Among farmers, technology fees and restrictions on biotech seed have never elicited much happiness.

“The best way I know to describe the relationship between seed companies and farmers is ‘uneasy alliance,’” says an Arkansas seed dealer.

“Tech fees and everything surrounding them have many farmers looking at profit margins and saying, ‘This isn't good enough.’ You want to hear some dirty words? Just say foreign farmers don't have to pay the same for seed as farmers here do.”

The dealer predicts several state and federal bills allowing farmers to save seed to plant will have traction in rural communities.

A Missouri seed dealer says farmers are “definitely interested in this, but I wonder if this legislation is just a political ploy in an election year.”

The dealer's concern stems from, among other things, a U.S. Supreme Court ruling several decades ago that living organisms can be patented.

“As I understand it, the government has no right to determine the value of a patent or the use of patented information or technology,” he says. “The government isn't in a position to pass a law determining the amount of a licensing or technology fee. It can't take it upon itself to administer a program to allow folks to use patented products without the consent of the patent holder. The way I read it, the laws they're trying to pass are worthless.”

If proposed legislation is, in fact, pointless, “those pushing it are doing a disservice to farmers. Don't push something if it isn't going to be effective. Find something that is and push that. I wonder if this legislation is providing false hope.”

State bill's architect

Wes Shoemyer says false hope wasn't on the menu when the idea was spawned. He was sitting at the “Big Liar's Table” in a popular Vandalia, Mo., eatery, “having lunch with a bunch of farmers. They were saying, ‘We like bio-technology and want to use it.” But allowing large seed companies to be the only game in town means they manipulate the market, he says.

Not long after that 2001 lunch, Shoemyer, a Democratic representative from Clarence, Mo., introduced a seed-saving bill in the Missouri legislature. At the time, Monsanto had a tech fee of $6 per unit of seed. As long as farmers paid the fee every year, Shoemyer said, they should be able to save seed to replant.

“This wasn't unfriendly to business at all. Monsanto deserves to be reimbursed for its patent. At the same time, farmers and local communities would benefit. Added wealth would be flowing through rural areas — seed would once again be cleaned locally.”

Shoemyer is aware of the issues surrounding seed. Besides working as a politician, he farms 1,000 acres of soybeans. If his bill is enacted, he claims, he would save about $20 per acre. “That's substantial, and if you multiply that by all the farmers in Missouri, you end up with an eye-popping number.”

Despite such claims and endorsements by organizations, including the National Farmers Union, Shoemyer's bill has been dogged by failure. He blames partisan politics (Republicans control the Missouri legislature) as the main cause for the bill's stagnation. Still, he brings up the topic at every opportunity.

“Many people criticize me for bringing this before our state legislature,” he says. “They claim it's a federal issue. Well, I think it's clear that country-of-origin labeling and price reporting were driven to the federal level by states. Hopefully, this is another example of that.

“According to a General Accounting Office study from 2000, South Americans were paying $9 for the same seed U.S. farmers were paying $22 for. I'm tired of U.S. producers paying for all the research and then shipping the fruits of that research to the rest of the world at a cut rate. We shouldn't have to shoulder that burden.”

The American Soybean Association has yet to weigh in on the seed-saving bill, something Shoemyer terms “a sad testament to anyone, like me, who's been paying check-off dollars for years. They should at least let us know where they stand.”

The American Corn Growers Association favors it. Shoemyer believes it won't be the last organization to give a thumbs up.

“When farmers find out (Rep. Marcy) Kaptur, D-Ohio, has this on the federal radar screen, a groundswell of organizations will be behind it. This is a battle that has to happen.”

The federal bill

Over the last year, Kaptur has heard from many producers wanting to plant saved seed. Their inability to do so “adds to income difficulties, because one option to control expenses has been lost,” says Roger Szemraj, Kaptur's chief of staff. “At the same time, we heard producers say the same biotech seed was being sold overseas and producers there weren't paying such a high technology fee. That gave (foreign producers) a competitive advantage when selling products derived from that seed back into the United States.”

Several months ago, Kaptur introduced in Congress a bill similar to Shoemyer's. But she added something: products imported into the United States would face a tech fee equivalency test. For example, if U.S. farmers pay a $20 fee and a foreign farmer pays $5, when the foreign crop hit U.S. borders it would face a $15 tariff.

In both cases — fees collected from domestic producers and those collected from imports — Kaptur proposes having the money collected by USDA. The proceeds would be disbursed to the patent-holding seed companies.

USDA has yet to comment on Kaptur's proposal, Szemraj says. Such use of the agency, he says, is up for discussion. “That's an issue to be explored as this moves ahead.”

Kaptur's bill has been referred to two committees, the House Agriculture Committee and the House Ways and Means Committee. Given that Congress will be back in session only during September, Szemraj doesn't think either committee will consider the bill this year. However, he rejects the notion of election year posturing, saying Kaptur “has every intention of reintroducing the bill next year. Now, though, she wants to begin elevating this issue and see what kind of feedback it gets.”

What about claims that the seed-saving bill will crash into patent laws and die? “Some say passing the bill could result in other countries putting tariffs on U.S. products. My boss' attitude on that is ‘Hey, fine. (Foreign producers) are paying less for the same seed our farmers are growing. We're perfectly willing to have a thorough examination of this issue.’”

Further, Szemraj says, the bill does nothing to change the patent rights of the holders. “In fact, it's respectful of those rights: the tech fee will be paid regardless of where the seed comes from. We'll even go farther by collecting fees on imports. That protects the patent rights.”

Other concerns

Another concern for Kaptur is private patents in general. Making sure tech fees are paid in a fair way is important, says Szemraj, “but (Kaptur) wants to build on that and focus on who controls the next generation of varieties.”

As a “matter of principle,” Szemraj says, Kaptur “disagrees with the idea that forms of life can be patented. Diseases can… afflict entire crops — naturally or through bio-terrorism. If seed is patented and privately held, what can be done to recover? How do we deal with these issues? We must be in front of this. These concerns got virtually no attention during the last two farm bills.”

Kaptur's bill, he says, is a bid to create debate on seed issues as the 2007 farm bill approaches.

“Should we reconsider the private patents on seed? If a disaster happens, will the USDA and land grant universities have to conduct research from the point just prior to Roundup Ready crops? Do existing patents mean there are research steps that couldn't be taken without permission from the patent holders? We need to know.”

Kaptur will be seeking co-sponsors for her bill in the coming weeks.

The other side

Not surprisingly, seed companies aren't keen on the proposed seed-saving laws.

Despite claims to the contrary, Lisa Dry insists, the seed patent laws supercede everything else. “It's not up to the USDA — as Kaptur proposes — to enforce patent protection. That enforcement belongs to the U.S. Patent and Trademark Office. And, of course, intellectual property isn't unique to biotechnology. It's common in many industries.”

Dry is director of communications at Biotechnology Industry Organization, a trade group whose membership includes Monsanto, Dow, DuPont and Pioneer. BIO represents clients on Capitol Hill and in regulatory affairs.

As written, Kaptur's bill would put the United States in violation of several trade organizations, says Dry. “To get specific, it violates Article 27 (the TRIPS agreement on trade-related aspects of intellectual property rights) of the World Trade Organization. This requires that patent rights are enjoyed without discrimination.”

Kaptur's bill is dead before it even leaves the starting gate, in Dry's opinion. “It would open the door to all kinds of trade and retaliatory actions by our trade partners.”

Then there are competition and innovation aspects of the royalty and licensing fees, she says. “The fees drive innovation and investment by seed companies to make additional products — drought-resistant crops, crops with higher yields (and other things). Intellectual property is the fuel driving the innovation engine. It's an investment that will allow farmers to maintain their competitiveness.”

Dry says BIO representatives will soon meet with Kaptur's staff members to talk about the bill. “We're also interested in talking to the commodity groups since their memberships are directly affected.”

BIO has yet to actively lobby against the bill, according to Dry. Currently, “we're involved in information gathering.”

It's important to remember what biotech crops have provided, says Dry. “Farmers have seen the value of biotech crops. The United States is leading the world in growing and acceptance of these crops. Farmers believe they get value in return for the licensing agreement — better yields, fewer inputs, insect resistance, and other things. It's important to consider all the value received in exchange for the licensing fee.”

Back in Arkansas, the seed dealer does his best to straddle a fence. “Farmers need the seed and seed companies need farmers to buy it. At this point, one can't do without the other — both sides had better realize that.”


e-mail: dbennett@primediabusiness.com