The Nature of Input Trait Fees

The seed industry competes on the basis of genetic characteristics enabled by each company’s elite genetics. Each identified genetic characteristic is called a trait. They are divided into two groups: 1) Input Traits; and 2) Output Traits. Input traits are the genetic characteristics of crops that are developed to manage the cost and yields of crops. They either lower the costs of farming by making plants better able to withstand their environment (with less costly chemicals) or they improve crop yields by having healthier plants. In this way, Input Traits are part of the collection of tools that a farmer uses to manage farming costs and crop yields.

A large part of the cost of farming is managing the environment. To manage the environment, it is well-known that farmers use a litany of costly chemicals (inputs) such as insecticides, fungicides and herbicides. What is less known is that an important input cost of farmers is for Input Traits. The fees paid for Input Traits and the fees paid for chemicals are both considered input costs. The difference is that the cost of Input Traits are commonly offsets to chemical costs because they make plants more resilient to disease or insects thus lowering amount of chemicals needed.

The price a farmer will pay for a specific Input Trait depends on the specific economics of the trait. The greater the cost savings or the higher the yield enabled by a trait, the higher the trait fee. The payment for the Input Trait is made in the form of a trait licensing fee or royalty. This fee is paid as part of the price of a bag of seed. The fee is a payment for the technology or intellectual property associated with the specific (genetic) trait. It is equivalent to the tech royalties increasingly paid by consumers for the technology components of their products. In farming, the trait fee (or tech royalty) is built into the seed price paid by the farmer. The fee is shared by the seed company and the developer/owner of the trait.

Cibus is the leader in developing the next generation of non-GMO Input Traits based on precision gene editing. Our trait focus is making the management of critical areas such disease and insects less costly and more eco-friendly by lowering chemical and fuel requirements. Our crop focus is the high acreage, high yielding row crops such as corn, wheat, rice, soybean and canola. In Europe, North and South America alone, the crop acreage for these important crops is over 1 billion acres.

Cibus’ Input Trait pipeline has a dual benefit: 1) Our traits are global traits that lower farming cost and increase crop yields on the world’s largest crops; and 2) Our traits are a key part of the 21st century global sustainability movement in farming because they lower ecologically unfriendly chemical use, increase global yields and directly impact agriculture’s carbon footprint.