An End Point Royalty (EPR) is a mechanism of value capture used by plant breeding companies to recover their return on investment. It is a risk sharing mechanism, whereby the grower of the crop pays a royalty based on production rather than a set fee for the relevant variety.
A significant level of investment is required to develop and commercialise new varieties, with a path to market that may take up to 12 years. The continual investment made by plant breeding organizations (both privately and publicly funded) is supported by returns generated from the EPR system. As EPR return is linked to production level, the return on investment received by plant breeding organizations provides an incentive to develop the most productive and highest value varieties, which in turn ensures the Australian grains industry continues to receive the highest quality varieties into the future.
The first EPR variety was released into the Australian market in 1996. Since then, the number of varieties under the EPR system has increased dramatically to the point where there are now over 180 EPR varieties in the Australian market, across a wide range of crops, including cereals, pulses and brassicas. Both growers and the extended grain industry are recognising the value of an EPR system to the Australian grains market as a risk sharing mechanism and also as the most effective way to support high quality breeding programs.