Innovation

Why China Steals Our Corn

by Mark Hay

February 11, 2016
Image via Flickr user Rob Bertholf.

In January, Mo Hailong, a Chinese national who has lived in the United States for more than 20 years, pled guilty to stealing high-tech trade secrets from American industrial giant DuPont. But Mo wasn’t stealing top-secret polymers or chemicals for the Chinese government, as you might think, given the fanfare around his case over the past few years. He was stealing corn (which explains why he made his plea in a federal court in Iowa)—and doing so in an utterly farcical way. An employee of Beijing Dabeinong Technology Group, part of China’s seed and livestock giant Da Bei Nong Group, Mo spent years traveling from his Florida home to test fields for high-tech, genetically modified seeds created by leading American companies, then just digging around in the dirt on the side of the road. Mo’s operation was actually fairly massive; at the time of his apprehension in 2013, after months of intensive FBI monitoring, it’s believed he’d been dealing in hundreds of pounds of seeds regularly, tested on his own fields. At least six other Chinese nationals, from his sister to the heads of his company, were also indicted in the scheme (although his sister’s charges were dropped and his higher-up co-conspirators fled). But the details of the case, involving seeds stuffed into popcorn boxes and men fishtailing into the road out of cornfields when flustered by guards, still reads like a farce.

The absurdity of Mo’s corn-based espionage makes it odd, then, to see how much time and effort the FBI put into busting him. His guilty plea got a lot more attention than the theft of a valuable paint pigment by another Chinese national, also from DuPont, in the same week. And cases of agricultural espionage, no matter how small—like a far less sophisticated operation in which one Weiqiang Zhang stole modified rice from a small Colorado biotech firm in 2013—sometimes seem to be higher on law enforcement’s radar than the theft of protected military-related aerospace designs (another common target for Chinese corporate spies). The FBI has even explicitly stated that protecting trade secrets like this is a top priority for the agency—just behind preventing terrorist attacks. This frenzied protection of agricultural trade secrets in the United States points to our country’s bizarre relationship with proprietary food technologies, how that grates against the needs of the world, and presents an opportunity to re-evaluate the way we approach agricultural patents.

A bag of DuPont corn seed. Image via Flickr user Orin Hargraves.

To understand the magnitude of what Mo was up to, we have to recognize that stealing a seed from DuPont is not like stealing a seed packet from a home and garden store (which is also wrong, but won’t get the FBI on your ass). When DuPont or Monsanto or some other major firm develops a seed, they don’t just crossbreed plants and hope for the best. They spend years playing with corn genomes to maximize yields against resistance to blights and other risk factors. According to DuPont, a successful line of seeds can take five to eight years and $30 to $40 million just to research and develop. This rightly necessitates some level of intellectual property protection for DuPont to recoup its losses, fund future research, and make a reasonable profit from its endeavors. In other words, this process necessitates the kind of services that a patent system provides. It also explains what a huge loss it could be when a company like Mo’s tries to steal seeds.

Yet many developing nations argue that universally applying these intellectual property protections can actually hurt both innovation in general and their own interests, specifically. International treaties on the subject gave some initial leeway on adhering to patent protection norms in the developing world. But many argue (with a fair amount of research behind them) that developing nations need to be able to cheaply copy and work from proprietary technologies in order to serve their populations’ needs and catch up with developed countries, allowing for the innovation of products suited to needs that companies like DuPont might not be responding to. These nations believe an unequal playing field needs to be evened out to best serve the global market. And they fear becoming too dependent on innovations from individual companies that can charge an arm and a leg for technology relating to such vital products as food.

Drying corn in China. Image via Flickr user Doug Knuth.

China’s corn market is a good case study in some of these concerns: Over the past few years a growing Chinese middle class has increased demand for meat. This meat relies on corn-based feed, causing demand for the grain to skyrocket beyond the nation’s production abilities. (China may be huge, but it’s also parched and lacks the vast tracts of arable land we have in the U.S.) Increasingly dependent on high-cost proprietary corn technology to feed its people, China is clearly unsettled. It has made efforts to consolidate 5,000 seed companies and buy up international agricultural concerns to centralize and jump-start its own seed optimization research. But the nation’s planners likely believe that its own agricultural stability, and in a way the future of the country, depends on jump-starting that research by lifting technology from DuPont, Monsanto, and other companies—as their existing seed lines alone could boost Chinese per-acre production by two to three times over Chinese seeds. That’s why many believe the Chinese state is in one way or another behind thefts like Mo’s, although no one will say that directly in court because of the potential implications.

It’s actually somewhat ironic that China feels the need to steal grain secrets from America. Henry A. Wallace, the early-20th-century father of the modified seed industry, aimed to revolutionize crop yields not to line his own pockets but for the good of global food security. He imagined his research as part of a nonprofit, perhaps government-supported endeavor, but was forced to create a corporation by the prevailing laissez-faire sentiments of the 1920s American political establishment. Still, the underlying philosophy of the industry that China is now tapping into via direct or indirect corporate spycraft was once directed toward providing what is needed, not protecting information for profit.

The transformation of the industry into one that jealously guards its secrets is also telling. During the Cold War, makers and shakers started to look at agricultural technology as key to maintaining American dominance. Our agricultural supremacy gave us the ability to strategically offer food aid or manipulate prices by flooding the market with grain reserves, in a way weaponizing food tech and scarcity. Competition over the ability to leverage food in this way led to a great deal of paranoia, which has arguably spilled over into the modern era, leading to extremely aggressive intellectual property protections on things like corn. We’re talking protection so aggressive that in the U.S., companies can even go after farmers for using second-generation seeds from a modified crop, or potentially for harvesting a crop that was accidentally contaminated with proprietary grain seeds from a nearby farm (via wind, perhaps). Behind a strong intellectual property firewall, these companies are free to use their massive market control to squeeze hard for high profits from seed sales—likely in excess of what many of us would deem necessary to recoup costs, fund research, and make a decent sum.

Image via Flickr user Shubert Ciencia

Although Mo is definitely guilty, and although it’s probably not right for other nations to freely take the hard-won fruits of American companies’ research, it’s difficult not to sympathize in some way with China’s position. Food security is very much like medicine—a field in which accessing new innovations is a matter not just of ease, but of life or death. Although rights are really just constructs formed between parties in agreement or as a way of leveraging power over one another, on some level it feels like a nation ought to have some special privilege of access to the resources it needs to secure the nutritional future of its people—or at least not pay out the nose or indefinitely depend upon foreign corporations. There is a case to be made, in this light, for reworking our conception of intellectual property, at least in certain situations of need, to loosen the bounds of law and regulation in favor of the basic needs of human life—in China or anywhere else on Earth.

Unfortunately it’s hard to say what that new regimen of seed protection would be. As meta-examinations of prevailing norms have pointed out, the economics of this field are under-studied. In order to figure out how best to reorient our priorities and laws regarding seed patents, we need to incentivize more study into the rights of nations and farmers to access this technology. We need to better understand the economics of seed innovation—what economies stand to lose or gain by opening up avenues of innovation access, and what companies like DuPont and Monsanto stand to lose. We need to accept the fact that food security is not just a national, but also a universal human concern, and while we need to help our own companies thrive, we also need to find a way to balance that with global nutritional needs. We need to do more public, large-scale questioning as to why Mo and China as a whole feel the need to resort to espionage over something as basic as a corn kernel—and whether there’s any merit in their motives. Maybe we’ll conclude that a country with China’s means can hack it without theft—but other nations in more dire need can’t, necessitating more robust tech access options. Ultimately, Mo’s case suggests that we need to re-examine the balance of creativity and empathy in corn and beyond.

Recently on GOOD
The
Daily
GOOD
Sign up to receive the best of GOOD delivered to your inbox each and every weekday
Why China Steals Our Corn