Seed licensing explained: a Q&A

Flexible licensing agreement approaches for National Agricultural Research and Extension Systems (NARES)

During the webinar on licensing agreements hosted by CGIAR Breeding for Tomorrow with New Markets Lab (NML), speakers examined how CGIAR Centers and public agricultural research institutions across Africa can better ensure that improved seed varieties reach the farmers they are designed to serve.

Speakers highlighted licensing agreements as a critical tool for bridging the gap between research and adoption, helping expand access to quality seed, support responsible commercialization, and increase the impact of public breeding programs. The discussion also offered practical guidance on how national research institutes and their partners can transfer commercial rights while safeguarding commitments to affordability and public value.

This article brings together the questions raised by participants during the webinar, presented here in a Q&A format to clarify key concepts, address common challenges, and share practical insights on licensing for seed delivery. Thank you to NML for addressing them!

Questions & Answers

1. How does NARES handle derived products created by licensees? Who owns the improvements?

Typically, the original breeder (NARES or CGIAR center) retains ownership of the base variety. The licensee may improve the variety but, unless otherwise specified, improvements are owned by the entity that developed them. Most public licenses include a grant-back clause requiring the licensee to inform the breeder of improvements and to give non-exclusive rights back to the public institution so the public good is not locked up. This maintains openness while still rewarding investment by licensees.

2. Shouldn’t NARES focus on developing capacity to release their own varieties rather than licensing?

Licensing does not replace NARES capacity to release varieties, it complements it. Licensing is only relevant after a variety is developed and released. Strong NARES still need partners to multiply, distribute, and market seed effectively. In addition to being an important channel for dissemination. licensing can also create revenue streams that support national breeding programs and reduce donor dependence. A capable NARES that licenses strategically is in a stronger—not weaker—position.

3. If varieties were developed using public funds, who should own them?

Public funding does not remove the need for clear custodianship, and it underscores the need for clear intellectual asset/IP policies to preserve the public good and encourage commercialization. Ownership typically lies with the public institution that did the breeding, not with individual breeders. Teams and scientists are still recognized through acknowledgement, promotion criteria, and impact evaluations. Licensing does not diminish recognition—rather, it often strengthens it by increasing visibility and uptake. Ownership structures must protect the public good while enabling commercialization partnerships.

4. What about enforcement?

Enforcement depends on having clear, simple, and practical licensing agreements and stronger tracking and data collection. In most cases, enforcement is not heavy-handed litigation but rather routine monitoring of certified seed production records, market intelligence, and field inspections (usually through existing seed regulatory systems) and maintaining good relationships with licensees to resolve issues collaboratively, using stepwise approaches like warnings, suspension, or termination of license only when necessary.

Because public-sector breeders rarely want to punish partners, emphasis is on compliance support rather than strict policing. Well-written agreements reduce disputes and make enforcement straightforward.

5. Any support in licensing would be very appreciated.

Many NARES lack formal licensing systems. Support can include:

• Templates for simple, non-exclusive licenses (some templates have already been developed)
• Training in negotiation, royalty structures, data collection, and compliance management
• Guidance on identifying promising private partners
• Building legal literacy and intellectual property (IP) management within NARES
• Strengthening commercialization units or technology transfer offices

All tools that have been developed will be shared on the New Markets Lab website (www.newmarketslab.org) and other partner websites. While support is project-contingent, please share licensing support requests.

6. Given that royalty systems based on certified seed sales work well for hybrid varieties but are difficult to apply to OPVs where value chains are less developed, is it feasible to design an alternative model—such as collecting royalties based on the traded grain from these varieties?

Royalty systems can be customized, including for crop-specific needs. Alternative models are gaining traction where seed systems for OPVs are weak, farm-saved seed limits royalty collection, and value chains are not organized enough to track grain movement. However, grain royalties tend to work only in the case of well-organized aggregators, traceability systems, and commodity buyers willing to contribute to a breeder  support levy.

Most countries currently lack the systems for this, so simplified, low-cost seed royalties remain the more feasible option.

7. How do these systems work for NGOs and other non-governmental agricultural organizations?

Generally, NGOs can also become licensees, especially when they multiply seed for development programs. NGOs must still meet seed quality standards, proper reporting, and other legal requirements. In addition, most licensing agreements allow non-commercial, humanitarian, or development use at no or minimal royalty. Licensing clarifies roles, reduces duplication, and ensures that farmers receive quality seed.

8. Public sector varieties often lack commercial value—why license them?

This may be true for some crops, but the landscape is changing. Beans, groundnuts, cassava, potatoes, and millet are becoming commercially significant. Seed companies want complete portfolios, not just maize. Even low royalties generate funds for breeder support and quality monitoring, and better data collection will be important for tracking these trends.

Licensing is not just about maximizing revenue. It is about creating structured partnerships, improving seed supply, and facilitating dissemination.

9. Examples of informal licensing and who is harmed by lack of formal licensing?

Informal systems include seed companies multiplying and selling varieties without clear agreements, workers/breeders in public institutions distributing starter seed without monitoring, absence of reporting or quality control at source, and no recognition to breeders.

Who is harmed?

• Smallholder farmers, when seed quality is inconsistent
• NARES, which lose resources to reinvest in breeding
• Seed companies, due to market confusion or “free riding” competitors
• Breeders, who receive no feedback or data
• The overall system, which cannot ensure distribution and accountability

Formal licensing brings order, traceability, and fairness.

10. How can we create strategies to reduce climate impacts in the next five years?

Within a licensing framework, climate-smart strategies include:

• Prioritizing the release/licensing of climate-resilient varieties
• Bundling traits (drought, heat, disease tolerance) in commercialization plans
• Using licenses to require climate-resilient seed production practices
• Supporting climate-informed extension with licensee partners
• Encouraging investments in local multiplication to shorten supply chains

Licensing becomes a tool to accelerate climate adaptation.

11. Is there a threshold market value below which licensing is not worthwhile?

There is no universal threshold, but institutions must consider the administrative cost of negotiation and monitoring, expected royalty revenue, strategic importance of the variety to national food security, and whether partners will expand reach to underserved farmers

A rule of thumb: If expected annual sales are over USD 100,000, a simple non-exclusive license with a standard 1–3% royalty is generally worthwhile.

12. How does licensing compare with the principle of public goods?

Licensing is compatible with the principle of public goods, particularly when licensing strategies are designed with this in mind. Some considerations include whether and when to non-exclusive licenses, modest royalty rates and reinvestment in public research, and humanitarian, research, and smallholder exemptions in licensing templates. The goal is not restricting access but ensuring better delivery and reinvesting in breeding

Licensing does not privatize public goods. It can be important tool for helping to sustain them.

13. Applicability of licensing between CGIAR and NARES?

CGIAR–NARES partnerships already include Material Transfer Agreements, joint ownership provisions, and shared testing and release pipelines. Licensing can build upon this framework to add clarity when private or NGO partners enter the system. CGIAR varieties normally move to NARES with public-good aligned terms, and NARES then license to local partners.

14. How to protect OPVs while ensuring equitable farmer access?

Options include non-exclusive licensing to avoid monopolies, very low or zero royalties, requiring licensees to maintain quality standards, allowing farmer-saved seed (without restrictions), and ensuring that any improvements are shared back to the public system.

The focus is on stewardship, not control.

15. Non-exclusivity vs exclusivity for private-sector needs

The key points in relation to exclusivity vs. non-exclusivity include:

• Exclusivity is mainly attractive when companies must invest in popularization, demos, and market creation
• Many companies are satisfied with non-exclusive, low-royalty licenses, so this option could be explored when beneficial
• Hybrid crops more often justify exclusivity
• OPVs and clonally propagated crops usually fit non-exclusive models

Exclusivity should be carefully considered and is best used with partners that have strong capacity.

16. Can these models work in West Africa, especially Francophone countries?

Yes, with adaptation. Success factors include clear national seed laws and regulations, recognition of plant breeder’s rights or alternative custodianship mechanisms, regional harmonization (ECOWAS seed rules), capacity support for NARES and technology transfer units, and simplified, template-based agreements to reduce complexity.

Pilot programs in Senegal and Mali (as well as work in Nigeria and Ghana) already show positive results.

17. How flexible are NARES in addressing crop failure, climate risks, or market shocks?

Licensing agreements can include risk-related and “force majeure-like” provisions focused on:

• Reduction or waiver of royalties in case of crop failure
• Flexibility in production targets
• Quality assurance programs to reduce risk
• Risk-sharing arrangements with partners

Licensing does not add rigidity, and well-designed agreements increase flexibility and resilience.

18. Licensing is not the primary reason for poor adoption—so why focus on it?

It is correct that licensing is not the main reason for poor adoption. Adoption failures arise from weak extension systems, seed market fragmentation, poor last-mile delivery, and limited information to farmers, among other issues. BUT licensing can be an important tool and can strengthen incentives for companies to invest in marketing, demonstration trials, quality assurance, and wider geographic reach.

It is an additive tool, not a standalone solution.

19. What is the realistic scope or “frontier” for licensing public varieties?

Licensing works best when a variety has commercial potential, a partner is willing to invest, the public system can monitor compliance and track data, and farmers benefit from improved access and seed quality. For low-value crops, licensing may focus on non-exclusive, zero-royalty humanitarian licenses, agreements that clarify roles without financial expectations, and regional cooperatives rather than private firms.

20. How does the licensing approach used in the African context compare with the systems and practices commonly used in Asia?

Asia has stronger private-sector engagement, more hybrid crops (rice, maize, vegetables), and active technology transfer offices in public universities. Africa is catching up, but approaches requires simpler agreements and more capacity as part of long-term development of legal and institutional systems. Lessons from Asia show that clarity and predictability are more important than strict IP enforcement.

21. Does non-exclusivity/exclusivity affect seed quality?

Indirectly, it can. Too many licensees without oversight can allow producers without the ability to produce quality seed into the system. Exclusivity ensures tighter control but risks limiting competition. The best practice is to license only to competent companies, track data, use certification systems, and monitor complaints and revoke licenses when necessary.

Licensing is a tool to improve, not compromise, seed quality.