TRADE AND MARKET I NG Breeding is prohibitively exp The international potato sector needs breeders who can guarantee long-term genetic advances of the potato crop. The entire potato chain will benefit: from growers, processors, retailers to the consumer, thinks Gerard Backx, General Manager of HZPC. ‘A reasonable Return On Investment (ROI) for every breeder is then a conditio sine qua non’, he emphasises at the World Potato Congress in China. ‘If that doesn’t happen, breeding will become prohibitively expensive’, he sets the cat among the pigeons. S elective breeding contributes significantly to an increase in the yields of many crops. In some crops, this has resulted in an annual genetic advance of 2 percent or even more. Within potato breeding, the genetic advances are limited, according to the HZPC director. Compared to other crops, investing in breeding is even lagging behind. ‘A slow genetic advance will ‘Don’t start breeding potatoes if you want to get rich from it.’ make a crop like the potato less competitive with other food products in the future’, is Backx’s firm belief. ‘It’s mainly the low ROI that’s currently responsible for the limited investment in pot Don’t start with breeding ‘It’s mainly the low ROI that’s currently responsible for the limited investment in potato breeding’. He pointed out that present-day breeders are mainly active because they see it as a challenge to get something unique out of the potato. ‘They have a passion, are usually very creative and want to make a contribution to the potato sector from their direct involvement by adding value to the chain. But if they want to recoup their investment, that often proves really difficult. So my conclusion is: don’t start breeding potatoes if you want to get rich from it’, Backx says bluntly. ‘You’ll only be successful if you’re not doing it for the money, but from a real passion for breeding.’ Trade provides margin How does Backx, director of a trading company with a good number of successful varieties, reach this odd conclusion? He argues that the ten-year development and introduction process of a new variety costs about 3 million euros over a period of at least 10 years. The breeder needs to recoup this amount within 5 to 25 years after its introduction on the market. For an Internal Rate of Return (IRR) of 8 percent, the breeder needs to receive at least 650,000 euros of annual licence income over a ‘A major stumbling block is Farm Saved Seed (FSS).’ period of 20 years, from the first 5 years after the introduction on the market for that particular variety. But even with an IRR of 9 percent, you still need a minimum annual income of 150,000 euros. This means that, with a licence fee of 20 euros per ton, a breeder needs at least a seed potato area of 32,500 hectares with an IRR of 8 percent and 7,500 hectares with an 4 Potato World 2016 • number 2 Pagina 3
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