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Charging for the use of plant varieties
Author(s) -
Kingwell Ross
Publication year - 2001
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.00144
Subject(s) - tonnage , profit (economics) , business , economics , preference , industrial organization , microeconomics , public economics , oceanography , geology
Private and many publicly funded plant breeding organisations charge farmers for use of varieties they develop. This article compares four alternative charging mechanisms and outlines responses to these alternatives by farmers and plant breeders. Risk‐averse farmers and breeders are shown to have opposite preferences for charging mechanisms. Results suggest profit‐based or ad valorem royalties are preferred by farmers whereas breeders prefer area or tonnage‐based royalties. Risk‐sharing arrangements between both parties could lead to an overall preference for profit‐based or ad valorem royalties. However, this finding is subject to important caveats and practical limitations.