We license the Cibus intellectual property associated with each trait product to seed companies for trait or license fees.
Trait Fees are essentially license fees or the price paid for the intellectual property associated with a specific trait.
Trait Fees for Crop Protection Traits are paid as part of total price for a bag of seeds. The fee is based on a trait’s ability to enable farmers to:
- Use less Crop Protection Chemicals and fuel (the “Inputs”) to manage challenges like disease, insects and weeds
- Improve yields
This is what we mean by favorable economics. Positive economics could be higher yield that increases a farmer’s productivity or less cost associated with reduced pesticide use and the fuel and manpower required for application. It is estimated that trait fees earned by the seed and trait companies is typically 25% to 50% of the positive economics. In other words, these traits are very profitable to the farmer and are very important in the ongoing movement for sustainability in farming.
In the markets like North and South America where GMO-based crops are able to be cultivated, their acceptance is well established in farming as is the basis for determining the value crop protection traits. In the corn and soybean market, over 90% of the crops grown in the United States are crops with GMO traits such as weed control or insect resistance. For each crop, there are long established crop specific trait or license fees associated with each trait based on the economic benefit of the specific trait.