Seed Production Contracting: Guidelines for Organic Seed Producers

This is an Organic Seed Resource Guide article.

Introduction

The seed grower and seed company are collaborators in a worldwide economic endeavor. Markets and demand for seed change constantly. Both grower and buyer are part of a symbiotic relationship; as one prospers, so will the other. Errors of judgment by either side can affect seed growers, buyers, and sellers around the world. If yield is inadequate, seed-buying companies have lost a marketing opportunity.

It is to everyone’s benefit for seed companies to provide sufficient information to promote the production of quality seeds. When selling to large, established seed companies, growers should expect to have a close, ongoing working relationship with the field representative, who works in an advisory capacity with the grower.

As demand for organic seed continues to grow, and as its production increases, some growers may have an experience different from that of growers who work exclusively with the seed companies concentrated in the seed production areas of Oregon and Washington. Those growers, or growers considering seed production as a new enterprise, have much to consider.

How will the grower and buyer assess and assign value to seed quality?

• Quality standards include germination rate, vigor, purity and seed moisture.
• The quality standards used as a basis for payment should be mutually agreed upon in advance. Assessment details, such as how, when, and by whom will these factors be assessed, and who will pay for testing should be part of this agreement.
• The contract should specify the quality standards required for full payment, as well as the deduction(s) to be assessed for a crop that does not meet them.
• The contract should specify, in case of crop failure, whether an indemnity payment will be made to the farmer, the factors determining its amount and arrangements for out-of-pocket costs or prepayments made to the farmer during the production year.
• Many Pacific Northwest-grown seeds are shipped via the Panama Canal and may be exposed to high heat and humidity during transit. Responsibility for a shipping-associated reduction in vigor must be specified prior to planting.
• Know in advance which crop and weed species will cross with the seed crop and your responsibility for ensuring that cross-contamination does not occur. Know, too, whether there are GMO crops that could cross with it and the buyer’s policy regarding GMO contamination.
• If the grower is responsible for roguing and selection, timing and criteria for these activities must be specified. If the buyer is responsible, that should be plainly stated.
• In case of sub-optimal weather conditions at harvest, determine who will be responsible for drying the seed.

When and how will the grower be paid?

• One common payment scheme is for the grower to receive partial payments several times during the year, such as at planting, after successful overwintering, and at harvest. These payments may amount to as much as 50 percent of the contract, with the balance paid after seed quality has been assessed.
• When selling to international buyers, determine the currency which will be transferred into your account.
• Know before signing a contract whether a bank is involved in the seed transaction and whether the buyer will be required to sign a lien release.

Agronomic Issues

• Know the field’s cropping history. Take crop rotations into consideration when selecting a field for seed crops.
• Confirm that proper isolation requirements been met before finalizing field selection.
• What will be the source of seed or transplants and who will provide them? Will seed or transplants be quality tested, and by whom? How will transplants have been grown prior to delivery? Will they be bare-root or plugs?
• Before planting, confirm access to dependable and timely irrigation water throughout the rotation.
• Anticipate likely weed problems and plan for their effective control.
• Anticipate likely insect pests, and determine which control strategies, including pesticides, can be used to manage them. Pesticides registered for use on non-seed crops may not be registered for seed crops of the same plant species.
• If hand labor will be necessary, plan for a sufficient, timely supply.
• Confirm timely access to all necessary equipment for planting, cultivation, weed and disease control, swathing, and harvesting.
• Plan to be timely in all agronomic and other operations such as planting, irrigation, swathing, harvesting and transport of seed.
• Permitted inputs for organic seed production for export vary by country and by crop. Make sure all inputs are cleared for your market before planting.

Export Issues

Many countries require phytosanitary certificates; these vary by country and by crop. Unless selling overseas directly, you will not be directly involved in the certification process. However, you should be involved in the planning of field inspections or other verifications. If selling direct, seek information from your state seed laboratory (see related article Government Agencies and Regulations: Resources for Organic Seed Producers).