Designer Seed Thought to Be Latest Target by Chinese

[rhoenix]

KANSAS CITY, Mo. — The case of the missing corn seeds first broke in May 2011 when a manager at a DuPont research farm in east-central Iowa noticed a man on his knees, digging up the field. When confronted, the man, Mo Hailong, who was with his colleague Wang Lei, appeared flushed. Mr. Mo told the manager that he worked for the University of Iowa and was traveling to a conference nearby. When the manager paused to answered his cellphone, the two men sped off in a car, racing through a ditch to get away, federal authorities said.

What ensued was about a year of F.B.I. surveillance of Mr. Mo and his associates, all but one of whom worked for the Beijing Dabeinong Technology Group or its subsidiary Kings Nower Seed. It resulted in the arrest of Mr. Mo last December and the indictment of five other Chinese citizens on charges of stealing trade secrets in what the authorities and agriculture experts have called an unusual and brazen scheme to undercut expensive, time-consuming research.

China has long been implicated in economic espionage efforts involving aviation technology, paint formulas and financial data. Chinese knockoffs of fashion accessories have long held a place in the mainstream. But the case of Mr. Mo — who was arraigned last week in Des Moines, pleaded not guilty and remains in custody — and a separate one in Kansas last year suggest that the agriculture sector is becoming a greater target, something that industry analysts fear could hurt the competitive advantage of farmers and big agriculture alike.

“Agriculture is an emerging trend that we’re seeing,” said Robert Anderson Jr., assistant director of counterintelligence at the F.B.I., adding that the trend has developed internationally in the last two years. “It’s pretty clear cut. Before then, the majority of the countries and hostile intelligence services within those countries were stealing the other stuff.”

The defendants in the Mo case visited numerous seed testing fields in Iowa and Illinois that were used by the big agriculture companies Pioneer, Monsanto and LG Seeds, the authorities said. They bought a test plot of their own in Illinois, according to the complaint, and concealed stolen seeds in, among other things, microwave popcorn boxes and napkins from Subway restaurants.

The seeds that they were after are called inbreds, meaning they come from self-pollinating corn plants. Inbreds are eventually crossed with other inbreds to create hybrid seeds that are then sold to farmers, and they are bred to be durable in the face of drought and pests. One inbred line takes five to eight years of research and can cost $30 million to $40 million to develop, federal prosecutors said.

A company or farmer can replant a stolen inbred seed and eventually use the new seeds to cross with a separate inbred to produce a hybrid — a shortcut that avoids years of costly research.

“These are quite brazen facts,” said Jay P. Kesan, a professor at the University of Illinois who specializes in intellectual property and technology law. “What makes this different, I guess, is really the extent to which these entities seem to have gone to try to get at these trade secrets.”

Mr. Mo, 44, was arrested at his home in Boca Raton, Fla., but the other defendants are not in custody, and the authorities have declined to comment on their status. Mr. Mo’s lawyer denies that his client, a seed dealer and permanent resident who he said moved to the United States 15 years ago, did anything wrong. In the other seed case, Zhang Weiqiang, of Manhattan, Kan., a rice breeder for Ventria Bioscience, a Colorado-based biopharmaceutical company, and Yan Wengui, of Stuttgart, Ark., a research geneticist for the federal Agriculture Department, are accused of giving proprietary rice seeds that contained medicinal qualities to crop researchers in their native China.

In 2012, Mr. Zhang, 47, a permanent resident, and Mr. Yan, 63, a naturalized citizen, both made trips to China, where the authorities said they discussed research they had performed in the United States with Chinese scientists. The men then arranged for a group from the Chinese Academy of Agricultural Science and the Crop Research Institute in China to travel to the United States last year. They brought the group to the Ventria facility in Kansas where Mr. Zhang worked and to his home, and to the federal agriculture facility in Arkansas where Mr. Yan worked.

The proprietary rice seeds were found in the luggage of members of the Chinese delegation as they tried to leave the country, according to the indictment, and at the home of Mr. Zhang, who, along with Mr. Yan, was arrested in December.

As seed technology has become more costly and time consuming to develop, “in some people’s eyes, it makes it more advantageous for them” to try to steal it because it “enables them to get a jump on three to five years of research on the back of somebody else’s time and effort that was put in,” said Andrew W. LaVigne, the president and chief executive of the American Seed Trade Association.

American farmers are concerned that stolen seeds could give their Chinese counterparts an unfair advantage because they could get access to the technologically advanced hybrids at lower prices, said Dave Miller, the research director for the Iowa Farm Bureau.

Foreign vegetable seeds make up 80 percent of the Chinese market, said Guo Ming, a consultant specializing in corn breeds for a Beijing-based agribusiness firm. Multinational corporations’ share of the corn seed market in China grew from a tenth of a percent just over a decade ago to 11 percent in 2011, according to an article published last year in People’s Daily, the Communist Party’s official newspaper. Although China’s domestic corn output has been growing over the years, the yield per corn plant has not grown significantly.

The Chinese have not developed a major corn hybrid since 2001, though the country’s second most popular corn, which debuted in 2007, was a collaboration between Pioneer and a Chinese company.

Analysts say one of the major problems is the fragmented seed industry in China. Much of the breeding research is done in state-funded universities and academies, and there is poor communication between them and the companies that sell and trade the seeds. So research often fails to yield strong commercial results. This structure also has fostered theft within the Chinese seed market, Ms. Guo, the breeding consultant, said.

“Some seed trading companies just went to breeding bases to steal the seeds,” she said. “Some breeding companies would outsource breeding to farmers, but when the seeds were harvested, the farmers wouldn’t sell back to the breeding company because seed trading companies pay more.”

Those trading companies would then sell the seeds at a premium, Ms. Guo continued, making an exorbitant profit on a product that cost them nothing to develop.

“That’s the ethos here,” she said.

That attitude, some say, could mean that the Chinese have long been stealing from American seed companies without getting caught. As the Chinese government encourages more innovation from seed producers, the desire to steal plant technology could grow.

“These varieties that Pioneer has, have shown to be better than the best varieties they’ve got in China,” said Carl E. Pray, a professor of agriculture, food and resource economics at Rutgers. “If they’re going to compete with multinationals, even in China, they need to get access to the basic material that multinationals are using.”

Well now. Chinese espionage apparently includes designer seeds for crops.

[frigidmagi]

Question: Will Chinese Corps be less of an enemy to our farmers then the current batch of assholes? You know the ones who will sue you for having windblown plants in your fields, purposely design plants to make you utterly dependent on yearly shipments at increasing costs and even more?

[General Havoc]

Question: Will Chinese Corps be less of an enemy to our farmers then the current batch of assholes? You know the ones who will sue you for having windblown plants in your fields, purposely design plants to make you utterly dependent on yearly shipments at increasing costs and even more?

No, they will not be less of an enemy.

[Cynical Cat]

The Chinese have more than a billion people to feed, limited arable land, and advancing desertification. They have plenty of reasons to commit agricultural espionage.

[Josh]

Question: Will Chinese Corps be less of an enemy to our farmers then the current batch of assholes? You know the ones who will sue you for having windblown plants in your fields, purposely design plants to make you utterly dependent on yearly shipments at increasing costs and even more?

The windblown seed one is something of an urban legend.

This is the idea that I see most often. A group of organic farmers, in fact, recently Monsanto, asserting that GMOs might contaminate their crops and then Monsanto might accuse them of patent infringement. The farmers couldn't cite a single instance in which this had happened, though, and the judge the case.

The idea, however, is inspired by a real-world event. Back in 1999, Monsanto sued a Canadian canola farmer, Percy Schmeiser, for growing the company's Roundup-tolerant canola without paying any royalty or "technology fee." Schmeiser had never bought seeds from Monsanto, so those canola plants clearly came from somewhere else. But where?

Canola pollen can move for miles, carried by insects or the wind. Schmeiser testified that this must have been the cause, or GMO canola might have blown into his field from a passing truck. Monsanto said that this was implausible, because their tests showed that about 95 percent of Schmeiser's canola contained Monsanto's Roundup resistance gene, and it's impossible to get such high levels through stray pollen or scattered seeds. However, there's lots of confusion about these tests. Other samples, tested by other people, showed lower concentrations of Roundup resistance — but still over 50 percent of the crop.

Schmeiser had an explanation. As an experiment, he'd actually sprayed Roundup on about three acres of the field that was closest to a neighbor's Roundup Ready canola. Many plants survived the spraying, showing that they contained Monsanto's resistance gene — and when Schmeiser's hired hand harvested the field, months later, he kept seed from that part of the field and used it for planting the next year.

This convinced the judge that Schmeiser intentionally planted Roundup Ready canola. Schmeiser appealed. The Canadian Supreme Court that Schmeiser had violated Monsanto's patent, but had obtained no benefit by doing so, so he didn't owe Monsanto any money. (For more details on all this, you can read the judge's . contains other documents.)

So why is this a myth? It's certainly true that Monsanto has been going after farmers whom the company suspects of using GMO seeds without paying royalties. And there are plenty of cases — including Schmeiser's — in which the company has overreached, engaged in raw intimidation, and made accusations that turned out not to be backed up by evidence.

But as far as I can tell, Monsanto has never sued anybody over trace amounts of GMOs that were introduced into fields simply through cross-pollination. (The company asserts, in fact, that it will pay to remove any of its GMOs from fields where they don't belong.) If you know of any case where this actually happened, please let me know.