2011 CIOPORA Chronicle - the 50th Anniversary Edition

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flowers and plants that appeal to
the people, whether this is a grower,
buyer or a consumer. Breeders need
a return on investment by earning
royalties by licensing their rights
which in our industry are mainly
known as plant breeders rights.
Intellectual property also includes
trademarks and utility patents. PBR
encourages creativity while it also
protects innovation.”
Plant breeding requires patience
and can take five, ten or for some
crops even fifteen years. Petunia,
for example, can be crossbred much
faster than a rose or bulb flowers.
“Speaking from my own experience
in vegetable seeds and Chrysanthemum
breeding, I know that huge
amounts of seedlings are required
with in the end, only a handful of
varieties which enter and stay on
the market as a cash crop.”
The investments involved are enormous.
It is often stated that breeding
costs account for 15 to 25% of
a company’s turnover. Leune finds
it difficult to give definite figures.
”If you start a new breeding programme
from scratch, it’s extremely
difficult to back your investments.
Once you discover a real market
leader the balance between costs
and earning can change quickly.
That’s a problem because when
starting breeding you have a clear
focus but it is not always for sure
that you will succeed in finding a
bestseller “
Royalty percentages
The royalty percentages vary
greatly. ”It’s up to the breeder to
decide who will obtain the license
to propagate his varieties, in which
countries and under which conditions.
Prices are primarily set by
RAI can rely on a team of specialists that knows the sector inside out
and provides world wide services for the ornamental breeders.
market influences. Breeders will
always look at their competitors to
determine the royalty percentage
for novelties. If he is convinced that
his product is better he’ll opt for
higher royalties. A lower royalty
level can be useful to open the
doors of new markets. Royalties can
fluctuate, with different levels on
different continents. In India and
China, for example, the prices on
the domestic market are significantly
lower and it’s impossible to come
up with royalty levels in accordance
with the European market.
However, with the present’s global
flower industry involving products
shipped from one continent to
another, it has become increasingly
important to have a more or less
equal royalty level to prevent false
competition. More recently, the
prices have levelled out and that’s
good for the business.”
Internationalisation
RAI employs 29 people divided
over four offices in ‘s-Gravenzande
(NL, headquarters), Fort Myers
(USA), Bogota and Tokyo. “In
1993 we entered into a strategic
alliance with Yoder USA in North
and South America allowing us to
spread our wings overseas. Today,
RAI offers the client worldwide
coverage. “Most of our employees
travel around the world to control
licensees, non licensees, growers,
wholesale markets, auctions and
exhibitions. Here we have the 2 +
2 = 5 effect. Imagine a shipment of
cuttings grown in Brazil, transported
to Holland and exported to
Italy with the final flowers ending
on the Moscow market. In such
cases, RAI has the possibility to
call its colleagues in South America
and Europe to check and combine
the information, allowing better
control.”
RAI has a profound knowledge of
horticulture. “We really understand
plants, the market and the grower.
We’ll never enter a greenhouse
in a suit and tie, having earned a
reputation as plant connoisseurs.
Our competitors in the market,
the lawyers, normally don’t visit
the grower, and only send letters.
Moreover, lawyers have an overall
lack of product and market knowledge.”
UPOV
RAI manages royalties under the
authority of the different UPOV
(International Convention of the
Protection of New Plant Varieties)
acts, which according to Leune,
need further improvements. “The
last time UPOV was revised, was
in 1991 when better protection of
end products was achieved. UPOV
currently has 68 member states of
which 45 have acceded to the 91
Act. This means that 23 countries
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CIOPORA Chronicle April 2011 | www.CIOPORA.org 37