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Baroness Anelay of St. Johns: The amendment addresses the concerns raised in the debate in another place by my right honourable friend Mr. David Curry (Hansard, col. 697) and my honourable friend Mr. James Paice (col. 732).

At Second Reading, as he reminded us, the Minister reassured the Chamber that the reason for the absence of any reference in the Bill to the 30th June 2001 date was to ensure that the prior use exemption would not expire on 30th June 2001, if the corresponding date in the Community regime is extended. He recognised the concerns that had been raised on this point. Further concerns have been represented to us on the Opposition Benches about this matter. The Minister told us that the Government would bring forward an amendment at Committee stage to rectify the matter. I am grateful that he has taken that action after the discussions this summer.

I support the amendment. I believe that it will reassure farmers who save seed that they may continue to use varieties that they currently save, free of charge, until that date.

On Question, amendment agreed to.

Baroness Anelay of St. Johns moved Amendment No. 6:

Page 5, line 36, after ("obtained") insert--
("( ) make provision for calculating the sensibly lower equitable remuneration rate payable by a farmer to a holder of the rights in accordance with subsection (3) above,").

The noble Baroness said: Clause 9 implements European Union law by obliging farmers (subsection (3)) to pay equitable remuneration to holders of plant breeders' rights for farm saved seed, set at a "sensibly lower" rate than the amount charged for production of propagating material of the same variety in the same areas with the holder's authority. I understand that after very lengthy and, I am told, tough negotiations an agreement was reached between farmers and plant breeders for a scale of payments for farm saved seed and that this came into operation in autumn 1996. It is hoped that that agreement will indeed prove durable and can be adjusted by further agreement between the parties as required in the future. But, if the agreement were to break down, farmers could be left in a vulnerable position to pay whatever the breeders demanded. We believe that it is in the public interest that there is a safeguard against such an eventuality.

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At Second Reading my noble friend Lord Lucas, who has done so much work on the Bill on our behalf, told the Chamber that:

    "We should like some long-term protection to ensure that negotiations continue to be conducted on a reasonable basis".--[Official Report, 18/7/97; col. 1136].
The amendment tries to achieve just that.

The amendment gives Ministers a long stop reserve power to intervene to impose a formula for payment if the parties were patently unable to agree. It is unlikely that the power would ever be required to be exercised, but we believe that its very existence would help to ensure that this was so.

Indeed, if by any chance the Minister is not inclined to accept this amendment today--the second refusal to me on the same day on my first time here--and believes that the amendment is not necessary, perhaps he can explain what powers Ministers already possess to take action to impose a formula for payment if the parties were unable to agree at some stage in the future. I beg to move.

Lord Carter: I think that the noble Baroness will find over time that charm does not work in this Chamber, I am afraid. The fact that I have turned down one amendment already does not mean to say that I shall not turn down this amendment.

The amendment is intended to give Ministers powers to determine how the rate for use of farm saved seed should be calculated. It would apply only to UK protected varieties. It would not--indeed could not--give similar powers in respect of Community protected varieties, since this is a matter for quite separate Community legislation. That is a weakness in the amendment.

My view is that this is a commercial matter between breeders and farmers. It is not one in which the Government should intervene. After long debate, the EC took this view when the Community regime was established. To give Ministers powers to determine how the rate should be calculated for UK protected varieties when they cannot unilaterally do the same for Community protected varieties strikes me as opening up the prospect of considerable confusion.

I know that the farming unions are keen to see this measure in the Bill. They regard the powers as "reserve" ones, as the noble Baroness said, which would be used only when farmers and plant breeders could not sort out their differences and reach agreement between themselves. I do not see them in quite the same way. My feeling is that if they are there, so is the incentive for one side or the other to dig in its heels and leave Ministers to sort out their differences for them.

I believe that the party opposite still believes in the free market and I suggest to the noble Baroness that we should leave commercial people to do what they are best at doing; namely, dealing with commercial matters.

These matters were successfully resolved through industry negotiations for EC protected varieties. The farming unions and plant breeders have also reached

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agreement on the way UK protected varieties should be dealt with once this Bill comes into force, as I shall mention in more detail when we come to the clause stand part debate. It seems to me that that is the right way to deal with the matter.

In reply to the noble Baroness's question about the powers which Ministers have, my answer is that they have no powers in that respect. With that explanation, I hope that the noble Baroness will feel inclined to withdraw the amendment.

Baroness Anelay of St, Johns: I thank the noble Lord for his reply. I shall still keep on trying. I shall not give up at this early stage. Certainly, it does my heart good to hear him express his free market theories. I hope that may continue--I do not say "for long" but at least for the odd year or so. In the light of his reply, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.15 p.m.

Lord Carter moved Amendment No. 7:

Page 5, line 39, at end insert--
("( ) Regulations under subsection (7)(a) above may include provision imposing obligations of confidence in relation to information supplied by virtue of the regulations.").

The noble Lord said: Clause 9(7) enables Ministers to make regulations requiring plant breeders, seed processors and farmers to provide information to each other for the purposes of the farm saved seed provisions in the Bill.

This amendment will enable Ministers to impose an obligation on the recipients of information to keep it confidential. If, for example, a farmer discloses that he has planted so many hectares of farm saved seed, the plant breeder who receives this information will be required to treat it as confidential.

Let me take as another example the tonnage of a species which a processor has cleaned for a client. We feel that in practical terms such sensitive information must be kept confidential. This information is provided at a plant breeder's by farmers or seed processors. I am sure that this will be welcomed. I beg to move.

Baroness Anelay of St. Johns: I am grateful for the Minister's explanation of the amendment and in particular that he gave an example of why matters should be kept confidential. It is something which any open government would not normally wish to enforce. But, in the circumstances and in view of the explanation, we support the amendment.

On Question, amendment agreed to.

On Question, Whether Clause 9, as amended, shall stand part of the Bill?

Baroness Anelay of St. Johns: I gave notice of my intention to oppose the Question that the clause stand part of the Bill in order to raise points put forward at Second Reading by my noble friend Lady Trumpington and by several growers and members of the public who

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subsequently wrote to us again. They are points which do not appear as yet to have been resolved by the amendments tabled today by the Minister.

My noble friend Lady Trumpington pointed out that the principle that holders of plant variety rights are entitled to royalties was agreed as a result of the UPOV convention of 1991 and by the European Union in Directive 8167/94 on 1st September 1994.

The directive also allows exemptions from royalties for small farmers and limits the rights to newer varieties only. Difficult trade negotiations decided rates of royalties and collection methods. But the royalty-free status of older varieties was an important element in those negotiations.

Clause 9(3) of the Bill seeks to extend the royalty scheme to all protected varieties, including the older ones which do not enjoy such protection under the European scheme. We have been advised by such organisations as the National Association of Agricultural Contractors that provision will destroy a cornerstone of the trade agreement.

Can the Minister tell us today whether any progress has been made to resolve that problem? Will older varieties be permanently exempted from royalties and, if so, how? I understand that the Minister gave assurances at Second Reading to carry forward discussions on this matter. Have they had a successful resolution?

Lord Carter: As the noble Baroness is aware, this is an important clause. To summarise the essentials of it, the 1991 convention extends the breeder's right to all production and reproduction of propagating material, including farm-saved seed. It also allows for that extension to be limited, subject to safeguarding the legitimate interests of the breeder, to permit the use of farm-saved seed, and that ensures the purpose of Clause 9.

An order under Clause 9(2) will exempt farm-saved seed of the main agricultural species--cereals and fodder plants, oil and fibre plants and potatoes--from the breeder's right. Farmers may therefore save seed for use on their own holdings of protected varieties of those species without seeking authority from the holder of rights. In return, however, the breeder may require a payment which is "sensibly lower" than the royalty payable on certified seed. Small farmers may save seed of protected varieties for use on their own holdings without payment. Amendment No. 5 should reassure everyone that the prior use exemption will not be discontinued until after 30th June 2001.

Clause 9 applies exactly the same approach to varieties protected in the UK as to those protected under council regulations. For example, the definition of "small farmer" and "suitably lower" are prescribed by reference to definitions in the council regulations. That should avoid confusion between the national and the EC system.

The levels of payment for farm-saved seed are a commercial matter between plant breeders and their customers. Constructive discussions between

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representatives of the farmers, seed processors and plant breeders led to a negotiated agreement on farm-saved seed payments for Community-protected varieties.

As the noble Baroness knows, when I met interested parties in July, I urged the different sectors of the industry to get together to discuss the treatment of UK-protected varieties, particularly older varieties. I am sure the Committee will be delighted to know that yet again plant breeders, processors and farmers' representatives reached agreement. I was pleased to play a part in ensuring that they reached that agreement and a formal document signed by all the farming unions and the British Society of Plant Breeders records all the details and is available in the Printed Paper Office.

A key element in the agreement is that plant breeders agreed to a zero rate for the farm-saved seed payment on UK-protected varieties granted rights before September 1994. Farmers will therefore be able to use them free of charge after the prior use exemption is removed. I am sure that the Committee will agree that that is a most satisfactory outcome.

The Committee may also be interested to know that there are no fewer than 75 varieties. There are 14 varieties of spring barley, four of spring wheat, six of spring oats, 10 of field peas, 12 of winter barley, 15 of winter wheat, eight of winter oats and six of field beans which are caught by the agreement. In addition, I am sure that the Committee, particularly Members with a farming interest, will be even more delighted to know that the British Society of Plant Breeders confirmed that the saving on the royalties on the old varieties is worth £200,000 per year to those farmers who are caught by the provision. I am sure that we can all agree that it has been a satisfactory agreement on all sides.

I turn to the other point made by the noble Baroness. More generally, I received a number of representations, as I know others have, from members of Friends of the Earth who are concerned that Clause 9 will make the use of farm-saved seed uneconomic and also lead to a loss of biodiversity. I shall ensure that a proper response is sent to all those who wrote to me. However, I cannot agree that Clause 9 will make farm-saved seed uneconomic.

Clause 9 is there to ensure that those farmers who want to save seed of UK protected varieties produced on their own holdings may continue to do so. I use the word "may" advisedly. I have already explained that some farmers are exempted by the Bill from the requirement to pay and the agreement between the British Society of Plant Breeders and the farming unions ensures that farmers will not pay to use the older UK-protected varieties.

In those cases where a payment has to be made, it must be sensibly lower than the royalty on certified seed. The British Society of Plant Breeders and the farming unions reached agreement on the payments which apply to EC-protected varieties which are sown this autumn. I am told, for example, that the charge for wheat is £23.37 per tonne of seed used. That does not suggest that the use of farm-saved seed will become uneconomic or that the clause will lead to a loss of biodiversity.

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In relation to the fear of a loss of biodiversity, perhaps I may refer to a point I made at Second Reading which was confirmed later by officials. It seemed to me as a layman rather than as a plant breeder--as a farmer--that over the years the number of varieties available has increased enormously. I am not sure where the argument for the loss of biodiversity comes from. When I started farming in the early 1950s and for a long time afterwards we had one variety of winter wheat (which was Cappelle Desprez) one variety of spring barley (which was Proctor), one variety of spring oats (which was S172) and one variety of oilseed rape (Primor). Perhaps I should stop showing off. There are now a large number of varieties; I listed 75. There are 75 older varieties which are exempt and hundreds of varieties on the recommended list. Therefore I am not sure where the argument for the loss of biodiversity comes from.

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