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Old May 5, 2013   #1
Heritage
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Default Compensating OP tomato breeders

I'm posting to invite some discussion from hybridizers and vendors as to what you feel is fair compensation to a breeder (from a vendor) for new tomato introductions. I'm offering a few scenarios for starters, but please offer any variations or alternatives you might think of, or now implement.

1. You have made a cross and carried it through to stability at F8. You haven't distributed seed to anyone in the process. You now are offering your seed exclusively to one vendor for sale. You will supply the stock seed to the vendor (the vendor will not grow the seed). What percentage of gross sales would you expect to get from the vendor?

2. You have made a cross and carried it through to stability at F8. You haven't distributed seed to anyone in the process. You now are offering your seed to two vendors for sale. Each vendor will grow out stock themselves from the seed you send them. What percentage of gross sales would you expect to get from each vendor?

3. You have made a cross and carried it through to stability at F8. Along the way you have freely distributed seed of various generations. This season, several vendors will be offering your variety for sale. What percentage of gross sales would you expect from each vendor?

Thanks for the feedback,
Steve
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Old May 5, 2013   #2
Tom Wagner
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1. Zero
2. Zero
3. Zero

That is what you can expect. However, if you come across as a businessman...something I never could do...there may some solace.

The old 'Carrot on the end of a Stick' ploy will be used. "Let us grow it for one year to see if we want to sell it and we will give you a royalty of 10%."
That has been said to me hundreds of times. I run the other way.
'
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Old May 5, 2013   #3
carolyn137
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3. You have made a cross and carried it through to stability at F8. Along the way you have freely distributed seed of various generations. This season, several vendors will be offering your variety for sale. What percentage of gross sales would you expect from each vendor?

$$$$$

Steve, could you please clarify this one for me?

First you say that various generations leading up to the stable variety have been distributed and then you say that the final stable one is being offered for sale by several vendors.

Why and where would those earlier generations be distributed and for what purpose?

As you know, in my annual seed offer here I have distributed varieties sent to me by various hybridizers that were not yet genetically stabilized.

Personally I'm not concerned about that b'c the seeds were sent to me freely for distribution, but how might that fit into what you posted above?

And I'd be interested to know your opinion of vendors, for there are small family run ones, and then much larger ones and I think it should, or could make a difference on any paybacks one might expect b'c of those vendor differences.

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Old May 5, 2013   #4
Boutique Tomatoes
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I'm curious as to what responses you'll get.

My understanding on scenario #1 is the norm is a 10% breeders fee added to the wholesale price of the seeds.

#2 is more challenging and I do not know. Perhaps Fred Hemple will drop in and offer insight.

#3 is likely close to #2 but has an added wrinkle that might lead to a 4th scenario:

4. If you're sharing the early generations, what happens if something interesting shows up in another person's grow out. It's not what the original breeder was looking for, but interests the other grower enough that they bring it forward to stability. What would be appropriate compensation for the original crosser in this situation?
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Old May 5, 2013   #5
frogsleap farm
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A germplasm royalty of 10% net sales is pretty typical for exclusive, or perhaps co-exclusive distribution rights of an OP variety - as long as the exclusivity is maintained. Without PVP protection, maintaining the exclusivity is unlikely to last more than a year or two as various small seed companies buy seed of the new variety, produce their own seed and offer it for sale. If you also produce the commercial seed you will also be paid for that - but at a rate no higher than the seed company could contract that activity themselves. If seed of the finished OP variety, or earlier generations of the variety, are distributed widely - all bets are off on getting a seed company interested in paying a germplasm royalty.

Tom, Brad and Fred/me are all trying new and different business models to capture value for the efforts of breeders - I'd say with at least moderate success. Ultimately any model for rewarding breeders for their efforts will depend on seed buyer willingness to purchase directly from the breeder/developers, or from their authorized distributors.
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Old May 5, 2013   #6
ScottinAtlanta
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Many of us out here are willing to pay for a breeder's royalty - I like sites that make it clear that xx% of gross price goes to the breeder (identified) so that I know who is accountable for what. But we support the breeders!!
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Old May 5, 2013   #7
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Quote:
Originally Posted by marktutt View Post
I'm curious as to what responses you'll get.

My understanding on scenario #1 is the norm is a 10% breeders fee added to the wholesale price of the seeds.

#2 is more challenging and I do not know. Perhaps Fred Hemple will drop in and offer insight.

#3 is likely close to #2 but has an added wrinkle that might lead to a 4th scenario:

4. If you're sharing the early generations, what happens if something interesting shows up in another person's grow out. It's not what the original breeder was looking for, but interests the other grower enough that they bring it forward to stability. What would be appropriate compensation for the original crosser in this situation?
Mark - I've learned that its best to formalize any agreement associated with sharing seed for early generation growouts so there is no doubt as to the relationship and responsibility between the parties in your scenario #4. It is best to get aligned early and before there is invested effort on everyone's part.
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Old May 5, 2013   #8
Heritage
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Thanks all for the responses so far!

Quote:
Originally Posted by Tom Wagner View Post
That is what you can expect. However, if you come across as a businessman...something I never could do...there may some solace.'
For experienced breeders I would be interested in not only what you "expect" but also what you "would consider fair" (in an ideal world)

Quote:
Originally Posted by carolyn137 View Post
Steve, could you please clarify this one for me?

And I'd be interested to know your opinion of vendors, for there are small family run ones, and then much larger ones and I think it should, or could make a difference on any paybacks one might expect b'c of those vendor differences.
I am seeing scenario #3, or similar, quite often with the increasing number of breeders. Yes, your experimental seed offerings would fall into this category if, in a few years, the original breeder decided to offer his/her stable selection to several vendors.

Good point about the size of vendors. Should the small vendors pay more/less than the larger vendors?

Quote:
Originally Posted by marktutt View Post
4. If you're sharing the early generations, what happens if something interesting shows up in another person's grow out. It's not what the original breeder was looking for, but interests the other grower enough that they bring it forward to stability. What would be appropriate compensation for the original crosser in this situation?
Yes, it could get quite convoluted. I would be interested in your personal opinion of the first 3 scenarios, particularly, do you think the current model is fair to the breeder.

Quote:
Originally Posted by frogsleap farm View Post
Tom, Brad and Fred/me are all trying new and different business models to capture value for the efforts of breeders - I'd say with at least moderate success. Ultimately any model for rewarding breeders for their efforts will depend on seed buyer willingness to purchase directly from the breeder/developers, or from their authorized distributors.
You/Fred, Tom and Brad all have experienced this from both sides so I value your input. As vendors, because of the price fixing laws, I understand we can't discuss specifics or come to a common agreement, but generalities are appreciated.

Quote:
Originally Posted by ScottinAtlanta View Post
Many of us out here are willing to pay for a breeder's royalty - I like sites that make it clear that xx% of gross price goes to the breeder (identified) so that I know who is accountable for what. But we support the breeders!!
I'm sure the breeders appreciate your support! (I know the vendors do)

Steve

Last edited by Heritage; May 5, 2013 at 01:01 PM.
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Old May 5, 2013   #9
carolyn137
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Steve, I started a response but it went away and when I came back Mark's post was there.

I have trouble seeing a situation where breeders would be sharing early generations of varieties before stability, and no, I don't want to discuss what's happening at another message site.

Would ANY of you expect compensation from Tania, Adam Gleckler, Mike Dunton, Jeff in Canada, Carol Knapp, Steve Whitteaker, Lee at J andL,to name some names, or is the focus places such as Tomato Growers, Johnny's, Territorial, Seeds of Change, Totally Tomatoes and the like.?

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Old May 5, 2013   #10
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1 20.
2 10.
3 0.

But in reality you may get nothing in few years.

If you breed yourself and supply the seeds and the variety is a big hit on the market.

You can name your price for a hybrid.

But you said OP so you lose because in no time folks will distribute seeds everywhere.
Conglomo will package it call it improved an leave you in the dust.

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Old May 5, 2013   #11
Cole_Robbie
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So if the breeder were to sell directly to the public over a web site and get 100% of the revenue, a vendor offering 10% would have to sell ten times as much seed just for the breeder to break even on the decision to use a vendor? Will a vendor sell over ten times as much as a well-optimized web site?
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Old May 5, 2013   #12
PaddyMc
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Quote:
Originally Posted by carolyn137 View Post

I have trouble seeing a situation where breeders would be sharing early generations of varieties before stability, and no, I don't want to discuss what's happening at another message site.
That scenerio exists right now. There are quite a number of 'amateur' (but very serious) breeders out there who are crowd-sourcing early-generation growouts. Mark at Frogsleap did it in a big F2 seed offer a few years ago, Brad Gates has a few people growing out his stuff. As long as you have some faith in the people you're working with, you can see a lot more segregates with 5 growers than you can see with one.
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Old May 5, 2013   #13
ScottinAtlanta
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Quote:
Originally Posted by Cole_Robbie View Post
So if the breeder were to sell directly to the public over a web site and get 100% of the revenue, a vendor offering 10% would have to sell ten times as much seed just for the breeder to break even on the decision to use a vendor? Will a vendor sell over ten times as much as a well-optimized web site?
Yes, easily, and you are assuming that a zero-sum game between the two. They are actually additive.
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Old May 5, 2013   #14
Boutique Tomatoes
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Quote:
Originally Posted by Heritage View Post
Yes, it could get quite convoluted. I would be interested in your personal opinion of the first 3 scenarios, particularly, do you think the current model is fair to the breeder.
I don't think the current model is fair to breeders developing OP lines, there is a lot of work that goes into carrying a cross forward to stability. At best they're going to get a couple of years where the value of their work isn't diluted by companies producing their own seed without an agreement to compensate the breeder. Applying for a PVP is both time consuming and relatively expensive, plus requires being able to fund defending it. It creates a barrier to entry for a small breeder, i.e. are you willing to gamble a non-trivial amount of money that your tomato variety will be a commercial success?

That said, I don't think there is a way to fix it and that is why most of the focus for commercial breeding is in hybrids today.
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Old May 5, 2013   #15
Boutique Tomatoes
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Quote:
Originally Posted by carolyn137 View Post
I have trouble seeing a situation where breeders would be sharing early generations of varieties before stability, and no, I don't want to discuss what's happening at another message site.

Carolyn
I was thinking in particular of Tom's model, where early generations of interesting germplasm is sold to the public. I know of a couple of situations where enthusiasts of Tom's work are growing unusual selections that bore little similarity to the stated goal of the original variety. Tom made the original cross and sent out F2 seed, but the other grower found something they liked and carried it forward to stability.

While I sometimes consider getting into the seed business with my kids as something they could do at their age and am dabbling at breeding, it's only a hobby for me. I just see this particular area as being very murky as amateur breeders exchange germplasm unless they formalize an agreement as Mark from Frogsleap suggests.
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