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Industry Structure

As with other industries, there are many different structures. Large companies will frequently have their own plant breeding program where they control the breeding process through the production and sales of commercial seed.

Smaller companies may work together as "virtual" companies with one company focusing on breeding, another on seed production, and another on distribution and marketing. At each level there may be one or multiple companies involved. For small plant breeding companies the product may be a license to a seed distribution/marketing company to produce and sell a specific variety as defined by the "pedigree."

The seed distritubiton/marketing company may contract with a seed grower to produce the commercial seed. The plant breeding company then makes money from the license fee and/or royalties associated with the sales of the seed. While this arrangement is usually part of a formal contract, in reality the parties must trust their virtual partners.

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