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OATS – Enhancing The Value A European Breeding Perspective Chris Green Fargo, July 2006. If we are to enhance value we need to know where value is created. - Who adds it? - Who benefits?. And here lies the problem. Oats are perceived by the consumer as wholesome,
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OATS – Enhancing The Value A European Breeding Perspective Chris Green Fargo, July 2006
If we are to enhance value we need to know where value is created. - Who adds it? - Who benefits?
Oats are perceived by the consumer as wholesome, healthy, natural and good for you ……… but upstream!
They are regarded as… • low value cereal • minor crop • niche interest • uncompetitive • in agricultural recession • few champions
As a breeder we are gravely concerned about the migration of value from field to food store. To arrest this migration we have to find a new approach.
Unique properties Easily substituted on price
Nitrogen Manufactures Fertiliser Compounders Pesticide Manufactures Seed Breeders Machinery & Equipment Manufacturing Tractor Manufacturing Agriculture Contractors Fertiliser/ Pesticide/Seed Distributors Seed Merchants Machinery Dealerships Farmers FSS Grain Marketers Pharmaceuticals Fine Chemicals Oat Starches Industrial Applications Animal Feed Manufactures Oat Feed Mills Confectionary Oat Oil Oat Starch Body care Flour Cosmetics Breakfast Manufacturer Food Processors Bakeries Retailers Oat Supply Chain
Definition of Value Chain “Where one or more partners identify the benefits of working in a more integrated manner to derive a sustained value and optimise their position."
Nitrogen Manufactures Fertiliser Compounders Pesticide Manufactures Seed Breeders Machinery & Equipment Manufacturing Tractor Manufacturing Agriculture Contractors Fertiliser/ Pesticide/Seed Distributors Seed Merchants Machinery Dealerships Farmers FSS Grain Marketers Pharmaceuticals Fine Chemicals Oat Starches Industrial Applications Animal Feed Manufactures Oat Feed Mills Confectionary Oat Oil Oat Starch Body care Flour Cosmetics Breakfast Manufacturer Food Processors Bakeries Retailers Oat Value Chain
Joint Venture Monsanto Cargill processor food manufacturer bio technology seed & crop inputs grower grain handler animal producer Depth of resources and expertise across the breadth of the value chain
Bridging the Knowledge Gap GROWERS Processors/ Consumers Plant Breeder and Crop Developer -IP Value integration
Competition as we have it today is based on separate entities – in future I believe competition will be in strategic value chains … ..with assured quality, shared profits and risks and responsive adaptation.
Plant breeding is about harnessing resources and knowledge to deliver improvements. Improve growing cost efficiency – main benefit is with the grower Yield Agronomy Disease resistance Quality & market attributes benefit the processor or end user Market attributes
These can all be quantified in respect to adding value
In Europe royalty is collected on Farm Saved Seed at 50% of the Certified Rate….. …yet the IP benefits/value are the same
The Future? We are looking at a new royalty system £ Hectares planted Seed
IPRA -Intellectual Property Royalty AgreementCreates a new model which we hope will apportion valuemore appropriately and stimulate innovation Breeders Growers Mills, processors, bakeries, others
Benefits Engages the chain for collective benefits Provides assurance Develops partnership approaches Fair and equitable and shares value Encourages contract production, improving logistics etc. Sustainable Dynamic allowing value added to be rewarded Adopt new ways of thinking In essence…Get Connected!
What Do We Need to Do? Even with oats we are in the innovation business. So the best way to predict the future……
Our Oat Goal “Through innovation, knowledge and collaboration improve the value and uptake of oats”.