Last month, President Joe Biden signed an Executive Order (EO) on Promoting Competition in the American Economy. This EO is exciting in many ways, from the sheer scope of its ambition to its acknowledgment of some of the many ills that have plagued American farmers, from unfair contract farming to retaliation. More on that EO can be found here.
One of the most exciting facets of the Order, however, only received a few sentences’ worth of attention.
The Order charged the Secretary of Agriculture, in conjunction with the Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, with submitting a report to the White House outlining the problems posed by patent-protected seeds.
These seeds challenge regulators to protect them as intellectual property, while still ensuring fair competition in the agricultural industry. Patent-protected seeds cause tension between carrying out the Packers and Stockyards Act, which seeks to reduce monopolies and increase competition, and the Patent Act, which seeks to reward innovation by financially protecting intellectual property.
While instructing bureaucrats to submit a report may not sound like exciting government action, that the Biden administration has acknowledged patent-protected seeds as a potential detriment to competition is a sign of progress.
Anti-Trust and Seed Competition
Competition in the seed industry is in real danger. Larger seed companies have been buying up smaller firms since the introduction of genetically engineered seeds, consolidating property rights in the seeds. Now, just four companies control 60% of global proprietary seed sales (see Howard’s seed chart here).
Consolidations in the seed industry mean higher prices and fewer choices for farmers. Farmers who use proprietary seeds also have to comply with restrictions on their use, including restrictions on seed saving. Decreased competition in the seed market also means less biodiversity in our soils and potentially, fewer tools as farmers look to adapt to an ever changing climate.
This industry consolidation is the kind of practice the U.S.’s antitrust laws are meant to prevent. Nevertheless, we also have robust intellectual property protections, under which these genetically engineered seeds are patented. These protections are rooted in protections going back to 1930, when the Plant Patent Act allowed the patenting of asexually reproduced plants (excluding tuber-propagated plants).
The patenting of plants continued to expand over the next fifty years, when in 1980 the first utility patent– these are the quintessential patents, granted for new inventions– was granted for a genetically engineered bacterium. Patent protections continued to expand as GE crops were rapidly developed throughout the 90s. Patents prevent others from making, using, or selling a protected product for a set period of time. Patents thereby grant the owner a limited period of exclusivity– the enemy of competition.
Biden’s Executive Order has charged the Secretary of Agriculture with a difficult task: assessing how to ensure compliance with our robust patent laws, while also breaking up the consolidation of the seed industry and increasing competition. Notably, there is no deadline in the Order for when this report must be submitted, nor any measures of success. However, the Biden administration has acknowledged seed competition as a concern, and the report will be a tentative first step toward what needs to be a vigorous solution.
This blog is the second in a series of two guest posts by OEFFA policy intern, Eliza VanNess.