High quality, self-fertile cherry varieties developed in British Columbia, Canada, have become standards in the international cherry industry.
British Columbia’s own cherry industry is comparatively small, with just 4,500 acres planted, but cherry varieties developed in the province, such as Lapins, Skeena, Sweetheart, Sonata, Staccato, and many more, have become world reknowned.
Cherry and apple varieties developed at Agriculture and Agri-Food Canada in Summerland (as well as some varieties from private variety developers in the province) are commercialized by the Okanagan Plant Improvement Company (PICO), which is owned by the B.C. Fruit Growers’ Association.
PICO’s general manager John Kingsmill said the majority of cherries currently grown commercially in the world were developed at Summerland.
The Canadian tree fruit industry is so small that the breeding program could not possibly be sustained if the only growers who had access to the varieties were Canadians.
PICO is charged with licensing Summerland’s new varieties internationally while ensuring that Canadian growers are the primary beneficiaries. Its “Canada First” policy is based on the recognition that the breeding program, which is federally owned, is funded by Canadian taxpayers and thus indirectly owned by all Canadians. Canadian fruit growers do have preferential access to the varieties and pay lower royalties than growers in other countries.
PICO is located at Summerland, but is not directly involved in evaluating the breeding program’s selections. Although it is aware of selections under development, it does not formally have access to them until they are released. Then, it multiplies budwood and makes it available to growers for testing. If a grower wants trees, PICO supplies budwood to nurseries to make the trees. Varieties with novel traits are usually released on a restricted basis rather than through open release.
PICO works with a network of vertically integrated companies around the world, and whenever a new variety is ready for international release, it provides material for evaluation. Those companies have the right of first refusal to negotiate a commercial license if they believe there’s an opportunity for the variety to be successful in that country.
Kingsmill said PICO tries to work with companies that have demonstrated their interest in protecting the intellectual property rights. “We’ve had really good success with our U.S. licensees in particular, and our licensees in South America, in combatting illegal propagation.”
In some cases, the company might put out a request for proposals, or invite a company to apply for licensing rights. Occasionally, it receives inquiries from places where it didn’t expect there to be any interest, Kingsmill said. “Just recently, we licensed a variety in Norway in response to a cold call. That doesn’t happen very often.”
Typically, Canadian growers have access to limited-release varieties for five or six years before they are released in other countries, Kingsmill said. For example, the Sentennial cherry, which was released in 2006, was not made available to other Northern Hemisphere countries until 2011.
Canadian growers pay a per-tree royalty, which is typically $1 per tree for the Summerland varieties. Producers in other countries generally pay up-front license fees, tree royalties, planting or acreage fees, and production-based royalties on the fruit.
“Even on these limited-release varieties, Canadians have never in the past paid more than a tree royalty, so there’s another advantage that the Canadian growers have,” Kingsmill said.
The royalties PICO collects are split, with PICO retaining a portion to fund its business operations and the rest going to the variety owner. In the case of Summerland varieties, the funds go into the Canadian government’s general revenues.
There are no restrictions on how many acres of the varieties Canadian growers can plant or where they can sell the fruit, whereas international licensees are limited both in the amount of acreage and the countries they can ship to. If the license holder is in the Northern Hemisphere, they are not allowed to export the variety to Canada or to markets where they would compete with Canadian exports. This is another protection for Canadian growers.
Occasionally, PICO has licensed varieties in other areas that Canadian growers aren’t interested in, perhaps because they don’t suit the growing conditions there. “Sometimes, they are really small niche varieties, but they’re making some grower a decent return somewhere,” he said.
Three years ago, the government of Canada presented PICO and the Summerland center with a Federal Partners in Technology Transfer award for their work in evaluating, propagating, and commercializing a range of high-quality sweet cherry varieties since they went into partnership in 1994 and helping to transform the way new fruit varieties are introduced and marketed.
The shift to actively marketing sweet cherry varieties had, by 2009, generated more than 250 domestic and international licensing agreements and returned more than $2 million in royalties to the breeding program, according to information from PICO.
Today, PICO has about 600 varieties in its budwood orchard. Kingsmill said PICO didn’t start out with all the varieties it is managing today. It began small and worked up. The company is profitable, but it took many years to reach that point. “Because we’re owned by the B.C. Fruit Growers’ Association, we have always felt we had an obligation to give back to the industry when we’re in a position financially to do that,” he said.
He doesn’t expect demand for new varieties around the world to slow down, though it takes many years to develop a variety and sometimes many more to get traction in the marketplace.
“A lot of thought and effort is being put into breeding and marketing these new varieties, and for those who have done it well, it seems to be paying off,” he said. “We’re not interested in releasing new varieties because they’re new, but because they have something distinctive about them. As long as the large, international, vertically integrated companies are behind a variety, you have a good chance of them succeeding.”
But it’s easier to find a place for new cherry varieties than apples, he said, mainly because of the research center’s reputation for developing high-quality cherries.
There’s been global demand for the self-fertile, late-season varieties that Summerland has specialized in.
Those traits were unique in the world for a long time.
“Those developments alone helped to sell the reputation of the cherry breeding program,” Kingsmill said. “We have growers from around the world beating a path to our door. Cherries are an easy sell. We don’t have to do much. We have growers coming here to see what’s new and taste the cherries. The cherry part is a lot easier than the apple part.
“Apples are becoming more challenging to develop because, unlike cherries, apples are sold by name, and you really need to come up with something special to get the world to adopt it,” he added, citing the British Columbia apple Ambrosia as an example.