USDA Report Highlights Harms of Seed Consolidation and Restrictive IP

These monopolies either cut off access to their patented gene pool entirely, or they demand onerous and restrictive licensing terms for any competing seed makers that want to use their proprietary traits and seeds. When most of the genetic base (called germplasm) for current varieties of commodity crops are patented, any breeder that wants to improve on top U.S. crops has very little to work with. “New [seed] entrants are very rare,” wrote the Farmers Business Network in a comment to USDA. “Consolidation will only continue to intensify, as new germplasm must be bred from existing germplasm that is owned and controlled by a few dominant companies.” If this cycle continues and seed monopolies’ walled breeding garden becomes too inbred or genetically similar then the entire U.S. corn, soy, or canola population could become vulnerable to a new disease or ecological shock.

Companies try to prevent their protected seeds and traits from ever coming off patent by making modest changes and applying for new patents. As for the seeds that eventually do come off patent, oftentimes, breeders cannot buy them anymore, or old, poorly kept stocks fail to germinate, USDA found. Breeders also struggle to use off-patent traits if they cannot be isolated from still-patented germplasm. This makes it especially hard to create cheaper generic versions of seeds with popular traits, like dicamba- or glyphosate-resistance.

USDA also found that it was hard for breeders to even identify whether traits and varieties were actually protected, needlessly chilling research. For instance, one seed breeder, Frank Morton, told USDA that they found a “bag tag,” a built-in licensing agreement that dictates how a bag of seed may be used on an unpatented heirloom-seed variety, revealing the lengths Big Seed companies will go to maintain control over seed varieties. Actions like these “[create] the impression that ‘everything is patented,’” Morton wrote in their comment. “This leads to people restricting their own fair use of public domain varieties, a kind of self-censorship, for fear of legal consequences.”

Without healthy competition, farmers have fewer choices and get pushed to buy pricey name-brand seeds and chemicals. USDA found that dominant seed companies will create an illusion of choice in the market by selling the same seed varieties under different names. Farmers that want to diversify their fields often do not know which variety of seed they’re buying until it arrives at their door, because companies only must put the variety on the bag and not online (something the USDA is trying to change through a Federal Seed Act policy statement, published this month).

Seed companies also use restrictive IP licensing to closely control and push out the independent seed dealers that produce large volumes of commercial seeds from monopolists’ base genetics. In their USDA comment, the Independent Professional Seed Association said that independent seed dealers “must provide a multinational corporation with a list of all our customers, … the amount of seed purchased by product for each customer, as well as our complete company financials” in order to license seed genetics from top corporations. This raises concerns about price discrimination, as dominant seed breeders could use dealers’ intimate business information to charge exactly as much as they can afford to license their genetics. It also means breeders could take independent dealers’ customers and try to sell them seeds directly.

Seed corporations say IP is essential to incentivizing costly research and innovation, which ultimately benefits farmers by inventing new, high-yielding products. But economic studies cited by USDA argue that “much of [the] benefits from private R&D may not accrue to the farm sector at all but accrue as profits to the input supply industries.”

USDA notes that public seed-breeding programs are an essential counterweight to private programs, as they cover regional needs and less profitable ventures that corporations will not take on. Public programs used to dominate seed development, but today, private sector research dollars far exceed public seed research and since the 1980s, over a third of public plant breeding programs have shut down. For instance, in 2014 there were just five public corn breeders compared to 25 in 1960. Programs that remain have less staff and funding, and short-term grants increasingly do not cover the full timeline for bringing new varieties to market.

Thus, to protect plant biodiversity and promote innovation in the face of a changing climate, USDA recommends investing in public seed breeding programs and partnerships with non-profits or small, independent breeders. USDA also announced new collaborative efforts with the patent office to improve the seed patent granting process and evaluate expanding PVPs’ exemptions for breeders and researchers to plant and utility patents. The International Seed Federation recommends this exemption to “maximize the potential for innovation,” and most other countries maintain these exemptions.  

USDA will also work with the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to identify potential antitrust violations by dominant seed corporations. It still remains to be seen if these latest promises will succeed where past efforts to take on Big Seed have failed. After the USDA and DOJ held a joint public workshop on seed consolidation in 2010, the DOJ later gave up on an antitrust investigation into Monsanto in 2012. Just this Wednesday, the DOJ decided not to challenge a merger between AM Fresh and International Fruit Genetics, two major fruit breeding companies, citing insufficient resources. However, the Biden Administration has shown some willingness to take on seed and agrichemical conglomerates, as the FTC sued pesticide manufacturers last year for paying distributors substantial rebates to block generic competitors, a charge that enforcers could also levy against seed corporations.