49 



Mr. Stenholm. Excuse me. Let me follow up on that to make 

 sure I understand current law. Is the protection there for the vari- 

 etal name or for certified seed and the process under which that 

 is grown? 



Mr. Schmidt. It is for the variety name, that specific variety. 



Mr. Stenholm. So if, as a producer, I am in a region that has 

 a crop failure for whatever reason except my crop is pretty good, 

 it is not certifiable, but it is what I have always called first year 

 after certified which is good enough for me. And if my neighbors 

 know that it has been grown clean, then it is first year after cer- 

 tified. 



Now, that is the example I was using about a producer that 

 didn't intend to have that for seed, but all of a sudden that be- 

 comes a very valuable commodity because there is no other certifi- 

 able seed in the area at a price that is comparable. And other pro- 

 ducers would say, hey, I am interested in that. I will take my 

 chances. I know where it came from. 



Now, that is permissible, but I would still owe a royalty to the 

 owner of the varietal name if I did that, if I chose to go into seed 

 business that year as a producer. 



Mr. Schmidt. Not only that, I first have to ask permission to sell 

 that seed from the owner of the certificate of that variety, and then 

 I may do so after I make an agreement under the royalty. 



Mr. Stenholm. What is the chances of him saying, no, you can't 

 sell that? 



Mr. Schmidt. I am not in that business myself. I would think 

 that the chances are quite positive if there is no seed available. 

 Why would the producer not want his variety to be sold? 



Mr. Stenholm. Let me just play the devil's advocate for just a 

 moment. Let's say the seed is available in the next State that could 

 be shipped in but for a very substantial increase in price because 

 of a shortage of the market. And let's just hypothetically say that 

 it is $20 a bag, where this seed I am talking about would be $10. 



Mr. Schmidt. That would be tough for me to answer that ques- 

 tion, but it is still up to the holder of that seed license. 



Mr. Stenholm. To allow me to sell it under the law. 



Mr. Schmidt. Correct. 



Mr. Strouts. Mr. Chairman, if I might respond to that question 

 there and be personal about it. 



Last year in my area we did have this total failure. It was not 

 too difficult for me to meet the needs of my customers by shipping 

 it in, so, as a case in point, this did happen, and we did not have 

 to result to anything other than within the normal rules and regu- 

 lations of PVP. 



Mr. Stenholm. But it would have been possible for a producer 

 to become a competitor with you if he had the seed and could get 

 the agreement of the breeder varietal owner, could have? 



Mr. Strouts. Could have, yes. 



Mr. Stenholm. Could have, and that is acceptable under current 

 law, and there is no change in the bill before us in that scenario. 



Mr. Volkmer. 



Mr. Volkmer. Yes. Just get on a different subject matter. 



I think as long as we are discussing all of this we should discuss 

 it, too, not a lot. But we have some seed corn producers in my dis- 



