Certified seed tax credit

GRAIN GROWERS OF CANADA and the Canadian Seed Trade Association are working together with groups across Canada to advocate for a broad-based tax incentive for farmers to buy certified seed.

Only 18 percent of seed planted to wheat in Canada is certified and only 30 percent of all seed in Canada is certified.  The result of producers not purchasing certified seed is a lack of private sector investment in both cereal   and other crop research.  Without farmers buying seed on a regular basis, there is no incentive for private companies to invest dollars in research to develop new varieties.

Seed research is extremely important to the future of Canadian agriculture.  In 2007 Canada’s seed companies invested over $56 million in research, with a plan to almost double this investment by 2012. 

The investment in seed research will not only benefit  growers through higher yields and plant resistance but will improve starch and oil content, milling characteristics and   oil quality for food processors.  More money invested in research will also enhance improvements on consumer  health issues such as reducing trans-fats and cholesterol.    On a broader scale, environmental improvements will also     be made through reduced tillage and better use of fertilizers and crop protection products.

The suggested solution is a broad-based tax incentive for farmers that buy certified seed.  One alternative is a 155 percent credit on the cost of buying certified seed as an expense on the income tax return of farmers.

This proposal would cost the government $89.5 million if the amount of certified seed increases from 30 percent to  50 percent and $179 million if Canada reaches a full 100 percent certified seed usage.

The George Morris Centre estimates that if Canada reaches 100 percent certified seed use, the tax credit will:

  • Increase farm income over $170 million from the eight most recently introduced varieties alone
  • Generate an additional $60 million in tax revenue from the eight most recently introduced varieties
  • Return to the economy would be $600 million

Grain Growers of Canada believes the proposal to implement a certified seed investment tax credit will promote greater private sector involvement in cereal, pulse and special crops research. •