Trait Fees are the price a farmer pays for favorable genetic characteristics of a specific Productivity Trait in a seed.
Trait fees are based on the favorable economics of a trait due to its ability to improve yields and/or reduce of costs such as chemicals.
Farmers price and pay fees for Productivity Traits on the same basis that they evaluate and pay for Crop Protection Chemicals.
Trait Fees for Productivity Traits are paid as part of total price for a bag of seeds. Using the Trait Machine™, Cibus edits the elite germplasm (seeds) of customer to achieve a specific genetic characteristic or trait, The trait could vary from disease resistance (reduced fungicides), pest resistance (reduced pesticides), herbicide tolerance (reduced herbicides) to improved nutrient processing (reduced fertilizer use). The farmer pays the seed company for the productivity gains from the trait. The seed company pays Cibus a license fee for the specific genetics. The Trait Fee includes both the payment to the seed company and the trait provider.
Farmers currently pays over $10 billion per year in Trait Fees for productivity traits for primarily two productivity trait categories:
- Traits to manage weeds by making the crop resistance to herbicides. These traits improve productivity by reducing herbicide use and increasing yields;
- Traits that make plants resistant to specific pests. These traits improve productivity by reducing pesticide use and increasing yields.
These two traits are categories primarily GMO traits that have only been available in North and South America. They have lead to massive productivity gains for farmers and contributed to a more sustainable and greener farming practice. In soybeans and corn, the traits are part of the seeds for over 90% of acres farmed. In total, they are used on over 300 million acres. Farmers pay anywhere from $5 to $20 per acre in trait fees for these productivity traits depending on the trait, crop and geography. This is why Trait Fees currently are estimated to be over $10 billion annually.
The huge promise of gene editing is that the productivity trait business will viewed positively by regulators enabling a new generation of productivity traits to address the critical productivity challenges of the global food supply. Traits from gene editing are indistinguishable from traits generated by conventional breeding or nature. Because of this, global regulators are beginning to regulate traits from gene editing on the same basis as traits from conventional breeding. The US and most of South America has already adopted this change. The EU is in a legislative process to adopt this change in 2023. Because of the range and scale of changes possible through gene editing, the potential impact to farming productivity in massive.
The big difference is that Productivity Traits address the same challenges as chemicals but they achieve their result using better genetics thereby reducing or eliminating the chemicals used for the specific application.