User pays proposal could cost us all
New Zealand’s Plant Variety Rights (PVR) scheme, which protects the intellectual property behind dozens of species driving our $57 billion primary sector, costs more than twice as much to run as it earns in fees from plant breeders.
Now the Government department which administers the scheme is looking at doubling or even quadrupling fees to help cover the shortfall, which was nearly $900,000 in the past financial year.
This is despite an independent report in 2023 which estimated plants protected by PVR contribute over $3 billion to our economy through improved performance and value. Think everything from pasture, cereal, apples and kiwifruit to potatoes, hops, fresh vegetables and forestry trees.
For contest, it currently costs at least $10,000 to gain PVR for a single new ryegrass or clover, from initial application through a minimum two years of growing trials to final examination. If the new cultivar needs three years of growing trials, the cost is closer to $15,000. On top of that, successful applicants have to pay an annual fee for the life of their PVR protection.
Industry sources say the new fee proposal, which has so far been kept confidential, undermines the Government’s own stated goal of doubling NZ export values by 2024. They say it would make the lengthy, expensive and often risky business of commercial plant breeding in NZ yet more costly, even though it underpins so much of the primary sector’s efficiency.
The change could also discourage large foreign owned plant breeding companies from continuing to invest here.
PVR is run by the Ministry of Business, Innovation and Employment via the Intellectual Property Office of NZ (IPONZ). It ensures those who create advanced new plant species can recoup their investment, without others immediately ripping off their genetics, and thus are incentivised to continue their work, which can take decades to reach fruition.
Cultivars protected by PVR can only be bred and marketed by approved parties, and royalties are collected on every transaction.
Peak industry organisations like Grain and Seed NZ and Horticulture NZ have been invited to feed back on the proposal to increase fees but these submissions remain private. However, Sarah Clark, chief executive of Seed and Grain NZ and the NZ Plant Breeding and Research Association, says her members asked that fees remain unchanged, and that MBIE instead seek budget funding from the Crown to cover ongoing costs of PVR.
“Investment in the breeding and protection of new plant varieties is a cornerstone of successful food and fibre industries in NZ.
“The proposed increase to fees makes a dent to that foundation because it acts as a disincentive to investment, testing, trialling and protection of the next winning variety.”
Because PVR is related to intellectual property and not to value on farm, the costs of increased fees would have to be absorbed rather than passed on to end users, one breeder points out.
“Margins are already slim,” he says.
“The government needs to look at how much downstream value is added to NZ GDP from having a full breeding to table capability in this country which supports our unique agricultural and horticultural industries, not the direct cost to one department in isolation.
“Hopefully some sense will prevail in the end.”
In the past five financial years, up to June 2025, IPONZ received a total 612 applications for PVR. Over half these were ornamentals, forest trees, fruits and nuts. Not all applications are granted. Of interest to anyone dependent on our dairy, meat and fibre industries, just 11 PVR applications during that time were for new clovers. Thirty five were for ryegrass, two were for cocksfoot, four were for fescue and two were for lucerne.
Gaby Cowcill, IPONZ manager patents (science) and PVR, says the office last reviewed its fees in 2022, as part of the new Plant Variety Rights Act the same year.
“That review noted that there was a shortfall between the fees collected and scheme costs, and indicated that a future fee review would also take place. Currently, the office is undertaking a review of the Plant Variety Rights fees. However, we are still in early engagement and no decisions have been made.
“We recently undertook some targeted engagement with stakeholders on fee options. These options will be further developed based on the feedback from the engagement.
“Once this engagement is completed and if a decision is made for updating the fees, a proposal will be sent to Cabinet for public consultation.”