CGN is considering the introduction of handling fees for the samples it distributes to its users. To explore the pro’s and con’s of this option, it started a discussion in the international genebank community by (1) posting a message on this weblog, (2) correspondence with the ECPGR Steering Committee via its mailing list, and (3) bilateral correspondence with some relevant actors. This request for feedback resulted in numerous valuable responses. Below we briefly highlight major outcomes of the discussion and their implications for the next steps that CGN will consider to take.
Budget shortages and handling fees a common theme
As a first outcome, it became apparent that the issue of requesting handling fees for genebank samples has been recently discussed in several genebanks. However, so far only very few (e.g. AVRDC, Taiwan and NIAS, Japan) have actually introduced handling fees. Regardless the outcome of the discussion, we feel that the discussion has a value in its own right, since it triggers attention for the difficult funding position of a number of genebanks. Whether genebanks can cope with deficiencies in their funding is of course highly relevant, given the crucial role that genebanks play in plant breeding and crop research, especially in the context of longer term world food security under climate change.
The nature of a handling fee
Generating regular income from the distribution of germplasm is clearly not CGNs intention; this would not be compatible with the conditions of the ITPGRFA, nor with AEGIS. Handling fees refer to relatively small contributions to cover the costs of handling the request, including the associated labour, material and postage costs, plus the transaction costs of the payment. To our understanding the ‘value’ of the accessions is thus irrelevant to answer the question of introducing handling fees or not by CGN or any other genebank, assuming this value exceeds the handling costs in the first place.
The fee level
A handling fee of €50 per accession that CGN initially proposed, was generally considered far too high for various reasons. Indeed, it might be more appropriate to calculate the true distribution costs and recalculate the resulting fees, that might possibly consist of a charge per transaction and a charge per accession. However, for some specific categories of material, that fall outside the definition of PGR in the narrow sense (mapping populations, allele collections, etc.) and that have not been included in the MLS, different charges might be applied not only covering the handling fees.
Transaction costs
It is expected that the costs of financial transactions can be kept low at both ends (provider and recipient) by using ICT solutions that are currently available.
Exemptions
Some groups of users will be exempted from the handling fees. Groups that are currently considered for exemption include users in least developed countries (according to the United Nations category), and partners of CGN that support CGN by regenerating and/or evaluating material as an in-kind contribution. Requests that can be considered repatriation will also be exempted. It seems fair if the distribution costs made for the exempted requests will be carried by CGN, and will not be compensated by increasing the fees of the other requests.
Possible effects of handling fee introduction
Handling fees will not only compensate distribution costs, they are also expected to considerably reduce the number of distributed samples, and thus in the longer term regeneration costs. Users may become more critical regarding the number of samples they request if there is a price tag connected to the individual accession, and some users might decide not to request material at all or try to get the material from other genebanks. This expected reduction in the number of requested samples can be both positive and negative, since it may avoid less well considered requests for material, but it may also deter serious users. The latter will in general be undesirable as genebanks have been mandated to promote the use of their materials. Also, the willingness of users to collaborate with the providing genebank, to give feedback and send evaluation data back to the genebank may be negatively impacted.
Handling fees and liability
The service that a genebank provides should be of appropriate quality, irrespective of whether handling fees are charged or not. Introduction of handling fees should not affect liability issues: a genebank provides the material as good as it can, and cannot be held liable for any damages due to the lack of quality of the seed material or the associated information. However, this issue should be investigated more in depth before the introduction of handling fees.
Related issues
In the discussion a few interesting issues arose that may justify a separate study or discussion. For example, it appeared that some of the major genebanks are confronted with a steep increase in the number of distributed samples over the last few years. What has caused this increase? To which extent might the following factors have contributed: (1) are breeding companies building up their own PGR collections since they fear these resources may get less accessible over time, (2) do new marker assisted breeding methods allow for more efficient use of exotic material, (3) or do websites and better use of other means of communication render the use of PGR much more attractive and easy. Related to this question is another lack of insight: what do we know about the distribution of genebank material to users by individual genebanks, how do different user groups compare, and what use conditions do apply on the distributed germplasm? The answers to those questions would also facilitate further deliberations on handling fees, but answers may not be feasible in the short term.
CGN’s decision-making process
In the coming months, CGN will continue its consultations with stakeholders, including its users and its main funding agency, the Dutch ministry of Economic Affairs, Agriculture and Innovation. A decision regarding the introduction of handling fees is expected to be made in the last quarter of this year at the earliest. In the meanwhile, we invite all our colleagues and stakehlders to further contribute to the discusions on the introduction of a handling fee for genebank accessions. In turn, we shall update you regularly ablout any new insights or developments.
Bert Visser & Theo van Hintum (CGN)
I think you’re still missing an important point — promoting and/or allowing commercial alternatives to your services.
Recently in the ‘Kokopelli Case’, the panel of judges ruled the EU marketing directives were in effect an unfair burden on small farmers:
“91 Paragraph 9.3 of Article 9 of the ITPGRFA provides that nothing in that article is to be interpreted to limit any rights that farmers have to save, use, exchange and sell farm-saved seed/propagating material, subject to national law and as appropriate.”
The CGN does not offer farmers using it’s materials the same rights. The SMTA associated with using the genetic materials of CGN is a similar unfair administrative burden. A farmer simply cannot be expected to fully understand and meet the administrative obligations of an SMTA, or defend themselves in case of a dispute. The only ones who can meet this obligation are large companies who can afford specialized staff for this purpose, or others who have no hope or intention of ever commercializing the materials or transferring them to others.
If you aren’t allowing reasonable competition as an alternative to your handling and distribution costs, then you’re simply running a commercial monopoly. In this case any handling fees are unreasonable.
Patrick: Where does the judgement say that the EU directives place an unfair burden on small farmers? The most I can get out of it is that certain provisions related to conservation of types of vegetable and regionally specific varieties not on the EU list allow farmers to sell seed; also that the ITPGR is not relevant as the rights of farmers are subject to national [EU?] law.
The experience of the Seed Savers Exchange in the US could help. What do they do as their seeds are duplicated in Svalbard and therefore covered by the ITPGRFA (Article 7 of the Svalbard Depositor Agreement – as are an increasing number of USDA samples)? Are they allowed to `sell’ seed freely? Note that I am not against this – we buy heritage seed each year for our garden: if someone takes the trouble to produce seed, we are gladly in the market (whether this is legal or not).
But also would it not be nice to be able to buy catalogued seed from genebanks at a commercial rate? I would love to get my hands on seed of the best dozen or so Capsicum varieties I taste-tested from a cast of literally thousands when I was managing the CATIE genetic resource collections – yummy. And what is the experience of botanic gardens, that for hundreds of years have had seed lists and sent out samples freely? There are a lot more questions that needed to be looked at.
Dave: Since I wrote the comment above, I’ve seen a number of interpretations of the court ruling around the Internet, with different perspectives. I think we may be discussing for some time what it actually means. My interpretation is also still evolving.
In my opinion, the EU court said the EU marketing directives did place an unfair burden on small farmers and did violate the spirit of the ITPGRFA, but the ITPGRFA is so weakly worded that in practice members can do what they want and the treaty is not legally binding. In any event, the court decided none of this mattered because of the overriding need to promote agricultural productivity.
I’m well prepared to accept there are other ways to interpret this!
The SSE in the US has a number of secret agreements with Svalbard, and it’s not really clear what’s been agreed there is or what’s binding on the SSE. A lot of people have been asking this same question and the SSE has remained silent, as far as I know.
I agree. Lots more questions…
Patrick: Thanks. Whenever I read things like the EU court ruling, the ITPGRFA, or the SMTA I think it is all too much for any farmer to take in. About the weakly-worded Treaty: this stopped farmers getting anything without a complex SMTA (unlike the previous FAO-CGIAR Agreement). However, at least for the CGIAR, there have been some changes allowed. Samples can be returned to the country of origin and also material under development can be sent to farmers for their direct use without any SMTA. There would seem to be no reason why farmers should not grow these samples and sell-on the seed. But it seems sad that the former free-and-easy system that I grew up with (and which worked to get samples around) has now so many strings attached.