Citrus Nursery Survey Says: Keep It Simple

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The emergence and availability of proprietary citrus varieties is a reality for citrus growers worldwide. Most promising new varieties will be protected by patents and plant breeder rights. Those interested in propagation, planting, and other commercial involvement will be faced with some form of licensure. This applies to varieties from public and private sources. In the past, growers and packers have offered insight into how this process affects their business decisions. Heretofore, we have not heard from Florida’s nurseries.

Nurseries are an important, if not the most important component of the new variety equation. Nursery input was sought through interview and survey for inclusion in this month’s feature. Though we were not able to reach a majority of the nurseries, the feedback received will be helpful to inform about Florida’s variety efforts moving forward. For streamlining purposes, input was summarized with a narrative summary.

  • Clearly, nurseries favor public domain varieties that are openly available to all without additional paperwork and recordkeeping. It minimizes costs and complexity. 
  • Despite the preference for the simplicity of public domain varieties, there is an understanding and acceptance on the part of most nurseries that proprietary varieties will be a large part of the industry moving forward for fresh and processed sectors. 
  • Nobody likes to review legal documents and nursery agreements. Most feel uncomfortable doing so without the advice of counsel, which adds a layer of complexity and cost. Furthermore, as most nursery agreements cannot be customized for each nursery, it does leave the nursery in the position of “accept or reject.” It would be helpful to establish a process for nursery input on agreements in the early stage, before they are published. This would perhaps lead to agreements that are viewed in a more favorable light. 
  • Several nurseries do not participate with proprietary varieties as they feel the nursery agreements are too complicated or onerous. That being said, several others comment that the most recent agreements in 2011 and 2012 were much easier to understand and implement than those when the programs first begun. All were in agreement the shorter the better.
  • Some nurseries requested more standardization in the nursery agreements from variety to variety, so that they can establish a comfort level with the process and it isn’t a moving target. They felt that this would improve nursery participation. Presently, only seven nurseries are offering proprietary varieties. 
  • None of the nurseries offering input favored a single source model, with a variety being offered through only one nursery. Though this could be lucrative for the one nursery, most favored more open availability to nurseries who elect to participate. Nurseries want to be able to choose the varieties that are most appealing to them and their customers. Since many growers have a strong allegiance to their nursery, the grower wants to be able to use their regular nursery, no matter the variety. The grower/nursery bond may be one of the best examples of loyalty/trust left in our industry. 
  • Some nurseries elect to offer proprietary varieties because they anticipate demand from growers and must stay ahead of the demand-curve with budwood supply. Others are too limited in screenhouse space and will not request a contract or initial budwood supply until a grower places an order. Some nurseries fall a little into both categories. The sheer volume of variety choices coming down the road may necessitate more nurseries to anticipate grower demand. 
  • Most variety contracts require the nursery to collect tree-fee type royalties when the grower takes possession of the trees. The fee is added to the tree cost and remitted to the licensor. We heard no objection to this process. Most prefer to remit the royalties quarterly rather than monthly and all were unanimous that they did not want the royalties due to the licensor before the payment terms with the grower had been met. For example, if the grower is paying net 30, the royalty should not be due until the payment is made by the grower. Cashflow is king. 
  • A couple nurseries requested indemnity clauses that are more “nursery friendly” than those currently in the agreements. 
  • Overall, recordkeeping is not a problem. The records generally required are already being maintained. 
  • When growers approach a nursery about a proprietary variety and the grower is not licensed, there is potential delay in the business transaction. Nurseries cannot take orders from an unlicensed grower. By and large, nurseries found New Varieties Development & Management Corp. (NVDMC) responsive to their requests for licensing growers for new varieties. 
  • Some private variety licensors require nurseries to pay a fee for the right to propagate the variety. Although the amount of this fee would clearly influence the willingness of nurseries to pay the fee, nurseries are split on this issue. Some would be willing to consider this for a strong variety; others would not consider this under any circumstance. 
  • Proprietary nursery contracts require site visits for verification. No nurseries voiced objection to this with due notice. There is a variance of opinion about entry into screenhouses. As entry is sometimes required, this will require more discussion. 
  • In response to the question of how NVDMC can be more effective in educating growers about new variety opportunities, most suggested exhibits at trade shows, providing materials to FNGLA, and attending as many industry functions as possible. 
  • When asked about the challenge of obtaining sufficient budwood for propagations, there is actually more frustration with a real or perceived lack of planning on the growers’ part than with budwood availability. Some nurseries would consider obtaining budwood from another nursery. Some would not. The role of NVDMC in this process is not always understood. Most nurseries understand that NVDMC is a grower-funded program designed to facilitate variety access in a timely and affordable way. Others were under the impression that royalties were created by NVDMC for profit purposes. The truth is that NVDMC is a not-for-profit program and retains an extremely small percentage of the royalties to cover variable costs. 
  • When looking forward to the implementation the UF/IFAS FAST TRACK model for experimental varieties, budwood supply will be key to the success of the program. All feel that this will require the combined efforts of private nursery increase and DPI production.

NVDMC is grateful for the input provided for this article. Nurseries are clearly increasing in their acceptance of proprietary varieties and knowledge of how to make the system work more smoothly. NVDMC needs to continue to seek input from nurseries along the way and in simplifying the process. Communication between grower and nursery is increasingly important as screenhouse capacity is tight, which is significantly alleviated by advance planning and notification.

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