the costs, the material and the preparation of sticks
BREEDING COSTS
(15600 Ptas. or $ 101.3). The other relevant cost is the
Let us study an example of the cost of a trial belonging one of the harvest, that includes the combined harto the network of a seed company. We have chosen a vester, harvest personnel and transportation of personcase in which we have 200 elemental plots available, nel (71200 Ptas. = $ 462.3). Finally, we include the cost
with an area of 0.44 Ha. The costs originated by the tri- of taking samples for its subsequent study in the laboal are summarized in table 1. These costs are made up ratory (5600 Ptas., $ 36.4), since sometimes the quality
of three main parts: direct costs, personnel costs and of grain is as important as the productivity achieved by
the new varieties that has been put to the test.
general costs.
Regarding the direct costs of the trial, the farmer who Another group of costs is the personnel-related cost.
owns the land has to be compensated by the loss of First of all, we should consider the dedication of the
harvest resulting from leaving aisles without sowing be- R&D Department to the trials of cereals. Let us assume
tween the plots. The estimated loss is around 300/0, and that the average budget of the R&D Department of a
the premium for the owner for letting the land to be medium mediterranean seed company is 7262000 Ptas.
used by the seed company is 20%. The economical ($ 47155.8), and let us assume as well that its personnel
compensation is based on the average productivity of dedicates 40% of their attention to cereals. If we calcuthe area where the trial is placed. In our example, late 40% of 7262000 we obtain 2904800 Ptas ($
28600 Ptas. This figure is obtained by multiplying the 18862.4). But this figure refers to all the cereal trials that
the company carries out throughout the year. To obtain
the cost per trial, we use the cost per plot. This way, we
divide the annual cost aSSigned to trials by the average
e) Department of Economy, Sociology and Agricultural Policy of the
number of plots sown by the company annually. The
"Escuela Tcknica Superior de Ingenieros Agr6nomos" of the University of
Cordoba (Spain).
result is the cost by plot of the R&D Department. ThereABSTRACT
43
heating, etc., plus a 100/0 amortiza tion cost applied to
R&D De pa rtme nt, lOta li zing 47700 Ptas ($ 309.7).
Table 1 Cereal/rial costs.
Adding up the three d iffe re nt costs (Direct, Pe rsonnel
a nd Ge ne ral) we get the total cost o f this cereal trial:
449400 Ptas ($ 2918. 2). To refe r this cost to a particula r
plot, let us d ivide the total cost by the average number
o f plots o f this ty pe o f trial: 449000 d ivid ed by 200 plots
equa l to 2250 Ptas ($14.6) .
Calculati on fo r 200 plots average trial
Tolal 'If"'" 4400
I.
J) in.~c l
111'
(0.44 I-I a)
cost
I. J Compensation/or OCCIf/X lI io ll of lalld
Harvest loss: 300Al
Tri al prt:llliul11: 2()%
Total: 5DOh over the aver:tge p roduction
of Ihe area: 5000 k g/ h ~1
ESlil11:l 1c::c1 price: 26 P1 3S./kg
1.2 SOf{)ill!!,
Sow ing drill :lI1d tra ctor driver
Transportatio n o f sow ing (e a m
Prepar~lI i on
of seed
R EG IST RATI ON COSTS
28,600 1'"
Next we are go ing to stu dy the cost o f the o ffi cial tria ls
T
that are necessary to register the va ri eti es that the com-
20,000 PiS
30,000 PiS
11,200 PIS
pa nies choose to be placed in the marke t. The re a re
two types of registratio n: the o ne o f comme rcial varie ties, that constiru les a syste m o f contro lling the pro ductio n o f seeds a nd seed lings, w ith the w ill o f protecting the fa rme rs' inte rests, a nd the o ne o f protected varie ties, whose goa l is to protect the rights o f the holde rs
of the varieties, a nd the refo re, to e ncoul11ge the e nU·e-
1.3. Sticks a lld btlgs
!vl:uc.::rial: 50 Plas. pe r elementa l plOI
I'repar::llio n and aisles arrangement
J.4. Harvest
Combined harvester and other equ ipment
H arvest tea m transporwt ion
H arvest perso nnel
10,000 PIS
8,600 PIS
20,000 PIS
40,000 PIS
11,200 PIS
5,600 PIS
185,200 PIS
preneuri al investments in research to obtain new vari-
eties. We can see the costs o f incl uding a cultiva r in the
commercial varieties registration for a seed company in
1.5. LaboratOlY samp les
Total direct costs
2. Personnel Costs
2. 1. Resea l'cb & Devc/opll1elll Dept . Costs.
4()% o f its atte ntio n, dedicated to cere:i1,
from a total budget of 7262000 Ptas. wit h 4.000 plots
Total: 726 Ptas ./Plot.
145,200 Pts
2.2. Vebicles costs
,. from a total b udget or 1570000 Pl as.
(157 PI3s'/Plol)
31,400 PiS
2.3. 'fi"a llsporltltion costs
.. from a 10 lal budgel of 1995000 Pt as.
(I99,5 Plas./PIOI)
39,900 PIS
Total or p~ rso nn e l COSIS
2 16,500 Pts
3. G~ n e r::li costs
Gen~r::1i services + 100/0 amorti zation of R&D
D epartment TOI ~d : 954000 with 4000 plots
Cost p~ r plot: 238,5 PI:IS.
47,700 PIS
4 . Summa ry
To ta l cost of the tri al
449,400 PIS
TOlal cosl p~ r plot
2,247 PI S
Source: Iniorma1ion supplied by a company 01 the sector. 1997.
fore, the cost by plot is de te rmined d ividing 2904800 by
4000 (tota l number o f plots o f all cerea l trials), resulting
726 Ptas (S 4.7). If we multiply this cost o f an ind ividual
plot by the numbe r o f plo ts in a pa rticula r u·ial, the result is the pe rsonnel cost o f that trial. In this case 145200
Ptas ($ 942.8). Fo llowing similar reaso ning, ve hicles a nd
tra nspo rtatio n costs a re calculated, being 31400 Ptas ($
203.9) the first a nd 39900 ($ 259. 1) the second . If we
sum the R&D De pa rtme nt cost, the vehicles cost a nd
the tra nspo rta tio n cost, we o bta in the the total pe rsonnel cost. In o ur exa mple, 216500 Ptas ($ 1405. 8). The re
are some gene ral expe nses left , including power, wate r,
44
ME])lT W 1199
table 2 (above). The process car-
Table 2 Officiallrials cosl (US $ = 154 Plas.).
Regi str~H i on of commercia l v~tri e tics ( Anual Costs in Pt ~t s . )
Species
Identificati o n T ri:lls
Rest of cereals
Corn/Maize
88,000 Pts.
176.000 Pts.
Years
Amount
1) Procedure for the application
of Title of Vegetal Holde r
33 ,000 PIs.
Only payment
2) Previous trials to Title
88,000
Pls l year
15,638 Pis.
Only payment
3) Tille of Vegetal Holder
4) Mainteinance of Holder's rights
5) Cancelled Titles
6) Dispatch of copies 10 Titles and
certificates or rejection of Tilles
1st
13,031 PIs.
15.638 PIs.
2,606 PIs.
Source: Spallish Official Bulle1ill, Dec. 31sl. 1996.
I
a nd othe rs ca lle d agro nom ical va lue
tria ls . Th e ir costs fo r cerea ls per
165,000 Pts.
yea r are summa rized as well in the
192,000 Pts.
upper part of table 2.
Identificatio n trial cost is 88000 Ptas.
($ 571.4) annually, and Agro no mica l va lue trial cost, 165000 (bo th figu res referre d to cerea ls), eqUi va le nt
I 41h I 5th to $ 1071.4.
These trials a re to be ca rrie d ou l
w ithin the Net o f trials of the fo rme rl y ca ll e d Nati o nal Insti tute fo r
Seed and Seed lings (I NSPV in Span31,275 Pis.
36,491 Pts.
is h , no w SGS PV) . And the me ntio ned quantities a re the o nes that
the breed ing compa ny has to pay
fo r the ir varie ties to be included in
the offi cia l tria ls.
The ide ntification tria ls tly to check
if the mo rphological fe atures o f the
teste d va rie ty match with the info rmatio n supplied by the compan y that owns the cultiva r.
This is phe notypica lly cont rolled.
Oth er aspects that a re also checke d are the foll owing:
the materia l muSI be new, diffe re nt to the alread y exisling, a nd stable, w ith fbled featu res .
Regarding the agro no m ica l va lue tria ls, their goa l is to
compare th e ne w va rie ties develo pe d by prog rams o f
genetic imp rove me nt, w ith the o nes a lread y in the marke r. The idea is to select the va rie ties that turn o ut to be
bette r than th e o nes already available for g rowers to
use. 'Bea e r' mea ns hig he r yie ld , bette r q ua lity a nd mo re
Agronomical Va lu e Trials
Registration of p rotected varieti es ( Annu al Costs in Pt:I S.)
Concept
ri ed out is made up of some previo us tria ls o f varietal ident ifi ca tion
2nd
3rd
18.243 Pts.
26,065 PIs.
resistance and/ o r tolerance to diseases .
Fo r pro tected va ri eties registratio n , the re are a number
o f taxes accord ing to vario us concepts. Some of the m
have to be pa id a nnu ally. These tasxes a re s hown in the
lower part o f table 2.
•
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y Tecno logia. Ed iciones Mundi-Prcos:1.
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International Seed Testing Assoc iatio n (1 992) . I-I:tnclbook of variety test ing.
Zurich.
Mericb J. (1994) ldenti ficaci6n de variecb des en plaruas de gr..1Il cuhivo.
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my, n. 24, \Visconsin.
c.v. (984) -
Breeding. Americ:m Sociery o f t\ gro no-
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45