48 



Mr. Strouts. That is exactly right. It is a truth in labeling sort 

 of thing inasmuch as the breeder-and I am referring mostly to 

 wheat seed because that is the only thing I am familiar with. 



But if AgriPro has a contract with one of their associates to 

 produce AgriPro seed — this meets certification standards in the 

 State of Kansas which are rather strict. They are rather detailed. 

 It must be grown on clean ground. It must be rogued. It must be 

 inspected two or three times and all sorts of things to meet the 

 truth in labeling requirements, so to speak. So it is going to be cer- 

 tified, to answer your question. 



Mr. Allard. So that if somebody buys the cheaper seed, they are 

 not buying certified seed so it is sort of a let-the-buyer-beware situ- 

 ation. You get exactly what you pay for. So, in a way, the market 

 tends to protect those who have a higher quality seed in this in- 

 stance to some degree, doesn't it? 



Mr. Schmidt. Correct. 



Mr. Strouts. To some degree, yes. 



Mr. Keeling. The brown bagging issue tends to be a bigger prob- 

 lem in more marginal production areas than it does primaries 

 where your yield variability is higher, as I understand it, so that 

 is somewhat what you are saying. 



Mr. Allard. So a farmer that goes out and buys from his neigh- 

 bor runs a risk — he probably has some risk of being next to his 

 neighbor. But say he was 30 miles away, it may not be true. But 

 he does have a risk of introducing some other contamination in 

 that seed that could have an impact on the ability of his farm to 

 produce maybe at some later date, I would assume. 



So it seems to me that you have a farmer who goes out and buys 

 a cheaper grain does assume a certain amount of risk that he 

 wouldn't from a legitimate source. And it seems to me there are 

 some farmers who would say that the real good farm manager 

 would say, listen, I don't want to risk my farm in getting into some 

 weed problems or something that I don't have to deal with now, so 

 I am going to stay with a certifiable seed and pay more. 



Would you respond to that? 



Mr. Schmidt. Well, let me try, at least. 



I think we have to understand that a breeder coming out with 

 a new variety, has made improvements in the variety, and for that 

 improvement he asks to be paid for it. And that seed is only avail- 

 able under his name, under his brand most likely or some other 

 brands, but under that certification. That is the only way it can be 

 sold, and that is the improvement he has made, and he has a right 

 to obtain the license or the price for it. 



Another grower who does not want to buy that improved variety 

 from that breeder, he may obtain it elsewhere. There is plenty of 

 seed available of noncertified varieties that he may continue to buy 

 at a lower price. That is still possible, and it will always be pos- 

 sible. 



Mr. Allard. In which case he is assuming more risk than if he 

 had bought the certified seed? 



Mr. Schmidt. That is correct. 



Mr. Allard. Thank you, Mr. Chairman. 



Mr. Volkmer. Mr. Chairman. 



