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seed. We also market inoculants made from naturally occurring organisms for crops 

 and livestock, and we offer a full line of business management services for farmers. 

 Sales of all products during the fiscal year which ended August 31, 1993, totaled 

 over $1.4 billion. 



Our research budget during fiscal year 1992-93 was over $100 million or a little 

 over 7 percent of our sales. We make that investment every year so that we can 

 offer farmers the improved genetics they need to increase their crop yields and to 

 make their crops more resistant to drought, diseases and insects. 



Pioneer's research is aimed at increasing the efficiency and profitability of farm- 

 ers. We have done that in the past, and we will continue to do that in the future. 

 But we need to be compensated for that research investment. 



That brings us to the issue at hand. Pioneer cannot make the research investment 

 needed to provide farmers with those improved genetic products unless we can be 

 paid for our effort and get a return on that research investment. The current Plant 

 Variety Protection Act does not allow that to happen. 



The Plant Variety Protection Act is a cornerstone of legal protection for U.S. 

 plant breeders. Strong protection is necessary to encourage the level of investment 

 in research required to ensure a steady stream of improved varieties. These im- 

 proved varieties are essential for U.S. farmers to remain competitive in world agri- 

 cultural markets. 



The current Plant Variety Protection Act is significantly flawed by allowing for 

 the sale of seed of a protected variety without permission of the owner. Due to this 

 unfair competition, private investment in varietal development research has plum- 

 meted in several major crops and is threatened in others. In addition, ambiguous 

 language contained in the current PVP Act causes needless litigation concerning 

 saved seed between seed companies and their farmer-customers. 



Pioneer supports the right of a farmer to save seed of a protected variety to plant 

 on his or her own holdings. We also support the position that a farmer may sell 

 seed of a protected variety only with the permission of the owner of the variety. We 

 believe such seed must meet all the requirements of Federal and State seed laws. 



Pioneer supports all other amendments to bring U.S. laws into harmonization 

 with the 1991 update of the International Convention for the Protection of New Va- 

 rieties of Plants (UPOV). These amendments are necessary to allow the United 

 States to become a member of the 1991 UPOV Convention and for U.S. farmers to 

 remain competitive in world agricultural markets. 



Mr. Chairman, a variety doesn't just spring into being as a part of nature's handi- 

 work. It takes years. It is the career enterprise of a plant breeder. It requires the 

 careful application of the science of genetics, detailed observation, testing and recog- 

 nition of events which occur with a frequency of less than one in 100,000, insight, 

 imagination, and luck. Nature supplies the luck, the plant breeder supplies every- 

 thing else. Through his or her work, the plant breeder creates something that has 

 not existed before. It is something of value — property. And the creator of a piece of 

 property owns it. 



This is the same basic principle applied in literature and art. We all start with 

 the same alphabet, the same words, the same colors. Some of us 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 ma- 

 terials, computer software, integrated circuits, and prerecorded audio and video cas- 

 settes, 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, denying the devel- 

 opers a fair return on their investment in research, yet putting back nothing in 

 terms of research for the future. It is our belief that 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, 5 

 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 varieties in the United 

 States tripled, to 86 percent. 



