50 



trict. Let's assume that producer has a contract with xyz company, 

 and for some reason or another xyz company decides they won't 

 take my product after harvest. What do I do with my seed under 

 the new agreement? What do I do with it? Speaking for myself. 



Mr. Clemons. Unless there is something changed, and I alluded 

 to it the last portion of my testimony, there is nothing that can be 

 done with what has transpired in the Senate. There is no teeth in 

 the law to cause anyone to do anything that would — he does not 

 have to pay for that seed. And as long as it is PVP, currently he 

 can sit on that until it rots, and the farmer is bankrupt or what- 

 ever the case may be. 



I have a little statement here that I think would probably clarify 

 that, and that is that in section 93 the prompt payment accom- 

 plishes — what it accomplishes is to specifically name lawn turf or 

 forage grass seed and alfalfa and clover grass seed, and other than 

 naming those seeds there is no change from grower contracts used 

 for decades on all crops. All grower conditioning, packaging, et 

 cetera, that contract must also carry a basis for payment if it is 

 going to be a contract, and that one thing is the date that the pay- 

 ment must be made. Without a payment date it is not a contract. 



In view of this, the overriding question is simply how do we pro- 

 pose to put teeth in the amendment? How and with what do you 

 enforce those teeth that have been put in place? 



Those who meet the contract terms should not have to pay en- 

 forcement costs. Neither should the grower have to pay. This then 

 puts the monkey on the back of the breeder/contractor who has de- 

 faulted his contract. Conversely, he keeps the monkey off his back 

 by simply meeting payment terms of the contract. 



Mr. Volkmer. Are you telling me that, basically, the grower is 

 going to just have to sue the breeder? 



Mr. Clemons. No, sir. If this is enacted into law, 30 days after 

 the due date on that contract the breeder/contractor says I am not 

 going to pay and that enables the grower then to market that seed 

 on whatever market he can find. 



Mr. Volkmer. That is fine. 



Mr. Stenholm. But go ahead and pay the breeder the royalty or 

 whatever. 



Mr. Volkmer. You had a contract. I am a grower, and I have a 

 contract with a breeder to produce for them. But because, for what- 

 ever reason, whether it is they got too much seed and they don't 

 need it, they don't want it any more, and so they are not going to 

 pay me for it. So I am stuck with it. I think, basically, you ought 

 to be able to just go out and sell it, get rid of it. 



Mr. Clemons. You are correct. 



Mr. Volkmer. The legislation 



Mr. Stenholm. Let the record show that all the heads are nod- 

 ding affirmatively with one exception. 



Mr. Schmidt. I would like to have someone else, if you give me 

 permission, to answer that question. Mr. Owen Newlin is here who 

 might have some more expertise on this from the seed industry. Is 

 that permitted, Mr. Chairman? 



Mr. Stenholm. Surely. 



Identify yourself for the record. 



