37 



All lending agencies look at cash flow and the security as a basis 

 for their loans. For decades, a seed contract was considered bank- 

 able paper because it provided security and a cash-flow schedule. 

 Not anymore. For the past 2 to 3 years, any grower contract for 

 PVP varieties are suspect due to the inability or refusal by some 

 breeder/contractors to meet the contract payment terms. 



Lending agencies are now requiring additional security even to 

 the point of refusing loans. It is sad and discouraging to see your 

 friend and neighbor selling his equipment and farm. This farmer 

 produced a quality crop, it was conditioned, carries a State certifi- 

 cate attesting to its contents and quality, all of which meets the 

 contract terms, yet the breeder/contractor refuses to pay or take de- 

 livery and prevents the farmer from marketing the seed produced 

 because it is a PVP variety. 



We see H.R. 2927 having the possibility of correcting this glaring 

 inequity without affecting in any way those breeder/contractors 

 who meet the payment terms of their contracts. We urge you to 

 consider and adopt the few additional words which, before reading, 

 I would refer back to the words utmost necessity. We firmly sup- 

 port the three objectives as set forth in H.R. 2927, Plant Variety 

 Protection Act Amendment of 1993 and as basically endorsed by 

 ASTA. 



We believe H.R. 2927 is important to the plant breeding commu- 

 nity, the seed industry, as well as all of American agriculture. We 

 believe H.R. 2927 reinforces the free flow of germplasm, an essen- 

 tial component to genetic diversity. 



We also believe H.R. 2927 will specifically ensure: One, that first 

 generation hybrids are protected; two, protection is extended to 20 

 years; three, protection to harvested plant parts is included; and, 

 four, a farmer's ability to save protected varieties for usage on their 

 own holdings. 



We strongly urge the adoption of changes agreed to in S. 1406 

 which are: One, extending protection to potatoes and tubers; two, 

 clarifying the ability to condition legitimate farm-saved seed; three, 

 VNS labeling allowance for grasses, alfalfa, and clover; and, as 

 well, that portion of S. 1406, section 93, titled "Prompt Payment." 



Which reads as follows: 



If a seed grower contracts with the holder of a certificate of plant variety protec- 

 tion issued under this act, or a licensee of the holder, to produce lawn, turf, or for- 

 age grass seed, alfalfa or clover seed, protected under this act, payments due the 

 grower under the contract shall be completed not later than the earlier of — one, 30 

 days after the contract payment date; or, two, May 1 of the year following the pro- 

 duction of the seed. 



For the reasons earlier stated, it is an utmost necessity the fol- 

 lowing be added: 



Three, and if the breeder/contractor certificate holder or licensee should fail to 

 make payment and/or take delivery of the seed produced by the grower pursuant 

 to the contract, the grower and all subsequent purchasers shall have the authority 

 of the owner of the plant variety protection certificate to market the seed as the 

 variety or variety not stated. 



We wish to thank you and appreciate your consideration of in- 

 dustry as you work through this amendment. I will try to answer 

 any questions you may have. Thank you. 



[The prepared statement of Mr. Clemons appears at the conclu- 

 sion of the hearing.] 



