172
6 Two Country Examples of PGRFA Conservation Systems
definition of a smallholder ("Kleinerzeuger") and the institutional process of
imposing the fee and the connected transaction costs.
A smallholder is defined according to BDP (1997a) as a farmer cultivating less
arable land than is needed for the production of 92,000 kg of cereal. By an average
of 575 kg of cereal per hectares this is 16 hectares 90 . By implementing this criteria,
between 250,000 and 350,000 of approximately 553,000 farms in Germany91 will
be exempted from any fees for the seed re-use 92 .
The fee for the re-use of seed will be collected based on a system of self esteem
and the provision of evidence. This procedure will be the crucial point of the
implementation. With an average annual fee from approximately US $ 21 up to
US $ 136 per farm, the collection costs may reduce the net benefit by 50%
because of administrational and enforcement costs. On a larger farm the fee can,
however, easily amount to US $ 520 reducing the costs significantly93. The only
sanctions which may be imposed in case a farmer is not cooperating is to charge a
fee - four times the amount of the license fee of certified seed 94 . Resources have to
be made available to monitor the agreement; 627 different varieties of the different
relevant crops are protected by the Plant Variety Protection Act (BSA, 1996).
Although in the worst scenario a zero play because of the high enforcement
costs, the significance of one incorporated benefit must be emphasized: the fee for
the seed re-use is not only an additional income for the breeding industry, but it
also reduces the comparative advantage of the seed re-use. This implies an
increasing number of farmers who will increase their SCR. By an average SCR of
50% for cereals on German farms, it may be predicted that the majority of farmers
will increase their SCR by approximately 10% in order to avoid any seed re-use
fees at all.
Because the agreement was first implemented in 1997/98 no trends can be
identified yet.
One major determinant of the decline of agrobiodiversity in Germany is the
Seed Trade Act. It restricts the market entrance only for those varieties, which
meet the criteria of distinctness, uniformity, and stability. Furthermore, it restricts
the market availability of a variety to a certain period of time. Both restrictions
were put into force to protect the consumer, i.e., the farmer. At present, the call for
a change in the Seed Trade Act by liberalizing the legal structure is increasing,
e.g., by the Forum Environment and Development (BUKO, 1996). Hence, BSA is
90 For potatoes it is defined to be less than 185,000 kg, i.e., around 5 hectares.
91 Only farms with more than 1 hectare were included.
92 Approximately 250,000 farms have less than 10 hectares, an additional 100,000 farms have
between 10 and 20 hectares. (BDP, n.d.).
93 If we assume an average farm size of 30 hectares, of which 70% is planted with cereals,
estimating the average SCR in German agriculture of 50%, the farmer will be charged a fee
for seed re-use for 10.5 hectares. The total of the fee, depending on the kind of cereal used,
will therefore amount to US $ 21 up to 136. However, on a farm with 130 hectares, the fee
can easily amount to US $ 520 (BDP, 1997c).
94 It is US $ 6 for 100 kg of cereal, assuming a need of less than 200 kg seed for one hectares,
the licence fee is less than US $ 22 per hectare. Hence the punishment is more than ten times
the amount of the fee for seed re-use.
6 Two Country Examples of PGRFA Conservation Systems
definition of a smallholder ("Kleinerzeuger") and the institutional process of
imposing the fee and the connected transaction costs.
A smallholder is defined according to BDP (1997a) as a farmer cultivating less
arable land than is needed for the production of 92,000 kg of cereal. By an average
of 575 kg of cereal per hectares this is 16 hectares 90 . By implementing this criteria,
between 250,000 and 350,000 of approximately 553,000 farms in Germany91 will
be exempted from any fees for the seed re-use 92 .
The fee for the re-use of seed will be collected based on a system of self esteem
and the provision of evidence. This procedure will be the crucial point of the
implementation. With an average annual fee from approximately US $ 21 up to
US $ 136 per farm, the collection costs may reduce the net benefit by 50%
because of administrational and enforcement costs. On a larger farm the fee can,
however, easily amount to US $ 520 reducing the costs significantly93. The only
sanctions which may be imposed in case a farmer is not cooperating is to charge a
fee - four times the amount of the license fee of certified seed 94 . Resources have to
be made available to monitor the agreement; 627 different varieties of the different
relevant crops are protected by the Plant Variety Protection Act (BSA, 1996).
Although in the worst scenario a zero play because of the high enforcement
costs, the significance of one incorporated benefit must be emphasized: the fee for
the seed re-use is not only an additional income for the breeding industry, but it
also reduces the comparative advantage of the seed re-use. This implies an
increasing number of farmers who will increase their SCR. By an average SCR of
50% for cereals on German farms, it may be predicted that the majority of farmers
will increase their SCR by approximately 10% in order to avoid any seed re-use
fees at all.
Because the agreement was first implemented in 1997/98 no trends can be
identified yet.
One major determinant of the decline of agrobiodiversity in Germany is the
Seed Trade Act. It restricts the market entrance only for those varieties, which
meet the criteria of distinctness, uniformity, and stability. Furthermore, it restricts
the market availability of a variety to a certain period of time. Both restrictions
were put into force to protect the consumer, i.e., the farmer. At present, the call for
a change in the Seed Trade Act by liberalizing the legal structure is increasing,
e.g., by the Forum Environment and Development (BUKO, 1996). Hence, BSA is
90 For potatoes it is defined to be less than 185,000 kg, i.e., around 5 hectares.
91 Only farms with more than 1 hectare were included.
92 Approximately 250,000 farms have less than 10 hectares, an additional 100,000 farms have
between 10 and 20 hectares. (BDP, n.d.).
93 If we assume an average farm size of 30 hectares, of which 70% is planted with cereals,
estimating the average SCR in German agriculture of 50%, the farmer will be charged a fee
for seed re-use for 10.5 hectares. The total of the fee, depending on the kind of cereal used,
will therefore amount to US $ 21 up to 136. However, on a farm with 130 hectares, the fee
can easily amount to US $ 520 (BDP, 1997c).
94 It is US $ 6 for 100 kg of cereal, assuming a need of less than 200 kg seed for one hectares,
the licence fee is less than US $ 22 per hectare. Hence the punishment is more than ten times
the amount of the fee for seed re-use.