USDA has rolled out a series of steps to further the Biden administration's efforts to address consolidation pressure in agriculture, including a series of near-term steps detailed in a lengthy report about the current state of the American seed industry.

Ag Secretary Tom Vilsack discussed the actions — and offered a new timeline on changes to rulemaking in the livestock sector — during comments at the National Farmers Union meeting in San Francisco. U.S. agriculture industry stakeholders say they are still reviewing the complexities of USDA's suggestions but are cautioning against broad patent and intellectual property reforms in the capital-intensive business of seed technology.

In March 2022, USDA sought input from the public about the impacts of concentration, market power and intellectual property in the market for seeds and other ag inputs. An initial review of the comments in June 2022 varied on whether competition in the seed business was robust or severely diminished.

On Monday, USDA rolled out a report detailing the findings of its study as well as recommendations in a new report: “More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs.” USDA’s Agricultural Marketing Service noted that many commenters expressed concerns about difficulty in accessing the information on existing intellectual property rights and the application of patentability standards in examining plant-related innovations.

“Commenters that primarily license IP from larger companies were concerned about the effects of consolidation on their choice of products,” the report noted. Many others “called for greater investment in public infrastructure around seed systems and plant breeding.” 

Following the rollout of the report, AMS is standing up a new farmer seed liaison. A USDA release explained the seed liaison will “deliver on report recommendations. Specifically, the seed liaison will boost transparency and reduce confusion in a complex seed system by helping facilitate communication between farmers and plant breeders and the patent system.”

Vilsack said USDA plans to name the liaison as quickly as possible. “The idea behind the liaison is pretty simple: It is to provide an avenue for farmers, breeders and researchers to have the capacity to provide input,” Vilsack told reporters following his speech to NFU members.

USDA and the U.S. Patent and Trademark Office are also forming a working group on intellectual property and competition issues in seeds and other agricultural inputs. The two entities plan to also work with the Department of Justice and the Federal Trade Commission “to promote fair competition in the seed market.”

Finally, AMS plans to broaden an existing portal to streamline the process for producers and seed retailers “to report tips and complaints related to competition and consumer protection in the seed markets.” Ahead of that expansion, USDA rolled out a Notice to Trade detailing labeling requirements companies should follow in the labeling of products headed to the nation's farm fields.

“The Notice underscores that farmers and seed businesses should know the kind and variety of the seed that they are getting from producers,” USDA said in a release.

American Seed Trade Association President and CEO Andy LaVigne said the group is carefully reviewing the report and plans to offer feedback to Vilsack on ASTA’s thoughts, concerns and potential solutions to the issues raised and actions proposed.

“While we can’t speak to the intricacies of the input received and the recommendations made, we can say that from a seed innovation and competition level, the American seed industry is second to none globally,” LaVigne said in a statement to Agri-Pulse. “The seed sector spends an incredible amount on research, development and distribution of seed to ensure that America’s farmers have the strongest, most resilient seed in order to meet the numerous challenges the American farmer faces every crop season.”

LaVigne also noted ASTA's position that companies are enabled to make major investments in new seed technologies due to strong IP protections, but said addressing regulatory responsibilities could also allow for more entities to enter the space.

“When it comes to biotechnology, in particular, the unfortunate reality is high regulatory burdens have impacted the diversity and competitiveness of the U.S. seed sector,” he said. “The resource intensiveness, in terms of time and cost, of the biotechnology traits regulatory process in the U.S. and globally is a barrier to entry for small or medium sized entities, public or private, to bring new biotechnology traits to the marketplace, especially those entities working with lower acreage crops and perennial plant species.”

When evaluating future technologies like gene editing and other developments, LaVigne said “clear, risk-proportionate and predictable policies” will encourage a “wide diversity of innovators to enter the market.”

Todd Martin, CEO of the International Professional Seed Association, said, “IPSA is glad to see the USDA highlighted its stance on IP and competition in the complex seed marketplace.” Martin continued IPSA looks forward to the interagency coordination between USDA, USPTO, DOJ, and FTC to promote fair competition in the seed industry.

Vilsack sees plenty of 'GIPSA rule' action in 2023

Often called the GIPSA rule, Vilsack said the first of a multipart package of rules under the Packers and Stockyards Act is in its “final stages of approval” with an anticipated finalization expected later this year.

The rule seeks to offer more transparency on the work and business practices of large-scale poultry integrators. In June 2021, the Biden administration began the process of soliciting comments on the rule to address “unfair and deceptive practices, undue preferences and unjust prejudices.”

The second PSA enforcement rule proposes companies cannot retaliate or discriminate against a grower who reported misconduct to a regulatory agency, Vilsack explained. The comment period closed in December 2022, and Vilsack said the agency plans to finalize that rule also by the end of 2023.

USDA also continues its work on a new rule addressing the so-called “tournament system” used in the poultry industry.

“That rule is in the process of being worked on as kind of a new concept,” Vilsack said, and was born out of comments received on other rules. “Our expected anticipation is that we would file that rule for public comments sometime in 2023. And that work will obviously bleed over ultimately into 2024.”

A fourth rule, known as the scope rule, can be expected this year, Vilsack said. That rule, he noted, is the most complicated and likely to draw the most attention. With a 2023 proposal, Vilsack said he is hopeful the rule could be completed in 2024. The rule would establish whether individual producers can bring claims under the Packers and Stockyards Act without proving broad harm to the entire industry.

“Our goal here is to get all four of them done by 2024,” Vilsack said.

He hopes to have two finalized in 2023, and two out for comment and consideration this year with completion in 2024.

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