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create something of value ~ a book, a poem, a painting. As a result, we 

 own it. The essence of owning property is that we are entitled to have 

 our ownership protected under the law. 



The commercial reproduction and sale of our PVP-protected, proprietary 

 varieties is no different in principle than the commercial duplication and 

 sale of printed materials, computer software, integrated circuits, and 

 prerecorded audio and video cassettes ~ all of which are currently illegal, 

 and in some cases are criminal offenses. We are facing the same 

 problem now in the seed industry. 



Farmer-to-farmer sales of protected varieties take commercial advantage 

 of the years of work that have gone into the creation of these varieties. 

 Thus, denying the developers a fair return on their research investment 

 and putting nothing back in terms of research for the future. We believe 

 commercial research programs for varietal crops are threatened. 



It costs approximately $1 million in research alone to develop a 

 significant and successful new variety. We must recoup our investment 

 in that variety to stay in business. We cannot do that if we must 

 compete with others selling our proprietary varieties in the marketplace. 



According to World Bank Discussion Paper 112, published in 1990, the 

 number of private- sector soybean breeders in the United States 

 increased from two in 1966, five years before adoption of the PVP Act, to 

 63 in 1984, 13 years after. Between 1977 and 1986, the share of acreage 

 planted to privately developed soybean varieties in the United States 

 tripled, to 86 percent. 



In view of those results, one might be tempted to question whether the 

 situation requires a change in the U.S. law. But it is not enough for us 

 to be satisfied with the status quo in American agriculture. American 

 seed companies are under global pressures to either perform or drop out 

 of the competition. That performance is measured not in the commodity 

 markets, but in the financial markets of the world. Simply put, there is a 

 fundamental financial reason why hybrid crops account for about 125% 

 of Pioneer's total annual profit. Faced with unfair price competition from 

 brown-bag seed, the varieties we have spent several years and millions of 

 dollars to develop cannot return the profits our investors require. At 

 times, that forces us to make some unpleasant decisions. 



In 1989, Pioneer announced its decision to discontinue its North 

 American research, production, and sales activities in hard red winter 

 and hard red spring wheat. Among the key factors that resulted in the 

 decision were: 



